1928-03-27

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Bill No. 152, respecting The Great Lakes and Atlantic Canal and Power Company, Limited.-Mr. Denis (Joliette).

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A message from His Excellency the Governor General, transmitting estimates for the financial year ending March 31, 1929, was presented by Hon. J. A. Robb (Minister of Finance), read1 by Mr. Speaker to the house, and referred to the committee on railways and shipping.

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On motions being called:
Hon. J. A. ROBB (Minister of Finance):: Mr. Speaker, in the special mail of yesterday the Finance Minister and Receiver General received the following letter:
March 25, 1928.
Enclosed find conscience money totalling $35, including interest. Please take good .care to speak of this in the house as soon as you get it, so it will be mentioned in the newspapers, and the sender can know before Easter that you received the money safely.


Mr. STEVENS:: He does not trust the
Minister of Finance.


James Alexander Robb: It looks bad for the minister.



INDUSTRIAL AND INTERNATIONAL RELATIONS


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Mr. C. R. McINTOSH (North Battleford) presented the second report of the committee on industrial and international relations, as follows:
Your committee has had before it Bill No. 4. an act to amend the Civil Service Act (Councils), referred to the committee on February 10, 1928. Having considered the bill and examined a number of witnesses on the subject matter involved, your committee beg leave to report as follows:
1.	That whereas the majority of the witnesses heard were of the opinion that further consideration should be given to the details of the constitution of national civil service councils;
C.N.R. Debenture Stock
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And whereas the government is prepared to establish such councils;
And whereas the objects of the bill may be attained by order in council;
2.	That this committee endorses the principle of the establishment by the government of a national civil service council, composed of representatives of the government and the organized civil service in equal numbers, to consider and advise the government upon matters of mutual concern to the government and civil servants in their respective capacities as employer and employees, also as to the establishing of any other consultative and advisory machinery that may be required.
3.	That, as the form of constitution for such a council, covering its scope and functions, can best be determined by joint agreement between the parties concerned, this committee recommends the setting up by the government of a drafting committee representing both the government and the civil service organizations, for the said purposes, provided that any such constitutions so drafted shall be subject to the approval of the governor in council; and
4.	That after the said constitution has been drafted and approved in the manner set forth the national civil service council should be established forthwith by the government.
5.	In view of the above recommendations your committee recommend that Bill No. 4 be not further proceeded with.
All of which is respectfully submitted.

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On the motion of Hon. Charles Marcil (Bonaventure) the first report of the joint committee on the printing of parliament was concurred in.


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Hon. J. A. ROBB (Minister of Finance) moved that the house go into committee at the next sitting to consider the following proposed resolution:
That the scheme of arrangement with holders of the five per cent income charge convertible debenture stock of the Canadian Northern Railway be ratified and confirmed, and that the governor in council be authorized to guarantee the principal and interest of the new securities to be issued in pursuance therewith not exceeding in aggregate face value such an amount as may by the governor in council be considered sufficient to raise $22,689,575.32; the proceeds to be deposited to the credit of the Minister of Finance in trust, to be released by the minister in such amounts as are required to carry out the provisions of the scheme.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
I might mention, Mr. Speaker, that this resolution is to provide for taking care of TMr. McIntosh.]
maturities in May. The purpose of the bill is to approve and give effect to the scheme of arrangement and compromise between the Canadian Northern Railway Company and the holders of its five per cent income charge convertible debenture stock. This stock is secured by trust deed dated May 6, 1910, supplemented by trust deed dated May 17, 1915. The trustees are the British Empire Trust Company, London, England, and the National Trust Company, Toronto. The due date is the 6th of May, 1930. The interest is payable at five per cent or such less rate, if any, as the net earnings of the railways concerned shall be sufficient to pay. The amount outstanding is $24,137,846.08, and 94 per cent of this amount is $22,689,575.32. The sale of securities shall be by competitive bids, but in view of the fact that time is the essence and will be very limited, provision is made for temporary financing.
If hon. gentlemen desire, we could take up this resolution now and give the bill its first reading, and then let it stand over until Thursday.
Sir HENRY DRAYTON:: Mr. Speaker,-


Mr. SPEAKER:: Except by unanimous
consent, this motion is not debatable. Standing order 38 provides:
The following motions are debatable:
Every motion-
(a) standing on the order of proceedings for the day (except government notices of motion for the house to go into committee at a later date).


James Alexander Robb: If I could have unanimous
consent, we might go into committee now and pass the resolution, and then introduce the bill. Then hon. gentlemen will be in a better position to discuss it.
Motion as amended agreed to, and the house went into committee thereon, Mr. Johnston in the chair:


Henry Lumley Drayton: This time I rise, Mr. Chairman, to support my hon. friend the minister. This is a very old subject. The stock was issued, not to carry interest unless interest was actually earned, but the time is coming when the obligation will have to be met. My hon. friends are perfectly right in meeting it, but in this connection I want to draw one little matter to the attention of the committee. The longer these things run generally the more people want, and I very well recollect, when in 1926 authority was given for negotiations to be entered into with the bankers through whom the business had been handled, the indignation of my hon. friends opposite on returning to office and the manner in which they cancelled

National Health and Veterans' Welfare
the arrangement that had been effected. Now, this is what actually did happen. The first offer was on the basis of the 40-year stock and carried interest at 4i per cent. That interest was not to start to run until May 6, 1930. The governing rate of interest in the market at that time-and I give my hon. friend, not my figures, but the figures of the gentlemen who were dealing with this matter and recommending it to their clients-was 4rJ per cent The discount value of those securities was on that basis, that is, the difference between 4i per cent and 4f per cent, or 93.42. But the securities had to run along from 1926 to 1930 without bearing any interest at all; so a further discount had to be made, which reduced the sum of money which the shareholders would receive under the arrangement to 80. Well, they have every reason to be pleased that my hon. friends stopped the arrangement, because it simply means that today they are getting a million and a half dollars more. The offer which we are now considering is a cash offer which becomes quickly payable. But the only fair way to arrive at its value would be to assume that it was made at the same time as the former offer and to apply the same discounts. Applying those same discounts-and that is going to the very furthest point in case of the proposition-this cash offer would be reduced, so that the value on the market at that time would be only 86, or six points above the offer which my hon. friend cancelled. In other words, it represents on the whole twenty-five million dollars an increase of a million and a half. I am not saying that it will cost the country an extra one and a half million dollars, I am merely pointing out the fact that the shareholders get that much more. It may not cost the country that much more. Why? Simply because the rate of interest in the meantime has gone down. We cannot 6ay exactly what the rate will be, for it depends entirely upon the American market, as we weTe told in the banking and commerce committee by the department's representative who in giving evidence on this question of the rate of interest chargeable by the government under the legislation of 1914 said that it was reduced from time to time having regard to the rate of interest charged in New York. None of us can say exactly what that will be, but it does show clearly that the former settlement was proper, that the liability was a real liability-everybody knew it-and that the shareholders as a matter of fact are getting, as I say, one and a half million dollars more than they would have received under the former arrangement, and their circular shows it.


James Alexander Robb: I am glad, Mr. Chairman, to have the assurance of my hon. friend that there is no difference of opinion as to the justice of meeting these bonds. It is one of the railway cases which has arisen out of the changed condition from poverty to prosperity. When we discuss the bill in committee I shall be very glad to deal with the relative merits of the two propositions, and to tell my hon. friend why the government at that time did not authorize the settlement which was said to have been arrived at.
Resolution reported, read the second time and concurred in. Mr. Robb thereupon moved for leave to introduce Bill No. 153, respecting the Canadian National Railways and respecting the Canadian Northern Railway Company five per cent Income Charge Convertible Debenture Stock.
Motion agreed to and bill read the first time.



DEPARTMENT OF NATIONAL HEALTH AND VETERANS' WELFARE

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Hon. J. H. KING (Minister of Soldiers' Civil Re-establishment and Health) moved that the house go into committee at the next sitting to consider the following proposed resolution:
Resolved, that the Department of Health and of Soldiers Civil Re-establishment be amalgamated in a single department to be called the Department of National Health and Veterans' Welfare, presided over by a minister of the crown; that the powers and duties of the minister be defined; and provision be made for the appointment of a deputy minister, the making of regulations, and the employment of such other officers, clerks, and employees as may be deemed necessary.
He said: His Excellency the Governor General having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Motion agreed to.

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Right Hon. W. L. MACKENZIE KING (Prime Minister) (for the Minister of the Interior) moved that the house go into committee at the next sitting to consider the following proposed resolution:
Resolved, that the agreement between the Dominion of Canada, the province of Ontario and the province of Manitoba respecting the construction of a dam for the purposes of conservation, regulation and power, at Lower Ear falls at the outlet of Lac Seul in the
Transportation of Coal
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province of Ontario, be ratified and confirmed, and that the governor in council be authorized to carry out the provisions thereof whereby the Dominion assumes three-fifths of the capital cost of the dam, estimated at $700,000, and the payment of interest and cost of operation and maintenance for certain limited periods.
He said:	His Excellency the Governor
General having 'been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Motion agreed to.

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Right Hon. W. L. MACKENZIE KING (Prime Minister) (for the Minister of the . Interior) moved that the house go into committee at the next sitting to consider the following proposed resolution:
Resolved, that the Yukon Quartz Mining Act be amended to provide for the payment of an annual royalty on the profits of mines in the Yukon Territory, exceeding the sum of $10,000 annually, in place of the royalty at present imposed upon sales of the products of the mines, and to prescribe the rates of royalty to be paid upon the said anual profits.
He said:	His Excellency the Governor
General having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Motion agreed to.


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On the orders of the day:
Hon. S. F. TOLMIE (Victoria):: Is it the intention of the government to introduce legislation at this session to carry out the recommendations of Commissioner Martin in connection with the return of British Columbia lands?


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Perhaps my hon. friend will allow the question to stand until the Minister of the Interior is in the house. I think he will be satisfied with the reply which the minister will make.



RADIO-CANCELLATION OF LICENSE INTERNATIONAL BIBLE STUDENTS' ASSOCIATION

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On the orders of the day :
Mr. ALFRED SPEAKMAN (Red Deer):: I wish to ask the Minister of Marine a question based on a number of communications I have received. In these communications exception is taken to the anticipated action of

the minister in cancelling broadcasting privileges hitherto enjoyed by the International Bible Students' Association. My question is: Does the minister intends cancelling these privileges, and, if so, why?


Hon. P. J. A. CARDIN (Minister of Marine and Fisheries):: I aim not in a position to make any pronouncement to-day on the matter. The question is still under consideration and I may be able to make a definite statement to-morrow regarding it.


Alfred Speakman: Thank you.



TRANSPORTATION OF COAL


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On the orders of the day:
Mr. THOMAS CANTLEY (Pictou):: In the absence of the Minister of the Interior, I wish to direct a question to the Minister of Railways based on a telegram I have received from Stellarton, Nova Scotia. This telegram reads:
Conditions as to work were never worse than at present in Pictou county coalfields. From first of April, 1927, until August 31, 1927, pits averaged only 19| days per month; from that until the end of year fairly steady. January, February, March, 1928 to date average 14J days per month with no prospects for future.


Hewitt Bostock: It is out of order to read telegrams inasmuch as they emanate from outside and the house has no assurance of their veracity. The rule, which is laid down in Bourinot, is well known. The hon. member may ask a question based on information he has.


Thomas Cantley: In that case, Mr. Speaker, may I ask the Minister of Railways whether he is now prepared to put in force the rate mentioned by the Minister of the Interior on Monday of last week in these words:
The movement of Nova Scotia coal is now under consideration, chiefly by the Minister of Railways (Mr. Dunning), as it is a railway Diatter.
Will the rate be put into force at once?
Hon. CHARLES A. DUNNING (Minister of Railways and Canals): I gathered from the telegram as my hon. friend read it that it is similar to one I have received personally and which I immediately forwarded to the management of the Canadian National Railways for their consideration as to whether anything further could be done as requested.
I am quite satisfied that the national railway management is doing all it can to help to provide work for Nova Scotia miners in the

Ways and Means-Interim Supply Bill
banking of coal for railway use; and, as my hon. friend knows, Nova Scotia coal is now used on the Canadian National Railways as far north as Cochrane and as far west as Belleville. Regarding the general question to which my hon. friend makes reference, it is true that the Minister of Mines asked me to help in investigating the possible application to Nova Scotia of a test movement similar to that which has been inaugurated in relation to Alberta. I have conveyed my views to the Minister of Mines and he is, I know, working on the matter. I cannot state definitely what the outcome will be, but I know that he is giving the subject his attention at the present time.



INQUIRY FOR RETURN

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On the orders of the day:
Mr. G. T. MacNUTT (Colchester):: May I ask the Minister of National Revenue (Mr. Euler) whether I may expect the return to a question asked by me a month ago-on February 22nd, to be exact? It was passed as an order for return. Has the answer to the question been lost in transit?


Hon. W. D. EULER (Minister of National Revenue):: I will inquire and report tomorrow.



INTERIM SUPPLY


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Hon. J. A. ROBB (Minister of Finance) moved that the house go into committee of supply.
Motion agreed to and the house went into committee, Mr. Johnston in the chair.
James Alexander Robb: Resolved, that a sum not exceeding $37,198,026.71, being one-sixth of the amount of each of the several items to be voted as set forth in the main estimates for the fiscal year ending 31st March, 1929, laid before the House of Commons at the present session of parliament, be granted to His Majesty, on account, for the fiscal year ending the 31st March, 1929.


Henry Lumley Drayton: Before this
motion for interim supply carries, we shall have to have the usual understanding. The minister saw me on Saturday in reference to the matter and I consulted my leader, who saw no objection to it. So far as we are concerned, therefore, we are not opposing the motion but the matter must, of course, be dealt with on the usual terms; that is to say, the vote, which is for two months, is not to be taken as in any way hampering the fullest and freest discussion in the house and the fullest right to object to any or all items.
And that right covers more than what appears on paper because the vote, although passed, is passed under this agreement. It is passed for the purpose of providing for necessary payments that have to be made. The civil service must be carried on and existing obligations met, but no new work can be commenced, so that any item may be moved to be struck out which ordinarily could be struck out when considered in the usual course.


James Alexander Robb: That is a fair understanding, and the usual procedure.
Resolution reported, read the second time and concurred in.



WAYS AND MEANS


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Hon. J. A. ROBB (Minister of Finance) moved that the house go into commitite of ways and means.
Motion agreed to and the house went into committee, Mr. Johnston in the chair.
James Alexander Robb: Resolved that towards making good the supply granted to His Majesty on account of certain expenses of the public service for the fiscal year ending 31st March. 1929, the sum of $37,198,026.71 be granted out of the consolidated revenue fund of Canada.


Henry Lumley Drayton: This is subject, of course, to the same arrangement.


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Motion agreed to.
Resolution reported and concurred in. Mr. Robb thereupon moved for leave to introduce Bill No. 154, for grantaing to His Majesty certain sums of money for the public service for the financial year ending March 31, 1929.
Motion agreed to, bill read the first and second time, and the house went into committee thereon, Mr. Johnston in the chair.
On section 1:
Henry Lumley Drayton: This bill, of
course, is subject to the same arrangement which was made in committee on the resolution.


[Stage Direction]
Section agreed to.
Sections 2 and 3 agreed to.
Bill reported, read the third time and passed.
James Alexander Robb: Mr. Speaker, as the house is aware, we adjourn on Friday over Easter, and I am told that the upper house which also adjourns on
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Friday may not reassemble until the latter part of April. Hon. members will recall that a few days ago I tabled further supplementary estimates for the fiscal year ending March 31, 1928, involving items of a number of departments and totalling $3,306,347.02. Included therein were the European war and active militia pensions, amounting to $1,600,000. With the unanimous consent of the house I would like to advance these further supplementary estimates so that we may pay them before the end of the fiscal year. I therefore move that the house go into committee of supply.


Mr. E. J. GARLAND (Bow River):: I
would like to ask the minister if he intends to ask the house to vote any other item than that covering these pensions?


James Alexander Robb: Yes. As soon as this is through we will take up similar supplementary estimates for the Department of Railways and Canals, covering the Maritime Freight Rates Act and certain advances to the Canadian Government Merchant Marine.
Motion agreed to and the house went into committee of supply, Mr. Johnston in the chair.
Marine and Fisheries [DOT]- contingencies - further amount required, $8,000.


Henry Herbert Stevens: We ought to have some
explanation about this.


James Alexander Robb: This is to provide for unforeseen expenditures of the fisheries branch of the department, more particularly as regards the expenses in connection with departmental officials and employees who were engaged in the Royal Fisheries Commission.


[Stage Direction]
Item agreed to.
National Defence - contingencies - further amount required, $10,000.
Edward Joseph Garland: What is
the explanation of this item?


James Alexander Robb: This sum is required mainly
because of the expansion of the work in connection with the air service. It has been necessary to employ several new clerks and stenographers for whom provision was not made in the civil government estimates. The outlay for telegraphs, telephones and travelling expenses was not estimated in the main estimates. The details given are:	To pay
of temporary employees, $5,000; telegrams and-telephones, $4,000; travelling expenses, $1,000.


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Item agreed to.
[Mr Robb.]
Public Archives 

 contingencies - further amount required, $6,888.70.
Item agreed to.
Secretary of State-contingencies-further amount required, $5,000.
Sir GEORGE PERLEY:: Will the minister give some explanation as to why this amount is required?


Mr. RINFRET:: When the revision of the statutes was rendered necessary new forms for application under the Companies Act and other acts were required. This sum is necessary for the printing of these special forms in connection with the revision of the statutes.


George Halsey Perley: No part of this
amount is needed to pay the salaries of a greater staff?


Louis Édouard Fernand Rinfret: No. it is merely to pay
for the printing.


Edward Joseph Garland: We see the lips of ministers moving when they are giving their explanations but that is all that registers in this corner of the house. Will the Secretary of State speak a little louder, because down here we have not heard a word he has said.


Louis Édouard Fernand Rinfret: I had explained, and I am delighted to explain again for the benefit of my hon. friends in that corner of the chamber, that the revision of the statutes made necessary the printing of new forms for certain acts that are under the administration of the Secretary of State, namely the Companies Act. There is also the printing of the Guide to Relative Precedence in Ottawa and in the provincial capitals.


Mr. GEARY:: Has the money been spent
in connection with these items?


Louis Édouard Fernand Rinfret: It is in process of being
spent.


George Reginald Geary: You have got a good start.


Louis Édouard Fernand Rinfret: As to the printing which
is being done in the printing bureau, the item is really a bookkeeping item. The amount will be outstanding between the printing bureau and the department. The work that is being done outside is in the process of being delivered to the department.


George Reginald Geary: These are not estimates at all, they are overdrafts.


James Alexander Robb: It is the customary thing.
At the end of every fiscal year we have such amounts.


Henry Herbert Stevens: It is an evil practice.


[Stage Direction]
Item agreed to.

Supply-Miscellaneous
Department of Agriculture-Fruit branch- further amount required, $35,000.
George Halsey Perley: We should have an explanation of this item.


Mr. MOTHERWELL:: This item was
occasioned by the additional cost due to the new policy of grading and inspecting fruit for export, from which source $60,000 was obtained in inspection fees. That amount, however, went directly into the treasury. The cost was borne out of our vote, consequently we need an additional $35,000.


George Halsey Perley: Did the minister not ask for a sufficient amount last year when we passed the original estimates?


William Richard Motherwell: We had no means of judging how much the work was going to cost and being the first year it was an estimate purely and simply. A great deal more
grading was done in connection with fruit for home consumption than was anticipated.
Sir HENRY DRAYTON. I think perhaps the explanation should come from the Minister of Finance. How was it that the Minister of Agriculture got ahead of him to the extent of $35,000?


James Alexander Robb: That is quite easy of explanation. I got ahead of the Minister of Agriculture when he was preparing his estimates, at least I think I did.


Henry Lumley Drayton: But he comes
back.


Henry Herbert Stevens: He is a good horse trader.


George Reginald Geary: Are these items being
charged up against the surplus?


James Alexander Robb: I hope not.


Mr. MANION:: All the expenditures are.


James Alexander Robb: This was provided for in
estimating the budget requirements.


[Stage Direction]
Item agreed to.
Pensions-European war and active militia -further amount required, $1,600,000.
Robert James Manion: Would the minister explain this item because this seems rather a large amount for a supplementary-supplementary.


James Alexander Robb: The department reports that
the provision in the main estimates will be inadequate and the above additional amount will be required. The expenditure to February 29, 1928, was $35,026,42121, leaving a balance of $1,973,578.79 available for the month of March. The expenditure for the month of February amounted to $3,273,333.78.
My hon. friend is quite aware that there are pension revisions going on from time to time, and I imagine that the present item is the result of granting a greater pension allowance in some cases.


Henry Lumley Drayton: Will the minister tell us how much of that goes to pensions? How much of the vote of $1,600,000 goes to the soldiers, how much of it goes in other expenditures, and how much of it goes to an investigation here or an investigation there?


James Alexander Robb: I think it is safe to say that all of it goes to pensions. My hon. friend will note carefully the wording of the item: For the European war and active militia pensions.


Henry Herbert Stevens: That covers a multitude of sins.


Henry Lumley Drayton: That covers everything.


James Alexander Robb: It is the result of revisions of pensions by the pension board from time to time.


Robert James Manion: How much of a supplementary of this kind did we have last year?


James Alexander Robb: I have not that information.


Robert James Manion: I should like, if possible, to have further details with regard to this $1,600,000. This is a large amount of money.


James Alexander Robb: It is a large amount of money.


Robert James Manion: I should like to have some further details than just a general statement.
Hon. JAMES H. KING:	(Minister of
Soldiers' Civil Re-establishiment): I did not come prepared with a complete statement, but this amount of money is required for pensions, not for administration expenses. The latter are taken care of by another vote, as are also treatment expenses. The amount required here is undoubtedly for pensions. We find that each year we have come to parliament asking for a supplementary vote for pensions.


Robert James Manion: How much was it last year?


Mr. KING (Kootenay):: 1 think over a million dollars last year. It is an unknown quantity. We have not yet reached the peak in the matter of pensions. More applications are coming in. We received many new applications last year, and then there have been increases in pension.


Robert James Manion: I certainly would be the last to object to what is necessary for pensions, but it seems to me that we ought to
Supply-Miscellaneous

be able to get a little closer to our estimates than practically 12,000,000 in a case of this sort. That is what strikes me. I am not objecting to the money being used for necessary pensions, but I hope that the minister next year will get a little closer to his estimates. I cannot work out the percentage of increase while on my feet but it is too large in the case of an estimate of this kind. I hope that next year the minister will make a closer estimate and that we shall not be asked for another couple of million dollars for a supplementary-supplementary such as this.


Mr. ADSHEAD:: Approximately what
amount is for European war pensions and how much for the active militia?


John Warwick King: This amount is
for European war pensions and also the active militia, further amount required.


Herbert Bealey Adshead: What is the approximate amount of each?


John Warwick King: The item for
militia pensions is very small. The main amount is for European war pensions.


Edward Joseph Garland: Then why not strike out the words "active miltia?"


John Warwick King: They are included in the pension payment but the amount is very small. I have not the figures with me but I can assure my hon. friends opposite that it is very difficult to estimate our pension bill from year to year. It is changing and we have not yet reached the peak. I think it has been the policy of the department and the desire of the government not to appropriate huge sums of money or more than is required, but rather to vote, as has been done each year, a supplementary item at the end of the year covering the deficit.


Mr. McGIBBON:: The minister ought to come to parliament with a little more information than that. He says: I think this and I think that; I can assure this and I can assure that. When it is all boiled down, he is not giving us any information at all. It is ridiculous that the Board of Pension Commissioners-and I do not blame the minister altogether for this-should not be able to make a more definite estimate.


John Warwick King: I do not think so.


Peter McGibbon: I think it is. They come before the pension committee making certain suggestions and they claim to be able to tell us almost exactly what they are going to cost. If they can forecast the cost of these in-

creased expenditures, they have the normal expenditures stabilized, so how is it they are two or three million dollars out? Are the expenses of the Hunter commission included in this?


John Warwick King: No.


Peter McGibbon: We hope to run across them somewhere, because we should like to discuss the commission.


James Alexander Robb: My hon. friend is quite right. We should have a little more detailed information on this item. I observe one item covering European war pensions short on account of retroactive awards. How can a government provide for retroactive awards?


Henry Herbert Stevens: How much is that?


James Alexander Robb: About $115,000. It is not exactly fair to blame the minister or the department for estimating short. When these estimates come before the treasury board, it is natural that we hold them down to the last dollar based upon the previous year's experience. The pension board are in operation all the time; they increase these pensions from time to time, and that is why there is a shortage at the end of the year. We can pay this only by the authority of parliament. My friends are quite right in stating that more detailed information should be given.


Henry Herbert Stevens: That is the point. We are not complaining about paying out legitimately money for pensions. The minister has given us one item. He must have under his hand an explanation of this appropriation. Can he give us the other items?


James Alexander Robb: That is all the information I have.


Henry Herbert Stevens: When the cabinet prepared these supplementary estimates they had before them from each department the details and the reasons why these supplementaries were required. Parliament is entitled to an explanation such as the minister has received from the different departments. This is a large item and we are entitled to know definitely what it consists of.


Robert James Manion: Retroactive awards take
place every year. I presume from the second year onward there have been retroactive awards. Again and again pensions are demanded and refused for a year or two; then they are granted and the commission grants the retroactive effect. Therefore some such figure as that should be included in the estimates each year. This item might be held

Supply-M iscellaneous
over for a little while in order to see if the minister cannot give us more information and we can go on with some of the smaller items.


Mr. EDWARDS (Frontenac):: Those who
prepared this amount of $1,600,000 for insertion in the supplementary estimates mu3t have had some information and details on which they based the amount. Either that is the case or they just guessed at the amount and said: We will ask for $1,600,000; we do not know whether it will be that much or $10,000,000. I assume they had some definite information on which they based this amount and the committee is entitled to know what that definite information is. I should also like to know how much will be paid out in the fiscal year ending the last of this month in actual money in pensions to soldiers and how much by way of administration.


James Alexander Robb: I shall have the question of
my hon. friend noted, and we will endeavour to get the information. I should like to have it myself. A moment ago I said that of this amount $115,000 was for retroactive awards. I find that $115,000 is in another item. I suggest that this item stand until the minister endeavours to obtain some more information.


George Halsey Perley: Will the minister let us have the figures as to how much is for European war and how much for active militia?


Edward Joseph Garland: Will letting the item stand injure any interested soldier?


James Alexander Robb: We will pick it up again before we go out of committee.
Item stands.
Railways and Canals-chargeable to income- canals-Sault Ste. Marie-compassionate allowance to the widow of the late William H. Tilley, who was drowned while on duty at the canai, September 23, 1916, $1,000.


Mr. CARMICHAEL:: Why is this payment being made more than eleven years after it was incurred?
Hon. CHARLES A. DUNNING (Minister of Railways and Canals): I can speak only of my connection with it. The facts were brought to my attention during the past year and on reviewing them I thought the widow, who is now seventy-three years of age, was entitled to some consideration on account of the death of her husband under these tragic circumstances. I am therefore recommending the payment. I had not heard of the matter until this last year.


[Stage Direction]
Item agreed to.
Welland canal-Compassionate allowance to Stanley Sleek, minor son of Mrs. Marcelle Sleek, who was accidentially injured on the Welland canal bridge in the city of St. Catharines on May 28, 1927, and for payment of said allowance to F. E. Hetherington (solicitor) as trustee for and on behalf of the said Stanley Sleek, $1,000.
Herbert Bealey Adshead: Will that $1,000 be the
amount Mrs. Slack will receive, or will the solicitor's fees be deducted from that?


Mr. DUNNING:: In connection with this
boy I took a personal interest in the disposition of the moneys. I can assure my hon friend the solicitor in the case gave his services either freely or at a very nominal figure, I forget which, and a trust arrangement has been made so that the education of the boy will be provided for out of this sum of money.


Archibald M. Carmichael: There does not seem to be a fair comparison between this item and the previous one. The previous item allows $1,000 for the death of an adult. This item allows $1,000 for an injury to a minor son. Just how serious was the injury?


Charles Avery Dunning: It was necessary to
amputate the boy's foot.


John Wesley Edwards: Do I understand that the government feels itself responsible for that injury to the boy?


Charles Avery Dunning: No. The allowance is
a purely compassionate one. There is no admission of responsibility. The circumstances were such that the term compassionate allowance is the best I can use to explain the matter.


John Wesley Edwards: My reason
for asking the question is that if any responsibility in any way attaches to the government or to the department over which my hon. friend presides, $1,000 is no compensation at all.


Charles Avery Dunning: I can assure my hon.
friend that any case where even the remotest responsibility attaches to the department always receives my most sympathetic consideration. I do not want to discuss the details of this case, but I can assure my hon. friend that the boy was injured on the swing bridge, and he had no business to be where he was. The case has been settled very satisfactorilj' from the point of view of all those people in the district who took an interest in the case.
Supply-Miscellaneous


Peter McGibbon: It is one more humane act on the part of the minister.


Charles Avery Dunning: I would not say that,
but rather on the part of parliament.


[Stage Direction]
Item agreed to.
Board of Railway Commissioners for Canada -maintenance and operation - additional amount required, $15,000.
Henry Lumley Drayton: Would the minister explain this?


Charles Avery Dunning: This further sum of
money is required due to two major hearings by the board. One of them was the general rates inquiry', which occupied sittings throughout Canada during 113 days. The record comprised 13,500 pages, and the additional expenditure involved covers evidence, $5,731.50; translation, $1,117.25; printing, $2,652.20; additional travelling expenses, $2,716.30. That comes out of the $15,000 chargeable directly to extra expense incurred in winding up the general rates inquiry. There was also an extensive inquiry into the affairs of the Bell Telephone Company, which included extra expense in taking evidence, printing, and so forth, to the extent of sixteen volumes of the records of the board, costing about $2,695.50. That makes up the amount which we are asking here.


Henry Lumley Drayton: What was the
total vote?


Charles Avery Dunning: In the main estimates of last year?


Henry Lumley Drayton: Yes.


Charles Avery Dunning: I have not that before
me.


Henry Lumley Drayton: The money has gone anyway.


[Stage Direction]
Item agreed to.
Ocean and river service-miscellaneous and unforeseen expenses-further amount required, $500.
Henry Herbert Stevens: What is this for?


Pierre-Joseph-Arthur Cardin: This is required to cover
small unforeseen expenditures, such as legal fees and small repairs to wharves which we control.


[Stage Direction]
Item agreed to.
To provide for the establishment of a patrol service to investigate the conditions of navigation in Hudson strait and Hudson bay- further amount required, $200,000.
Mr. CAHAN:: This is to provide for the
establishment of a patrol service to investigate the conditions of navigation in Hudson

strait and Hudson bay. At the last session of parliament a sum was voted for this patrol service which has been continued during the autumn months up until the present time. The department must now have very complete reports with regard to the conditions which were encountered in the Hudson bay and strait during the autumn and early winter, and I submit that parliament is entitled to know the facts as they are within the knowledge of the department over which the Minister of Marine presides. I think we should have some statement to the house in regard to the matter.


Pierre-Joseph-Arthur Cardin: The report of the officer
in charge is practically completed, and I shall be in a position in the course of a few days to table it. The printing of the report is practically completed.


Mr MANION:: What was the amount in
last year's estimates for this work?
Mr. CARDIN. The amount last year was $850,000.


Robert James Manion: That was all used, plus
this $200,000?


Pierre-Joseph-Arthur Cardin: Yes.


Robert James Manion: That makes a little over


Pierre-Joseph-Arthur Cardin: Yes, $1,050,000.


Henry Lumley Drayton: Why should not that be looked after in the usual way by governor general's warrants? Is no attempt at all being made to keep down departmental expense? Are they allowed to overdraw just as much as they want? This is a big overdraft, $200,000, with a main vote of over $800,000.


James Alexander Robb: It is not the fault of the
department that we did not put through governor general's warrants. When the matter was called to the attention of the department, it was so near the time of the assembling of parliament that we thought, and I think quite properly, that parliament should vote the money.


Henry Lumley Drayton: It does, in any event, whether it is done by way of governor general's warrants or not. I understand that this money has been paid. Where did it come from? By what legerdemain have we got $200,000 from nothing?


Pierre-Joseph-Arthur Cardin: Most of the accounts remain to be paid. Certain wages have been paid out of some other votes, and we want to reimburse them.

Supply-St. Lawrence Ship Channel


Henry Lumley Drayton: I was quite sure that that would be the answer. We have departmental juggling between one vote and another for the purpose of running along.
I do not know which is the worse, to take money voted for one purpose and use it for another purpose, so as to get along without governor general's warrants, or to pay these overdrafts openly and above board.


Henry Herbert Stevens: Was not one of these
camps or posts destroyed by fire?


Pierre-Joseph-Arthur Cardin: No.


Henry Herbert Stevens: I heard that one camp
Pad been destroyed by fire.
Mr. DUNNING. I think my hon. friend is referring to one of the buildings at the old port of Nelson which was burned a couple of months ago; the fire was reported in the press.


Henry Herbert Stevens: It was one of the patrol camps, I understand.


Charles Avery Dunning: My hon. friend is wrong there.


Henry Herbert Stevens: I am very glad to know
it.


Mr. ARTHURS:: As this amount involves altogether an expenditure of over $1,000,000,
I think we should have some details of the expenditures.


Pierre-Joseph-Arthur Cardin: I shall be glad to give the committee a complete list of all the expenditures under the vote of $860,000 of last year when we come to the main estimates.


Mr. KAISER:: Does this include the expenditure on the aeroplanes?


Pierre-Joseph-Arthur Cardin: Yes.


Thomas Erlin Kaiser: Are we getting any reports from them?


Pierre-Joseph-Arthur Cardin: The report is practically
completed and will be tabled in the course of a few days.


[Stage Direction]
Item agreed to.
River St Lawrence ship channel-maintenance and operating dredging fleet - further amount required, $400,000.
Charles Hazlitt Cahan: In connection with this vote for the river St. Lawrence ship channel, and in order that the minister may prepare himself somewhat for the discussion on the estimates for the ensuing year, I wish to call the attention of the committee to certain facts in regard to navigation through the ship channel of the St. Lawrence river. When the later work was undertaken some time ago, it was the intention of the government, as stated, to make a depth of 35 feet for navigation up to and into the harbour of Montreal. From the engineering reports which are now available, it appears that the prevailing levels in Montreal harbour are now about three feet lower than they were at the time when the datum was established for the 35 foot depth. This lowering of the water level in the Montreal harbour is alleged to be due largely to the diversion of water through the Chicago drainage canal, to some extent to a decrease in run-off, and to the channel dredging at various points which facilitates the more rapid flow of the river. If there is a decrease in depth of three feet in comparison with the datum fixed at the time this work was projected, and if the dredging of the river facilitates a more rapid flow of the water, it would appear that the expenditure which we are making on the development of that river is not resulting in the advantages which were estimated at the time this later project was undertaken.
There is no doubt that the navigation depth of 35 feet in the channel will merely meet the existing requirements. For instance, I have before me a statement of the vessels which now make their destination at Montreal during the season of navigation, and I will read it into Hansard:
Canadian Pacific ss.
Vessel	Gross tons	DraughtMontrose.	.. .. 16.402	27' 6"Melita. . .	
15,183	34' 4"Montcalm.	
16,418	27' 6"Minnedosa	.... 14,000	34' 4"Metagama	. .. . 12.400	27' 7"Montclare	.... 16,314 Robt. Reford Co.	27' 6"Athenia..	.. .. 13.465	27' 81"Letitia..	.. .. 13,475	27' 81"Alaunia..	. 14.030	32' 2"Antonia..	.. .. 13,867	29' 5"Andania..	.. .. 13,950	29' 51"Ascania..	.. .. 14,013	30' 11"Aurania..	.. .. 13.984	30' 111"Ausonia..	.. .. 13,912 White Star Line	30' 11"Doric.. .	
16.484	33' 111"Regina..	
16,500	33' 111"Albertic..	.. .. 18,940	30' 10"Megantic.	
14,878	27' 6"Calgaric..	.. .. 16,063	32' 71"In the season which we are	approaching
the new White Star liner Laurentic of 19,000 tons will come to Montreal. The new Canadian Pacific liners, the Duchess of Athol and the Duchess of Bedford, each of 20,000 tons, will also come into the St. Lawrence trade.


Mr. BOYS:: What is their draught?
Supply-St. Lawrence Ship

Channel


Charles Hazlitt Cahan: I have not their actual draught, but I am told it will exceed the draught of any of the ships which I have already mentioned.
_ Mr. DUFF: Did those vessels enumerated in the list enter the port of Montreal last year?


Charles Hazlitt Cahan: Yes. I am not dealing with the ships that made their destination at Quebec. The Empress of Australia, of 22,000 tons, is now compelled to make her final destination at Quebec, being unable to come up the river to Montreal. The number of these ships which are now able to come to Montreal, at some seasons of the year, owing to the decrease in the depth of the river, are compelled to enter the port with depleted cargoes, and to sail again only partially loaded. So the reduced depth in the river means a, very great loss indeed to the shipping companies, and also to the traders and merchants of Montreal who are compelled to pay a higher freight rate when ships are not able to take a full cargo.
This 35-foot channel which we are projecting will not be, under present conditions, a 35-foot channel at all. Furthermore, I notice in their report that the engineers, who have been studying the development of the navigation on the St. Lawrence river and Great Lakes, suggest that compensating works should be provided in lakes Ontario and Erie and at other places to restore the levels of lakes Michigan and Huron, and lakes Erie and Ontario further down, which have been lowered by the diversions already made at Chicago and elsewhere. Engineers with whom I have come in contact, who are not partisans of one scheme or another, but who have studied this question, advise me that the construction of these so-called compensating works as proposed, either in connection with the levels of lakes Michigan and Huron or the levels of lakes Erie and Ontario lower down, will still further tend to decrease the depth of water in the harbour of Montreal bo the construction of these compensating works further west will tend to decrease the depth of water actually available for navigation at those seasons of the year when a certain depth is requisite for the shipping of Montreal. Therefore I sugest that when we come to deai with the main estimates in which there is an extra appropriation of something like $1,000,000 under item 220 for the construction and regulating of retaining dams m the St. Lawrence river, and a further appropriation under item 216 of $373,000 for the maintenance and operation of a dredging fleet

we should have a full and complete statement from the minister regarding the works which are now in progress, the extent to which the government proposes to carry on these works, the result with respect to the depth of water available for navigation in the harbour of Montreal and in the river, and some evidence, if it is available, to reassure us that the work of dredging which is being carried on is not actually resulting in further depleting the water which is required in the harbour of Montreal at certain seasons of the year to accommodate shipping which makes its destination there. I do not expect the minister to go into the larger question of the diversion at Chicago w'hich has resulted in such serious loss to Montreal, because I infer that this is a matter which will be dealt with by the Prime Minister or some other member of the cabinet when we are discussing the St. Lawrence navigation scheme which has been suggested by the board of engineers. But I do call the attention of the government as such to the fact that there is an opinion, clearly expressed and apparently well substantiated by the facts, that the projects of compensatory works which have been suggested in connection with the St. Lawrence waterways scheme, the larger scheme will simply result, in robbing Peter to pay Paul: they will diminish the depth avaliable for navigation in the port of Montreal in order to create and retain a greater depth of water in lakes Ontario, Erie, Huron and Michigan. The desire to ascertain the facts-a legitimate desire on the part of those interested in shipping in Montreal-is so great that, I suggest, the minister should prepare himself to give us a clear and definite statement regarding these matters when the estimates for the year are brought down. I do not wish to prolong the discussion on this point, but I thought it wise to call the attention of the minister and of the government to these facts.


Mr. POWER:: The solution of the difficulties suggested by my hon. friend (Mr. Cahan) would seem to me to be a very easy one: if the boats cannot go to Montreal, let them stop at Quebec. For fifty years or more we have been endeavouring to interfere with the course of nature by dredging the channel between Quebec and Montreal. As the hon. member himself says, it is extremely doubtful whether these dredging works have served the purpose which it was sought to attain when the dredging was begun. We have had, first, an agitation for a twenty-five foot channel to Montreal, then for a thirty foot channel and now for one of thirty-five feet. People who understand these things have stated very

Supply-St. Lawrence Ship Channel
definitely that there is a limit to which one can dig in a river such as the St. Lawrence; it is stated that increased dredging tends to allow the water to run off more rapidly than it would otherwise.


An hon. MEMBER:: The sea will flow
back.


Charles Gavan Power: The sea flows back up as far as Quebec, I may tell my hon. friend, and not as far as Montreal. That is one of the natural advantages with which Providence has endowed Quebec. When ships of draught such as mentioned by my hon. friend-ships of thirty and thirty-two feet-are proceeding in a narrow channel with only perhaps from six inches to a foot of water between the keel of the vessel and the bottom, there is a natural tendency to drag from the sides of this narrow channel all the silt and mud and so constantly to refill that portion which has been dredged. This, I think, has been stated by engineers to be one of the reasons why it is almost impossible to maintain a constant depth of thirty-five feet in this channel. Then, owing to the advance of settlement in the upper reaches of the river and the lack of storage facilities always due to vegetation and forests, we find that every spring the water runs off much more rapidly. This is, of course, far more noticeable in the smaller rivers which serve as feeders to the main body, the St. Lawrence river; but the same action is felt in the St. Lawrence also. It is true, perhaps, that the Chicago diversion has had some effect, but generally speaking it will be found, I think, that the principal reason why the St, Lawrence is lower at certain seasons of the year now than it was formerly is that the land has been cleared at the head waters which flow into the river, so that naturally the water flows off much more rapidly.
I had not intended taking part in this discussion, but I want to assure my hon. friend that there is being constructed at Quebec a magnificent port capable of accommodating all the vessels of the type he mentions, and many more, some up to forty feet, and if the hon. gentleman will be prepared to accept, as the lot of the harbour of Montreal, the lot which Providence no doubt intended for it, that of receiving only smaller vessels., and leaving to Quebec the lot of receiving the larger vessels, not asking parliament to intervene in the workings of nature, then possibly we might all get along better.


Thomas Cantley: I have not the slightest objection to the hon. member (Mr. Power) having the mail boats stop at his Indian village, but I want to point out that the depth of
water in the St. Lawrence is a matter of considerable importance to Nova Scotia. We cannot unload, at Quebec, coal from Nova Scotia destined for Montreal; we must get the boats to Montreal.


Charles Gavan Power: I do not think any of the small vessels carrying coal-vessels of ten, twelve and fifteen thousand tons-will have any difficulty reaching Montreal. It is the large transatlantic vessels having a draft of twenty-eight and thirty feet which will find it difficult as they have done in the past.


Thomas Cantley: I quite understand that. I may tell the hon. gentleman that I have landed from ocean liners at Quebec and I have also gone up to Montreal on liners and on coal boats. The difference in cost between transporting coal in vessels of eight and ten thousand tons capacity and in vessels of twenty thousand tons is very material.


Charles Gavan Power: Are there any vessels of
twenty thousand tons transporting coal from Nova Scotia to Montreal at the present time?


Thomas Cantley: No, but there ought to
be. Before boats of that size will be constructed for the trade the people who will have to operate the boats must know that the required water will be provided and maintained. We have coal boats to-day of 27 and 28 feet draft, and even they are in trouble. I wish to point out to the house that this is not entirely a matter of providing water for the mail boats; there are other interests involved, the only advantage we in Nova Scotia receive from the whole St. Lawrence scheme of navigation is the opportunity to send our coal to Montreal. Hon. members must not think that the city of Quebec and the city of Montreal are the only places interested in the navigation of the upper reaches of the St. Lawrence river.


Mr. ROSS (Kingston):: Will the minister
explain whether this amount is for the general dredging fund or if it is ear-marked for any particular object, because there is a certain section of this country even above Quebec and Montreal which is interested in the development of the St. Lawrence.


Pierre-Joseph-Arthur Cardin: This amount is intended
for the general work of deepening the St. Lawrence channel, and in part it is necessary at present because we have increased the salaries of the men working on the dredges and tugs connected with this work. Last year we provided for an increase to a certain class of navigators employed on what we call the Dominion steamers, those ships which are used for the maintenance of the lighthouses,

Supply-St. Lawrence Ship Channel
but having made that increase which was provided for in the main estimates we thought it would be only fair and just to extend it to all the men working on the dredges and tugs which are used in this work.


George Halsey Perley: What part of this $400,000 is accounted for by increased salaries?


Pierre-Joseph-Arthur Cardin: They account for $100,000 In addition, certain units of the fleet required extensive and unexpected overhauls during the year, which necessitated further unforeseen expenditures approximating $300,000, which this proposed supplementary appropriation covers.
In connection with the main point raised by the hon. member for St. Lawrence-St. George, speaking offhand I might say that the engineers of the department in charge of the work are under the impression that we can deepen the channel of the St. Lawrence river profitably for some time to come; we have not reached the point as yet where dredging ceases to be profiable. We can deepen the channel to 35 feet without seriously interfering with the water in the port of Montreal and without causing a greater or more rapid flow of the water in the river. As a matter of fact, the first program which was undertaken to deepen the channel to 30 feet is practically completed, and in the course of probably seven years we will have the channel 35 feet deep from Montreal down. I might emphasize that fact, that the engineers state that we can dredge the channel to a depth of 35 feet without interfering with the water in the port of Montreal. I am not quite clear on the matter, but it seems to me that the deepening of the water in the port of Montreal is a matter under the control of the Montreal harbour commission rather than the Department of Marine and Fisheries. I am not quite sure, but that is my impression at present. In the main estimates to which my hon. friend has referred we are providing for an expenditure of about $1,000,000 for the construction of submerged dams below Montreal, with a view to raising the water in that port and removing the necessity for further dredging. The engineers have reported that if we could construct two or three submerged dams, one below Montreal and one in the vicinity of lake St. Peter, we would raise the level of the water in the port of Montreal by nearly two feet. Of course, when we come to the discussion of the main estimates I will be in a position to give all these details which have been asked for by my hon. friend from St. Lawrence-St. George.
With regard to the safety of navigation between Quebec and Montreal, I may say
[Mr. Cardin-1
that navigation on that section of the river is quite as safe as navigation from Quebec down to the gulf, and in fact the accidents are not so numerous in the section of the river from Quebec to Montreal as they are from Montreal down to the gulf. The channel is very safe, and I have said before that the insurance people are not fair with regard to the St. Lawrence route. I maintain that the rates are too high, because the risks are no greater on the St. Lawrence river than on any other water course in the world. The government of Canada have spent large sums to establish buoys and lighthouses on this route, and I am sure it was a source of great comfort to the Canadian people when a high officer of the American government stated last year that the St. Lawrence route was the best inland route existing in the world. I think the money spent in deepening the St. Lawrence as much as can be done profitably is a wise expenditure, because up to the present navigation on that river has proven very beneficial to the country at large. It has helped develop one of the greatest ports in the world, and the benefits which have been derived by Montreal and by the whole country will amply justify the expenditure which has been made in that connection.
As far as the refilling is concerned, there is none to speak of. The nature of the soil which composes the bed of the river is such that when the dredging is done practically no refilling takes place, and the money we are expending now in deepening that channel is amply justified by the benefits which have been derived.
Then the hon. member for St. Lawrence-St. George referred to the lowering of the water by three feet in the port of Montreal. I am not prepared to agree that that is the situation. If my memory serves me right, certain engineers have contended that the diversion at Chicago does not very much affect Montreal. It may be affected in some way but at the most it will be a matter of a very few inches That, however, is a matter which is not quite clear, and there are expert opinions on both sides. At all events, may I repeat that I will be very glad to gather all the information in the department and give it to my hon. friend and to the house when we come to the main estimates.


Charles Gavan Power: Just a word to correct
what was probably a slip on the part of the Minister of Marine and Fisheries. He made perhaps somewhat invidious comparisons between the casualty rate of vessels below and above Quebec. In that connection

Supply-St. Lawrence Ship Channel
I would simply say that if anything happens to the vessels below Quebec it is not due to a lack of water in the channel, and there never has been any complaint that it was impossible to load vessels at Quebec to their full capacity. Possibly if the same amount of money had been expended in connection with lighthouses and other aids to navigation between Quebec and the sea as has been expended in dredging and similar work be-, tween Montreal and Quebec, the accidents would be much less numerous. With reference to the question of refill that, as the minister has said, is a matter of opinion, and as neither of us is a navigator or an engineer-


Charles Avery Dunning: You are a navigator.


Charles Gavan Power: I am not a navigator on this occasion. Possibly as neither of us is an engineer or a navigator both our theories may be wrong. The passage of the vessel through the mud and silt is of a nature to draw those materials from the sides into the centre of the channel, particularly in places where the channel is so very narrow that sometimes two or three ships cannot pass abreast.


Henry Herbert Stevens: What do they do, do they jump over each other?


Charles Gavan Power: They almost jump over each other. It is apparent to everyone that vessels of such weight and displacement must inevitably draw silt from the sides of the channel; but in the case of what may be regarded as the floor of the channel, if the material is so bard that none will be drawn up, I submit it must be too costly to dredge. In either case I very respectfully submit to the Minister of Marine and Fisheries that he should make out a somewhat stronger case, and the hon. member for St. Lawrence-St. George (Mr. Cahan) should have something more to say, before endeavouring to take away from Quebec the few ships which make that port their terminus.


John Wesley Edwards: Will the
minister tell me if any part of this vote is to be applied to dredging between Kingston and Montreal, or is all to be spent below Montreal?


Pierre-Joseph-Arthur Cardin: All below Montreal. The St. Lawrence above Montreal is under the control of the Department of Public Works.


John Wesley Edwards: This item would not in any way affect the determination of where the terminal is going to be?


James Alexander Robb: Not at all.


Mr. McQUARRIE:: Is it possible for the minister to gjve us some further information with respect to the increases in wages? To the crews of what vessels do these increases apply, and what is the nature of the work the men are doing?


Pierre-Joseph-Arthur Cardin: The house will recall that last year I asked for a certain amount to equalize the pay received by the captains, engineers and crews of all our vessels. The officers and men of our vessels in British Columbia were receiving higher pay than the rates received by the officers and men on our vessels in eastern Canada, and particularly on vessels employed on the St. Lawrence. I asked for a certain amount for the purpose of increasing the salaries of the men working on what we call the Dominion steamers and it was granted. The Dominion steamers are supposed to look after the maintenance of the lighthouses and buoys on the St. Lawrence river. After these increases in salaries had been granted representations were made to us that the wages of the captains, engineers and crews of the dredges and tugs used on the St. Lawrence channel should also be increased to the same rates. We thought this request was absolutely justified, and we decided to increase all salaries on the dredges and tugs working on the St. Lawrence river. That is the reason for the increase granted to the officers and men of these ships operating on the St. Lawrence.


William Garland McQuarrie: The increase was granted in order to bring their pay up to the British Columbia rates?


Pierre-Joseph-Arthur Cardin: Precisely.


William Garland McQuarrie: These men do not
come under the Civil Service Commission?


Pierre-Joseph-Arthur Cardin: Under the law the captains, engineers and crews are not under the control of the Civil Service Commission. The majority of them are part time employee*.


William Garland McQuarrie: Are they temporary employees?


Pierre-Joseph-Arthur Cardin: They are seasonal employees.


William Garland McQuarrie: We have the same thing in British Columbia, and there is quite an agitation in that province on the part of these employees to be placed under the Civil Service Commission so that they would enjoy the advantages of superannuation, and other benefits. Has that matteT been considered by the minister?



Supply-St. Lawrence Ship Channel


Pierre-Joseph-Arthur Cardin: Representations have been made to the department that the. captains and engineers particularly on these boats should be .given the advantage of the Superannuation Act, but the matter has not been decided yet; it is under consideration.


William Garland McQuarrie: Why the captains and engineers and not the rest of the men employed on these vessels?


Pierre-Joseph-Arthur Cardin: The captains and engineers, in a sense, are more permanent employees than the ordinary sailor. After a vessel has been laid up for the winter, very often these officers look after it and direct the repairs which may be required while the ship is laid up. That is why a distinction is made between these classes of employees.


William Garland McQuarrie: I know that in British Columbia some of the men have been in the employ of the government for ten or fifteen years, and are still temporary employees. They are not entitled to any superannuation.


Pierre-Joseph-Arthur Cardin: No.


William Garland McQuarrie: They are not entitled to annual holidays which are allowed, I think, to the captains and the engineers. The ordinary sailor does not receive the same consideration at all that the captain or the engineer does. I suppose there is the same agitation in the east that there is in the west with respect to the matters of which I have spoken. I must say that with us there has been quite a strong demand that these men be placed under the Civil Service Commission. Another matter that has come up relates to certain men employed on these vessels having to work on Sundays. Does the same condition prevail in the east as in the west in that connection?


Pierre-Joseph-Arthur Cardin: Yes.


Charles Gavan Power: They work seven days in
the week.


William Garland McQuarrie: Contrary to the provisions of the order in council, without being allowed anything extra for working on Sunday?


Pierre-Joseph-Arthur Cardin: No, they are paid by the month.


William Garland McQuarrie: Has the attention of
the minister been directed to the order in council in that connection, which provides that [DOT] no man shall be employed on Sunday without being allowed off on another day or given compensation?
FMr. McQuarrie.]


Robert James Manion: Is it true, as some people
claim, that the Sundays are longer in British Columbia than they are in Quebec?


William Garland McQuarrie: I do not know why
they should be. Is the minister willing to discuss that matter?


Pierre-Joseph-Arthur Cardin: I am not in a position to
discuss the matter to-day.


William Garland McQuarrie: I notice that with us,
all these matters come under the Public Works department?


Pierre-Joseph-Arthur Cardin: Yes.


William Garland McQuarrie: Down in the east they come under the Department of Marine and Fisheries.


Pierre-Joseph-Arthur Cardin: Yes.


William Garland McQuarrie: Does that only
apply to the St. Lawrence?


Pierre-Joseph-Arthur Cardin: Well, the jurisdiction of
the Department of Marine and Fisheries extends only to the channel of the St. Lawrence from Montreal down to the gulf. The rest of the St. Lawrence is under the control of the Department of Public Works; and in British Columbia, as well as in the maritime provinces, that department looks after the dredging of the channels, the care of the wharves, and everything else.


Arthur Edward Ross: Do the vessels
engaged in dredging look after the lighthouses and buoys on the St. Lawrence river?


Pierre-Joseph-Arthur Cardin: No. We have special
steamers, called Dominion steamers, that look after the maintenance of the lighthouses and the providing of them with supplies. This appropriation relates only to the dredging fleet.


Arthur Edward Ross: That is why I am asking the question. The minister said that he had to increase the pay of the captains and others who look after the lighthouses and buoys.


Pierre-Joseph-Arthur Cardin: Their salaries were increased.


George Halsey Perley: Has this money
already been paid?


Pierre-Joseph-Arthur Cardin: Practically as far as salaries are concerned. Certain accounts for supplies and materials have not been paid.


George Halsey Perley: Last year we
voted 81,500,000 for this item and the increase is $400,000, or quite a large percentage. I am not objecting to the expenditure of the money if it was required for the purposes of the St.

Supply-M iscellaneous
Lawrence, but I should like to know how the department manages to spend such a large, sum in excess of the amount voted by parliament. The minister said on the previous item that the money had not been spent; that there were accounts to pay. As regards this item he says that the amount has practically all been paid out. It is quite evident that the work of dredging the St. Lawrence is done in the summer and it was stopped some three or four months ago at least. Therefore I should like to know why, the Minister of Finance knowing that, the Department of Marine and Fisheries should get such a large amount without a governor general's warrant to cover this sum which they have expended in excess of the amount voted by parliament.


Pierre-Joseph-Arthur Cardin: Frankly, I am not quite
clear as to the exact procedure which is followed by the accountants and other officers of the department, but I understand, as was indicated by my good friend a moment ago, they are taking an amount which is appropriated in one place and transferring it to another vote. Of course accounts for supplies and materials are not paid; payment has been delayed on these, but salaries have been paid out of money provided in some other vote.


George Halsey Perley: How much do
the unpaid accounts amount to under this item?


Pierre-Joseph-Arthur Cardin: I could not say at the
moment.


George Halsey Perley: Perhaps the Minister of Finance will explain how they are able, without a governor general's warrant, to spend this sum of money over and above the estimate voted by parliament.


James Alexander Robb: I am really unable to explain, but I repeat the statement made a moment ago that they urged the granting of a governor general's warrant after parliament had been called. We thought it was proper that they should wait until parliament met.


George Halsey Perley: This item of
$400,000 is a large item and the department must have known long ago they had overrun the amount voted by parliament. This cannot have happened in the last few days or just before parliament opened.


Pierre-Joseph-Arthur Cardin: I may add by way of
explanation that in an item that is voted by the house for certain things, an amount is included for wages and the balance is for materials. Probably the amount which was provided for materials and supplies was used for wages and we may be short on the money 56103-1114
necessary to pay for materials and supplies. Sometimes we may provide a certain amount we expect will be required for the repair of a boat and we discover later that the amount is not sufficient. That may be a reason why at certain times we have not enough money.


George Halsey Perley: I am not objecting to the expenditure. I suppose it was spent for purposes of the St. Lawrence river. I am objecting to the fact that the vote of parliament of last year has been over-expended by such a large sum as $400,000 apparently without any reference to the Department of Finance, or without the obtaining of a governor general's warrant.


[Stage Direction]
Item agreed to.	.
Fisheries-salaries and disbursements of fishery officers and guardians, fisheries patrol and fisheries protection services-further amount required, $50,000.
Henry Herbert Stevens: What is this for?


Pierre-Joseph-Arthur Cardin: Owing to unusually intensive salmon fishing in British Columbia where 2.252 more licenses for fishing were issued than in the previous year, it became necessary to use more boats and to employ more assistants than was expected; also particularly in the maritime provinces it was found essential to spend more than was expected in safeguarding sport and commercial fisheries. The expenditure at the end of February was practically SS'oOOOO; at least $60,000 will be required to meet the March accounts, making a total of $910,000, or $50,000 more than the appropriation.


[Stage Direction]
Item agreed to.
Labour - Annuities Act - further amount required, $15,000.
George Halsey Perley: We ought to have1 an explanation of this item.


Hon. PETER HEENAN (Minister of Labour):: This is chiefly due to increased:
business in selling annuities. This carries with it increased help and increased commissions. We have increased the business this year by 145 per cent and consequently the commissions have also increased somewhat.


Mr. CHAPLIN:: How much does 145 per cent mean in dollars? What is the business
this year?


Peter Heenan: Over three million dollars.


Mr. HEAPS:: How many people took out annuities last year?


Peter Heenan: I am not quite sure of the number last year. It was about one thousand altogether.
Supply-M iscellaneous


Abraham Albert Heaps: What was the total amount of money these people paid to the government?


Peter Heenan: I am not sure of that.


Abraham Albert Heaps: I want to find out how much it cost to get the business. This sum of $15,000 seems quite an amount of money to pay for it.


Peter Heenan: This is not all for commissions. Travelling expenses and expenses of that nature are included.


Abraham Albert Heaps: It was part of the cost of
getting the business?


Peter Heenan: Yes.


James Dew Chaplin: There must be some basis of profit in this business. What amount of profit would be made to justify the payment of $15,000 of expenses?


Peter Heenan: There are no profits made at all on the annuities. The system is run practically at cost, the government paying for the administration.


James Dew Chaplin: There must be something to balance the expenses of the proposition.


Peter Heenan: The government bears all the expenses.


James Dew Chaplin: If that is the position,
then the sooner the government gets out of the business the better.


Henry Lumley Drayton: I think when
the minister brings down his estimates and has his explanation before him he will find that the rates were based upon the actuarial rates as applicable in Great Britain and other places. The general feeling has been that the rates have been a little too high, and that we are not doing nearly as much business as we ought to be doing, and that the government is making a profit out of it, but I personally do not know.


George Reginald Geary: Is there any loading of the premium for expenses?


Peter Heenan: No.


Abraham Albert Heaps: I would ask the minister,
when he brings down his estimates, to provide the committee with the information we have asked for this afternoon.


Peter Heenan: Yes. I should just like
to make it clear that we do not load the premium for the expenses. The government bears the cost.


George Reginald Geary: What was the total estimate last year for which this is a supplementary?


Peter Heenan: The amount last year was $25,000.


George Reginald Geary: This amount is for acquiring new business?


Peter Heenan: Yes, practically.


George Reginald Geary: It has nothing to do with
carrying the old business?


Peter Heenan: No.


George Reginald Geary: How do you carry the old
business?


Peter Heenan: I did not expect this
matter to come up to-day; I would prefer to give a full explanation when the main estimates are under consideration. There are accounts in hand unpaid amounting to $3,200; advertising, $4,500; salaries $2,500; commissions to agents, $5,000.


Mr. STEWART (Leeds):: What is the scale of commissions paid to agents?


Peter Heenan: One per cent on one kind of annuity and two per cent on another. We have been paying one per cent for years to the postmasters.


Hugh Alexander Stewart: Have you agents in addition to the postmasters who are devoting all their time to this work?


Mr HEENAN:: Yes.


Hugh Alexander Stewart: And you pay
them on a commission basis?


Peter Heenan: Yes.


Hugh Alexander Stewart: And no salary?


Peter Heenan: We have trained a few
returned soldiers in the office giving them $120 or $125 a month while training and afterwards they go out and solicit business on commission.


Hugh Alexander Stewart: I quite approve
of the extension of the government annuity system. How many men are now working on commission and where are they working? Do they cover the whole of Canada?


Peter Heenan: We have one at Quebec,
Vancouver, Regina, Winnipeg, two or three in Toronto, and two in Montreal. We are gradually extending the system.


[Stage Direction]
Item agreed to.
Indians-New Brunswick - relief 

 further amount required, $3,000; medical attendance and medicines-further amount required, $3,000.
John Wesley Edwards: I notice
under several of these items an amount for the relief of destitute Indians. Has there

Supply-M iscellancous
been a general epidemic among the Indians all over the Dominion of Canada during the last year, or is this just the usual vote? Do we have to give this relief every year?


James Alexander Robb: As my hon. friend knows,
the Indians are the wards of the government, and we have to meet their requirements as they come along from time to time. I know that in preparing the estimates we keep the amount down as low as possible. The explanation I have before me, in the absence of the minister, is that this further amount is required for medical attendance due to the fact that the appropriation of $32,700 already granted is inadequate.


Mr. EDWARDS (Frontenae):: Perhaps my question might better come under item 392.


[Stage Direction]
Item agreed to.
Prince Edward Island

medical attendance and medicines-further amount required, $800.
Mr. QUINN:: Does this means that the
Indian population of Prince Edward Island is growing? The general population of the island is not. Why this increased appropriation for the Indians?


James Alexander Robb: The explanation I have before me from the department is that the amount already granted for medical attendance and medicine has been, exhausted, and this further amount is required to meet the expenses for the balance of the year. I have no information as to the numbers of the Indian population on the island, but my colleague the minister will be prepared to give that information when we come to the main estimates.


Felix Patrick Quinn: There seems to be no policy of retrenchment on the part of the government. Every year the amounts voted under these and other heads are increasing. If this government is in earnest in adopting a policy of retrenchment, it might as well begin here.


[Stage Direction]
Item agreed to.
Ontario and Quebec-hospitals and medical attendance-further amount required, $8,000; repairs to roads and bridges and drainage- further amount required, $2,000.
Felix Patrick Quinn: I register the same objection against this item. The Indian population is not increasing in Ontario and Quebec, and why should there be an increase in the vote?


James Alexander Robb: The memorandum I have before me states that $8,000 is required to complete the plant and bnild an ice house in connection with the hospital which is being constructed on the Six Nations reserve. The amount of $19,030 has already been voted for
this purpose. The amount of $2,000 is required to compensate the Indians for lands that have been taken in connection with the construction of a highway through the Caughnawaga reserve.


[Stage Direction]
Item agreed to.
Manitoba, Saskatchewan, Alberta and Northwest Territories-supplies for destitute Indians -further amount required, $40,000; hospitals, medical attendance and medicines *- further amount required, $30,000.
Felix Patrick Quinn: I register the same Objection here against increasing the votes in this or any other branch of the government.


James Alexander Robb: The appropriation of $163,-
450 for providing supplies for destitute Indians has been exhausted, and a further amount of $40,000 is required for this purpose. An appropriation of $35,000 was voted to establish a hospital at Isle a la Crosse, but owing to difficulties of operating in that remote region the cost has exceeded the appropriation, and the department estimates that $30,000 is required to complete the work.


Alexander McKay Edwards: Is this vote for destitute Indians something that we are up against. every year? Are we up against the same thing so far as the Indians of the west are concerned, or have we to make an appropriation every year for destitute Indians in the prairie provinces and British Columbia? If it is an unusual case, what has brought it about?


Charles Avery Dunning: Mr. Chairman, the Minister of the Interior (Mr. Stewart) is not present, but as I am somewhat familiar with the situation which arises in the northern part of the prairie provinces, I may be permitted to answer my hon. friend. He will notice that this vote also includes the Northwest Territories. While within the prairie provinces this destitution on the part of the Indians cannot be said to be of regular occurrence. there may be in any area a greater or less degree of it. depending sometimes upon the extent of forest or prairie fires, sometime? upon the movement of game, and upon othes factors. When I was at Churchill last summer I saw a band of Chipewayan Indians- probably the furthest north Indians we have. They were in pretty poor shape, the preceding winter having been bad for them, and they were anxiously awaiting the incoming Hudson bay steamer in order to get the wherewithal to carry along. In fact the Hudson's Bay Company had given them a considerable credit in advance. They are not a very provident people. I am not now speaking of the British Columbia tribes; the hon.
Supply-Miscellaneous

members from that province know that the situation there is somewhat different. But in the Northwest Territories and the extreme north of the prairie provinces they are not nearly as self-sustaining as the Indians further south in the same provinces.


John Wesley Edwards: Do they provide food for themselves by raising com?


Charles Avery Dunning: Not that far north; they do nothing in the way of farming or tillage. In the southern parts of the prairie provinces the Indians engage in farming quite extensively under the Department of Indian Affairs; but the northern tribes live in a primitive fashion, hunting and fishing, and do not put aside from a season of plenty anything to provide for a season of scarcity. You may have destitution in one tribe, and another tribe fifty miles away may be enjoying plenty during the same season.


Henry Herbert Stevens: I wish to draw the atten-of the Minister of Finance to a rather striking feature of this vote. I am not complaining of providing the necessary funds to look after these destitute Indians. The Minister of Railways (Mr. Dunning) suggests, and I have no doubt in perfectly good faith, that there may be a bad season when the vote would be overtaxed. In this case we are dealing with a supplementary estimate of $40,000 for supplies to destitute Indians. If the minister will turn to next year's estimates he will find that the department has provided for an increase in that vote of $40,000. In other words, as soon as parliament grants assistance for a year, that amount is carried in as the minimum for next year, and at the end of next year the department comes along for a further increase, and I suppose it goes on indefinitely. That is one of the things that governments must watch. The Minister of Finance and the Minister of Railways and their colleagues will, I know, agree with me that after all it is the duty of parliament to criticize these things.


Charles Avery Dunning: That is right.


Henry Herbert Stevens: Here we are faced with a glaring example of what I have referred to. The department does not know what it will require next year any better than it knew last year, but it puts in this vote an additional $40,000 for supplies to destitute Indians, which is the exact amount it is now asking in the supplementaries for the present year; and under hospitals the department has asked for an additional $20,000 for next year. I think the minister ought to be prepared to

redluce that vote when we come to it, because it looks to me as if we were just providing a basis for the continued increase of these items.


Charles Avery Dunning: My hon. friend speaks quite sympathetically with respect to the government's duty in relation to the various departments. Those of us who are members of the treasury board have occasion to watch the kind of thing to which he refers. But I might point out that there is criticism from two angles. A little while ago there was criticism with respect to the $1,600,000 asked for pensions. I am in a position to speak with knowledge that that $1,600,000 vote comes about by reason of the treasury board last year having taken precisely the attitude that my hon. friend says, and I think very properly, we should take in endeavouring to hold these votes down. The same is true with regard to the item now before us. I may say by way of explanation, in order that we may be fair to all departments, that the treasury board of the present government in reviewing the estimates looks back over the experience of the preceding five years in connection with each one of these votes. I presume that when we come to the main estimate to which my hon. friend refers my colleague will be here and will be able to give him full information about it. But I thought it would be of interest to the committee to know that in dealing with the estimates generally the treasury board takes that course.


John Wesley Edwards: What is the Indian population?


James Alexander Robb: I have not those figures. They will be available on the main estimates.


[Stage Direction]
Item agreed to.
British Columbia-relief to destitute Indians 

further amount required, $5,000; medical attendance, medicines and hospitals-further amount required, $15,000.
James Alexander Robb: The additional amount of $5,000 required for relief is to supplement the vote of $45,000 already granted which, it is explained, is inadequate. The amount of $106,700 already granted for medical attendance is insufficient, and the department states that $15,000 additional will be required.


Thomas Cantley: Mr. Chairman, may I ask how the Indians in Nova Scotia are looked after? Nothing is here provided for them.


James Alexander Robb: There are no Indians in Nova Scotia.

Supply-M iscellaneous


Thomas Cantley: Kedus, ukwis Micmae soolajookun welos putawa sesmogun castome tamawa seowwn-Yes, yes my son Miemac needs his food, tea, sugar, molasses, tobacco, many things.


[Stage Direction]
Item agreed to.
Soldiers' Civil Re-establishment-unemployment relief-further amount required, $200,000.
Henry Lumley Drayton: Mr. Chairman, I have no doubt that this item is absolutely necessary, and I have no doubt also that if I had been here at the time I would have found that representations were made that the assistance afforded by the main estimates was entirely inadequate. But I think the committee should get some explanation as to where this unemployment exists, and in what lines of activity.


Hon. J. H. KING (Minister of Soldiers' Civil Re-establishment):: This item is to assist pensioners who are out of employment. It has been voted from year to year, and a supplementary is not unknown; in fact each year the vote has been supplemented because over expended. The expenditures have been made- largely in Montreal, Toronto, Winnipeg, Edmonton and Vancouver. Last year about $400,000 was expended. We expect it will run very nearly the same this year. In addition to the vote of $250,000 we are asking for a supplementary of $200,000. I understand that on March 1 this year we had just $50,000 left, which will probably take us through.


Henry Lumley Drayton: Out of this supplementary?


John Warwick King: Yes; that will
probably take us through to the end of March, when the relief ceases for the year.


Henry Lumley Drayton: Perhaps my hon. friend will explain that item a little more clearly. In the first place he had a vote of $250,000 in the main estimates, and that is all spent?


John Warwick King: Yes.


Henry Lumley Drayton: Then we have a supplementary of $200,000 of which $150,000 has already been spent-


John Warwick King: Yes.


Henry Lumley Drayton: -and $50,000
left to clean up this month. Will my hon. friend tell me where he got the $150,000 which he paid out in advance of this vote?


John Warwick King: It is carried in
the books of the department. This is a vote for an expenditure already made.


Henry Lumley Drayton: It is carried in the books, but how? It must be an overdraft.


John Warwick King: Yes.


Henry Lumley Drayton: Where did the
money come from to afford that overdraft? It must have come from the treasury board. Then we shall have to ask the treasury board under what system moneys can be made available and kept available without a vote or a governor general's warrant. I ask as a matter of curiosity.


James Alexander Robb: I take my colleague's word
that the amount is paid, although I really do not know personally. However, I will be frank with the committee and agree that it is not good business to include a relief vote in your estimates, to dazzle the eyes of the public from one end of Canada to the other, and for that reason we will pursue the same policy this year and keep the vote as low as possible, trusting to parliament when we come back.


Henry Lumley Drayton: My hon. friend with his inimitable smile is dodging the issue. Where did he get that $150,000? There was neither vote nor warrant for it. Of course, if he had got a warrant for it there would be no question of dazzling the eyes of the unemployed.


John Warwick King: The $250,000 voted in the main estimates in all probability provided the funds to carry us well into January. After the house opens it is not possible to have a warrant, and that would explain the vote.


Robert James Manion: I would suggest that in
future, in dealing with unemployment of this nature, the government should hold a secret session to discuss the question, because I remember only recently when some of us mentioned the fact that there was unemployment in the country we were accused of being unpatriotic and were told that we were not only driving people out of the country but preventing prospective immigrants from coming to Canada. If the government wants to be consistent they should have some other way of covering these votes than the method they are now adopting. I suggest that next year, when the unemployment vote comes up, unless the government wish us to apply the tu quoque argument to them and charge them with a want of patriotism for implying that there is such a thing as unemployment in Canada, they should adopt a secret method of having the money voted in the house.


James Dew Chaplin: They are covering up the payments pretty well.
Supply-Miscellaneous


John Wesley Edwards: They might have the relief vote printed in the Chinese language.


Herbert Bealey Adshead: Is the unemployment
relief applicable to pensioners or to returned soldiers generally?


John Warwick King: It applies largeK to pensioners.


Herbert Bealey Adshead: Is it denied to soldiers
who are not pensioners?


John Warwick King: It is applied to
unemployed disabled ex-members of the forces, pensioners, to provide shelter, fuel, food, clothing and so forth. It goes largely to pensioners although there may be exceptions; an ex-member of the force who is down and out might be given relief.


Herbert Bealey Adshead: It is not applicable to
ordinary returned men who are out of employment? I know returned soldiers who are out of work and if this applies to them I want to put them in touch with it.


John Warwick King: It does not apply to them.


John Wesley Edwards: I would suggest that the minister use his influence with, say, the Postmaster General (Mr. Yeniot) to give employment to returned soldiers, as he is supposed to do under the act, and not turn them down and give the preference to those who have not served at all, as he has done and is doing right along.


Mr. VENIOT:: As my hon. friend did in his time.


John Wesley Edwards: I?


Peter John Veniot: Yes, in 1921 when you were a member of the government.


John Wesley Edwards: Not at
all.


Peter John Veniot: Yes, you did.


John Wesley Edwards: If the Postmaster General's authority for other statements is no better than his authority for this one, he is not on very safe ground.


Peter John Veniot: I am on safe ground.


Charles Gavan Power: Did you have a pull with
the government?


[Stage Direction]
Item agreed to.
I nforeseen expenses-further amount required, $25,000.
George Halsey Perley: What are governor general's warrants for? In our time they covered unforeseen expenses. It is all right

to put unforeseen expenses in the estimates because there are always contingencies arising *which you cannot anticipate; but these and unforeseen expenses turn up during the year. Governor general's warrants are for unforeseen necessary expenses, but not for moneys borrowed from the bank, parliament afterwards being asked to pass a vote.


James Alexander Robb: When I explain what this is
my hon. friend will appreciate the necessity for the vote. This is an additional amount required to pay outstanding accounts, largely in connection with overseas visitors whom I need not mention. Most of the accounts have been incurred since parliament assembled.


Henry Herbert Stevens: Under the item in the
main estimates it is provided that the expenditure under "unforeseen expenses" shall be under order in council on the recommendation of the treasury board, a detailed statement to be laid before parliament within fifteen days of "the next session." The amount was $110,000 last year.


James Alexander Robb: The details have been tabled.


[Stage Direction]
Item agreed to.
Canada Grain Act-further amount required, $175,000.
Henry Herbert Stevens: I trust the minister will
have a pretty complete explanation to make of this item, but before he speaks I will call attention to the main vote. Last year the vote was $1,500,000 and we have a vote now of $175,000. I notice that the main estimates this year have been increased by $355,000.


Charles Avery Dunning: Business is growing.


Henry Herbert Stevens: I presume it is but the
item is a large one and the increases predicted for next year are considerable. The whole subject deserves a fair explanation.


Mr. MALCOLM:: The treasury board did
not give all the money we asked for and the additional amount is required for this reason:	The estimated requirements of the
Board of Grain Commissioners had been reduced by $150,000, but the crop of last year as all hon. members know, was rather more difficult to handle than formerly. There was a good deal of damp grain, and the number of moisture testing machines that had to be installed, as well as the extra men who were employed to handle the crop, undoubtedly increased the cost of administration of the Canada Grain Act. There will be no profit, no money returned from last year's vote. The fees probably will not quite

Supply-M iscellaneous
meet the expenses of administering the act, and I doubt whether there will be very much change next year. More service has been demanded each passing year, and with more tough grain and a greater demand for grain drying the cost of administering the Canada Grain Act will increase The total amount asked for was $1,654,600; there was voted $1,504,000. Up to January 31 we had expended $1,421,000 and had available on that date only $82,000. We estimate February and March to take about $258,000, which, less the amount we have available, means that we require $175,838.


Mr. MILLAR:: I would like to ask the
minister if he has the figures to show whether the grain is carrying itself, whether the fees equal the amount voted.


James Malcolm: This year there will be a deficit; the fees will not equal the vote.


Peter McGibbon: Is it the policy of the
department, to make the fees cover the cost of operation?


James Malcolm: Yes, and in the past
there has been a substantial surplus although we have never charged interest on the elevators or on any of the equipment. There has been a substantial profit but not of late years.


Peter McGibbon: Does that include the
interest on the capital invested in the elevators?


James Malcolm: I think so.


[Stage Direction]
Item agreed to.
Governor General's warrants-restoration, old examining warehouse, Montreal, $150,000.
Henry Lumley Drayton: What was the
extreme urgency in connection with that old warehouse?


Mr. ELLIOTT:: The old examining warehouse was destroyed by fire and it was necessary to replace it as speedily as possible.


Herbert Bealey Adshead: Was there no insurance
on the building?


Mr ELLIOTT:: No.


[Stage Direction]
Item agreed to.
To cover unprovided items, 1926-27, as per Auditor General's report, vol. I. page 3, 192627, $222,657.
George Halsey Perley: Will the minister please explain this item?


James Alexander Robb: This is an interesting list,
and I observe that one of my colleagues has run away because he did not want to be called upon to explain the first item, which
comes under the Department of Agriculture -"International	Institute of Agriculture,
$3.70." I imagine this is to provide for overdrafts. The remainder of the list is as follows:
Dominion lands; shortage in salaries in Canadian National parks vote, $7,102.59.
Fisheries; shortage in vote for expenses of International Fisheries Commission, $505.80.
Legislation; shortage for expenses of members attending first part of session and for contingencies in printing, $12,164.42.
Lighthouse and coast service; shortage in vote for maintenance and repairs to lighthouses, $30,772.29.
National Defence; shortage in votes for topographical surveys, transport and freight, $2,757.44.	_
Penitentiaries: shortage in votes for Manitoba and British Columbia penitentiaries; increased number of inmates, $53,515.92.
Pensions; European war pensions, shortage on account of retroactive awards, $115.047.OS.
Post Office; shortage in appropriation for miscellaneous outside services, $230.39.
Scientific institutions; shortage in vote for the topographical survey, $301.08.
Public Works, capital: shortage in vote for construction of Fsquinialt dry dock, $195.09.


George Halsey Perley: I quite understand that this is chiefly a bookkeeping item to adjust the accounts which have been taken care of, but I am rather puzzled as to why some of these larger amounts were not known before parliament prorogued last year. The smaller items are quite understandable, but does not the minister think some of the larger items must have been known when the house was in session last year, and that they might have been provided for them in the supple-mentaries?


James Alexander Robb: My hon. friend is only making it more difficult for me to resist the demands which will be made in preparing the estimates this year.


[Stage Direction]
Item agreed to.
Pensions-European war and active militia -further amount required, $1,600,000.
Mr KING (Kootenay):: This amount will be paid directly to the pensioners or to their dependants; none of it will be used for administration. I think in our legislation last year we brought to the pension board a number of cases which formerfy had not been entitled to attention, and many pensions were made retroactive. During 1925-26 the house voted $1,000,000 for this purpose in the supplementary estimates, and in 1926-27, $500,000. I do not know that it is possible to estimate exactly what the amount will be, but I think it has been the desire of parliament that these pensions should be fair and reasonable. They should not be excessive, but they should meet
1748	COMMONS
Supply-Maritime Freight Rates Act
the situation, and this supplementary item will take care of them for this year. I repeat that none of this money will be used for administration; if hon. members will turn to page 8 of the report of the Department of Soldiers' Civil Re-establishment a statement will be found showing the cost of administration, under the various headings.


James Dew Chaplin: The minister has made
a wordy statement, but I cannot make out one word of explanation in it.


John Warwick King: What would my
hon. friend like to know?


James Dew Chaplin: I would like to know what this $1,600,000 will be used for?


John Warwick King: It will be spent
in paying pensions to the pensioners or their dependants. That is the explanation.


[Stage Direction]
Item agreed to.
Railways-Maritime Freight Rates Act:
Amount required to provide for payment of the difference, estimated by the Board of Railway Commissioners and certified by the said board to the Minister of Railways and Canals, occurring on account of the application of the Maritime Freight Rates Act, between the tariff tolls and the normal tolls (referred to in section 9 of the said act) on all traffic moved during the period July 1, 1927, to December 31, 1927, under the tariffs approved, by the following companies:-
Atlantic	Quebec &	Western	Railway,$9,074.20; Canada & Gulf Terminal Railway, $890.39: Canadian Pacific Railway, including Fredericton & Grand Lake Coal and Railway Co., New Brunswick Coal and Railway Company, $130,962.64; Cumberland Railway & Coal Co., $13,597.03; Dominion Atlantic Railway, $86,971.71; Maritime Coal Railway & Power Co.. $10,980.96; Quebec Oriental Railway Co., $4,905.52;	Sydney & Louisburg	Railway,$150,408:	Temiseouata Railway, $12,964.11-
total $421,654.56.
Mr. GARDINER:: Will the minister give
us an explanation of this amount? Is this for the six months period?
Hon. CHARLES A. DUNNING (Minister of Railways and -Canals):	I had the estimate drawn in what I thought was a selfexplanatory fashion, but possibly a word of explanation is necessary. The passing of the Maritime Freight Rates Act at the last session involved the making of payments by the government to the Canadian National Railway under one section, and to the other railways operating within this territory under another section of the act. No provision was made last session for the six months of 1927 commencing July 1 and ending December 31; it was not possible to deal with it at the time the bill finally went through the house. All the railways have been complaining, that we

compelled them by this legislation, in the first instance, to bear the 20 per cent reduction themselves for a year, and hence they are out upon the amount represented by that reduction. In order to meet that situation, or at least to meet it more nearly than is now the case, we propose to bring down estimates for the fiscal year 1928-29 providing for the amounts which we estimate will be required upon the certificate of the railway commission for the calendar year 1928, in order that the railways may be paid these amounts more promptly and not compelled to carry such a large amount as is seen here. I have before me the certificate of the Board of Railway Commissioners for Canada with respect to the amounts we are now discussing. It reads as follows:
February 27, 1928.
Dear Sir,-
Pursuant to the authority contained in your letter to me, dated February 14, 1928, you will please find hereto attached the certificate which, under the provisions of the Maritime Freight Rates Act, 1927, s. 9 ss. 3, the Board of Railway Commissioners is directed to forward to the hon. the Minister of Railways and Canals at the end of each calendar year in respect of the difference between the normal tolls and the tariff tolls on all traffic moved by railway companies owning or operating lines of railway in, or extending into the select territory, as defined by the act.
I am also directed to forward herewith two copies of the detailed statements filed by the said railway companies respectively in support of their claims.


George Reginald Geary: Is that letter dated February 27th?


Charles Avery Dunning: Yes, February 27, 1928.


George Reginald Geary: Was that the first intimation the minister had of that amount?


Charles Avery Dunning: I wrote to the Board of Railway Commissioners-I have not a copy of my letter here

asking them for a submission as soon as possible. Under -the law they were compelled to certify as soon as possible after the close of the calendar year, and of course the length of time involved in the year 1927 was from the 1st of July to the 31st of December only. I wrote to them asking when I could expect -this certified statement to enable me to put before the House of Commons the necessary estimates and have the money voted.


George Reginald Geary: How did that amount come to the knowledge of the Minister of Finance so as to enable him to make up his supposed surplus in preparing his budget speech?


Charles Avery Dunning: I can assure my hon. friend that the Minister of Finance made allowance for it. I think I can go further,

Supply-Maritime Freight Rates Act
and say that the Minister of Finance was very conservative in his statement regarding his surplus, as the end of the fiscal year will reveal.


George Reginald Geary: There was some information available.


Charles Avery Dunning: It is just an estimate of course.


Thomas Erlin Kaiser: In the item there are a number of railways mentioned. Are these railways branches of the Canadian national railway system or are they privately owned roads?


Charles Avery Dunning: The lines in the vote we are now dealing with are not branches of the Canadian National Railways at all. They are all railways included in section 9 of the Maritime Freight Rates Act, which reads as follows:
Other companies owning or operating lines of railway in or extending into the select territory may file with the board tariffs of tolls respecting freight movements similar to the preferred movements, meeting the statutory rates referred to in section seven of this act.
My hon. friend will remember that last session we made provision not only for the Canadian National Railway, but for all the other railway companies operating within the area in which these special rates apply, to have the right to meet and reduce the rates if they desire to do so and come under the provisions of the act with respect to the 20 per cent.


Thomas Erlin Kaiser: Was it ever the understanding that if any of these railways made application, parliament was to make up that particular difference?


Charles Avery Dunning: That is what the law, which was passed unanimously last session, says.


Peter McGibbon: Were there any railways that did not take advantage of the provision?


Charles Avery Dunning: I believe they are all under it now. There was some reluctance on the part of some of them, and they did not all come under it on the first of July, on account of the fact which I mentioned previously, that they were compelled to carry the 20 per cent themselves and to be out the interest on it until parliament voted the money. I think they may now be said to be all in.


Herbert Bealey Adshead: Is the amount of $3,471,-
400.87 the actual amount which the Dominion government will have to pay for a period of six months because we reduced the freight rates to the maritimes 20 per cent?


Charles Avery Dunning: No; I should make that clear. Perhaps if my hon. friend would wait until he reads the next item, which deals with the Canadian National Railway, the explanation will be a little clearer than it would be at this stage when I am dealing with railways other than the Canadian National.


Robert Gardiner: If the minister would
file the certificate from the Board of Railway Commissioners hon. members would have an opportunity of looking at it.


Charles Avery Dunning: My hon. friend means
more than the certificate; he means the amounts as well.


Robert Gardiner: I mean both. When
this legislation was before the house last year it was pointed out by the minister that the cost to the country of this reduction would be something like $2,400,000. Has the minister any information in regard to the amount of tonnage moved in the six months period dealt with, compared with previous six months periods?


Charles Avery Dunning: I do not like to differ
from my hon. friend as to what I estimated last year, but my memory is that I stated that we estimated close to 2i million dollars for the Canadian National Railway for the whole year due to the 20 per cent reduction, and approximately half a million for the Canadian Pacific Railway. I think that is what I said. In any event, the experience of the first six months would indicate $1,350,000 for that period. If my hon. friend will add together the two amounts in votes 404 and 405 he will arrive at the total cost to Canada of the 20 per cent reduction under the Maritime Freight Rates Act for a period of six months.


Thomas Cantley: On all lines?


Charles Avery Dunning: On all lines. Of course
I must qualify that by saying that not all lines came in by the first of July.
. Mr. KAISER:	Will the same condition
obtain year after year?


Charles Avery Dunning: So long as the Maritime Freight Rates Act remains on the statute books, so long will these payments be made year by year in exactly the terms set forth in the estimates now before the committee. The estimate is worded to follow accurately in every particular the language of the statute.


Thomas Erlin Kaiser: At the present time there
is a certain tonnage. That tonnage means so much money. Supposing the tonnage increases and the railways earn more money, shall we have to go on paying these deficits?

Niagara Falls Memorial Bridge


Charles Avery Dunning: Will my hon. friend
allow this question to stand until we come to the Canadian National vote? It is much easier to deal with the general deficit on eastern lines under the vote which relates to it. In connection with the other railways all that the government does, when authorized by parliament, is to pay the 20 per cent; but in connection with the Canadian National we pay under the terms of the act two amounts: first, the amount represented by the 20 per cent freight reduction, and, second, the deficit on the eastern lines which are segregated for accounting purposes under the act.
I will come to that when we reach the next two items.


Edward Joseph Garland: Does the
Board of Railway Commissioners undertake a scrutiny of the accounts submitted to them in connection with this 20 per cent reduction?


Charles Avery Dunning: They undertake a detailed audit. In fact I have had to provide for more staff for them in order to carry this out.


Edward Joseph Garland: Can the
minister tell the committee whether the original statements submitted to the railway commission by the railways have been accepted in full? Is the amount contained in these estimates the actual amount submitted by the railways?


Charles Avery Dunning: I am afraid I cannot
say that accurately.
At six o'clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clock. PRIVATE BILLS


NIAGARA FALLS MEMORIAL BRIDGE COMPANY
[Stage Direction]
Mr. G. H. PETTIT (Welland) moved the . third reading of bill No. 14, to incorporate the Niagara Falls Memorial Bridge Company.
Abraham Albert Heaps: I
beg to move, in amendment, Mr. Speaker:
That the said bill be not now read a third time, but be referred back to the committee of the whole with instructions to amend it so as to insert the following in substitution of section 20 of said bill:-
The employment of labour in the construction, maintenance and supervision of the said bridge shall be subject to the terms and conditions of the fair v'age clauses set forth in the order in Council, No. 1206. of June 7th, 1922, and any amendments thereto, and so far as it may be
[Mr. Kaiser.)
practical to do so, Canadian materials aud labour must be used in the construction of the said bridge, and a certified statement shall be sent weekly to the Department of Labour giving the names and addresses of firms supplying materials and the quantity thereof.
As the house was proceeding to divide on the amendment of Mr. Heaps:


Hewitt Bostock: I must say that when I
put the question a moment ago and called for the yeas and nays, I thought the nays had it. I have since been informed by the promoter of the bill that he has no objection to the amendment, so if the house is also agreeable to accepting the amendment, no vote need be taken.


James Alexander Robb: I may say on behalf of the
government that we have no objection.


[Stage Direction]
Amendment agreed to.
Hewitt Bostock: The question now is on the main motion as amended.


Mr. WILLIAM IRVINE (Wetaskiwin):: Mr. Speaker, the question being proposed that Bill No. 14, to incorporate the Niagara Falls Memorial Bridge Company be now read a third time, I move in amendment thereto, seconded by the hon. member for Athabaska (Mr. Kellner):
That the said bill be not now read a third time, but that it be referred to the committee of the w'hole for the purpose of amending it by striking out from section 12 of said bill all words after the word, "directors", in the eighth line of the said section 12 and by inserting in place thereof the words following:
"but no such issue or allotment of shares as fully or partly paid up shall be valid or binding upon the company
(a)	Unless before any such issue or allotment of shares shall have been made as fully or partly paid up otherwise than in cash, the company shall have filed in the office of the Secretary of State a contract in writing, duly executed by the parties thereto, setting forth the considerations other than cash for which the company is about to issue and allot such shares as fully or partly paid up; nor
(b)	Unless in each and every ease in which the company shall allot or issue shares upon the footing that the -whole or some part thereof shall be credited as paid for a consideration other than cash, such consideration shall be received and credited by the company at not more than its then actual cash value;
(e) And, in case the foregoing provisions of this section are not complied with, the holders of the shares so issued shall be liable to the company and to its creditors to the amount of the par value of the shares held by them respectively."
If hon. members will look at section 12 of the bill as it is now before the house they will find that it reads:
The directors may issue as paid-up stock shares of the capital stock of the company in

Niagara Falls Memorial Bridge
payment for any businesses, franchises, undertakings, rights, powers, privileges, letters patent, inventions, real estate, stocks, assets and other properties which the company may lawfully acquire, and may, for such considerations, allot and hand over such shares to any person or corporation, or its shareholders or directors; and any such issue or allotment of stock shall be binding upon the company and such stock shall not be assessable for calls, nor shall the holder thereof be liable in any way thereon; or the_ company may pay therefor wholly or partly in paid-up shares or wholly or partly in debentures, as may be agreed upon.
It is clear that this clause gives power to the company to allocate stock to individuals for certain considerations other than cash. Those considerations other than cash may be very much overvalued. My amendment merely provides; first, that a statement of the contract between the parties concerned and the company shall be filed with the Secretary of State specifying such considerations; next, that a definite value shall be placed upon the considerations by the company; and, third, that if such value appears to be excessive the holders of the shares so overvalued shall be liable to the company. Considering the extent to which stock has been watered in the past generation or so, and in view of the general public objection to the practice, I think that this parliament would be remiss in its duty if it failed to check this sort of thing as far as it could. Passed in its original form the bill would open the door to all kinds of stock watering and stock manipulation. I therefore urge the house to accept my amendment. It does not prevent the company from proceeding with its business but it sees to it that the company shall conduct business in a proper legal manner.


Charles Avery Dunning: The house a few moments ago resolved to go into committee to do a certain thing. The house has not yet been in committee and-


Hewitt Bostock: I may tell the hon. member that by the notices given I know there are four amendments to be moved and I think that the house should dispose of these before going into committee, the moment the house decides the points raised by said amendments it will go into committee.


Charles Avery Dunning: If the house, having decided to go into committee on one amendment, declines to do so on the next, does that estop consideration in committee of that first motion?


Hewitt Bostock: No; after these amendments are disposed of, the order of the house to refer the bill back to the committee will operate.


Thomas Erlin Kaiser: May I ask the mover of the amendment whether it has been drawn up by a legal gentleman?


William Irvine: Is that a question?


Thomas Erlin Kaiser: Are we being asked to pronounce upon an amendment covering matters which, in my opinion at any rate, the hon. gentleman knows nothing of? I protest against the house being fed on infantile material such as this. Are we going to upset a proposition which has been considered by men capable of studying it, and carry an amendment coming from a gentleman whom I consider to be absolutely incapable even of understanding it?


Mr. WOODSWORTH:: Mr. Speaker-


Thomas Erlin Kaiser: I ask-


James Shaver Woodsworth: I rise to a point of order. The hon. member has referred in unparliamentary terms to certain members in this corner of the house. I myself have not spoken on the bill; had I done so, possibly I might have incurred the hon. gentleman's displeasure. He says that members in this corner are incapable-


Some hon. MEMBERS:: Order.


James Shaver Woodsworth: -of understanding or dealing with such matters. I submit that it is not in keeping with the dignity of the house that certain members should be spoken of in these terms. We are all presumably quite capable of considering the business that comes before the house and the hon. member ought not to refer in the way he has done to hon. members with regard to a motion which is introduced in all seriousness and which the mover has every right to propose.


Some hon. MEMBERS:: Question.


George Halsey Perley: May I correct my hon. friend? No reference was made to members in any particular corner of the house.


Hewitt Bostock: From what I heard of the remarks of the hon. member for Ontario (Mr. Kaiser) I did not infer that he was criticising any hon. member in the way suggested. However, I appeal to the Easter spirit and ask hon. members to discuss dispassionately a purely private bill.


Thomas Erlin Kaiser: I had no thought of including all hon. gentlemen in that comer in the statement I made and I would especially exclude the hon. member for Winnipeg North Centre (Mr. Woodsworth), whom most of us regard as a well versed man. I only wish I knew half as much as he thinks he does-

Niagara Falls Memorial Bridge


Robert Gardiner: I rise to a point of
order-


Thomas Erlin Kaiser: Mr. Speaker-


Hewitt Bostock: Order.


Robert Gardiner: The hon. member has
made a certain reference to members in this comer and he has used language which in my judgment is not parliamentary. He says that an hon. member is incapable of passing on the question now before the house, I ask that the expression be withdrawn as unparliamentary.


Hewitt Bostock: In the course of thirtytwo years I have heard some severe expressions used in debate, and I must say that I do not consider the remarks of the hon. member for Ontario unparliamentary. There is nothing in what he says that discredits any hon. member.


William Irvine: May I be permitted to
answer this almighty mind?


Some hon. MEMBERS:: Question.


Hewitt Bostock: Order.


Thomas Erlin Kaiser: I asked the hon. gentleman a question. I simply wanted to know whether the amendment has been submitted to a legal or a financial mind; that is all.


William Irvine: If the hon. member were
as brilliant as he would have the house believe he would know at once, without consulting anyone, whether the amendment had been drawn up by a lawyer. No doubt he would be perfectly satisfied if I assured him that the amendment had received legal approval, but I would ask the hon. gentleman to use his own judgment and. to consider the amendment on its own merits. Where is his intelligence? Let him apply it to the clause in question and he will discover that the member to whom he has referred slightingly knows just as much as he does, and perhaps a little more. I do not ask anyone to tell me whether a clause is properly drawn or not; I use my own intelligence.


Hewitt Bostock: Order. The hon. member has exhausted his right to speak. I allowed him to speak as he was replying to a question, but having replied he may not go further.


William Irvine: This is the answer. I can assure my hon. friend that this clause was drawn-


Some hon. MEMBERS:: Order.


Hewitt Bostock: The hon. gentleman
having already made that statement, the incident is therefore closed.


William Irvine: I have not answered the question yet.


Charles Hazlitt Cahan: At the risk of being placed in the infantile class by my hon. friend from Ontario (Mr. Kaiser), I wish to state that I have read and considered this amendment on two previous occasions, and I agree entirely with the way in which it is drawn both from a legal and from a financial point of view. This measure is one with which I have no particular concern ; I am as anxious as other members may be, coming from various parts of this Dominion, to see measures passed by this house providing for such international communication across the St. Lawrence river wherever it may be required. I do not think I am in a position to judge as to whether this particular measure should be passed on that ground, but I endorse it from the fact that it has been before the private bills committee. They have heard the evidence and have reported to this house that a bill of this character should be passed.


Mr. DIONNE:: Mr. Speaker, I rise to a point of order.


Some hon. MEMBERS:: Oh, oh.


Charles Hazlitt Cahan: This is a bill to incorporate a public service company; it does not incorporate an ordinary trading company, and in respect of every public service or public utility company of this character, coming before the house I insist upon my right as a member of this house to ensure, so far as my voice and my vote may do so, that it shall be organized on a cash basis, and that it shall not be a company which may be watered to any extent which may be desired by the promoters. I think the time has come in this country when we are bound to adopt such a policy as that.
I can remember in earlier years when we had to cross the rivers by floats or by ordinary ferries-and when, in order to secure a bridge, the people were prepared to endorse almost any measure and to make almost any concession to the promoters of such a public utility. In the condition in which we find ourselves to-day, however, where a public utility of this character has its success assured from the very start, it should be organized on the basis that the capital of the company shall be paid up in cash, or, if property is to be transferred, that the transfer shall be made at the actual cash value of that property.

Niagara Falls Memorial Bridge
There is no reason in the world why the promoters of this bill need or should be authorized to transfer to the company a single bit of property in payment of its shares. They should subscribe the capital of the company and that capital should be paid up as it is required; they should use that capital when it is paid up to acquire only such property as is necessary to carry out the undertaking which they have in view. The tolls of the company should be subject to the control of the governor in council, as is the case in the present instance, as the Solicitor General (Mr. Cannon) pointed out in a previous discussion. Furthermore, he has given us the assurance that with respect to these tolls the governor in council will exercise its right to refer these matters for decision to the Board of Railway Commissioners which is competent to hear the evidence and revise the tolls from time to time. But these tolls should be based upon the traffic of a company such as this, upon the income of such a company in respect of its capital which has been paid up, either in money or in actual money's worth.
Therefore I say I am in favour of this amendment, first because in respect of every incorporated company, which we now have in the province of Quebec and in respect of every bond issue by a company under the Companies Act, parliament has insisted that the company shall file, with the provincial secretary in the case of a Quebec company and with the Secretary of State of Canada in the case of a company incorporated under the Companies Act of Canada, a contract showing how, to what extent and for what consideration every share issued has been paid, if paid otherwise than in cash. That enables the government, by a reference to the Secretary of State, to know exactly on what financial basis the company is organized, and it enables any other person interested to ascertain the same fact in the same way. Therefore that section of this measure is in accord with the best legislative precedents which have been established by parliament, and those precedents should be adhered to in the present case.
Then take the next point. The contract should be filed, and if property must necessarily be acquired by an issue of stock, which I regard as unnecessary and inexpedient in the case of a company of this kind, that property should be acquired at something approximating its real or market value. In the incorporation of utility companies such as tramway companies-and in its larger aspect this is a tramway company-in the incorporation
of transportation companies of this kind we should insist upon such legislative enactments as will prevent the watering of the stock of such companies.


Mr. PETTIT:: Mr. SpeakeT, I rise to a point of order. The hon. gentleman started to discuss the amendment to section 12, but it strikes me, as I think it must have struck every other hon. member of the house, that he is dealing with everything but the amendment.


Charles Hazlitt Cahan: Mr. Speaker, in order that it may be clear that I am adhering strictly to this amendment, I call your attention to subsection (a) of the amendment and the words immediately preceding it:
-but no such issue or allotment of shares as fully or partly paid up shall be valid or binding upon the company
(a)	Unless before any such issue or allotment of shares shall have been made as fully or partly paid up otherwise than in cash, the company shall have filed in the office of the Secretary of State a contract in writing, duly executed by the parties thereto, setting forth the considerations other than cash for which the company is about to issue and allot such shares as fully or partly paid up.
I have dealt with that much. Now, secondly:
(b)	Unless in each and every ease in which the company shall allot or issue shares upon the footing that the whole or some part thereof shall be credited as paid for a consideration other than cash, such consideration shall be received and credited by the company at not more than its then actual value.
Now if you allow the company to issue its paid-up stock for a mere consideration without regard to that principle, by purchasing a bit of land for $500 and turning it in for $2,500,000, or any such scheme as that, then you depart from the principle and policy that should govern parliament in respect of the incorporation of every public utility company of the kind which is organized for carrying on a transportation service in this country.


Charles Avery Dunning: Would my hon. friend
permit a question? I am very sympathetic with his line of argument, but who would determine the actual cash value for the purposes of this subsection?


Charles Hazlitt Cahan: The board of directors who are taking the property would have to assume that risk, and if they turned in property of a nominal or purely fictitious value, then the result would be that the shareholders would be liable not only to the creditors of the company but to the call of its board of directors for the difference between the actual value of the property which they turned in and the par value of the stock which was issued there-

Niagara Falls Memorial Bridge
for. That is a matter which has come before the courts time and time again, and it is that principle upon which I am relying. That principle applies in respect of every company incorporated in England for any purpose whatsoever. That principle applies to every company incorporated under the Companies Act of the province of Quebec, with which I am more familiar; and I say that that is a proper principle to apply in a country as highly developed as ours with respect to the incorporation of public utility companies the success of which is absolutely assured from the start, as the success of this one is. We have had questions arising in the city of Montreal with regard to the rates or tolls that should be charged by public lighting companies, by waterworks companies, and the rest; and it is impossible I say for the public utilities commission, which has to decide what the rates and tolls shall be, to decide that question of rates or tolls without considering at the same time the capital stock of the company upon which a fair return, or income, or profit should be paid. In order that they may determine what is a fair return or income or dividend to the stockholders of that company, it should be assured from the start that that stock when issued represents money or money value. I think that is a fair principle. If we were incorporating a company in some new part of our northwest where the enterprise was purely speculative, I should probably adopt the policy which was adopted by this parliament many years ago with respect to allowing these companies to pay up for a consideration other than cash or cash value. The question of speculation then enters into it, and to induce men to engage in an enterprise in a new and unsettled country you have to offer probably larger rewards. Before the committee who considered this bill, the promoters said, and the clear inference from the evidence was, that the traffic was awaiting the construction of this bridge, and that that traffic would ensure an adequate recompense or return or revenue upon the entire cost of the bridge almost from the day it was opened. Such being the case, I am myself opposed to any stock watering in connection with this enterprise, or to the enactment of a measure that will permit stock watering and stock jobbing to be carried through.


Hewitt Bostock: The question is on the amendment. Those in favour of the amendment will please say "aye."


Mr.  J. ETIENNE D@ASSAULT (Levis: (Translation):	Mr. Speaker, I am sorry to
delay the vote, but I ask that the amendment of the hon. member for Wetaskiwin (Mr. Irvine) be read in French.
And the amendment having been read in French, the house divided on the amendment (Mr. Irvine) which was negatived on the following division:
++YEAS
Messrs:
Adsheacl,	Gershaw,
Bancroft,	Heaps,
Benoit,	Irvine,
Bird,	Kellner,
Black (Halifax),	Kennedy,
Cahan,	Lacombe,
Campbell,	Lovie,
Carmichael,	Lucas,
Chaplin,	MacLaren,
Charters,	McGibbon,
Clark,	Neill,
Delisle,	Power,
Denis (St. Denis),	Robitaille,
Dunning,	Ryckman,
Evans,	St-P6re,
Fansher (Last	Speakman,
Mountain),	Spencer,
Fansher (Lambton	Steedsman,
East),	Stewart (Leeds),
Gardiner,	Woodsworth.-38.

Messrs:	
Allan,	Girouard,
Anderson (Toronto-	Goodison,
High Park),	Goulet,
Anderson (Halton),	Guerin,
Baldwin,	Hall,
Barber,	Harris,
Beaubien,	Hay,
Bell (St. John-	Heenan,
Albert),	Hepburn,
Black (Yukon),	Howden,
Blanchard,	Ilsley,
Blatchford,	J enkins,
Bothwell,	Johnston (Long
Bouchard,	Lake),
Boulanger,	J ohnstone
Bourgeois,	(Cape Breton No
Bowen,	Victoria),
Bowman,	Kaiser,
Bradette,	Kay,
Cahill,	King (Kootenay
Cannon,	East),
Cantley,	Laflamme,
Cayley,	Lanctot,
Cotnam,	Lang,
Descoteaux,	Lapierre,
Deslauriers,	' Letellier,
Dickie,	MacLean (Prince)
Dionne,	McLean (Melfort)
Duff,	'McGregor,
Dussault,	McIntosh,
Elliott,	McKenzie,
Fiset (Sir Eugene),	McMillan,
Foster,	McPhee,
Fraser,	Maybee,
Garland (Carleton),	Millar,
Geary,	Morin (Bagot),

Supply-Maritime Freight Rates Act
Morrissy,
Motherwell,
Odette,
Parent,
Peck.
Pettit,
Price,
Ralston.
Raymond,
Rennie,
Robb,
Robinson,
Ross (Kingston City), Rutherford,
Ryerson,
Sanderson,
Seguin,
Senn,
Sinclair (Queens), Sinclair (Wellington North),


Robert Gardiner: of order arising out ister of Immigration seat and did not vi was not paired and recorded.
Smith (Cumberland), Smith (Stormont), Spence,
Spotton,
Stinson,
Stirling,
Taylor,
Telford,
Thompson,
Thorson, .
Tobin,
Totzke,
Vallance,
Veniot,
Verville,
Wi 1 son (Wentworth), Young (Saskatoon), Young
(Weyburn) .-104.
I wish to raise a point of the vote. The Min-(Mr. Forke) was in his ate. The hon. member I ask that his vote be


Mr. FORKE:: I might explain. I have
no objection to voting; but as I was not in the house when the matter was under discussion, I do not know what it was about and, as a matter of conscience, I do not care about voting in regard to something which I do not understand.


James Dew Chaplin: The minister is not the
only one who did not understand what he was voting for.


Hewitt Bostock: The rule is that members who are present when a motion is read must vote if they are in the house whilst the division is being taken. But when an hon. member declares that he does not know what the amendment is about, he is excused from voting. That is the practice followed in the British House of Commons.

The house again in committee of supply, Mr. Johnston in the chair.
Railways-Maritime Freight Rates Act Amount required to provide for payment of the difference, estimated by the Board of Railway Commissioners and certified, by the said board to the Minister of Railways and Canals, occurring on account of the application of the Maritime Freight Rates Act, between the tariff tolls and the normal tolls (referred to in section 9 of the said act) on all traffic moved during the period July 1, 1927, to December 31, 1927, under the tariffs approved, by the following companies:-
Atlantic Quebec & Western Railway	 $ 9,974 20
Canada & Gulf Terminal Railway. 890 39 56103-112
Canadian Pacific Railway, including Fredericton & Grand Lake Coal and Railway Co., New Brunswick Coal and Railway Company	
130,962	64Cumberland Railway & Coal Co.	13,597	03Dominion Atlantic Railway. 86,971	71
Maritime Coal Railway & Power
Co	
10,980	96Quebec Oriental Railway Co..	..	4,905	52Sydney & Louisburg Railway..	..	150,408	00Temiscouata Railway	
12,964	11


Charles Avery Dunning: This is the item which
was discussed for some time before recess and I think it might be carried now.


Robert Gardiner: Before six oclock I
pointed out to the Minister of Railways that last year he made a certain estimate as to what this maritime freight rates discount would cost. The minister this afternoon stated that his estimate was approximately 82,000,000 for the Canadian National, $500,000 for the Canadian Pacific, and another sum, probably about $500,000, for the other lines. During the recess I took the opportunity of looking up Hansard and at page 1878 of last year's Hansard I find that the minister stated during the debate that in his judgment the total amount that would be required to meet this maritime freight rates discount would be approximately $2,500,000. The minister did state that he did not want to be held down to that figure; and consequently I merely make this statement so that the estimate will be put on Hansard.


Mr. MacLAREN:: Is there any charge submitted by the Kent Northern railway?


Charles Avery Dunning: I explained before the
recess that there was some reluctance on the part especially of the smaller lines to come under the provisions of the law because they would be compelled to carry themselves the 20 per cent reduction until payment was made. Some of them did not come under the law immediately. The Kent Northern has not yet come under the provisions of the act.


[Stage Direction]
Item agreed to.
Amount required to provide for payment to the Canadian National Railway Company of the portion of the deficit in- receipts and revenues of the eastern lines, as defined in the Maritime Freight Rates Act, occurring within the period of July 1, 1927, to December 31, 1927, on account of the application of the said act, $931,809.89.
Robert Gardiner: Has the minister any
information as to the tonnage moved during the six months which this estimate covers, as compared with the previous six months?

1756	COMMONS
Supply-Maritime Freight Rates Act


Charles Avery Dunning: It would be impossible to go into this matter upon a tonnage basis. The 20 per cent reduction has a relation to the rate charged by the railway company; it has no relation at all to the tons of freight of the various classes carried. The statement of the Board of Railway Commissioners with reference to this matter, as supplied to me, is a monthly statement with respect to each company.
I think the member for South Toronto asked before recess regarding the checkup by the Board of Railway Commissioners. I have made inquiries of the officials of the board during the recess, and they inform me that the certificate which they are now giving is of necessity an E. & O.E. certificate because they have not yet had an opportunity of making that thorough audit which the terms of the act require. The E. & O.E. provision, of coure, will permit of the necessary adjustments being made with respect to next year's payments under the same act. I am informed, however, that there is every indication that the amounts are correct. After all, the check-up, in a gross sense, is fairly easy for the reason that as regards the freight moving under the various preferred movements, if you take the aggregate revenue received by the railway company for these various classes of freight and then apply the provisions of the act with respect to the 20 per cent-in gross, I say-it can be easily calculated; but manifestly there must be a proper audit made in order to make sure that no railway company is padding its books, let us say. I do not accuse any railway company of doing that, but obviously the necessary care must be taken by the audit staff of the Board of Railway Commissioners in that connection. I can give the figures in connection with each railway concerned for each of the six months now under review, if that is desired by any member of the committee.
With respect to the item under discussion, I want to draw the attention of the committee to the fact that in accordance with the terms of the act itself, this item comprises only that part of the eastern lines deficit which is chargeable to the 20 per cent reduction. The next item gives the balance of the deficit on the eastern lines.


Henry Lumley Drayton: Is that right? I think my hon. friend is putting the cart before the horse. The item refers to the deficit on those lines irrespective of the 20 per cent.


Charles Avery Dunning: No,-"less the portion of such deficit occurring on account of the ap-
(Mr. Gardiner.]
plication of the said act." The reason for presenting it in this manner is so that the house will be able to see from year to year what is the actual result of the application of the Maritime Freight Rates Act to the traffic covered by it. If business increases at all, the item we are now discussing, 405, amounting to $931,809.89, will naturally increase also, but if the ordinary laws of railway operation work out, an increase in that item, due to an increase in tonnage and an increase in traffic, should give a decrease in the deficit in item 406. One cannot say that it will follow naturally, but I am placing it before the house in this form so that the house will have a true conception each year of how the act is working in all particulars.


Sir EUGENE PISET:: Was not the minister incorrect in stating that this deficit applies to the whole of the eastern section of the Canadian National Railway? I think it applies only to that section of the Canadian National Railway from Levis to Halifax, not the whole eastern section.


Charles Avery Dunning: My hon. friend is correct except for the fact that where I used the term "eastern lines" I meant eastern lines as defined in the Maritime Freight Rates Act. It is important that that distinction should be drawn. The area defined in the act is the area east of Levis and Diamond Junction.


Henry Lumley Drayton: I have not been objecting at all to the item because I assume that the estimates for this year will go to the special committee, where we shall have an opportunity of going into the manner in which these matters are checked up. But my hon. friend will have to do more than merely certify in gross, and we ought not to have in the future any E. & O. E. statements.


Charles Avery Dunning: That is right.


Henry Lumley Drayton: The only safe way is not to handle it in gross. There is only one way of doing it, and that is to check it on the billings. The Board of Railway Commissioners have duplicates of all the billings, and there should be no bulk about it at all. The minister ought to have before the committee the officials of the board who are dealing with this question, because it is a very important one.


Charles Avery Dunning: My hon. friend is quite right respecting the nature of the audit. I would merely ask the committee to remember that the statute came into effect only on the first of July last, and we had to ask the Board of Railway Commissioners to set up the ne-

Supply-Merchant Marine
cessary organization to make the kind of check to which my hon. friend refers. When I said a moment ago that one could look at it in the gross, I did not mean to suggest that the railway commission was using that method, but simply that an idea could be gained by the average individual of what the 20 per cent reduction would amount to if he knew the gross revenue from the movements under review. My hon. friend suggests that the item in the main estimates similar to this might go to the special committee. I really had not thought of sending it there, because it is not a Canadian National Railway item; it is an item under the statute which must be considered in the departmental estimates. If there is any desire to inquire into its application in the specal committee, I shall be very happy to have that done there, but I would not like formally to pick out this item from the departmental estimates and send it to the special committee.


Henry Lumley Drayton: I do not care
how it is done so long as the committee have a chance to find out how the checking is done and that a proper check is kept.


Robert Gardiner: Can the minister give us any information as to whether this 20 per cent reduction has increased the movement of freight in this area?


Charles Avery Dunning: With the experience we have up to date it has been difficult to answer that question positively. My estimate last year, as my hon. friend pointed out, was about two million and a half dollars, based upon the experience of the then current year. Putting the figures together which we have before us to-night, he will notice that it is running practically in accordance with that estimate. But I must qualify it by the fact that some of the smaller roads did not come under the provisions of the act promptly after July 1. I am informed by maritime members that there is better business down there, which will show us an increase in traffic; but that can only be a general statement. I cannot for a moment give the figures of the tonnage, but I will bear in mind when the main estimates are before the house, when I think possibly I shall be able to give some information in that regard.


[Stage Direction]
Item agreed to.
Amount required to provide for payment to the Canadian National Railway Company of the deficit in receipts and revenues of the eastern lines, as defined in the Maritime Freight Rates Act. occurring within the period July 1, 1927, to December 31, 1927, less the portion of such deficit occurring on account of the application of the said act, $2,117,936.42.
Robert Gardiner: Is this an operating deficit?


Charles Avery Dunning: Yes.


Henry Lumley Drayton: I am not familiar with the legislation, but I apprehend that this is the operating deficit as the result of the legislation.


Charles Avery Dunning: This item is not the result of the legislation.


Henry Lumley Drayton: Why is it done in this way?


Charles Avery Dunning: The legislation provides for its being done this way, but this amount is not the result of the legislation.


Henry Lumley Drayton: My hon. friend has not caught my point. In other words, the legislation did not create this deficit; but the legislation provides for the deficit to be thus reported.	.


Charles Avery Dunning: That is it.


Henry Lumley Drayton: Does it go to the extent of saying that the deficit is thus to be paid?


Charles Avery Dunning: Yes.


Henry Lumley Drayton: Then we will have it up twice; we will have it up again in connection with the major statement.


Charles Avery Dunning: No, it is a receipt in the major account.


Henry Lumley Drayton: We can look
into it just as well in that connection.


Charles Avery Dunning: Yes.


[Stage Direction]
Item agreed to.
Canadian Government Merchant Marine- Loan to Canadian Government Merchant Marine, Limited, repayable on demand with interest at a rate to be fixed by the governor in council, upon such terms and conditions as the governor in council may determine, and to be applied in payment of:-
Deficits in operation of the company and of the vessels under the company's control during the nine months' period ended December 31, 1927. and working capital requirements, $1,000,00.
Henry Lumley Drayton: I do not think this should be dealt with here at all. It certainly should be referred to the special committee now.


Charles Avery Dunning: I have an explanation to make in that regard. As my hon. friend states, this is an item which in the ordinary course of events would be referred to the special committee on Canadian National railways and shipping. But the fiscal year of the government ends on March 31. This
175S
Supply-Merchant Marine

estimate was prepared only a day or two ago, has not been before the committee, and cannot get there prior to the end of the fiscal year. I may say that the whole matter of the Canadian Government Merchant Marine will be dealt with by that committee on the main estimates. These we have already tabled. But in connection with this item, the close approach of the end of the fiscal year compels me to present it to the committee of the whole house.
It will be remembered that at the last session no vote was taken for deficit purposes. If my memory serves me correctly, I think there was a vote in the neighbourhood of something like $18,000 for capital requirements, but the showing of the previous year caused the management to believe that possibly they might get along without a deficit during the year 1927. Experience, however, indicates an expected deficit in operation of $559,000. In addition to that there has been a gradual impairment of the working capital from year to year since 1922, in which year the Canadian Government Merchant Marine received from the government working capital to the extent of $930,000. Deficits from time to time have whittled that down until it is now about $84,000-an insufficient amount of working capital. For that reason, and in order to bring the working capital up to the necessities of the business, the balance of this vote of $1,000,000 amounting to $440,000, is asked for.
The condition of the merchant marine during the last few years can be indicated by the following figures: In 1923-24 there was a deficit of $1,829,000,-1 am omitting the odd hundreds-in 1924-25 it was $1,416,000; in 192526, $.595,000; 1926-27, $44,000; and as I indicated a few minutes ago, this year it is estimated to be $559,000.


George Halsey Perley: Will the minister be good enough to tell us how the tonnage compares to-day with that of three or four
years ago?


Charles Avery Dunning: There has been a steady adjustment in that regard, reviewed by the committee from year to year. Only those ships suitable for the service have been retained, but I cannot give my hon. friend a comparison, for instance, between 1927 and 1926. I can, of course, undertake that everything in that regard will be subject to review by the special committee.


George Halsey Perley: All I am trying to understand is whether the deficit has been reduced by the management getting new markets, or simply because the tonnage has been reduced.


Charles Avery Dunning: There is no doubt that
the reduction in tonnage has not had any material effect in reducing the deficit, for the ships disposed of were for the most part not in use. In any case where it was found to be impracticable to apply the ships to good business purposes they were in the course of time sold. In general I may tell my hon. friend that I am encouraged by the progress which is being made in this connection. It is needless for me at this time to go into the experience of other countries in this regard; it does not do us much good to take comfort from the sorrows of others; but it is a fact that while our government-owned mercantile marine is not entirely a bonanza, it is at least doing a great deal better than any similarly owned mercantile marine that I know of. And it is performing a real service in connection with Canada's trade, a service which I hope will increase as time goes on.


Henry Lumley Drayton: Has there been
any change in the working year of the merchant marine?


Charles Avery Dunning: We are this year changing it to the calendar year.


Henry Lumley Drayton: I thought it was always so.


Charles Avery Dunning: No.


Mr. BLACK (Halifax):: Mr. Chairman, this vote of one million dollars is apparently to cover a deficit for nine months' operation, and if you add to that another 25 per cent you have a very large deficit. I am confining myself strictly to the freight boats which are being operated by the government and am not referring at all to the West Indies services, the new ships for those services not yet being in operation. Let me say at the outset that the criticism of the leading shipping paper in the world, Fair Play of England-I am sorry I have not a copy under my hand- without being able carefully to analyze the accounts, tells a totally different tale from that which is put forward by the government. With regard to these boats, I make the following statement without fear of contradiction, and if I am contradicted I am perfectly willing to submit the matter to any firm of experienced shipping auditors or chartered accountants in the bid country who are familiar with this business. I say that the Canadian merchant marine, if wound up to-day, would be found to have cost the country $125,000,000. And what are the ships doing? To-day they are operating in competition with privately owned ships in every quarter of the globe, going east and west and north and south.

Supply-Merchant Marine
They are competing with privately owned English shipping concerns who are thoroughly familiar with the operation of steamships, and these concerns are paying, as the merchant marine boats are not. The government merchant marine steamers are carrying cargo from the east to various American ports and cutting rates in opposition to the established lines. What are they doing with regard to the Australian, the South African and the New Zealand trade? There are private companies that have been operating in those waters for years, and in comes the merchant marine and cuts rates, to which it has not agreed. The merchant marine is running voyage after voyage at an absolute loss, and I maintain, as I have always done, that the government operation of steamers cannot be profitable. I contend, therefore, that the sooner the operation of the merchant marine is discontinued the better it will be for the taxpayers of the country, who will have less to pay.


Charles Avery Dunning: I shall appreciate it if
my hon. friend will let me have that criticism of the accounts to which he refers in order that we may submit it to the management and have them appear before the special committee prepared to deal with that criticism, thus enabling the members of the committee, and the house later on if necessary to ascertain the facts, whatever they may be. With regard to the cost to the country, which my hon. friend says would be something in the neighbourhood of $125,000,000 if the merchant marine were wound up now, I do not want to revive the acrimony of past debates in that connection. I am endeavouring to deal as well as I can with the merchant marine as this government found it and as it has since been carried on by the management of the Canadian National Railways. The major portion of the loss certainly cannot be said to be chargeable to the present management of the merchant marine. I prefer to remain on a business plane in discussing the question and not to go back to the origin of the merchant marine, discussing what we have been compelled to do with it. Such a debate might involve a good deal of argument, some of it acrimonious, which would get us nowhere. The country knows perfectly well that we have the ships. They were built under war conditions, as similar ships were built, and while I may have quarrelled with the policy at the time, I do not think that this is the time to discuss that policy or to exchange recriminations regarding it. We are dealing with the conditions that now exist. I do not think that
the Canadian people would be satisfied to have their government owned ships disposed of at the present time, and I will state why. The people of Canada, rightly or wrongly, now own a great railway transportation system and the operation of shipping in connection with that system is a very important factor indeed. The chief competitor of our Canadian National Railway system, the Canadian Pacific Railway, has gone very extensively into the shipping business-extensively and,
I believe, successfully. At any rate the shipping controlled both by the Canadian Pacific Railway and by the Canadian National system is to-day a valuable contributor to the traffic of the railways operated by these two companies, and I do not think there is immediately before us the prospect of completely closing out the merchant marine. We are providing, not through the government merchant marine, it is true, but by special legislation, for the management of the Canadian National Railways to operate a Canada-West Indies steamship service which will, of course, form a part of the same general shipping arrangement which contributes to the success of our railways. I do agree, however, that we should scrutinize with the utmost care this institution which belongs to us and which is operated by the Canadian National railway system; and, I repeat, l shall be very much pleased, as the government will be, to have any criticism either of the presentation of accounts or of the system itself in time to permit us to put it before the management and ask them to appear before the special committee prepared to deal with it thoroughly and in detail. *


William Anderson Black: No doubt it is
pleasing to the house to hear of the wonderful traffic which the merchant marine is bringing to the railways, but I would ask the minister this question: If these ships are withdrawn does he think the traffic will lose at all? I maintain that private interests would bring m a good deal more traffic because, by reason of the fact that the merchant marine is operating in competition with them, private shipping companies are not favouring our railways. I say, therefore, that the minister would get just as much traffic if not more from the private companies. My judgment, based on observation, is that the merchant marine does not increase the traffic of the railways.


Charles Avery Dunning: That is, of course, a
matter of opinion which could not be determined by actual test. I am sorry I cannot agree with my hon. friend.
Supply-Merchant Marine


Thomas Cantley: There is evidently one
branch of the service which is not contributing much to the Canadian roads, and that is the service operating from Australia and New Zealand direct to New York. It is not contributing to the building up of traffic on our railways.


Charles Avery Dunning: Is my hon. friend quite
sure of his facts?


Thomas Cantley: I think so. I understand that the boats from the far east, from Australia and New Zealand, are carrying cargo through the Panama canal and unloading at New York before coming up to Canadian ports. After discharging the bulk of their cargo at Boston or Philadelphia or New York they then come to Canadian ports.


William Anderson Black: We read in every newspaper of the movement of ships from South Africa, Australia and New Zealand to New York, where they discharge; they do not land here first.


Charles Avery Dunning: That may be so, and I
suggest to my hon. friends that they examine the management before the special committee as to the reason why these boats from the far east call at American ports, if they do. I have no personal knowledge of it but I know that my hon. friend from Halifax (Mr. Black) studies these matters and presumably he knows whereof he speaks. But I also presume that the management will have some pretty good business reasons to offer as to why the boats make these calls, if they do.


Henry Herbert Stevens: When the special committee reassembles after the Easter recess the minister might have the management submit a statement regarding the voyages of the various ships. Such a statement should be easily compiled. The complaint which my hon. friend from Pictou (Mr. Cantley) has voiced I have also heard frequently, that is, that the "Canadian government marine ships operate fcetween two foreign ports and not directly ^between Canadian ports and other parts of the world. I may remind the minister that the Canadian people and this parliament, in so far as it sanctioned the original construction of the ships, had in mind the utilization of the merchant marine for the development of Canadian trade. That was really the only justification for the policy, and any departure from that policy ought to be fully explained and defended, if it can be, by the management before the special committee. This, I suggest, could best be done by having submitted to the committee a report showing the various voyages during the last year at least.
fMr. Dunnin*.]


Charles Avery Dunning: I will undertake that
that information will be placed before the special committee when these matters are under discussion, as well as any other information which may help the committee to get an understanding of the whole situation. I think we should look into it very clearly.
3ir HENRY DRAYTON: My hon. friend snould do more than that; there is not much use looking into it when it has been done. There is a real business reason why he should get these other amounts through and get that indebtedness out of the way, but of this vote $441,000 is for new capital. Why treat that as last year's business? You want that capital for the future, and my hon. friend would be well advised to let this whole item go to the committee. Certainly there is no excuse for trying to crowd the item through; this is merely a government subsidiary and there is no business reason for hurrying payment of that $559,000. That, can be borrowed, so I would suggest that since we have let these other items go through the minister should take this item and send it to the committee.


Charles Avery Dunning: I should like to meet my hon. friend on that, but I would point out that the item is properly in the supplementary estimates for the current fiscal year. It relates to the last fiscal year of the merchant marine, and certainly should be payable to them out of money available in this fiscal year. The money has been borrowed and is chargeable in their accounts in that way, and I would ask my hon. friend to reconsider his request.


Henry Lumley Drayton: As my hon.
friend knows, the supplementary estimates are often passed months after the fiscal year is ended, so there can be no trouble about that. If anyone would be hurt it would be different, but this will not injure anyone; it is merely a matter of bookkeeping.


Charles Avery Dunning: I am afraid no one would be helped either, because I would have to come back with a supplementary item identical to this, and even though I brought it in during the new fiscal year it would remain a supplementary for this year.


Henry Lumley Drayton: Send this one item to the committee.


Charles Avery Dunning: That would mean the introduction of another supply bill at a later date for 1927-28. I suggest to my hon. friend that it would be an unnecessary complication.


Henry Lumley Drayton: As I see it, the committee should know everything about this

Supply-Merchant Marine
new capital. I am willing to take my hon. friend's word for it now that he has had a loss which he knows nothing about and which he did not think would occur; we will take his word for that at once, but at the same time he says they need something which they have been getting along very well without for some considerable time, and they need it as a supplement to the past year. What has new working capital to do with the past year?


Charles Avery Dunning: It has been borrowed.


Henry Lumley Drayton: Whose overdraft was that?


Charles Avery Dunning: The Canadian Government Merchant Marine.


Henry Lumley Drayton: If the Canadian
Government Merchant Marine have already borrowed it from the bank willy-nilly, so far as we are concerned it makes no difference whether it goes over or not. The bank can afford to let it stand out a little while.


James Alexander Robb: Mr. Chairman, may I appeal to my hon. friend to allow this item to go through on the assurance of my colleague that the fullest inquiry will be made when it comes before the committee with the other items? I should like to get this properly cleared up before the end of this fiscal year, for one reason, and for another reason the bills are now all printed and ready.


Henry Lumley Drayton: If my hon.
friend tells me that it will help him in his work I am quite satisfied, so long as it is thoroughly understood that we still have a string on the item.


Charles Avery Dunning: Absolutely.


Thomas Cantley: Will the minister tell
us how many of the boats are laid up, and where they are laid up?


Charles Avery Dunning: I am compelled to speak without definite information, but I know of only one which is laid up. The Canadian Raider is laid up at Port Burwell.


George Reginald Geary: Before the item passes would the minister tell me if a supplementary estimate is the place where he is going to put items 405 and 406 from year to year? I think there was some conversation about it which I could not hear, but under the statute I believe these should go in the railway estimates.


Charles Avery Dunning: It is not the intention
in future years to bring in supplementary estimates for items 405 and 406. These will appear as items in the main estimates of the Department of Railways and Canals in accordance with the statute, which I will cite to my hon. friend. With regard to other companies section 9 applies, but with regard to the Canadian National Railways the statute states that in the event of any deficit occurring in any railway fiscal year in respect of the eastern lines, the amount of such deficit shall be included in a separate item in the estimates submitted to parliament for or on behalf of the Canadian National Railways at the first session of parliament thereafter. Now I have my hon. friend's point, which I did not see before. I was very anxious, and the government were very anxious, to present to parliament the whole picture in connection with the Maritime Freight Rates Act, and the manner in which it was working. Consequently that is all placed on one page in .this fashion, and I think it would be well to continue that practice in future estimates, while it is not the intention to bring these items down in the form of supplementary estimates. I would point out that in a certain sense the wording of this estimate does amend the statute, because the statute intends to have the full year expire, then to have an audit take place, after which the railway commission certifies to the result. By following that practice the railway companies are out that amount of money for a considerable period of time, while by introducing an estimate worded in this fashion it will be possible to make payment by the government closer to the time at which the expenditure is incurred by the railways. That is the objective in view.


George Reginald Geary: I am not questioning the
desirability of doing that; I am only pointing out that it is not according to the statute which was passed last year, and I suggest that the procedure be definitely decided upon. Perhaps you will amend the statute, but I am simply pointing out that it should be done in order.


Henry Herbert Stevens: There is nothing of this
nature in the main estimates for this year, so far as I can see.


Charles Avery Dunning: The railway estimates
are not in the main estimates; they were tabled to-day as a separate estimate.


Henry Lumley Drayton: 
Charles Avery Dunning: We do not regard the
Canadian Raider as lost.


Henry Lumley Drayton: Is it damaged?


Charles Avery Dunning: Yes.

Sickness and Accident Insurance


Henry Lumley Drayton: Have you any
estimate of the damage?


Charles Avery Dunning: It will be taken care of by that famous insurance fund but there seems to be a good deal of hope that it will not be lost.


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


[Stage Direction]
The house in committee of ways and means, Mr. Johnston in the chair.
James Alexander Robb: Resolved that towards making good the supply granted to His Majesty on account of certain expenses for the public service of the financial year ending the olst March, 1928, the sum of $7,777,747.89 be granted out of the consolidated revenue fund of Canada.


[Stage Direction]
Motion agreed to.
Resolution reported, read the second time and concurred in. Mr. Robb thereupon moved for leave to introduce Bill No. 155, for granting to His Majesty certain sums of money for the public service of the financial year ending the 31st March, 1028.
Motion agreed to, bill read the first and second time, considered in committee, reported, read the third time and passed.

James Alexander Robb: Mr. Speaker, on March 19th the house was considering a motion introduced on February 16th by the hon. member for North Winnipeg (Mr. Heaps) that the committee on industrial and international relations be authorized to investigate and report on insurance against unemployment, sickness and invalidity. On that occasion the hon. member for New Westminster (Mr. McQuarrie) moved, seconded by Mr. Dickie:
That the said resolution be amended by adding the following:
"That the said committee be authorized to investigate and report on the operations of companies carrying on sickness and accident insurance business in Canada."
I took some exception to referring this matter to the committee on industrial and international relations, and suggested that if my hon. friends were willing I would facilitate

its reference to the committee on banking and commerce. By unanimous consent I would therefore move:
That the committee on banking and commerce be authorized to investigate and report on the operations of companies carrying on sickness and accident insurance business in Canada.


Mr. SPENCE:: Did not the hon. member for New Westminster withdraw his amendment? I think he did.


James Alexander Robb: He did, but he desires now that it should go to the banicing and commerce committee.


Hewitt Bostock: This resolution can only be moved by leave of the house. Is it the pleasure of the house to adopt the motion?


[Stage Direction]
Motion agreed to.


[Stage Direction]
The house in committee of ways and means, Mr. Johnston in the chair.
The CHAIRMAN:: Just before the committee rose at the last sitting, Mr. Robb moved that the following be substituted for item 219b:
Customs tarif-219b. Formaldehyde containing not more than 15 per centum of alcohol: British preferential tariff, free; intermediate tariff, free; general tariff, free.


Henry Herbert Stevens: I do not think there is
any need to detain the committee at any length in regard to this item, as the matter has been pretty clearly placed before the minister. I have but one suggestion to make, if the minister would give it consideration, namely, inasmuch as the one company-and there is only one company of this kind in Canada-has on hand necessarily a large quantity of raw material, I understand something like 12,000 cords of hardwood, some consideration might be given as to the time when this would come into force and effect, say a year, or something of that character. We have done this in other cases; for instance, we have specified in the tariff that certain items shall be effective only after a certaintime or shall come into force at a certain time. Would the minister consider that suggestion? I presume it is not necessary for me to remind him of the very small effect that this tariff has upon the value of formaldehyde in the small quantities in which it is sold, but the very serious effect it has on the whole upon this one company.


James Alexander Robb: Representations have been
made to me on behalf of the company that, as stated by the hon. member for Vancouver

Ways and Means-Customs Tariff
Centre, they have now in stock some 11,000 or 12,000 cords of hardwood, which apparently is used for this purpose. They also represent that the distribution for this year has already been made so that this change will not affect the price of their material. That being the case, if we extend the time the distribution for next year would also be made before parliament met again, and it seems to me that we might very well stand by our decision of a few days ago and put the item through as it is now.
Item as amended agreed to.
Customs tariff-267b. Crude petroleum not in its natural state .725 specific gravity or heavier at 60 degrees temperature, when imported by oil refiners to be refined in their own factories: British preferential tariff, free; intermediate tariff, free; general tariff, free; on and after the 1st July, 1931, per gallon: British preferential tariff, $ioc., intermediate tariff Yioe., general tariff, Jc.


James Alexander Robb: I wish to move an amendment to meet some technical objections that were made to this item as it was originally presented. I understand this meets with the concurrence of the parties who asked me to make this change and also of some who were offering opposition. Neither of them was altogether satisfied, but I think the resolution is pretty fair. As it was before there was a question as to certain points of specific gravity which would have been lost altogether. Therefore I move that item 267b be struck out of the resolutions. We are inserting a new resolution.


[Stage Direction]
Motion agreed to.
James Alexander Robb: I beg to move that the following item, enumerations and rates of duty be inserted in schedule A to the customs tariff:
Customs tariff-272b. Crude petroleum not in its natural state, .725 specific gravity or heavier but not heavier than .770 specific gravity at GO degrees temperature, when imported by oil refiners to be refined in their own factories until July 1, 1931; British preferential tariff, free; intermediate tariff, free; general tariff, free.


George Halsey Perley: Is no duty imposed until the first of July, 1931?


James Alexander Robb: No. After that it goes where it was before.


George Halsey Perley: It will have to
be dealt with then?


James Alexander Robb: No, it goes back to where it
is under the old item.


[Stage Direction]
Item agreed to.
Customs tariff-526. Household blankets wholly of cotton, not to include horse blankets, automobile or steamer rugs, nor similar articles: British preferential tariff, 15 per cent; intermediate tariff, 22J per cent; general tariff, 27J per cent.
Abraham Albert Heaps: I wish to say a word in connection with the tariff in general. The other night, when we were discussing this question in the house, we were assured that the tariff was given to the manufacturers in order to afford some protection to labour employed in industry. I said that if such were the case we in this corner of the house could have a certain amount of sympathy for protection. On looking at the papers this evening I find that the workers employed in one of the most highly protected industries in this country are out on strike because they have had three reductions in pay in the past six months.
I am now referring to the automobile industry. Men employed in the automobile industry at Oshawa are out on strike because some of them have refused to accept a further cut in their wages. If such be the case, the whole idea on which protection io based falls to the ground. I suggest to the minister, in view of the protection that parliament gives to the automobile industry and of the fact that, automobile manufacturers in Canada are continually reducing the wages of men employed in that industry, lowering the standard of their living, and compelling them, in the case I have mentioned, to go out on strike within the past day or two. that the house should take some action in the matter and refuse to continue to give to such industries the protection we have been giving them.


George Reginald Geary: I do not think my hon. friend has proved his case by what he has said. If I remember rightly, there was a reduction in the protection on this very article not long ago which I might with just as much confidence put forward as an argument why they had to reduce wages, but I do not know anything, nor does my hon. friend, about what the circumstances in that particular factory are. I have a great deal of sympathy with what he says about wages, whether in that particular industry or in any other. My contention is-I am not going to argue it now, but it is well supported- that the great thing that will go-I hate to repeat words that I have already uttered- towards the making of security in industrial life and to the fixing of a living wage is this very factor of protection. It is an agent of great potency in producing that particular result. That is the general statement I make,
1764	COMMONS
Ways and Means-Customs Tariff
but I do not attempt to bolster it up by any reference to the industry which my hon. friend mentions, nor do I think that his reference to that industry proves the other side of the case. If there is any way in which we can, by means of the tariff or otherwise, protect the worker more than he is protected now in his security of employment, I am all for doing anything that would help to bring that about.


Robert James Manion: Anyone who has followed industrial conditions in England during the
last few years since the war realizes that practically the only industries in England which are at all successful to-day, both from the point of view of the industry itself and of the workers engaged in it, are those to which England has given the safeguarding of industries protection, which amounts to 33J per cent. Just a day or so ago I was reading an article in the National Review which I have on my desk upstairs, written by an English manufacturer of the cheaper types of china, and he points out that previous to the war he was selling this crockery throughout the whole world. He had his own market in England, he had the Australian, the South American and the Indian market. Because of the low cost of manufacturing in England he was able to maintain his place in these markets, but to-day, because of the low wages being paid in Czechoslovakia, Germany, Japan, and a number of other countries in comparison with those paid in free trade England he cannot even compete in his own market in England; he has lost altogether the Australian, the Indian and the South American market, and the only hope for his industry to continue and give work to the people engaged in it and afford him a chance to succeed is that it shall receive, as other industries have received, the safeguarding of industries protection. I say with the utmost respect for the opinion of my hon. friend (Mr. Heaps), because I am quite sure he is sincere in his support of the workingman, that anyone who gives this question any thought must realize that the goods produced in the countries of Europe that have lower standards of living and lower wage scales must to a certain extent be kept out of those countries where higher wages and better standards of living prevail if the industries in those latter countries are to compete. Look over the different industries of England to-day and you will find that practically the only ones that are successful are those that are receiving the 33J per cent protection under the Safeguarding of Industries Act, and they are the only

ones that are able to compete in the markets of the world because of the lower wages and lower standards of living prevailing in other countries.


Abraham Albert Heaps: I would point out to the hon. member that one of the highest protected countries in the world is Japan, and not only has it a high protective tariff, but a 200 per cent anti-dumping law which is put into effect against American goods.


Robert James Manion: But it is one of the lower standard of living countries.


Abraham Albert Heaps: That merely goes to prove
that protection does not of necessity raise the standard of living, or it would be high in Japan. What we have to contend with in this country in the automobile' business is the competition not of Japan or of 'Czechoslovakia but of the United States, where wages are higher than they are in Canada. The point I raised was that when parliament gives great concessions to certain industries and protects them the way it does, those industries owe something to the workers employed in them. But what protection has General Motors of Oshawa given to the men employed in that industry? Two years ago they treated their employees in a very miserable way. They got them to come to Ottawa in a huge delegation, and when I moved amongst these men I found that hardly any of them knew why they had come here. Parliament gives to that industry a protection which is worth a great deal to the industry, and that being the case the industry owes something to the men and women engaged in it. But what has happened? We find by this evening's paper the men have had two cuts in wages, and they refuse to accept a third. The wages they are receiving now are lower than are being paid in the same industry in the United States. When they were here these men told me' that they were working under conditions that were far from the best, that they were receiving from 42J to 75 cents an hour, the1 average being not much over 50 cents an hour-considerably below a living wage; yet the stock of that company, because of the flourishing condition of the industry, attributable in some degree to the high protection it enjoys to-day, is now over 200, and it may be worth only one-tenth of that.


George Reginald Geary: You are speaking now of General Motors in the United States.


Abraham Albert Heaps: The Oshawa company is a subsidiary, and it also is enjoying a great deal of prosperity, as is manifested by the additions it has made to its buildings at

Ways and Means-Customs Tariff
Oshawa in the last few months. Why should parliament protect an industry of that character? If we have any lever to use over such an industry, I say that it should be used when they are taking away from the workers something which they have no right at all to take away. The question of what is happening in other countries, the tariffs of Czechoslovakia, Australia and Japan, do not enter into this question at all. This is a question of one particular industry in Canada which is enjoying a high degree of protection, the gift of this parliament, yet it takes that gift to further its own interest at the expense of its employees. If that is the case I believe parliament would be justified at the very first opportunity in expressing its strong disapproval of the action which the management of that company has taken toward the men it employs.


Robert James Manion: I just wish to say that I was not arguing in regard to that particular case at all. The hon. gentleman when he was speaking previously had said that if this is the way the Oshawa industry is treating its employees, all that argument about protection protecting the working man is wiped out. It was a general argument I was making. I was not speaking of this particular case because I have a great deal of sympathy with the remarks of the hon. gentleman in that regard. I was speaking of protection in general.


Peter McGibbon: It does seem to me that those people who'pretend to represent labour in this house have a very meagre knowledge of the requirements of labour in this country. There is no question at all that what this country wants to-day is work. AH you have to do is to survey the industries of thia country, and find out where that work can be got. I would ask the hon. gentleman (Mr. Heaps) what he would do if all the industries of this country were closed down. Where would labour go then? Does he want a still bigger army marching across the border into the American republic to get work in one of the highest protected countries in the world? That is what has been happening in this country for a number of years.


Charles Gavan Power: Mr. Chairman, I rise to a point of order. I think we are getting far away from the subject of cotton blankets. I am always glad to hear my hon. friend from Muskoka-Ontario because he is so very sincere about everything, and I have no objection to listening to my hon. friends from Winnipeg and Port William, but really this debate is becoming too much enlarged.


Peter McGibbon: I think the hon. member is a little mixed in his point of order. I would tell the hon. member for North Winnipeg that a few years ago hundreds of men were employed in my constituency but to-day their jobs have disappeared.


Charles Gavan Power: Mr. Chairman, I should like your ruling on my point of order-that the discussion has wandered far afield from the resolution before the committee.


John Frederick Johnston: I do not think the
hon. gentleman's point is well taken. The hon. member who has the floor is discussing the principle of protection, and the item now before the committee provides for protection of 15, 22J and 271 per cent.


Peter McGibbon: I contend, Mr. Chairman, that if it were not for the principle of protection-which, I admit, is inadequately applied-there would be no work here at all. If the hon. member for North Winnipeg had his policy put into force, our working men would not have any jobs at decent wages.


Abraham Albert Heaps: Why?


Peter McGibbon: Because there would not be any work except for the agricultural classes. What happened a few years ago to our leather industry? Factories were closed, and to-day those workmen are gaining a livelihood in the United States. What happened to the glass industry when the Libby-Owens Company went out of business? Not only did their workmen lose their jobs, but men in the bush were also adversely affected. For instance, in my riding two lumber firms were supplying that company with all their rough lumber for making boxes, and naturally when the glass industry went out of business the men back in the bush lost their jobs. The same can be said of the automobile industry. It is true the government tinkered with the tariff on automobiles two years ago, and then modified their action, but to-day there are five thousand fewer jobs in the automobilp industry^ than there were at that time. Is that the kind of policy the member for North Winnipeg wants to establish in this country? Does he want to destroy completely every chance of our working men getting jobs. I have a great deal of sympathy with him when he advocates raising the working man's wages; but the first thing the Canadian working man wants is a job.


Mr. SANDERSON:: May I ask the hon.
member a question?


Peter McGibbon: Yes, if it is not too hard.
1706	COMMONS
Ways and Means-Customs Tariff


Frederick George Sanderson: I understood him to say that five thousand employees in the automobile industry are out of jobs to-day for the reason that the tariff on automobiles was lowered two years ago. Is that what he said?


Peter McGibbon: Yes, that is correct with regard to the industries auxiliary to the automobile industry.


Frederick George Sanderson: All I can say is that
my hon. friend does not know what he is talking about.


Peter McGibbon: Of course we all have
to bow to the wisdom of the hon. member for South Perth (Mr. Sanderson). We know that after he has spoken there is nothing more to do than pronounce the doxology.


Frederick George Sanderson: My hon. friend never talks wisdom at all.


Peter McGibbon: Those are not my
figures, they are the figures of the industry.


Frederick George Sanderson: And yet he believes
them.


Peter McGibbon: Those figures have been proven to be correct. It would be well for the hon. member to post himself on the primary things he presumes to talk about.


Frederick George Sanderson: I am just as well
posted as my hon. friend.


Some hon. MEMBERS:: Order.


Peter McGibbon: My point is that the working men of this country must have jobs, and until they get them our population is not going to increase. Every man who is not a parasite wants to work at a reasonable wage. For the life of me I cannot see how you are going to close down industries and cause unemployment and still keep our working people in the Dominion. You cannot do it, as our experience during the last five years amply proves. The exodus will continue at that rate as long as we pursue our present policy. What protection does primarily is to protect the working man to the extent that it protects his job. If you destroy his job what are you going to do? In my own village industries have been destroyed and their buildings torn down, although for forty years they were employing hundreds of men. Do hon. members think that that is not a serious matter? Are not our working people a national asset? I say again, as long as you pursue this policy that is what will happen. Take the agricultural implement industry: last year we 
imported thirty millions dollars' worth of agricultural implements. If those implements had been manufactured in Canada there would have been work for the people that our friends from Winnipeg are supposed to represent, and do not.


Abraham Albert Heaps: It is not simply a supposition; we do represent Winnipeg.


Peter McGibbon: You think you do.


Abraham Albert Heaps: No, we do. If you think we do not, come to Winnipeg North and Winnipeg North Centre and see for yourself.


Peter McGibbon: North Winnipeg is not the whole Dominion. That is the fault with the members for Winnipeg,-


Abraham Albert Heaps: Neither is Muskoka.


John Frederick Johnston: Order.


Peter McGibbon: -they seem to think the whole Dominion is contained in that small circle. I can tell him that the members for Winnipeg do not represent the sentiment of labour throughout Canada. Whether they represent Winnipeg or not I do not know. I presume they did represent it in 1921 when they agitated and brought on a strike.


Abraham Albert Heaps: May I state, Mr. Chairman,
that since 1921 I have been five times elected to public office.


John Frederick Johnston: Order. The discussion is getting very far away from the item before the committee.	,


Peter McGibbon: I do not know how many times the hon. member wants to speak; he makes a speech every time he interrupts. But I think there are many members in this house who represent labour a great deal more accurately than do the members for Winnipeg. Winnipeg, as I said, is not the whole Dominion, and all Canadian labour is not centred there-in fact a very small part of it. On behalf of the labouring people of my riding and of the other ridings that are represented by my colleagues, I want to say that the government is not protecting sufficiently the labouring man's job. There should be greater protection, rather than less. I am not speaking in the interests of the manufacturers, but in the interests of the labouring people. As long as we continue a policy that takes away jobs from our working men and drives them out of the country, then I say the Dominion is worse off to that extent. In to-day's paper I read that Canada and Mexico have been supplying the United States with practically all their immigrants. Within the last six months fifty thousand Canadians have migrated

Ways and Means-Customs Tariff
across the line. How long can this country stand such a drain? We are losing the very best of our native-born, the educated, the ambitious, the industrious. When I am home not a week passes that I have not to make out medical certificates for the very best people in my riding; they are going to the United States. I contend that nothing but an adequate protective policy will provide work and keep our people at home. We have tried everything else more or less. Now give us a fair protective policy for the working men of this country and see what we can do.


Mr. KENNEDY:: I believe this item was held over so that the minister might consider whether or not horse blankets would be given a lower tariff.


James Alexander Robb: Yes; and as soon as this item is passed I will bring in the other.


[Stage Direction]
Item agreed to.
Customs tariff-526a.	Horse blankets or
horse clothing of any material: British preferential tariff. 15 per cent: intermediate tariff, 22.| per cent; general tariff, 271 Per cent.
Robert James Manion: What is the decrease in
the tariff?


James Alexander Robb: The present rates, under four
classifications, are 30 , 35, 35 and 35. Under the British preference the rates are 20, 25, 27J and 221.


Robert James Manion: The present tariff just
brought in is not the same as the tariff which we have passed?


James Alexander Robb: No; this is to bring it in line
with the other.


[Stage Direction]
Item agreed to.
Customs tariff-138b. Automobiles for conveying passengers only, n.o.p., valued at retail at place of production, when new, with standard equipment complete at not more than $1,200 each; motor cars or motor trucks (not for railways or tramways) for carrying goods only; motorcycles; chassis for motor vehicles specified in this item:	British preferential
tariff, 124 Per cent; intermediate tariff, 174 per cent; general tariff, 20 per cent.
George Halsey Perley: This is something entirely new; the minister should explain it.


William Daum Euler: This is designed to correct
what seems to be an unfair discrimination arising out of the legislation of 1926, at which time automobiles valued at $1,200 or less could be imported at 20 per cent whereas cars valued higher than $1,200 were still subject to a duty of 274 per cent. Under the law as it stands, an automobile which is manufactured in Detroit is transported through the
western states on its way to Winnipeg, that being the shortest route. The car might be worth $1,200 in Detroit, or perhaps a little less, but when it enters Winnipeg, for purposes of duty the freight is added, thus bringing it into the class that would pay the .274 per cent duty. In that case there is a discrimination to the extent that the man who imports a car at Windsor has to pay a duty of only 20 per cent as compared with a duty of 274 per cent imposed upon the western Canadian importer. This amendment is intended to remedy that situation. I should add that while this fixes the rate at 20 per cent-because the value of the car for duty purposes is to be taken as at the point of production, say at Detroit-the 20 per cent will be paid on the value plus freight at the point it enters Canada.


Robert James Manion: The point that strikes me is that this will be a discrimination against the Canadian railways. Previously the man importing the same car at Windsor from Detroit brought it over the Canadian railways and paid 20 per cent, whereas if the car were transported by American railways through Minneapolis and St. Paul to Winnipeg the duty was increased above 20 per cent owing to the extra freight. What the minister is doing is to encourage people in western Canada particularly to import over American railways. It seems to me that this amendment will operate to the profit of the American railways and to the disadvantage of the Canadian roads.


William Daum Euler: There is some force in what my hon. friend says, and the same thing occurred to me. But if the car came from some distant point inland in the United States and were brought to Windsor the freight would be considerably increased.


Robert James Manion: That does not apply in the summer when there is traffic by boat, and I am not sure that it is true of the rail haul.


Henry Lumley Drayton: I think the minister is overlooking the fact that there is competition.


William Daum Euler: It frequently happens that a man wants a car on short notice and he might cross the line from British Columbia, say, to Seattle or Portland.


Mr. YOUNG (Weyburn):: It is the duty of the customs department to collect revenue and not to direct railway traffic in this country. The railways can be trusted to get their share of the business and it is not for us to use the tariff to force people to ship their goods over one railway instead of another.
1768	COMMONS
Ways and Means-Income War Tax Act


George Halsey Perley: Does my hon.
friend think that the government should change the tariff to induce people to ship goods by American railways instead of by Canadian?


Edward James Young: No. All we ask is that the government remove a distinct discrimination which to-day exists against western Canada whereby the Canadian in the west pays 27i per cent duty while the eastern man pays 20 per cent.


James Alexander Robb: I would ask hon. members to bear in mind the fact that the Canadian railways now enjoy a considerable automobile business which is not altogether Canadian.
" Mr. McLEAN (Melfort): Is the duty always paid on freight?


William Daum Euler: Yes.


[Stage Direction]
Item agreed to.
Customs tariff-705a. Settlers' effects, viz:

Machines and implements for agricultural purposes moved by mechanical power; and motor vehicles, valued at not more than one thousand dollars, and boats for fishing purposes if actually owned abroad by the settler for at least six months before his removal to Canada, and subject to regulations prescribed by the Minister of National Revenue. Provided that in respect to motor vehicles valued in excess of one thousand dollars duty shall be payable only on the amount in excess of one thousand dollars. Provided further that the said machines, vehicles, implements and boats may not be so entered unless brought by the settler on his first arrival, and shall not be sold or otherwise disposed of without payment of duty until after twelve months' actual use in Canada: British preferential tariff, free; intermediate tariff, free; general tariff, free.
George Halsey Perley: Is this a concession to people who are coming in or is it an extra burden?


William Daum Euler: Under the law as it stands, under certain conditions, the effects of settlers coming into Canada are free of duty. That includes automobiles valued at $1,000 or less at present. If the oar is valued at more than $1,000, however, it becomes immediately dutiable for the full amount, so you have this situation: A car valued at $1,000 comes in free, whereas a car valued at $1,050 pays a tax on the entire amount. If it is fair to exempt entirely an automobile valued at $1,0000 or less it seems to me fair to exempt $1,000 of any sum greater than that. This is designed to correct that situation.


George Halsey Perley: Is that all that is in the change?


William Daum Euler: That is all it means.


[Stage Direction]
Item agreed to.

[Stage Direction]
Resolved, that it is expedient to amend the Income War Tax Act, and to provide:
1.	That the schedule of rates of income tax pertaining to individuals be reduced for the year 1927 and thereof by twenty per centum.
2.	That the income tax of companies for the year 1927 and thereafter by eight per centum.
3.	That allowance for exhaustion of mining lands, oil and gas wells and timber limits be afforded to and apportioned between lessee and lessor.
4.	That the income from the operation of ships owned or operated by a non-resident person or corporation be exempt from taxation, provided that the country of residence grants an equivalent exemption in favour of a person or corporation resident in Canada.
5.	That $500.00 exemption be given persons supporting dependents twenty-one years of age and over, incapable of self-support on account of mental or physical infirmity.
0.	That upon election by the trustee controlling a superannuation pension fund or plan to have the investment income exempt from taxation the contributions by employees shall not be exempt.
7. That provision be made for procuring information as to payments made from the source of payment.
George Halsey Perley: Will the minister please explain paragraph 3?


James Alexander Robb: I have a rather long memorandum on that. The substantial principle established under the income tax law is that mineral royalties received by the fee owner and the profits made by the operating lessee of the mineral rights above the cost of operation are income. Under the statutory allowance for depletion it cannot be twice credited, Once to the fee owner and once to the lessee; the depletion belongs as of right to the fee owner.


Henry Lumley Drayton: In other words, what you really mean is that the depletion goes to the owner of the property and not to the lessee.


James Alexander Robb: That is the law at present.


Henry Lumley Drayton: What is the change?


James Alexander Robb: To give the depletion to the
lessee, who is the real operator; or they may agree on it.


George Halsey Perley: Under the amendment it is to be apportioned. Do you mean to divide it between the two?


James Alexander Robb: In many cases the lessor is the crown, and they may agree upon what the depletion may be.


[Stage Direction]
Resolution agreed to.

Questions
Resolution reported, read the second time and concurred in. Mr. Robb thereupon moved for leave to introduce Bill No. 156, to amend the Income War Tax Act.
Motion agreed to and bill read the first time.
Hewitt Bostock: When shall the bill be
read a second time?


Edward Joseph Garland: At the next sitting.


James Alexander Robb: If there is no objection we
might put through the sales tax resolutions and introduce the bill to be founded on them.


Henry Herbert Stevens: I wanted to ask one or
two questions but the matters to which they relate are not very serious.


George Halsey Perley: That would take a few minutes.


Henry Lumley Drayton: I think an explanation of the meaning of the language used in the resolutions would occupy some time.
On motion of Mr. Mackenzie King the house adjourned at 10.55 p.m.
Wednesday, March 28, 1928