1928-04-10

Hon. J. W. EDWARDS (Frontenac-Ad-dington):: I wish to add to the thirty thousand signatures I presented last session some six thousand names of persons in New Brunswick, Quebec, Manitoba, Ontario and Saskatchewan

asking for the transfer to the prairie provinces of their natural resources without restrictions.
I have also been requested to present to the house a petition signed by some ten thousand men and women of the Dominion asking the parliament of Canada to enact legislation whereby it shall be constituted a crime, punishable by fine or imprisonment, or both, for any person or persons to state or publish any statement that any person or persons legally married according to the law of any province in Canada under which such marriage takes place, are not legally or lawfully married, or are living in adultery, or shall in any way make reflections upon the legality of such marriage or the legitimacy of any child or children born of such marriage.



CANADIAN GOVERNMENT MERCHANT MARINE

[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Railways and Canals):	I lay on the table
of the house the ninth annual report of the Canadian Government Merchant Marine, and
I	wish to advise the house that I expect either to-morrow or the following day to be able to table the annual report of the Canadian National Railways.

[Stage Direction]
Hon. ROBERT FORKE (Minister of Immigration and Colonization) moved for leave to introduce Bill No. 187, to amend the Immigration Act.
Mr. MANION:: Explain.


Mr. FORKE:: This bill reads:
His Majesty by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
Section 41 of the Immigration Act, chapter 93 of the revised statutes of Canada, 1927, is hereby repealed.
Hon. members will remember that a similar bill was introduced into the house last session and if I recollect rightly it was carried without division but it was afterwards rejected by the senate. I do not think it is necessary for me to read the clause which has been repealed.


Mr. GARLAND (Bow River):: Had we not better reform the senate first.


Robert Forke: Maybe. This bill is designed1 to make deportation for certain causes dependent upon a conviction in Canada, under part
II	of the Criminal Code, relating to offences against public order, rather than upon a hearing before a board of inquiry concerning certain offences under section 41 of the Immigration Act.

Exchequer Court Act

Proceedings for the deportation of such undesirable classes are provided by sections 40, 42 and 43 of the act, and under those sections deportation may be carried out. It is considered that the provisions of section 41 are unnecessary, as section 40 and part II of the Criminal Code cover the case.
I do not think it is necessary to make any further explanation because all the members who were here last session will be conversant with this proposed amendment to the Immigration Act.
Motion agreed to and bill read the first time.



CANADA GRAIN ACT AMENDMENT

[Stage Direction]
Hon. JAMES MALCOLM (Minister of Trade and Commerce) moved for leave to introduce Bill No. 188, to amend the Canada Grain Act.
Robert James Manion: Explain.


Mr. MALCOLM:: The amendments proposed by this bill to the Canada Grain Act are with regard to the grading of spring wheat, oats and barley. These amendments are made upon the recommendation of the Board of Grain Commissioners after a thorough investigation and they are rendered necessary by the development of new varieties of these grains and by new conditions. It is felt that the proposed amendments will meet the existing situation and will prove of considerable benefit to the western producers.
Motion agreed to and bill read the first time.



PRISONS AND REFORMATORIES ACT AMENDMENT

[Stage Direction]
Hon. ERNEST LAPOINTE (Minister of Justice) moved for leave to introduce Bill No. 189, to amend the Prisons and Reformatories Act.
Mr. GARDINER:: Explain.


Mr. LAPOINTE:: Part 9 of the Prisons and Reformatories Act applies only to the provinces of New Brunswick and Prince Edward Island. The purpose of this amendment is to extend to Nova Scotia as well the application of the sections concerning the home for young women in Cloverdale, New Brunswick. Owing to a mistake, Nova Scotia was not included in the amendment of two years ago and this is for the purpose of sending young women from Nova Scotia as well to that home in New Brunswick.


Mr. BENNETT:: Nova Scotia was left
out in the revision, was it not?


Ernest Lapointe: Yes.
Motion agreed to and bill read the firs! time.



EXCHEQUER COURT ACT AMENDMENT

[Stage Direction]
Hon. ERNEST LAPOINTE (Minister of Justice) moved for leave to introduce Bill No. 190, to amend the Exchequer Court Act.
He said: This bill is offering some slight amendments on matters of procedure. For instance, there are now two judges of the exchequer court, the chief justice and a puisne judge, and this bill is for the purpose of making it clear that either the president of the court or the puisne judge may exercise the power which in many statutes is conferred upon a judge of the exchequer court.
There is also a section of the act which provides that the practice and procedure in suits, actions and matters in the exchequer court shall be regulated by the practice and procedure in similar suits in His Majesty's high court of justice in England. That provision was made in 1877, and since then the practice and procedure in the high court of justice in England has been amended in many respects. This bill is for the purpose of having those same amendments apply to our exchequer court.
The bill will also give to the judges of the court the right to make general rules and orders, instead of only the chief justice as formerly.
Motion agreed to and bill read the first time.

[Stage Direction]
Hon. ERNEST LAPOINTE (Minister of Justice) moved for leave to introduce Bill No. 191, to amend the Criminal Code.
He said: This bill is for the purpose of reintroducing a bill which passed this house on three or four occasions but was rejected by the senate. It is for the purpose of repealing a clause which was inserted in the Criminal Code in the session of 1919 concerning unlawful associations, the printing of seditious books, and so forth.
Motion agreed to and bill read the first time.

[Stage Direction]
Hon. ERNEST LAPOINTE (Minister of
Justice) moved for leave to introduce Bill No. 192, respecting interprovincial and international traffic in intoxicating liquors.
[Stage Direction]
Geneva Slavery Convention
He said: This bill provides that in any province where there is in force an act in virtue of which it is unlawful to sell or have in possession intoxicating liquors without authority or permit of the government of the province or of any board, commission or other governmental agency authorized to issue such permit or grant, it shall be unlawful to import liquors Otherwise than through the governmental agency, board or commission which has the control of the sale of liquor in the province.
Motion agreed to and bill read the first time.

[Stage Direction]
Hon. CHARLES STEWART (Minister of the Interior) moved for leave to introduce
Bill No. 193, to amend the Dominion Forest Reserves and Parks Act.
He said: The object of this amendment is merely to withdraw from the forest reserves in Manitoba and Saskatchewan certain areas which have been examined by our soil surveyors and have been approved of as fit for agricultural purposes. It is proposed to withdraw one quarter section of land from the Riding Mountain forest reserve in Manitoba, and in Saskatchewan, an area of 21 square miles from the Big River forest reserve; also 6.65 square miles from the Fort a la Come forest reserve; one-half section from the Pas-quia reserve; one half section from the Porcupine No. 2 reserve; one quarter section from the Pines reserve; 2.25 square miles from the Keppel reserve, and .63 of a square mile from the Nisbet reserve. All of these small withdrawals consist of lands which have been applied for and found suitable for settlement.
Motion agreed to and bill read the first time.

[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Railways and Canals) moved the first reading of Bill No. 194, to amend the Canadian National Railway Act.
He said: The object of this bill is to bring the Canadian government railways more completely under the jurisdiction of the railway commission than is now the case.
Motion agreed to and bill read the first time.


[Stage Direction]
Bill No. 168, for the relief of Daisy Myrtle McPherson.-Mr. Pettit.

[Stage Direction]
Right Hon. W. L. MACKENZIE KING (Prime Minister) moved that the house go into committee to consider the following proposed resolution:
That it is expedient that parliament do approve of the slavery convention signed at Geneva on the twenty-fifth of September, one thousand nine hundred and twenty-six, and which was signed, on behalf of Canada^ by the Canadian representative duly authorized to that effect;
And that this house do approve of same.
He said: Mr. Speaker, as the resolution indicates, this international convention was approved by the seventh assembly of the League of Nations. It was signed by the Right Hon. Sir George Foster, under authority of an order in council of Canada, passed on August 7th, 1926. The matter was fully discussed by the Assembly of the League of Nations, and Canada's representatives were present during the discussion. The convention contains twelve articles, which may be summarized as follows:
The contracting parties undertake to prevent and to suppress the slave trade and to bring about the complete abolition of slavery in all its forms. For this purpose they shall give to one another all possible assistance and undertake to prevent compulsory or forced labour from developing into conditions analogous to slavery. Disputes arising from this convention, if not settled by direct negotiations, shall be referred to the Permanent Court of International Justice or to some other court of arbitration.
Slavery is defined as being the status or condition of a person over whom any or all of the powers attaching to the right of ownership are exercised. The slave trade includes all acts involved in the capture, acquisition, or disposal of a person with intent to reduce him to slavery or with a view to selling or exchanging him and all acts of trade or transport in slaves.
The convention will come into operation for each state on the date of the deposit of its ratification or of its accession.
It is in order that the convention may be made applicable to Canada in this formal way that the present resolution is introduced.
Richard Bedford Bennett: Mr. Speaker, I cannot but feel that it is idle to ask this house to give its

Harbour Commissions
ratification and approval of any measure unless that measure has been printed and in the hands of hon. members for a sufficient time to enable them to study its provisions. We should be something better than mere rubber stamps in a matter of this kind. While the right hon. Prime Minister's explanation makes it abundantly clear that this is a convention to which parliament can give its assent, the fact remains that we should not be asked blindly to approve of any treaty without having had an opportunity to consider its terms and fully understand all its implications. At a later time I shall certainly avail myself of an opportunity to say something with respect to the whole procedure which is followed by this country in regard to the League of Nations, but this is not the time or place to speak of it. However, I do suggest to the Prime Minister that these treaties should be printed and in the hands of hon. members before they are asked to give their approval.


Mr. MACKENZIE KING:: I am sorry my hon. friend was unavoidably absent from the house before the Easter recess. Had he been present he would recall that at that time I did lay on the table copies of this convention both in English and French. Of course I agree entirely with my hon. friend that the house should have all documents before it in order to study their terms. The conventions have been printed for some time in the proceedings of the League of Nations, and, as I say, they were formally presented to the house in printed form before the Easter vacation.


Richard Bedford Bennett: I am aware that the right hon.- gentleman laid them on the table at the time, but I think that is not sufficient to enable members to have full knowledge of their terms. The documents should be printed and in our possession before we can be in a position to express our views thereon.


William Lyon Mackenzie King: They are
printed and distributed in both English and French.


[Stage Direction]
Motion agreed to.
William Lyon Mackenzie King: That it be resolved by the House of Commons:
_ That a message be sent to the senate, informing Their Honours that this house has adopted the above resolution and requesting that Their Honours will unite with this house in the approval of the above mentioned convention and that the Clerk do carry the said message to the senate;
And that this house do approve of same.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Hon. J. A. ROBB (Minister of Finance, for the Minister of Marine and Fisheries) moved that the house go into committee at. the next sitting to consider the following proposed resolution:
Resolved, that it is expedient to authorize a loan to the Harbour Commissioners of Quebec in an amount not exceeding $8,500,000 to carry on the construction of terminal facilities, upon approval by the governor in council of detailed plans, specifications and estimates for such works, and the deposit of debentures of the corporation to cover said loan.
He said:	His Excellency the Governor
General having been made acquainted with the subject matter of this resolution recommends it to the favourable consideration of the house.
Motion agreed to.

[Stage Direction]
Hon. J. A. ROBB (Minister of Finance, for the Minister of Marine and Fisheries) moved that the moved that the house go into committee at the next sitting to consider the following proposed resolution:
Resolved, that it is expedient to authorize a loan to the Harbour Commissioners of Saint John in an amount not exceeding $5,000,000 to enable the corporation to construct such terminal facilities as are necessary properly to equip the port of Saint John, upon approval by the governor in council of detailed plans, specifications and estimates for such works, and the deposit of debentures of the corporation to cover said loan.
He said:	His Excellency the Governor
General having been made acquainted with the subject matter of this resolution recommends it to the favourable consideration of the house.
Motion agreed to.

[Stage Direction]
Hon. J. A. ROBB (Minister of Finance, for the Minister of Marine and Fisheries) moved that the house go into committee at the next sitting to consider the following proposed resolution:
Resolved, that it is expedient to authorize a loan to the Harbour Commissioners of Halifax in an amount not exceeding $500,000, to enable the corporation to construct such terminal facilities as are necessary to properly equip the port of Halifax, upon approval by the _ governor in council of detailed plans, specifications and estimates for such works and the deposit of debentures of the corporation to cover said loan.
He said:	His Excellency the Governor
General having been made acquainted with
[Stage Direction]
St. Lawrence Waterway
the subject matter of this resolution recommends it to the favourable consideration of the house.
Motion agreed to.

[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Railways and Canals) moved that the house go into committee at the next sitting to consider the following proposed resolution:
Resolved, that the acts relating to the Toronto Terminals Railway Company be amended to provide that the amount of $7,000,000 which the Canadian National Railway Company was authorized to issue by the amending act, 1925. c. 28, may be increased to $10,500,000 to be used for the purposes therein prescribed and for defraying the cost of other railway facilities necessitated by or incidental to the construction of the said viaduct and works.
He said:	His Excellency the Governor
General having been made acquainted with the subject matter of this resolution recommends it to the favourable consideration of the house.
Motion agreed to.

[Stage Direction]
On the orders of the day:
Richard Bedford Bennett: Mr. Speaker, I wish to ask the right hon. Prime Minister (Mr. Mackenzie King) whether or not there will be laid on the table at an early date the correspondence in connection with the treaty between Egypt and Great Britain so far as that correspondence took place with Canada.


William Lyon Mackenzie King: The British government
tabled, in the form of a white paper, the correspondence which they wished to have presented to the British House of Commons, and I understand from the despatches 'which we have received that that is all the British government wishes to have known formally to the world at large. I shall with pleasure communicate with the British government the request of my hon. friend that the correspondence between Canada and Great Britain with respect to the Anglo-Egyptian treaty be laid on the table of this house, and I much hope that the British government will give its consent to having this done.



ST. LAWRENCE WATERWAY CORRESPONDENCE WITH WASHINGTON

Richard Bedford Bennett: Mr. Speaker, it seems fitting at
{Mr. Robb.]
this time, in view of the press despatches, that I should ask the right hon. Prime Minister (Mr. Mackenzie King) for some assurance as to when the correspondence between the government of Canada and the government at Washington will be tabled and also the report of the advisory committee in connection with the St. Lawrence waterway. It is now several weeks since a part at least of the correspondence took place. I think we would not be unreasonable in asking that it be now laid before the house.


William Lyon Mackenzie King: Before the Easter recess
I took occasion to communicate with the Secretary of State at Washington and intimated that I thought our parliament would wish to have the correspondence tabled very shortly after resuming. I suggested that it should be tabled simultaneously at Washington and at Ottawa early next week. I think I may promise my hon. friend that this will be done.



PRIVILEGE-MR. BENNETT

[Stage Direction]
On the orders of the day:
Richard Bedford Bennett: I hesitate to trouble the house
about a personal matter, but on March 29 last, during my absence from the house, in the course of a debate that arose on a motion of the hon. member for Bow River (Mr. Garland), the hon. member for West York (Sir Henry Drayton) made certain observations which are reported in Hansard as follows:
Now is there no duty on the part of the government to See that the laws of this Dominion are carried out?
Whereupon the Solicitor General is reported to have remarked:
Before my hon. friend leaves Baldy Robb I would suggest, if he wants to know the reason, that he had better inquire of his own leader.
Whereupon the hon. member for West York replied:
That is a suggestion the hon. gentleman can safely make in the absence of my hon. leader.
The Solicitor General is then reported to have said:
I give you warning.
Subsequently, during a somewhat lengthy discussion towards the close of the debate, the Solicitor General stated that he withdrew nothing that he had said.
I regard these observations as very serious reflections upon myself. If I was in any shameful or discreditable manner associated with this convicted criminal, Baldy Robb, I

Privilege-Mr. Bennett
think I would merit the condemnation of the house. But the facts are these-and I ask my hon. friend the Minister of the Interior (Mr. Stewart) to follow me closely: Last summer, after the house had Tisen, I had occasion to visit the Minister of the Interior in his office at Ottawa in connection with a departmental matter. I do not charge my memory as to how exactly the circumstance arose, but during the course of the conversation something was said about Baldy Robb, and I thereupon observed that he had been released some time ago. The Minister of the Interior said that such was not the case-he had not been released-although as a matter -of fact a statement to that effect had appeared in the public press. It transpired that the minister was correct and we had some conversation touching the matter. My recollection is that I stated I would have nothing to do with it, pointing out, however, that I had recently been in Edmonton where I had learned that a large number of people there, who had been associated with the prosecution of Robb, were of the opinion that the ends of justice had been satisfied and the law vindicated by his conviction and imprisonment, and that, having regard to the fact that his wife and family were in poor circumstances, there was no reason why, if the government deemed it a proper course to pursue and such a recommendation should be made to His Excellency, Baldy Robb should not be released on ticket-of-leave. If I remember rightly the Minister of the Interior inquired whether I would have any objection to communicating that fact to the leader of the opposition. I told him I would not. I ascertained that the leader of the opposition was absent from Ottawa, as was also the Solicitor General, and I telephoned the Minister of the Interior to that effect.
I had no communication with the Solicitor General with respect to this matter. I made no recommendations of any kind regarding the release of this convicted criminal; I left the responsibility where it belonged. I did state, however, that I would not criticize any action that might be taken in the circumstances by the law officers of the crown. This view I intimated to the Minister of the Interior, the only minister with whom I had had any discussion with reference to the question. I desire to place this matter frankly before the House, without either comment or any endeavour to draw any inference from what transpired. I feel I owe this as a duty, primarily, not so much to myself as to those with whom I am associated in this house.


William Lyon Mackenzie King: I am sorry the Solicitor
General is not here; I know he would wish to say a word in reply to my hon. friend. But maj' I direct the hon. member's attention to a remark the Solicitor General made, which appears a little further on in Hansard, in which he makes it abundantly clear that he had no desire in any way, directly or indirectly, to imply that any action on the part of the hon. member was other than what everyone would wish and expect. The Solicitor General had been speaking of procedure in the remission of sentences and the propriety of discussing such matters on the floor of the house. But he made it perfectly clear that he imputed no improper motives to my hon. friend. Let me assure the hon. member, speaking not only for the Solicitor General but for every member of the government, that we all have that view and that view only.


Hon. CHARLES STEWART (Minister of the Interior):: In connection with the release
of Baldy Robb I had received a very largely signed petition from the citizens of Edmonton and vicinity, inquiring whether, inasmuch as his wife was in delicate health and he himself was not in the best of health, and inasmuch also as all others who had participated in the wrongdoing had been released, it might not be possible to secure a remission of the sentence. Hence the discussion that took place between my hon. friend and myself. Apart from that discussion I know nothing about the matter. I conveyed the impression I received from the hon. member, which was that he would have no objection if the proper officers assumed the responsibility for releasing Baldy Robb.



GOLD AND SILVER MARKING ACT AMENDMENT

[Stage Direction]
The house resumed from February 10, consideration ini committee of Bill No. 21, to amend the Gold and Silver Marking Act- Mr. Malcolm-Mr. Johnston in the chair.
On section 12b-Trade mark of manufacturer to be applied.
The CHAIRMAN:: When the bill was last before the house all its clauses had been carried with the exception of 12b. Shall 12b carry?


Some hon. MEMBERS:: Carried.


[Stage Direction]
Section agreed to.
Bill reported, read the third time and passed.
[Stage Direction]
National Battlefields Commission


[Stage Direction]
Hon. J. A. ROBB (Minister of Finance) moved the second reading of Bill No. 34, to amend an act respecting the National Battlefields at Quebec.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Johnston in the chair.
On section 1-Payment of $750,000 authorized.
Sir HENRY DRAYTON:: Will the minister kindly let us know first the sums we are now paying each year, and also what new work is proposed under the increased grant?


Mr. ROBB:: Very well. This explanation was given when the resolution was moved on February 10, but I will give it to my hon. friend again. Last year we paid a total of $75,000; in 1912-13 the amount was $116,500; the following year it was $145,000, and then $143,000. During the war period it ran from $34,000 to $52,000, while in 1926-27 the amount was $48,000. The commission point out that they can make their plans better by having a fixed amount for a period of ten years. The members of that commission are Sir George Garneau, Hon. A. Turgeon, Robert Bicker-dike, Senator T. Chapais, N. A. Dussault, Hon. W. H. Price, Hon. L. A. Taschereau, and Dr. A. G. Doughty.


Henry Lumley Drayton: My hon. friend has not told us the work which it is intended to do.


James Alexander Robb: There are numerous works and improvements contemplated; for instance, the Ross rifle factory is to be taken down and cleared away and other danger buildings around there are to be removed. That work ' is on capital account.


Henry Lumley Drayton: Are the Martello towers being looked after?


James Alexander Robb: I do not think they enter into this scheme.


John Wesley Edwards: How much has been expended to date by this commission?


James Alexander Robb: They have expended each year the amounts which I have just given, totalling $1,078,010. That is what we have given them, and in addition to that I believe they have received some voluntary contributions.


Mr. McGIBBON:: Would the minister tell us what he expects this work to cost the country ultimately?
[The Chairman.]


James Alexander Robb: If my hon. friend will tell me how long the country will last I might give him an estimate. I am now giving what has been done since the first payment was made in 1912-13. Perhaps I had better read a letter which I recently received from the chairman of this commission under date of November 18, 1927, addressed to myself:
When I met you last in Ottawa, you asked me to remind you of the suggestion which I made to the subcommittee of the Privy Council in connection with the funds voted for the National Battlefields Commission.
At present, the ordinary expenses for administration and maintenance of the park amount to about $50,000 per year. It is estimated that when the park is finally completed the annual expense, for its administration and maintenance, will be about $75,000.
I suggested, and I strongly commend the idea to your favourable consideration, that instead of having parliament to vote the required grant each year it be given a statutory grant of $75,000. The excess of this amount over that required for maintenance will be applied to the work of completing the laying out and construction of the park (capital expenditure) and in course of time _ the maintenance will increase and the capital expenditure will diminish until we arrive at the estimated final cost of up-keep of $75,000 per year.
That is their estimate, and out of this amount we are now providing they will take care of capital expenditure.


Peter McGibbon: Is there any revenue from it at all?


James Alexander Robb: No, it is a public park, the Plains of Abraham, as my hon. friend knows.


Richard Bedford Bennett: I do not think any man of business would do this; it is simply an invitation to reckless expenditure of public money. This is an admirable commission; it is doing excellent work, but when you place in their hands a given sum of money per annum you are simply inviting them to spend that amount, because human nature is only human nature. Would any corporation in the conduct of its business place in the hands of its directors a given sum per annum, regardless of their requirements, for the purpose of enabling them to carry on their work? This work should be budgetted; the requirements of this commission should be submitted to the minister yearly and these requirements should be carefully considered by the government and a sufficient sum placed in the estimates each year to meet them. The moment you do business this way, as I have said, you are simply inviting them to spend that much money. You may argue otherwise; you may remark how excellent is the commission, but my experience in business and elsewhere has been that where there is

National Battlefields Commission
a given sum of money available, human nature being what it is, that money is going to be spent by those who have control over it, and I therefore submit that the minister is wrong in adopting this method. I protest against placing a sum of money in the hands of any commission, amounting to $750,000 at the rate of $75,000 per year, by this method; if they have the money they will spend it. They are most admirable gentlemen, giving their services freely and gratuitiously for this work, but I submit that this is a wrong principle, because parliament is deprived of its power. Parliament now says, "Here is $75,000 a year for ten years; go and spend it." I protest against that method, having regard to the requirements of the public service at I know it elsewhere.


James Alexander Robb: On general principles no
person can find much fault with the observations of my hon. friend, but having looked into the matter after receiving the request from the commission for further sums of money to take care of the different buildings in that vicinity and to remove the Ross rifle factory, in addition to other work, we considered that it would be cheaper to say to the commission, "You cannot have any more money than this during the next ten years." They know they are going to receive this money each year and can plan their work accordingly, so I believe it will cost the treasury less in the end. In connection with keeping track of the expenditure, I would remind my hon. friend that under the Audit Act the Minister of Finance can send in auditors at any time, and as a matter of fact I believe they have already looked over these accounts.


Richard Bedford Bennett: Yes; I have looked over the accounts also.
Sir HENRY DiRAYTON:	Can my hon.
friend give us any real reason why an amount should not be voted each year in the ordinary way? I believe there has been no difficulty in the past in voting the money required.


James Alexander Robb: Under the original act they
received an amount of $300,000; so money has been voted in this way before. The section of the act which is to be repealed authorized the payment of that amount to the commission.


Henry Lumley Drayton: I am only
speaking from memory, but I think my hon. friend will find that the $300,000 was voted for the initiation of the work and that sums of money have been voted each year since having regard on the one hand to what
parliament thought should be spent and on the other hand to the real requirements of the work. I think my hon. friend will find that in some years the vote was very small, while in other years the commission received much larger sums. For example, I think the vote has gone as high as $115,000.


James Alexander Robb: The highest was $145,000.


Henry Lumley Drayton: And I think it has been as low as $34,000, so that each year it was a question of what parliament thought should be voted and for how much the work could be carried along. We got along pretty well in the past with that method; why not stay with it?


Ernest Lapointe: Of course everybody
knows that this development must be completed. It is not only a national undertaking but it is an imperial undertaking. When the tercentenary of Quebec was celebrated there was a subscription not only in Canada but throughout the British Empire to buy the fields and the plains where the battles were fought which decided the fate of Canada in 1759; even school children in Canada and in the empire contributed for that purpose. The commission which was appointed to supervise the undertaking has done its work in the most admirable way. I am specially paying tribute to Sir George Gameau, the president of that commission, who has made it almost a personal affair, devoting most of his time to the work of the commission, trying to do that work as economically as possible, being there all the time, supervising everything, and giving his services freely.
Now there are some advantatges in the scheme proposed by my hon. friend the Minister of Finance, and it is at the request of the commission that this change is being proposed. It is all very well to say that every year an amount may be voted in the estimates. Well I remember that a couple of years ago the Minister of Finance in his great zeal for and devotion to economy cut that item; Sir George Garneau threatened to resign because he could not go on with the work of the commission, and the minister had to reinsert the amount in the supplementary estimates.
Sir George Garneau and the commission are now proceeding to transfer the old buildings of the Ross Rifle Company, which are really an eyesore on the battlefield. They must be sure of a certain amount for a certain number of years. This method has been followed for a number of years in connection with other matters, for instance the contributions of this government to the highways

National Battlefields Commission
of the provinces. The provinces could rely upon a certain amount as a contribution to their highways for a certain number of years. Especially with the work which the commission has in view and the work which the commission has been doing, I believe this is certainly a reasonable demand, and that it should be granted.


John Wesley Edwards: Mr. Chairman, I just want to say one word in regard to this matter, not because of this resolution but because the same principle has been carried out, or is being carried out, in another place, and I do not think the principle is right. For instance, you have on this order paper, number 26, under the heading of the Federal District Commission, a certain amount of money-$250,000-set aside for sixteen years. Now we are asked to change that and vote that sum for thirty years, and I do not think that is right. It is a fact beyond question that during the years of the war and the years immediately succeeding the war there were many important and necessary public works which were necessarily held up. The government took the stand then, and very properly, I think, that not one dollar would be expended for this or that public building or public work where it was possible at all to get along without the expenditure, every dollar being required for war purposes, for the purpose of meeting the expenses of the war, and for several years thereafter.
Now it occurs to me that in connection with some of these large schemes of the government they are losing sight of the fact that for a number of years a great many works which should have been carried out have been held up.
I think the principle is wrong of voting a sum of money for a period of years without having placed before parliament at least a rough idea of what it is proposed to do with the money which is being handed over. That is the principle objection. I do not think anybody objects to the work that is going on in Quebec. I believe everybody is of one mind in regard to the fixing up of that place; it is historic, and it is something which belongs to all of Canada and which everybody in Canada would like to see in proper condition and maintained properly. I simply wish to register my objection as a general principle to the voting of sums of money for a long period of years. I do not think, having regard to the works which were held up for so many years, that it is just right at the present time.
fMr. Lapointe.]


Richard Bedford Bennett: I do not think the Minister of Justice (Mr. Lapointe) or the Minister of Finance (Mr. Robb) appreciates the point we are making, that here we are committing this country in future to these payments, whereas in other cases we are able to meet the annual demands from the resources we have in our hands from time to time. In the one case we pledge our credit and tie the hands of posterity. In the one case we make a direct and fixed charge upon the revenues, regardless of what they may be. In the other case, we contemplate just such an exigency as occurred during the war, when there was no longer money for such purposes and we had to curtail expenditures. I would like to ask my hon. friend the Minister of the Interior if he would not be as well justified in asking similar sums for Banff and Jasper. We base our expenditures upon our expected revenues, and a budget is for the purpose of endeavouring to have the expenditures met by the revenues, to provide sufficient revenues to meet contemplated expenditures.
The judges' salaries are a charge upon the revenue. The interest on the public debt is a charge upon the revenue. The payment of pensions is a charge upon the revenue, by statute. Now we are adding by statute two additional charges upon the revenue, regardless of what it may be, one in Quebec and one in Ottawa. The analogy in respect to highways does not apply. In connection with highways, the money was to be paid on condition that the province expended certain sums; and if conditions in this country warranted our being able to pay the money to the provinces, because they performed their duty under the statute and thereby earned it. It is only necessary to add that conditions, financial and otherwise, in the provinces would be reflected in the revenues of the Dominion; and if the provinces are able to make the expenditures, we would be able to implement our promise.
I would think this a grave departure from the principles that underlie parliamentary government. It is taking out of the hands of this parliament for a fixed determinate number of years an annual expenditure, regardless of what financial and other conditions in the country may be. This case is in Quebec; there is another in Ottawa; it will be in another case somewhere else; the principle involved will be endeavoured to be applied by people from every part of the country, and I am sure with an equal measure of justice. Under those circumstances we

Inspection oj Root Vegetables
can only record our protest against it, and add our tribute to what has been said by the Minister of Justice as to the work of this commission with Sir George Garneau at its head and which has become to him a labour of absorbing love. Perhaps no man has done more than he has in this matter. He says that this $75,000 is to take care of part of his capital expenditures; but he estimates that when all work is finished, the whole $75,000 will go for maintenance and expenses. However desirous we are to make this historic ground a park for all time, we should have regard to the great principle that governs appropriations of money for any public purpose, namely, that the budget should be submitted to the executive of the country and that the executive of the country should determine the extent to *which it will meet those demands and whether those demands should be met, having regard to the existing resources of the country and the effect which will be caused upon the revenues generally. That is the principle for which we contend and why w'e protest against this legislation.


[Stage Direction]
Section agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
Hon. J. L. RALSTON (Minister of National Defence) moved the second reading of Bill No. 39, respecting the disposal of certain canteen funds.
Motion agreed to and bill read the second time.
Mr. RALSTON:: I move that this bill be referred to the special committee on pensions and returned soldiers' problems. I discussed it with some of the members and they thought a more thorough consideration could there be given to the question of the disposal of these funds. While I am on this subject, I note that in Hansard, at page 463, I am quoted as saying that I was advised it was not necessary to enact legislation. That was a misprint. I stated that I considered it was necessary to enact legislation.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Hon. W. R. MOTHERWELL (Minister of Agriculture) moved the second reading of Bill No. 51, to regulate the sale and inspection of root vegetables.
Richard Bedford Bennett: I have grave doubts as to the constitutionality of this legislation, which affects the inspection of roots and vegetables. Clearly it deals with property and civil rights. Whether or not the provisions of section 91 of the British North America Act conferring upon parliament power to deal with matters of agriculture, is to be construed so widely as to enable it to invade entirely the field of property and civil rights in the provinces, I am not prepared at the moment to say. But I think it is my duty to direct the attention of the minister and the law officers of the crown to the provisions of the statute. Clause 3 reads;
No person shall sell, offer, expose, or have in possession for sale potatoes, onions, turnips, artichokes, beets, carrots, parsnips or such other vegetables as may be named in the act or by the governor in council under the provisions of this act unless such vegetables comply with all provisions of this act and regulations made thereunder.
That is a very sweeping section. When the bill was first introduced I took occasion to look into the law very roughly and I certainly think the Minister of Justice (Mr. Lapointe), when he looks into it, will have some hesitancy in proposing that this parliament, because it has jurisdiction over agiculture, coordinate jurisdiction with the provinces, has power thus to destroy the whole law with respect to property and civil rights. I am merely directing attention to the matter at the moment without going into it with any degree of care. It is certainly a serious matter to say that no person shall have in his possession any vegetable, onions, potatoes, carrots, unless he has complied with the provisions of this federal statute. It will be recalled that the courts of the country with respect to egg-grading legislation held that it was ultra vires of this parliament, and I think the application of the same principle to this legislation would indicate that it was invalid. I am not in any sense discussing the merits of the measure beyond directing attention to the matter as it struck me when I read the legislation in question.


Mr. MOTHERWELL:: I am informed by
my officers that no new principle is involved except one to which I referred on the first reading of the bill and which had never been challenged. When there is any doubt, as there was in the case of the Live Stock and Live Stock Products Act, we invariably ask the provinces to pass concurrent legislation so as to make our legislatiqn strong where it would otherwise be weak. If it is found that
Inspection of Hay

the same situation exists with respect to this legislation, we shall have to ask the provinces to pass concurrent legislation. The new principle to which I refer, and which is not a new principle when applied to other bills, may be found in section 10 which refers to the appointment of a representative advisory board to recommend certain standards.


Richard Bedford Bennett: But section 3, the one
to which I refer, is a new section.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the select standing committee on agriculture.

[Stage Direction]
Hon. W. R. MOTHERWELL (Minister of Agriculture) moved the second reading of Bill No. 61, to amend the Live Stock and Live Stock Products Act.
He said: This is a bill in regard to which we have concurrent legislation by all the provinces. It provides for a system of voluntary grading of meats.
Motion agreed to, bill read the second time and referred to the select standing committee on agriculture.

[Stage Direction]
Hon. W. R. MOTHERWELL (Minister of Agriculture) moved the second reading of Bill No. 72, to amend the Fertilizer Act.
Motion agreed to, bill read the second time and referred to the select standing committee on agriculture.

[Stage Direction]
Hon. W. R. MOTHERWELL (Minister of Agriculture) moved the second reading of Bill No. 73, respecting the inspection and grading of hay and straw.
Richard Bedford Bennett: I suppose the minister proposes to refer this also to the select standing committee?
Mr. MOTHERW7ELL: Yes.


Richard Bedford Bennett: We have in this country something over nine hundred federal inspectors in the Department of Agriculture, and the question is, shall this country become burdened with inspections of everything or not? We have now touched fertilizers, which have to be registered before they are sold; we have had eggs, which was declared unconstitutional; we have live stock, which is

voluntary; we have vegetables, and now we are turning to hay and straw. This is the old story of the advisory board and regulations, and then inspecting officers. Once more you have cumbersome paternalism carried to a point that I think is wholly beyond what was ever intended with respect to this problem. The provinces may be able to look after their own affairs. It may be desirable to have uniform legislation. I am not going to discuss the matter beyond pointing out that every measure that we are thus placing on the statute books adds just one more burden on the taxpayer. We may talk about voluntary advisory boards, but in the end, when the provisions of this statute with respect to inspection and inspectors become operative, some political friend has to be rewarded, and there is another job given, and another charge on the public revenue. I am not saying it will be my hon. friend's particular political friends, but the political friends of the party in power, and it means a continually increasing charge upon our revenues. I asked the other evening as to the number of inspectors, and the deputy minister undertook to look the matter up, and I was amazed when it was subsequently stated that we had now over nine hundred inspectors, and I think he was greatly surprised to learn that too. Where is this going to end? It must mean a charge on the revenues of this country of nearly $2,000 per day.


Henry Lumley Drayton: More than that.


Richard Bedford Bennett: I want to be very conservative. Some of the inspectors are very lightly paid. At $1,000 each, it means $1,000 a day or $365,000 a year, and at $2,000 each, it would amount to nearly three-quarters of a million a year. I think parliament should calmly and carefully investigate this matter, and I make these observations for whatever they may be worth so that if the minister is going to refer this matter to the committee, that phase of it may be considered.


William Richard Motherwell: My hon. friend's
observations would be quite in order and quite to the point were this a new bill, but long before I came into this government there was a bill of this nature under the administration of the Department of Trade and Commerce.


Richard Bedford Bennett: But this changes it.


William Richard Motherwell: It is changed
slightly, yes. The characteristics of hay vary very much, and we are transferring to the various parts of this country the authority to make such grades as will suit the requirements of the particular province concerned.

Validation oj Orders in Council
That is decentralising, rather than centralising the power here. There were inspectors under the old law under the Department of Trade and Commerce, and before this government came into existence.


Richard Bedford Bennett: Not so many.


William Richard Motherwell: We are trying to
improve a little on the old order, and I think my hon. friend will find that it is all right.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the select standing committee on agriculture and colonization.

[Stage Direction]
Hon. CHARLES STEWART (Minister of the Interior) moved the second reading of Bill No. 62, relating to the submission to parliament of certain regulations and orders in council.
Henry Lumley Drayton: Explain.


Charles A. Stewart: In 1906 certain amendments were made to the acts mentioned in this bill and in addition there was a revision of the statutes. While the Department of the Interior has been tabling the regulations, action was not taken for complete validation by resolution of parliament, and therefore there is a doubt as to the validity of the regulations that have been passed since 1906, and by this bill we are seeking to validate all these orders in council that have been passed since that time.


Richard Bedford Bennett: The principle involved is certainly unsound in part. Part of it may be sound, but certain people may have acquired rights; in fact, in one instance that I know of rights have been acquired. The people knew the order in council was invalid-they were so advised by their lawyers-and they acted accordingly. An order in council passed in January 1928, and not being validated by both houses of parliament before December 1929, there being an intervening session of parliament, would be invalid, and would have no force or effect at all, and therefore those who proceeded on the assumption of there being no order in council would be proceeding on sound ground. For us now to validate these orders in council en bloc, without having them before us at all, is most unsound, and I submit to the minister that if he is going to validate them, they should be attached to the bill as a schedule, or at least the orders in council should be laid on the table, because it is usual in a case of this character to protect the rights that have been acquired. There are not very many of them.


Charles A. Stewart: Oh yes.


Richard Bedford Bennett: There are; I had forgotten. The Minister of Justice will appreciate this point, that in law there are no orders in council at the moment. The period of time within which they might have been validated having expired, they have no longer any validity as orders in council, and not having validity as orders in council, peoples rights are not affected thereby. I do not say all of them: I am speaking of those that require validation by both houses of parliament, and which have not been validated at the next succeeding session of parliament. Their validity as orders in council has ceased; they are invalid; they are waste paper, and those who have acquired rights, being under the impression, the proper impression, that there was no valid order in council affecting the matter, may now be prejudicially affected by this legislation because it is retroactive in every sense of the term. It gives validity to something that has become invalid. It gives force to something that had no effect, and under those circumstances I ask the minister respectfully to submit to this house, or at least to lay upon the table, the orders in council in order that we may determine to what extent we may be interfering with the rights of people that may have accrued under and by virtue of the circumstances of there being no orders in council, by reason of the necessary action to validate them as provided by the statutes not having been taken.


Charles A. Stewart: My hon. friend is quite correct up to a certain point, but whether his argument with respect to the omission to have validation annually by parliament carries full weight may be a question. However, I am free to say that the Justice department have advised us that there is that doubt, and they have advised this means of curing it, but we are not admitting even yet that the sanction of parliament is absolutely required to validate them. But I am frank to say that that is the advice we have been given by the Justice department. I am perfectly willing to table these orders in council, but may I say to my hon. friend that there is a great number of them dealing with regulations that have been passed from 1906 on, and it will be some, problem.


Richard Bedford Bennett: Some of them have been validated, I think.


Charles A. Stewart: No, the officials of the department felt that their full duty was performed when these orders in council were tabled, but in the opinion of the Justice department apparently that was not
1SS0

Lower Ear Falls Storage Dam
complete validation, and action should have been taken by both houses of parliament with respect to these. If my hon. friend will indicated such orders in council as he desires to have produced, I shall be glad to bring them down.


Richard Bedford Bennett: There were a number
affecting the Rocky Mountain park.


Charles A. Stewart: I shall be
glad to bring those down.


Henry Lumley Drayton: It occurs to me that if we have been going on very comfortably since 1906 something must have happened to make it necessary for my hon. friend now to propose this legislation. The house will be absolutely in the dark unless he takes us fully into his confidence, or brings down all the orders in council. I have no doubt that somebody has put in claims, and that difficulties have arisen in the department of such a character as to make it necessary to consult the Department of Justice as to what action should be taken. If as my hon. friend the Minister of the Interior says nothing has been done since 1906, it is obvious that now we are either creating or destroying rights.


Charles A. Stewart: We are not creating any rights.


Henry Lumley Drayton: I do not know as to that. Rights may from time to time be created by order in council; on the other hand, rights may have arisen as a result of the absence of orders in council. It would be the same one way or the other.


Charles A. Stewart: What would my hon. friend term a right?


Henry Lumley Drayton: My hon. friend knows that by his orders in council and regulations he does certain definite things, which may put out of court this or that man in connection with certain matters. I am quite sure that my hon. friend the Minister of Justice (Mr. Lapointe) will agree absolutely with me on this principle, that whatever our powers may be, we ought not to pass legislation affecting existing rights unless the parties affected are heard, or unless they are compensated for the rights taken away. My proposal is that when we take up this legislation again the Minister of the Interior be armed with a list of all these things so we can intelligently consider what we are really doing, and whether we are violating any rights that may exist.


Mr. J. A. FRASER (Cariboo):: Mr. Speaker, I would remind the Minister of the Interior (Mr. Stewart) that in the session of 1926 we

passed a validating act in relation to the Railway Belts Water Act. I am at a loss to understand why it is now necessary to duplicate that legislation.


Charles A. Stewart: It is not
duplicating the legislation. I will bring down a list of the orders in council.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Johnston in the chair.
Charles A. Stewart: Mr. Chairman, as I have already pointed out to the house, the object of the bill is simply to validate certain regulations and orders in council, and before it is again taken up by the committee I shall bring down a number of those documents for inspection. I move that the committee rise and report progress.
Progress reported.



LOWER EAR FALLS STORAGE DAM

[Stage Direction]
Hon. CHARLES STEWART (Minister of the Interior) moved that the house go into committee 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 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.
Motion agreed to and the house went into committee, Mr. Johnston in the chair.
John Wesley Edwards: Is $700,000
the total cost or does it represent the three-fifths to be assumed by the Dominion?


Charles A. Stewart: No, $500,000 is our responsibility in the matter. The engineers apportioned $200,000 to Ontario.


Henry Lumley Drayton: Will the minister kindly state the terms of the agreement?


Charles A. Stewart: It is similar to the agreement with respect to the lake of the Woods, and the work will be controlled by the same body under the same set of circumstances, except that the Dominion government is not assuming any responsibility because this Lac Seul storage is not considered to be navigable water. Under the arrangement relative to the lake of the Woods storage, the Dominion government became responsible for one-third of the cost attributable to navigation. In this case all the costs are

Yukon Quartz Mining Act
borne by the interested parties, namely, the power companies in the province of Manitoba and the power companies to be created in the province of Ontario. The Dominion government is not contributing anything to this particular scheme. The construction will be carried out by the Ontario government under the supervision, I believe, of its hydro engineers.


Henry Lumley Drayton: Then the resolution is not quite correct when it is suggested that there will be no cost. The resolution provides that the Dominion government shall assume three-fifths of the capital cost of the dam.


Charles A. Stewart: Yes, we
are putting up the money; we shall have to vote $500,000. It will be repaid to the Dominion by the Manitoba power interests. We are doing this because the Dominion government owns and controls the water powers of Manitoba. All the parties are in agreement regarding the creation of this storage, and the Ontario government having passed the necessary legislation, which has received the assent, all that remains is for this parliament to carry out its part. I do not know that there are any unusual particulars in the bill.


Richard Bedford Bennett: Will the agreement be
attached to the bill?


Charles A. Stewart: Yes.


Richard Bedford Bennett: Then we can discuss it
in connection with the bill.


Robert Gardiner: I presume this legislation is intended for the development of power. Will that power be under the joint control of Manitoba and Ontario, or will it be controlled by the Dominion government and Ontario?


Charles A. Stewart: Until such
time as the Manitoba government shall have secured its natural resources the control will be under the Dominion for the power users of that province, in the same way as the lake of the Woods.


Robert Gardiner: What is the policy
of the federal government regarding power development in the prairie provinces? Is it the policy to give private interests the control of that power, or otherwise?


Charles A. Stewart: The policy
of the government has been, whenever any application has been made for the development of any given power, first to notify the provincial government and then to keep them informed of every stage of the development.
If they require the power for their own use they, of course, are given the first opportunity of securing it; if not the policy is to deal with private interests.


Richard Bedford Bennett: Beyond question, the
agieement will be attached to the bill?


Charles A. Stewart: Yes.
Resolution reported, read the second time and concurred in. Mr. Stewart (Edmonton) thereupon moved for leave to introduce Bill No. 195, an act to facilitate the provision of storage in Lac Seul in the province of Ontario, and to repeal the Lake of the Woods Regulation Act, 1921.
Motion agreed to and bill read the first time.



YUKON QUARTZ MINING ACT AMENDMENT

[Stage Direction]
Hon. CHARLES STEWART (Minister of the Interior) moved that the house go into committee to consider the following proposed resolution:
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 annual profits.
Some hon. MEMBERS:: Explain.


Charles A. Stewart: 
Richard Bedford Bennett: Will the effect of this
be to put the system on the same basis as that of Ontario?


Charles A. Stewart: Yes; it is
exactly the same. We are adopting the Ontario system. The difficulty in the Yukon has been that owing to the very excessive cost of operations in the outlying districts-transportation and other costs incidental to mining-it has been impossible for the companies to operate and to pay royalties, and year by
18S2
Yukon Quartz Mining Act

year we have been extending to them a privilege in allowing them to escape payment of these royalties. Had we compelled them to pay the royalties-we have the assurance of responsible people to this effect-it would have closed down mining operations in that district; and in order to obviate that I am introducing this legislation, putting the system on precisely the same basis as that of the province of Ontario. Upon annual profits in excess of 810,000 and up to $1,000,000 the payment shall be three per cent; in excess of $1,000,000 and up to $5,000,000 five per cent; and in excess of $5,000,000 and up to $10,000,000, six per cent.


Richard Bedford Bennett: That is, on the price
they get?


Charles A. Stewart: Yes. These
are the provisions which I wish to have embodied in the bill.
Motion agreed to and the house went into committee, Mr. Johnston in the chair.


Richard Bedford Bennett: Will the bill contain a
provision fixing the rates of percentage?


Charles A. Stewart: Yes; I have just quoted them.


Richard Bedford Bennett: I wanted to be sure.


Robert Gardiner: It is proposed to restrict this legislation to the Yukon. In view of the arrangement made in Manitoba with the Flin Flon, would it not be advisable to adopt the same principle there and get something out of it? Has not the government given up royalties in that big mining area for twenty years? We shall get nothing at all out of those natural resources, and if this legislation is good for the Yukon, it should be good for Manitoba.


Charles A. Stewart: It is our
intention to apply these provisions to the Northwest Territories and to the prairie provinces, but that would not apply to the exemption given the Hudson Bay Mining Company, which operates on a very restricted area-something like two miles by three. The balance of their claims, some ninety odd which are in that immediate vicinity, do not come under these exemptions.


Robert Gardiner: Perhaps this is not in
order, but will the minister explain why such a small area is exempted? What is the real reason for that exemption?


Charles A. Stewart: Only to induce the company to go in and operate. Perhaps my hon. friend is not aware of the fact that the old company had a very much

larger area under exemption for a ten-year period, which expires in 1930. However, I will be glad to discuss this with my hon. friend on another occasion.


Peter McGibbon: Will the minister be
good enough to tell us how these companies can pay percentages if they cannot pay royalties?


Charles A. Stewart: It will partially obviate the necessity of an examination of their books and accounts. The difficulty has been that had we insisted on the collection of the royalties, these large companies would have closed down immediately.


Henry Lumley Drayton: The difference
is that you are giving an exemption.


Charles A. Stewart: That is what we have been giving, and once they earn the amounts set out in the proposed act we begin to collect royalties.


Peter McGibbon: Then the minister will
admit that if they have not paid anything under this act the department has been beaten out of some money.


Charles A. Stewart: No, I
could not admit that, because we have taken every precaution to ascertain that their reports were correct. Now it will not be necessary to check them constantly to see whether their reports are correct, and it will not be necessary to pass orders in council annually exempting them from the payment of royalties.


Richard Bedford Bennett: This gives me an opportunity to mention something which I had not intended to bring up, but which the hon. member for Acadia (Mr. Gardiner) has mentioned; I refer to the Flin Flon mine. I apprehend that the exemption in that case has been made by order in council?


Charles A. Stewart: Yes.


Richard Bedford Bennett: As yet that order in
council has not been validated by parliament, and I was anticipating that it would be brought down together with all the papers, which would enable us to say something about it. At present we are not in a position to determine the merits or the demerits of the proposal. I may say they are principally demerits from my observations and the knowledge I have, although that is a matter of opinion.


Charles A. Stewart: I may say
to my hon. friend that I am just as keen as anyone to get revenue, but this was a matter of arrangement with the government of

Yukon Quartz Mining Act
Manitoba. Of course I must assume the responsibility; I am not seeking to avoid it, but we had a full discussion and consultation with the government of Manitoba, and apparently an assurance was given that unless some concession of this kind were granted or extended, this company would not invest in the property.


Mr. ADSHEAD:: May I ask how you are
going to arrive at the gross profits or the net profits made by these companies? Did I understand the minister to say that gold was valued at S15 an ounce?


Charles A. Stewart: Yes, under
the present system. Of course, it fluctuates as do all other commodities.


Herbert Bealey Adshead: But the present price of gold is $20.1f>
an ounce. How was the figure of $15 arrived at?


Charles A. Stewart: I will admit there are some difficulties to be overcome, but we are abandoning that system land adopting the present method.


John Anderson Fraser: Under the old system has the royalty paid on the production of the mine?


Charles A. Stewart: Yes.


John Anderson Fraser: And now it is paid on the profit?


Charles A. Stewart: Yes.


Edward Joseph Garland: But that is the very question brought up a moment ago by the hon. member for East Calgary (Mr. Adshead). How do you determine the profit?


Charles A. Stewart: In Ontario
they have a very well defined method of ascertaining the profit; there are certain charges allowed the companies which are taken out of the calculation in arriving at the net profit and the gross profit. These are elements which we will discuss when the bill is in committee, but full provision is made for an accounting and an examination of the company's books.


Mr. GARLAND (Row River):: Then, in
effect, will the minister admit that this resolution simply prefaces the introduction of a measure of exemption from charges at present applicable to these mining companies?


Charles A. Stewart: It would
have this effect; mining companies which are making no profits certainly would not pay a royalty, whereas if the present system were enforced the royalties would have to be paid,
which would put many of the companies out of business. Where a company is not making a profit in the mining of gold, silver or lead, under our present act we have the right to collect royalties, but my hon. friend will understand that if they are not making a profit they will not stay in business very long. Ontario and Quebec have realized that and have adopted the principle of collecting a royalty on the profit.


Edward Joseph Garland: Then does not the minister think that this whole provision would rather open the door to speculation in mining property, just as we have speculation in western lands to-day? A company may secure a holding but it is under no obligation to develop it; it does not have to pay a royalty, and this property can be held out of production.


Mr. LAPIERRE:: They have to do a
certain amount of development.


Charles A. Stewart: They do not pay any royalty unless they are producing now.


Edward Joseph Garland: But there is a certain annual tax. Now you are leaving it in the hands of these companies to hold the property for speculation.


Charles A. Stewart: I think my hon. friend is wrong there. They pay no royalty under the existing act unless they carry on development work and are producing, but the difficulty is that they may be developing and producing without making a profit. They may face losses, and under the existing act we have the right to collect for every ounce of gold that they produce, as well as every ounce of zinc or every ounce of lead. We have found ourselves in this position in the Yukon, that if we enforced that provision we would put some of the companies out of business. Therefore we have suspended the royalties in order to permit the companies to carry on, and I frankly confess that I do not like that system; I do not like recommending that responsibility to the government. I would much prefer the Ontario and Quebec system, under which the company has to earn a certain profit before a royalty is collected. I think we will all agree that unless a company is earning some profit it is not in a position to pay a royalty, and that is the reason I am asking for this change.


Edward Joseph Garland: The hon.
member for Nipissing (Mr. Lapierre) interjected a remark a moment ago concerning which I would like to have some information. I would like to know if it is correct that

Yukon Quartz Mining Act

under Dominion government leases to-day a certain development is required within a certain period of time.


Edmond Antoine Lapierre: That is so under the
Ontario government.


Edward Joseph Garland: I am talking about the federal act.


Charles A. Stewart: I would like to be definite about that; there are so many different leases.


Richard Bedford Bennett: Some of them contain that provision.


Charles A. Stewart: I know some of them do, but I do not want to make any mistake in answering that question. I will secure that information, however.


Robert Gardiner: The minister has brought up a new point which seems to be very important; he says that unless a company is making a profit the government will not collect any royalty. Will he apply the same principle to the farmer with respect to the tariff? Is not that just as logical as the proposition which is now placed before us?


Charles A. Stewart: Unfortunately land has never been designated as a mineral, although I believe we are accused of mining the land out west. But land, whether profit has been made or not, has always been deemed to be taxable, whether in an urban or in a rural locality. That is the only answer I can make to my hon. friend. This, I must confess, is very much under the same principle as the income tax, and under the Income Tax Act no taxes are paid unless a certain percentage of profit is earned. In some degree it is a duplication of the income tax, and to that extent I think it is fair.


Robert Gardiner: The Minister of the Interior has said that unless a company has made a profit they will pay no tax. It is quite true that land is altogether different from minerals; but on the other hand, whether the farmer makes a profit or not in any one year, he has to pay the tariff tax. Apply the same principle. What we object to is giving to certain classes exemptions which you do not give to others.


Charles A. Stewart: I think my hon. friend is under a misapprehension. The company pays the provincial taxes and all other taxes of every kind. They are not exempt from taxes on their property; but when they come to pay royalty on their production, then insead of its being based on a definite amount per pound or per ounce, it is based on profits. That is all the difference.


Robert Gardiner: That is my point as far as the tariff is concerned; if we do not make any profit we should not pay any tariff tax, and if we do make a profit we should pay the tax.


Richard Bedford Bennett: The wheat pools make no profits and therefore pay no income tax, which is a proper application of the principle. The same principle is being applied here-no profits, no taxes.
Resolution reported, read the second time and concurred in. Mr. Stewart (Edmonton) thereupon moved for leave to introduce Bill No. 196 to amend the Yukon Quartz Mining Act.
Motion agreed to and bill read the first time.



MILITIA PENSION ACT AMENDMENT

[Stage Direction]
Hon. J. L. RALSTON (Minister of National Defence) moved that the house go into committee to consider the following proposed resolution:
That the Militia Pension Act be amended,- 1. In regard to reservations from an officer's salary while in the public service of Canada: to the payment of a gratuity to a widow or children in case of death before pension may be granted; and to the payment of pensions to militiamen of His Majesty's army reserve who enlisted in the permanent force; and for additions to apply the Militia Pension Act to the royal Canadian navy and to that portion of the royal Canadian air force comprising solely the permanent active air force of Canada.
Motion agreed to and the house went into committee, Mr. Johnston in the chair.
Richard Bedford Bennett: Explain.


James Layton Ralston: Two of the sections of the bill which is founded on this resolution are made necessary by the passing of the new Civil Service Superannuation Act and its substitution for the. Civil Service Retirement Act. In this respect the title of the new act is substituted for the old one. There is a section which provides for certain cases of hardship, in that widows and children do not receive any allowance where an officer dies before having served the requisite number of years required for pension. The Civil Service Superannuation Act provides that a gratuity, one month's pay for each year of service, is payable to the widows and children of civil servants who have not served full time for pension. Under this bill the provision is for the payment of the amount which has been actually deducted from the salary.


Richard Bedford Bennett: With or without interest?

Militia Pension Act


James Layton Ralston: Without interest. There is also a provision to cover the cases of 149 men who were in the British army reserve. These cases were taken up before the commission with which I had something to do some years ago, and have been presented to this house from time to time. The situation was that certain men who had first served under the colours of the British army had then gone on the British army reserve and afterwards enlisted in the permanent force here. The condition of their enlistment in Canada was that they could be called up to the colours in the British army. The war came on and the Canadian authorities asked the British authorities to allow these men to serve here, which they did.


Richard Bedford Bennett: They having first been
called up.


James Layton Ralston: A request having been
sent by the British authorities to the Canadian authorities asking that they be sent back, the Canadian authorities asked that they might be allowed to stay here. The British authorities consented that these men should be allowed to remain with the Canadian army, and they served with it. Their complaint is that by this action of the British authorities they were prevented from counting toward their service for pension their British service with the colours and in the reserve. Under the Militia Pension Act their service towards pension began to run only from the beginning of their Canadian service. It will be remembered, however, that the pay and allowance regulations of the Canadian service provided for a much higher remuneration than under British service, and also the rates of pension were very much higher. I think the view has been taken, although apparently no definite decision has been made, that possibly most of these reservists were as well off, in view of the higher rate of Canadian pension and the higher rate of pay, as if they had returned to the colours in Britain and served at the lower rate of pension and the lower rate of pay. However, it has been thought well to make an equitable adjustment of the matter, and the proposal of the bill will simply be this that these reservists be treated as if they had been permitted to go back to England when they were called up by the British authorities, and be paid by the Canadian authorities the amount of pension which they would have earned had they served with the British army during the war. Then if they 56103-1204
continued serving after the war their service counts towards pension period under the Canadian provision.


Richard Bedford Bennett: I should think that was not quite enough.


James Layton Ralston: They have the option of accepting that plan, or of counting their full Canadian service towards a Canadian pension at the higher rate. I think this puts them in exactly the same position as if they had gone back and served in the British army.


Peter McGibbon: Is that satisfactory to
the reservist?


James Layton Ralston: I cannot say that. All
sorts of propositions have been made. I think it has even been proposed that they have both Canadian and British pensions.


Mr. BRADY:: How many will be affected
by this?


James Layton Ralston: One hundred and fortynine, at the most; but many of these will find that settlement under Canadian regulations will be better than if they had gone back and taken the British settlement. There is another provision, and it is also rather technical, but it seems to be a case which should be provided for. In July, 1919, in order that a very large number of overseas officers might be discharged from the force on fair terms, an act was passed providing that when a man completed ten years' service he would be entitled to retire under pension; and under that act many officers who had served in the Canadian expeditionary force were discharged. It applied only to those of the permanent force serving at the time the act was passed. There were a certain number who served in the Canadian expeditionary force but who in July, 1919, at the time this act was passed, had been invalided out on account of wounds and who therefore did not come under the provision of the ten-year period. It has been thought fair to provide that the act of 1919, which permitted a man who had served overseas to have a pension on ten years' service, should apply to those who, by reason of wounds, were not actually in the service at the time. That provision is in this resolution. The last two provisions are to make the regulations of the Militia Pension Act apply mutatis mutandis to the Royal Canadian Navy and to that portion of the Royal Canadian Air Force comprising solely the permanent air force of Canada.


Peter McGibbon: It is the intention of
the minister to send this legislation to the special committee?
Militia Pension Act


James Layton Ralston: No, although I have no
objection whatever. This is a service pension, not a disability pension. It is in quite a different field and would involve an examination of an entirely different act from the one that the committee has been considering.


Peter McGibbon: I think the option which the minister, on behalf of the people of Canada, is giving to reservists is very fair, but there is a tendency in all these pensions, under the Pension Act and in the pension committee, to gather everything and everybody within the folds of the act. If I am correctly informed, we have gathered into the act a lot of office boys, elevator boys who served as such during the war and who happened to be put into uniform, and I am credibly informed that a number of these are receiving larger pensions than the people who served over in France. I would suggest to the minister that he send this to the committee, and in order to be fair and just to everybody let us clean the whole situation up. There has been too much interweaving of the militia, the soldiers, the reservists, and practically everybody else in this country under the pension board, for the one purpose, of course, of getting a larger pension. The whole thing ought to be cleared up before the end of the session.


James Layton Ralston: I understand my hon. friend's proposal, but I do not quite apprehend the reasons for it. In this resolution we are dealing with the Militia Pension Act, which provides for pensions for men who have given a certain amount of sendee in the militia. What my hon. friend is talking about is pensions to men who have suffered disabilities on account of war service. That is an entirely different thing and based on an entirely different principle. The one is to meet a lack of earning power caused by a disability incurred during the war, and the other is an award which is given to any public servant, either under the civil service or the army Pension Act or any other sort of superannuation act, after he has served a certain time, even though he is in full bodily health when discharged. Before thinking of referring this bill to the committee which has to do with returned soldiers' problems and pensions I should want to consult with the chairman of the committee. The pensions dealt with in that committee have to do with returned soldiers. It happens that these reservists who served in the war come in as well, not because of disability pensions but 'because of service pensions, and these reservists are asking for consideration because of British army service pension regulations, not as war pensions.


Peter McGibbon: And some because the time limit and service wounds have put them out of pensions.


James Layton Ralston: That is not brought in as a disability pension at all. As a matter of fact I do not think I have had any representation from any body of men with regard to that last class I mentioned; but men have been deprived of the benefit of the ten-year provision because -they happened to be discharged on account of wounds a little before that act -came into force. In this case again it is not a disability pension but a service pension which is granted.


Mr. ROSS (Kingston):: Has the minister had any communication from officers now in our permanent service who claim that if this goes through they are not being fairly treated; in other words, that they have served in departments and are not getting the benefit of that service on joining the permanent force? Has the minister had any correspondence from any permanent officer in regard to cases of a similar nature to this?


James Layton Ralston: I do not think I have with regard to a case of a similar nature to this. Many representations have been made in individual -cases by those who have felt that the disposition of their particular case regarding pension has not been just or equitable. I have endeavoured myself to review all those cases and to give every consideration to the representations made, bearing in mind that we have to have some sort of uniform system, and keeping in view the provisions in other acts as well. I think I can say that the bill founded upon this resolution is, generally speaking, a result of that consideration.


Arthur Edward Ross: There is another class whose -case I have for some years been bringing to the attention not only of the present minister but of previous ministers. I refer to the case of service pensioners' wives and children who have been deserted and who are now living on charity and work, whereas the pensioner is in some other country enjoying a pension paid by this country. I have asked the minister for the last three years if some change could not be made so that the wife and children, living in Canada, of such pensioner should get the benefit of that pension.


James Layton Ralston: My hon. friend has made representations, and exactly similar representations are made with regard to disability pensions. But it must be remembered that the pension is payable to the soldier, and it is very difficult for the pension authorities to enter the home and -determine the merits of a

Militia Pension Act
domestic dispute and legislate and say that the pension which is payable to the soldier shall be paid to somebody else. That is a matter for the civil, not for the pension authorities.


Arthur Edward Ross: It is a very difficult one. The civil authorities cannot do anything about it. If the man is in the old country they cannot touch him. Month by month the pension is going out to that man, who may be living with another woman or under some unfavourable circumstances in another country, while the wife and children in Canada are without means of support. They cannot go to the Mothers' Allowance Board because they are met there with the statement: Go and find out where the man is and follow him with a civil action. There may be some legal reason why the Pension Act cannot be changed, but I do not know what it is. I think it is unfair to ask these people to take civil action.


Richard Bedford Bennett: Am I right in assuming that this legislation deals solely with the statutory right to pension based upon contributions made by the soldier or amounts withdrawn or withheld from his pay?
^Mr. RALSTON:	That depends upon
whether it is an officer or a non-commissioned officer or man. There are no deductions made from a non-commissioned officer or man as m the case of the officer.


Richard Bedford Bennett: This is an endeavour, then, to place the statutory pensions upon a little better basis. That is the whole story, as I understand it. There is one other point to which I should like to direct attention, and which has been touched on by the hon! members for Kingston City and Muskoka-Ontario. Not long since a case such as they mentioned came to my attention. I intended to write the department about it, but did not do so. It does occur to me that when this bill is being considered by the minister he might provide a section whereby, in the case of an order for support being made against the husband at the instance of the wife, the department would be enabled to pay the money to the wife. I think the minister could go that far. There are similar provisions in all the provinces dealing with the right of the wife to support by her husband, and if the department would take the same view that the Finance department took with regard to the Nova Scotia subsidies, when it withheld a portion of the subsidy because the province had not paid for troops that were sent down
there, I think an application of the same principle in this case might bring about the result we aim at.


Herbert Bealey Adshead: What provision is made for the wives of non-commissioned officers and privates in case they get in distress?


James Layton Ralston: I have not the act before me. There are a good many provisions in it but I think the act itself provides with regard to the widows of non-commissioned officers and men for gratuities, not for pensions. Pensions are based on the fact that contributions are made by officers. No contributions are made by non-commissioned officers and men. There is no change made by this act with regard to the wives of non-commissioned officers and men.


Herbert Bealey Adshead: Is there any reason why they should not come in if they are willing to contribute?


James Layton Ralston: It has never, I think,.been inquired into whether they are willing to contribute, but I should be very much surprised if they agreed to a contributory scheme.


Mr. MacLEAN (Prince):: Has the minister considered dependents other than the wife and children? I have a case in mind where
a military man left his sisters, who are dependent upon him, and who had contributed largely to the funds, and they have never been able to get anything in the way of a pension. To my mind their case is in the same category as those that have been referred to this afternoon.


James Layton Ralston: I think my hon. friend has spoken to me about that case before. Was it the case of an officer who had not served the full period required for a pension?


Alfred Edgar MacLean: I think he had served the full period.


James Layton Ralston: There is no provision here for extending the ambit of dependants in that case. The dependants are the wife and children.


Mr. ERNST:: The minister referred in the course of his remarks to civil remedies where pensions were payable and the widow, or the grass widow, I should say, was not able to obtain a proportion of the pension. Is there any serious objection to providing legislation whereby if the wife is unjustly deserted she can obtain a proportion of the pension as a matter of principle?


James Layton Ralston: I would say immediately that the pension paying authority would then be put in the place of a court trying a question
Militia Pension Act

of domestic relations between husband and wife. My hon. friend the leader of the opposition mentioned a different case, where an order had already been made and the matter dealt with by a court of competent jurisdiction.


William Gordon Ernst: The minister misunderstands me. I did not mean that the pension board should be placed in the position of a court, but was speaking of cases where there had been an order by the court. Let us say that the divorce court in Nova Scotia grants alimony. To-day the pension cannot be attached for alimony. I have one particular case in mind where the husband is looking forward to the divorce because he will get clear of supporting his wife, whereas a proportion of his pension is going to her so long as they remain married. If the court has made an order for alimony, is there any reason why the pension paying authority should not deduct the amount from the pension?


James Layton Ralston: The same reason, I would think, why the employer of that husband should not be called upon to recognise an order for the payment of alimony.


William Gordon Ernst: You can garnishee his wages.


James Layton Ralston: That is not simply recognising it and paying the amount without a special proceeding, and I do not think even a garnishee would apply until provision had been made so that the husband would be entitled to his maintenance. I shall be very glad to take the suggestion of the leader of the opposition into consideration, that is in cases where an order has actually "been made.


William Gordon Ernst: That is all I am asking.


James Layton Ralston: My hon. friend said where the wife had been unjustly deserted.


William Gordon Ernst: I did not mean to say that, but I had in mind cases where there had been an order by the court, for alimony, for instance.


Arthur Edward Ross: Is it clear, then, that the minister agrees that an order of the court shall be respected?


James Layton Ralston: 
Arthur Edward Ross: Will the minister
. agree to move that the committee rise so that he can consider this matter?


James Layton Ralston: I think that is unusual.


Arthur Edward Ross: I want to bring
before him the definite case of an officer.


James Layton Ralston: That is all right. My
hon. friend can bring it up now.


Mr. KAISER:: There have been a number of cases where a soldier has died within two or three years after the war and left a widow, but she is not entitled under the law to receive a pension unless it can be demonstrated that the soldier's death was due to war service. Now' there are many instances where medical experts cannot positively testify that death was due to war service, and I therefore do not see anything unreasonable in my suggestion that if a soldier dies within a reasonable time, say within two or three years after returning from the war, his death should be considered due to war service. There is not a great number of these cases, and they should all be considered on the same plane. I know one or two cases where the widow is in difficulties because the husband died within a year or two-in one case within a year-after the war, and it was not clear that his death was due to war service. I think the country could well afford to regard these cases as being war casualties.


James Layton Ralston: We all have cases similar to those to which my hon. friend refers, but they do not, I think, come within the spirit of the Militia Pension Act, which provides for pension only in the case of a definite period of service. What my hon. friend is referring to are cases which come under the Pension Act providing for pensions in case of death from war disability. Those are now being considered by the special committee, as my hon. friend knows.


Thomas Erlin Kaiser: It is being considered?


James Layton Ralston: I do not know whether
the particular case which my hon. friend puts is being considered, but I shall be very much

Customs Act
surprised if it is not, because it was brought up whenever the problems affecting ex-service men are considered.
Resolution reported, read the second time and concurred in. Mr. Ralston thereupon moved for leave to introduce Bill No. 197, to amend the Militia Pension Act.
Motion agreed to and bill read the first time.



CUSTOMS ACT AMENDMENT


[Stage Direction]
Hon. W. D. EULER (Minister of National Revenue) moved that the house go into committee to consider the following proposed resolution.
That the Customs Act, chapter 42 of the revised statutes, 1927, be amended to make provision for a more adequate enforcement of the act and the prevention of smuggling operations in the territorial waters of Canada.
Henry Lumley Drayton: Explain.


Mr. EULER:: The bill to be founded upon this resolution is the result of recommendations made by the royal commission with regard to smuggling, especially on the eastern coast of Canada. At all times there has been considerable doubt whether, in law, we have authority to make seizures within territorial waters of Canada beyond the three mile limit. The bill is intended to remove that doubt so far as it is possible to do so. With regard to vessels of British registry, we are extending the limit to twelve miles as well. There is also provision in the bill requiring importers to keep accurate and complete books of record of their importations. That has not been the case in the past, and in many instances it has been very difficult to establish that goods were smuggled.


Richard Bedford Bennett: That would not go far with bootleggers.


William Daum Euler: I am afraid not.
Motion agreed to and the house went into committee, Mr. Johnston in the chair.


Richard Bedford Bennett: Mr. Chairman, perhaps
the minister will be good enough to explain to the committee the recommendations made by the royal commission that will not be included in the legislation under this resolution; or, if he desires it the other way, to explain which of the recommendations will find a lodging place in the statute that he now proposes to enact.


William Daum Euler: A very considerable number of the recommendations of the royal commission are embodied in three separate bills; one to amend the excise act, which has had a third
reading; another based on this resolution; and a third, the resolution for which will follow after this is disposed of.


Richard Bedford Bennett: This deals only with territorial waters?


William Daum Euler: That is all, except in regard to keeping complete books of record of importations.


Mr. MARCIL:: Three or four years ago, Mr. Chairman, I brought this matter up in connection with the Bale de Chaleur. It has been the practice there for boats to stay outside the three mile limit and keep open bar both day and night, the fishermen getting their supplies of liquor from those boats and landing it at various points along the coast. The hon. Speaker co-operated with me in protesting against this practice, and asking for legislation to put a stop to it. I wish to congratulate the minister on this resolution, for I think no means would be too severe to put a stop to what has become a very serious abuse, leading to the demoralization of the fishermen and their families. I am sure the suggested legislation will meet with the hearty approval of people residing both in New Brunswick and Quebec.


Richard Bedford Bennett: It is in respect of that and similar matters that I am endeavouring to find out what the minister proposes to do. If my memory serves me correctly, His Lordship Bishop Ross wrote a letter to the royal commission in which he pointed out just what the hon. member for Bonaventure (Mr. Marcil) has mentioned. At that time it was clear that we could not cope with the situation. Recommendations were made by the royal commission. Will the minister be good enough to explain just what he proposes to do to meet the situation? Owing to the shoal waters liquor boats anchored more than three miles from the shore of the Baie de Chaleur and the local fishermen sold their catch and with the proceeds bought strong drink, to the utter demoralization of themselves and the ruin of their families. It was felt at that time that we should consider the whole situation not only from the national, but possibly from the international standpoint also. Will the minister explain to the committee what is being done in that regard?


William Daum Euler: I regret Mr. Chairman, that I did not make myself clear on the point. As I said at the outset, there has been doubt whether we have power to seize any vessels beyond the three mile limit, although in what might be regarded as territorial waters of Canada. We want to be in a position to seize any vessel so long at is it in such waters.
i890
Customs Act


Richard Bedford Bennett: What is the definition of territorial waters?


William Daum Euler: I do not know. I am free to admit that a difficulty may be encountered there, and the question is one that must be left to the judgment of the courts. They must say what constitutes territorial waters. I do not think anyone can say absolutely, with regard to any particular section of the coast, what comprises the territorial waters of Canada and what does not.


Mr. CHAPLIN:: Will this apply to other than British vessels?


William Daum Euler: If in territorial waters of
Canada, yes. AVith regard to Canadian vessels or vessels of British register there will be a limit of twelve miles from our own coast.


William Gordon Ernst: Twelve miles off Halifax,
say?


William Daum Euler: Yes.


William Gordon Ernst: Where under heaven can you get a power like that?


William Daum Euler: They are our own vessels.


William Gordon Ernst: But they are outside your own territorial waters.


William Daum Euler: This is entirely in harmony with the recommendation of a commission consisting of three judges. I do not know whether my hon. friend has any confidence in their opinion.


William Gordon Ernst: I have not the slightest confidence in it if it applies to vessels twelve miles off Halifax. The Supreme Court of Nova Scotia in a case tried recently decided otherwise.


William Daum Euler: My hon. friend will not say that this will do any harm?


William Gordon Ernst: I fancy you will find yourself in a blind alley; you will get nowhere. The courts will hold such a provision as this ultra vires.


Richard Bedford Bennett: Why twelve miles?


James Dew Chaplin: Because the United States fixed upon that limit.


William Daum Euler: For that matter, why three miles?


William Gordon Ernst: That limit is for international
purposes.


William Daum Euler: Well, we might have made it thirteen. As a matter of fact we thought of making it eighteen, but it was felt that twelve miles would be a fair range.


Henry Lumley Drayton: I presume that what the minister is really doing is following the tentative arrangement made between Great Britain and the United States?


William Daum Euler: Yes.


Henry Lumley Drayton: And that gives a right of search up to twelve miles; that is my recollection. With regard to the three mile limit, the minister professes ignorance of the reason for that arbitrary limitation having been established. Surely he must know what that reason was. Every country has the right to protect its coast, and three miles was fixed upon for the reason that, at the time that limitation was established, three miles was the range of cannon. One argument advanced by the United States in relation to the twelve mile limit was that the range of shore cannon had tremendously increased, and they felt that the limit should be correspondingly extended. At any rate, whether right or wrong, the three mile limit was fixed for the reason I have stated. But my hon. friend has not answered this pertinent question: What are territorial waters so far as Canada is concerned? The minister confesses that he is unable to answer the question, and I sympathize with him in his view that the question is one for the Justice department. But has not the Minister of Justice been taken into my hon. friend's confidence in connection with the bill? I speak subject to correction, because I have been away so much, but I remember that in connection with the customs investigation Mr. O'Connor was consistently of the view that most of these waters were enclosed to us-mare clausum, over which we had sovereign rights. He thought the Bale de Chaleur was one of these, as well as the Northumberland straits. He prepared an argument in support of this view-an argument for which, by the way, he was not paid. Nor was he allowed to sue for payment. Is the minister adopting Mr. O'Connor's opinion without having paid him for it? At any rate, I think seriously we are entitled to know exactly what we are doing. Take for example lake Ontario, Where there is considerable activity: I am sure the minister desires to take action there. Well, is that a territorial water of Canada?


William Daum Euler: I think it would be, to the middle of the lake.


Henry Lumley Drayton: Is that understood with the United States in connection with the endeavour to put a stop to the nefarious practice there?

Customs Act


William Daum Euler: This is not particularly designed for the lakes; the legislation is intended to apply to the coasts.


Henry Lumley Drayton: Has the minister any definition of "territorial waters"? Is there any such definition in the bill?


William Daum Euler: No, but I may say for the benefit of my hon. friend that the bill has passed the scrutiny and had the approval of the Department of Justice. I am not a legal man and candidly I do not know what might constitute territorial waters in any given case. Would my hon. friends tell us where, in their opinion, territorial water begins or ends at the mouth of the St. Lawrence, for example? Can that be decided? We must take each case as we come to it.


William Gordon Ernst: I do not propose to answer the minister's question, but I ask him in all seriousness to tell us just what the purpose of this bill is. Is it intended to justify or to attempt to justify seizures beyond three miles from low water wark on the coast line, say, of Nova Scotia?


William Daum Euler: If they are hanging about the coast outside the three mile limit and we know that their object is to smuggle, we want to be able to seize them.


Richard Bedford Bennett: Regardless of the flag
they fly?


William Daum Euler: If within territorial waters, yes.


William Gordon Ernst: But what does the minister mean by "territorial waters?" The definition given in the British Territorial Waters Jurisdiction Act is, three miles from low water mark; so that within a radius of three miles around an island a ship would be within territorial waters.


William Daum Euler: That is not in accordance with the argument of my hon, friend from West York.


William Gordon Ernst: It is in accordance with the findings of the court. In the case of Mason versus Coffin, in which the department made a seizure beyond the three mile limit, the Supreme Court of Nova Scotia only a few months ago held this action to have been unwarranted. It is therefore futile to pass such a law. Why does not the minister go to the British parliament and have the Territorial Waters Jurisdiction Act enlarged if he feels that the present law is not wide enough? We have no constitutional power in the matter, and if the minister is honest he will appeal to
the British parliament to have the law amended. I should like to see this done, but the minister should recognize that this parliament has not the power to pass such a law as this.


Mr. CHURCH:: Any improvements in the customs regulations will be in the public interest. This whole question dates back to the pioneer work done in this house by the hon. member for Vancouver Centre (Mr. Stevens), who was mainly responsible for the collection of $60,000,000 of customs dues which otherwise would not have been received. Has the minister endeavoured to enforce our customs regulations without seeking help from the admiralty of the United States? I noticed the other day that an armed flotilla of American boats entered the port of Walker-ville, within the territorial waters of Canada, over the head of the Canadian government, and fired off guns and rifles, breaking windows, according to dispatches in various papers in the Toronto district. If the government of Canada need life-saving operations carried out on the great lakes they must at present appeal to American life-saving stations. When there is a mine disaster and 100 men or thereabouts are killed or injured, as in the case of the Hollinger mine, they have to go to Pittsburgh to get a life-saving crew. Is the government going to depend upon the United States in order to prevent smuggling in territorial waters of Canada, and appeal for assistance from American customs boats? How much longer is the government going to stand for that sort of thing? It is all very well to say that they are tightening up the regulations, but the fact is that around Windsor and elsewhere they have to rely somewhat on American craft to-help them enforce their regulations. Where is this wonderful external affairs department with, its admiralty. Where is the admiral, with an American invasion at Walkerville? I hope the minister will become active. I must give him credit for having been active in the past year and having tightened up the regulations, on the initiative of the hon. member for Vancouver Centre. But these regulations should be enforced without help from the admiralty of the United States. I hope now that this wonderful Department of External Affairs will get busy and mobilize our fleet in the Detroit river to protect the citizens of this country instead of sending ambassadors all over the seven seas. Smuggling should be prevented by co-operation between the two governments, and we should tell the authorities of the United States that when they cross into Canadian waters they are in a dangerous position, without regard to our new status.
Customs Act


William Daum Euler: I have no knowledge whatever of American preventive officers or boats entering Canadian waters and firing shots on Canadian ports. If that be true I certainly think it would require some investigation and consideration. But the hon. member has confused two things. Smuggling into the United States is not smuggling until boats leave Canadian waters, and I know of no smuggling into Canadian territory at Windsor or Walker-ville or other ports. It is quite true that goods, wet goods if you like, leave Canadian ports, but even if they are carried in American bottoms that is not smuggling into or out of Canada, and has nothing to do with the prevention of smuggling. When these goods enter the United States it may be smuggling, but that is not breaking a Canadian law.


Mr. BELL (Hamilton):: Then will the
minister inform the committee if there was no breach of the Canadian law when the steamer Kennedy was taken in for hovering in the Northumberland straits with $20,000 worth of Scotch whiskey belonging to a company of which the hon. member for Antigonish-Guysborough (Mr. Duff) was president?


William Daum Euler: I made no reference to that.


Leslie Gordon Bell: I would like the minister to refer to it.


William Daum Euler: The two cases are not at
all parallel. I think we have always contended that the Northumberland straits are Canadian territorial waters, although I believe that point is contested.


Leslie Gordon Bell: If the minister is correct in that, perhaps he will be able to inform the committee why the $20,000 worth of wet goods carried by the Kennedy was afterwards handed back?


William Daum Euler: I have no knowledge of the case; I cannot recollect the circumstances. However, it has happened in other cases that we were found to be wrong in the seizure, and naturally we had to give back the goods.


Richard Bedford Bennett: It was held that Northumberland straits were not territorial waters.


William Daum Euler: If we were not entitled to
make the seizure we had to give back the goods.


Leslie Gordon Bell: If my hon. friend will allow me, the records show that the question of whether or not the Northumberland straits were territorial waters was not decided; there were opinions in favour of that contention and opinions against it, and it has not been decided up to the present.


William Daum Euler: Perhaps I should know about this case, but I do not, and I should like to know the circumstances. Did this case come before the courts, as to whether we had power to seize that $20,000 worth of liquor?


Leslie Gordon Bell: No. The department had reports for and against that contention, and they decided that they would-


Richard Bedford Bennett: Give the prisoner the
benefit of the doubt.


Leslie Gordon Bell: And the whiskey.


William Daum Euler: I have no knowledge whatever of that case; if it were done in that way I have no doubt the departmental officials had good reasons for so doing.


William Gordon Ernst: Is it honestly the considered opinion of the law officers of the crown that this parliament has power to pass laws affecting British or other ships beyond three miles from low water mark on the coast line of Canada?


William Daum Euler: Is my hon. friend referring to territorial waters?


William Gordon Ernst: I am referring to the three mile limit, say three miles from the extreme point of the Nova Scotia coast. Within that three mile limit these waters are territorial, but is it the considered opinion of the law officers of the crown that we can legislate for twelve miles beyond the low wafer mark?
M(r. EULER:	Only for ships of British
registry.


William Gordon Ernst: Then I venture to say that this law will be held ultra vires the first time it comes before the courts. This principle was so held by the privy council in 1897.


William Daum Euler: I can only repeat what I have already said, that the bill was drawn with the assistance of the officials of the Department of Justice.


William Gordon Ernst: Then I have not a very good opinion of the law officers of the department.


Richard Bedford Bennett: Surely the Prime Minister is interested in this matter. If we claim the right, not as a sovereign state but as a selfgoverning dominion, to pass certain legislation, we cannot claim the right to place ships flying the flag of Great Britain in any different position from the ships of any other country. That is obvious, and if you now propose that a British ship can be seized within twelve miles of Nova Scotia if it carries a cargo of liquor, obviously that law must stand or fall on a determination of the question whether or not you can apply the same

St. Clair Transit Company
rule to ships flying the American flag or the Norwegian flag, and surely it is clear that you cannot do so. In addition to that, the parliament at Westminster passed the Territorial Waters Jurisdiction Act, largely because of a certain decision in which thirteen judges took part. It is a matter of interest to us that on that case sat the only Canadian who ever has been a member of the High Court of Justice in England. Those judges divided very acutely upon the question. The imperial parliament then passed this Territorial Whters Jurisdiction Act, and the jurisdiction thus defined is three miles out to sea from low water mark. In the light of that legislation, and following the decision in the Nadan case, how can this parliament pass a law with respect to any ships other than its own beyond the three mile limit?


William Daum Euler: It applies only to our own ships.


Richard Bedford Bennett: No; the minister was
very careful to say that it applied to ships of British registry as well.


William Daum Euler: I understand that there is
only one registry. I am not familiar with these legal points, but I believe there is only the British registry, and that we have no strictly Canadian registry of ships.


Richard Bedford Bennett: Yes, we have ships registered at St. John, Halifax and Yarmouth. The minister need not offer any apologies for his lack of knowledge; he approaches his problems as few ministers do, with a very frank desire to secure the legislation he wants, and it is our duty merely to point out to him as far as possible the difficulties in the way. If we can assist him to overcome those difficulties, we have done our duty. I am now pointing out that the Territorial Waters Jurisdiction Act of England and these decisions to which I have referred clearly show that this parliament cannot possibly pass legislation which will affect ships other than Canadian ships beyond the three mile limit. If we desire to have this law apply beyond the three mile limit we should negotiate such a treaty as Great Britain negotiated with the United States, to which there was so much opposition and which a great many people in England think improper. The United States claimed that they had jurisdiction over a British ship the minute she came within the three mile limit, and that therefore they could seize the liquor cargo of the ship and do various other matters of that kind which necessitated the sealing of the liquor on the ship before she came into harbour. Finally Great Britain yielded to the establishment
of the twelve mile limit. Now I say this to the minister: I do not think he is one of those who desire to get credit for something that, when he does it, he knows is no good. I have seen ministers who desired to take great kudos for what had been done in parliament, for the legislation enacted-with their tongue in their cheek, knowing very well it was just a gesture. Perhaps the minister will put this matter before the law officers of the department; for I believe no government has power to pass a law which will enable anyone to seize outside the three mile limit, a British ship registered in London, England, or in Glasgow, Scotland, having on board a cargo of liquor being smuggled into Canada.


William Daum Euler: I appreciate what my friend has said, and no doubt he is as anxious as I am to obtain the results desired. He has rather anticipated what I intended to say, that of course I will consult the law officers of the crown in regard to the matter. It may be that I am wrong in this, but I suggest to the committee that the resolution be allowed to pass, and this point can be discussed and, if necessary, an amendment inserted when the bill actually gets into committee. I think that might be regarded as satisfactory.


Richard Bedford Bennett: Yes, I think so, if the
minister will take it that we are not in any sense acceding to the terms of the resolution; for that, I think, is something which we find it a little difficult to do.
Resolution reported, read the second time and concurred in. Mr. Euler thereupon moved for leave to introduce Bill No. 198 to amend the Customs Act.
Motion agreed to and bill read the first time.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
Mr. W. T. GOODISON (West Lambton) moved the third reading of Bill No. 23, to incorporate the St. Clair Transit Company.
Mr. A. A. HEAPS (North Winnipeg):: I
have a notice of motion in the votes and proceedings in reference to this particular bill. I beg to move in amendment:
That the said bill be not now read a third time, but be referred to the committee of the
St. Clair Transit Company

whole with instructions to amend it so as to insert the following in substitution of section 22 of said bill:-
The employment of labour in the construction, maintenance and supervision of the Baid bridge shall be subject to the terms and conditions of the fair wage clauses set forth in the order in council, No. 1206, of June 7, 1922, and any amendments thereto.
_ Canadian materials and labour must be used in the construction of the said bridge, so far as it may be practical to do so, 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.


Mr. GOODISON:: I am quite willing that the hon. member's amendment be accepted.


[Stage Direction]
Amendment agreed to, and the house went into committee on the bill, Mr. Johnston in the chair.
On section 22-Labour and materials.
Abraham Albert Heaps: I beg to move that the
following be inserted in lieu of section 22:
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 wage clauses set forth in the order in council, No. 1206, of June 7, 1922, and any amendments thereto.
Canadian materials and labour must be used in the construction of the said bridge, so far as it may be practical to do so, 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.


Thomas Langton Church: I have no objection to
the amendment; I believe Canadian labour and materials should be utilized in the construction of this bridge; but I opposed this bill in the private bills committee because I believe the government of Canada should laydown a policy in regard to these international bridges. The national railways have moved the shops from Stratford where they were' to Port Huron and they have spent millions of dollars in developing Port Huron, but apparently now they are satisfied to keep the through traffic and to hand over the local traffic to the promoters of this bill. Who are these promoters? Some of them are officials of the Canadian National Railways. One man is a Canadian National engineer, another a salesman, another a loan company manager, another a barber, another a lumber merchant, and so on. I oppose this bill on public policy grounds because I believe the government should lay down a policy in regard to these international bridges. The reason why the promoters have to come to parliament in connection with these bridges is because they are international, they affect navigation. We have some proposed bridges on the St. Lawrence, some on the Niagara and some on 
the St. Clair. What is the government going to do with regard to the general principle involved in all these bills? Where is the Minister of Railways and what is the policy of the government? Just last Thursday the governor of New York state, Mr. Smith, laid down a policy for his country. He said that these bridges are to be built by the people for the people, and that if any profits are to be made out of the tolls on these bridges, they shall revert to the state of New York. He is big enough on behalf of his government to lay down as a public policy that the profits shall not go into the pockets of private promoters but shall belong to the public. The governor of New York state has practically vetoed two bridge bills which this parliament has passed, and which are similar to the one before the chair to-night. Governor Smith is reported as follows:
"Such bridges should be built by the state or states or by one or more governmental subdivisions or by a public municipal authority similar to the port authority," the governor declared in his blanket veto of the three measures. "If such a bridge is to be built over international waters it should be constructed jointly by the United States in conjunction with the Canadian government or by the state of New York in conjunction with the Canadian province affected."
Such projects, the governor felt could be financed at lower cost by the state or federal governments, while, he added, "they are in their very nature public; to authorize privately-owned toll bridges is a step as backward as to authorize privately-owned highways, under the wording of these acts, the franchise is practically made perpetual."
"If it pays private corporations to erect these bridges," the governor's memorandum continued, "it will certainly pay the state to do it. If tolls are to be charged, the state should be the recipient of the tolls, and they should not be in excess of what is required to operate and maintain property, pay the interest on the bonds and make the necessary annual contributions to the sinking fund for their retirement."
I criticize the Canadian National Railway for surrendering this territory to private parties for private gain. This particular bridge should be made a feeder for the Canadian National's through traffic. This parliament has spent a large sum of money developing Port Huron, and Sir Henry Thornton is going to surrender this territory, where a good deal of local traffic by motor bus and motor truck could be picked up for the national railway. Everybody knows that motor truck and bus competition has been an important factor in depriving the Canadian National Railway of a large part of its earning power, and yet here we are in this parliament without a public policy, proposing to pass bills to erect two or three bridges at

Bell Telephone Company
Sarnia, two or three more in the Niagara district, and two or three across the St. Lawrence, but if this parliament will not look after the rights of the people, the governor of the state of New York is looking after the rights of the American people. He has vetoed these bridge bills and declared that these international bridges shall belong to the people of the United iStates for all time to come, and that tolls shall be regulated, and that the bridges shall be under joint operation and joint control. I am very much surprised that the government railway should surrender territory in this way. Just the other day they surrendered territory which they had exclusively at Port Colborne, and they gave the Canadian Pacific Railway running rights over their system, notwithstanding that this parliament will spend over S100,000,000 on the new Welland canal. This bill should be referred back to the private bills committee, and the Canadian National railway authorities should be brought before that committee. When this bill came before the private bills committee, the Canadian National Railways had lobbyists right in the committee room, canvassing members of the committee in favour of this private owned company which would take away the Canadian National Railway's bread and butter. The time has come for a showdown in this parliament. It is time for the Minister of Railways to declare what is the policy of the government regarding these international bridges. The government were asked in the prvate bills committee to lay down their policy, but they had nobody there to lay down a policy.
I have no objection to the amendment that is before you, Mr. Chairman. A labour clause came before the committee and I strongly supported it, but on grounds of public policy I am urging that this bill should go back to the private bills committee, where the government should announce its policy. If the policy that I have enunciated of joint operation and control of international bridges is good enough for the state of New York, it should be good enough for the state of Michigan and for the state of Ohio.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Bill reported.

[Stage Direction]
The house in committee on Bill No. 43, respecting the Bell Telephone Company of Canada-Mr.	Edwards	(Ottawa)-Mr. Johnston in the chair.
On section 1-Power to increase capital.
Thomas Langton Church: I have given notice of an amendment to this bill, Mr. Chairman. It is now twenty minutes past eight, and I intend to talk until nine o'clock. I am surprised that this proposal of the Bell Telephone Company to increase its capital stock from $75,000,000 to $150,000,000 should meet with no protest from the committee or from this house, and particularly from the Progressives, who are supposed to be adherents of the principle of public ownership. This company is nothing but an American monopoly, which has crossed the border into Canada. It first came to parliament in 1880 and got its incorporation, under chapter 67. It came back again in 1882, and asked for amendments which were incorporated in chapter 95; in 1884 it came back again for further amendments, chapter 88; in 1892 it came back again and got further amendments, chapter 67; in 1894 it applied for further amendments, which were incorporated in chapter 108; in 1902, chapter 41, it applied for an increase in its capital stock; it came back again in 1906, and got another hand-out from this parliament, by chapter 61; in 1920, which was the last time we saw them around this chamber, by chapter 100 the company was practically given the title deeds to the country and granted a monopoly throughout the whole of Canada. As a result what happened? In the provinces of Alberta, Saskatchewan, and Manitoba they established government owned telephone systems in order to be free of this masterful American monopoly. The late Sir Adam Beck proposed that the province of Ontario should establish a government owned telephone system, but corporation activity killed the proposal.
There is practically no regulation of the Bell Telephone Company. Almost every rate application that has been made by the company to the Board of Railway Commissioners has been granted in toto. The company is a law unto itself; it is supposed to own the heavens above, the earth beneath, and the waters under the earth. When the municipalities applied to the railway commission to remove the discrimination in telephone rates the commission decline to hear oral argument and told counsel to file written argument-which no doubt was put in the wastepaper basket by the so-called rate regulators. In brief, you might just as well abolish the railway act so far as effective control of this corporation is concerned and go back to the old law of supply and demand as a rate regulator.
In 1917 the Drayton-Acworth report recommended that before any applications for in-
Bell Telephone Company

creased rates were granted by parliament they should be reported on by the Board of Railway Commissioners for Canada. Why was not that course taken in this case? Why should this company be singled out for favoured treatment? The Northern Electric Company is part and parcel of the Bell company. The Northern company has practically a monopoly in the supply of telephone apparatus and there is no regulation of its charges to the parent company. In fact, the Board of Railway Commissioners found that the Northern Electric Company was outside their jurisdiction and could not be required to submit its records for inspection in connection with the recent application of the Bell company for increased rates. The hon. member for South Toronto (Mr. Geary) has introduced a bill this session to amend the railway act in relation to the investigation of subsidiaries of telephone or telegraph companies like the Northern Electric, and I submit that it should be passed before one line of this bill is adopted. For the information of the house let me quote from that bill:
"1. Section three hundred and seventy-five of the Railway Act, chapter one hundred and seventy of the revised statutes of Canada, 1927, is amended by inserting the following subsection immediately after subsection twelve thereof:-
"(13) The board shall have jurisdiction to inquire into and investigate the affairs of any company, corporation of firm in which any telephone company or telegraph company subject to the jurisdiction of the board has, in the opinion of the board, a controlling interest as shareholders or partners, or of which such company, corporation or firm in the opinion of the board is a subsidiary, and to examine the books, accounts, vouchers and papers of the said company, corporation or firm, and for such purposes and to that extent the said company, corporation or firm shall be subject to the jurisdiction of the board."
In my opinion the Minister of Railways (Mr. Dunning) ought to take over the hon. member's bill, because unless it is treated as a government measure there is very little prospect of its being enacted this session. I hope that before this $75,000,000 hand out to the Bell company is granted the hon. member for South Toronto will insist that his bill become law in order to confer on the Board of Railway Commissioners jurisdiction over such a company as the Northern Electric, which is purely a subsidiary of the Bell company, formed for the purpose of supplying to the parent company telephone apparatus at fabulous prices.
The government of Ontario opposed the application of the Bell Telephone company for increase of rates to which I have already referred. They were represented before the 
railway commission by Mr. Reid, who did well there, and he has since seen fit to write a letter to that public ownership organ, the Toronto Globe. The Globe up to a few years ago was always considered to be the mouthpiece of the Liberal party, but latterly it has been somewhat critical in its attitude towards its old-time friends. It was not the Globe that deserted the Liberal party; the Liberal party deserted Liberal principles and the Globe upheld Liberalism. The Globe is a supporter of public ownership of public utilities. I am interested in the attitude of the Liberal party towards this bill. In the late election our opponents went up and down the country charging that the Conservative party was the party of the "big interests." Where is the Liberal party to-night regarding this bill? In the railway committee did the government voice any opposition to this obnoxious measure? Did the government lay down any policy for such a hand out as this -an increase in capital from $75,000,000 to $150,000,000 by this company, with scarcely a tittle of evidence presented to the committee as to any necessity for the increase? I am not here to attack this or any other public utility. I have considerable sympathy for most of our public utility companies, for they are having a hard time to make ends meet in face of the heavy increase in taxation and the greatly enhanced cost of labour and materials; but I do say that before any such increase as is proposed by this bill is granted there should be a thorough and impartial investigation of the Bell Telephone Company and of the subsidiary Northern Electric Company by the railway commission as to the necessity for this particular increase of capital. What do they propose to do with this extra $75,000,000? Does anyone argue that if this bill passes to-night the Bell Telephone Company will devote this money to extensions? No. I venture to say that from $25,000,000 to $50,000,000 of it will be a split of common stock or just a melon to be cut up among the shareholders, paying dividends running up to $50,000,000 on all classes of stock issued, with the result that the telephone users will have to shoulder an added burden in rates on this watered stock. In the hydro-electric system the rates are based upon the actual investment in the enterprise; but when people in the cities buy, say, a quart of milk or a loaf of bread they pay not only the actual worth of that milk and bread, but also extra millions in rates represented in dividends paid out on the various common stocks of no par value.

Bell Telephone Company
I venture to say that when this stock is issued and placed on the market a large block of it, anywhere from ten to forty million dollars, will be common stock which will represent not a dollar put into the undertaking. The telephone users of the country will pay for it. In the past two years an application has been made to the Board of Railway Commissioners by this company for an increase in rates. This application was heard, evidence having been taken over a period of several weeks or months. On a motion made in the house in the dying hours of one session, the Minister of Railways said he would bring down a return showing the contracts of the government and the national railways with the Bell company in the matter, which contracts created a discrimination greater than any that had previously existed. The municipalities appealed to the Board of Railway Commissioners asking to have removed this unfair and altogether unjust discrimination. But what does the government of Canada do? Through the national railways the government entered into a private contract over the heads of the commission whereby the government and the national railways get certain cut rates from the Bell Telephone Company at the expense of the rest of Canada. The government itself, for its own purposes, made that private arrangement with the company for the reduction of rates, with the result that telephone users in Ontario and Quebec, through the discrimination which the company showed in favour of the government on the one hand and the Canadian National Railways on the other, were compelled to shoulder an unwarranted burden. Furthermore, the governor in council declined to hear the representatives of the municipalities; after sitting a day and a half they summarily dismissed their application.
The people of this country expect, if public rights are to be respected in this parliament, that some brakes shall be put on this monoply. In this connection I have here a letter which I think it well to read to the committee. It is written to the Globe and is signed by counsel for the Ontario government, Mr. R. A. Reid. He appeared before the railway commissioners and in this letter, dated March 26, he refers to this application, stating:
AVith the sanction and approval of the Dominion government and by order of the Board of Railway Commissioners for Canada, the telephone rates of the Bell Telephone Company of Canada were recently increased all over the provinces of Ontario and Quebec, and a new and additional burden of taxation was thereby imposed upon all of these telephone users of over $2,600,000 per year.
This was the hand-out which the company got from the Board of Railway Commissioners, who are supposed to regulate these matters, but who as a matter of fact regulate nothing. Far from expecting any control of rates from this body, you might just as well repeal the Railway Act which created the board. I submit that it would be far better for freight, passengers and express if we repealed the Railway Act and reverted to the old law of supply and demand. The good old free trade law of supply and demand would be a more potent factor in regulating public service corporations than the Board of Railway Commissioners. What with that $2,600,000 and this extra $75,000,000 now asked for, the Bell Telephone Company expect to get from this parliament a grant of $77,600,000. The letter goes on:
This increased burden of taxation upon the people was granted upon the application of the American Telephone and Telegraph Company of New York City, through the Bell Telephone Company of Canada, which it controls, and this new form of increased taxation upon the public was allowed without any legal or logical reasons being given therefor, and without any specific and definite findings being made on the most important issues and questions raised at the hearings in that rate case. The case decides nothing, except the bald grant of an increase of telephone rates; the issues will sooner or later have to be fought all over again before a new and reorganized railway commission. The present railway commission at Ottawa refused the people of Ontario and Quebec the right to argue their case in person before the board, and were supported in this treatment of the public by the government.
In doing so the Board of Railway Commissioners violated the Railway Act. They broke the law when they refused to hear representations from Montreal, Toronto and the municipalities of Ontario and Quebec, because the act-the very charter creating the commission -requires that they shall determine, take evidence and hear counsel on all sides of every case presented and upon the facts adduced render decision. So that they violated the law when they refused to hear counsel representing those opposed to this outrageous request-because it is outrageous. That is the only word that can adequately describe what this company is seeking from parliament at the present time. And it is an American trust; that is all it is; for it is owned in the United States. I have here the shareholders' book which I shall refer to in a moment. The letter goes on:
There are now before the Dominion parliament at Ottawa for consideration two bills, one being put forward by the Bell Telephone Company of Canada, asking the permission to allow that company to increase its capital stock from $75,000,000 to $150,000,000, or an increase of $T5,000,000. In truth and substance this if
189S
Bell Telephone Company

really an application by the American Telephone and Telegraph Company of New York, which controls the Bell Telephone Company of Canada. Now, the Bell Telephone Company of Canada is incorporated under a special statute, and must submit to have its whole affairs investigated, and an account given to the parliament of Canada of the manner in which it has dealt with all its former stock and bond issues authorized by its act of parliament.
Let me ask what became of the stock issues of 1882, 1884, 1892, 1894, 1902, 1906 and 1920. Did the railway committee ever have the facts of these sales of stock before them, to whom it was sold, the names of the directors of this company as well as the shareholders, the directors of the subsidiary companies and so on? Not one word was said in this connection before the committee last week; this application was passed with no adequate or proper investigation at all. Under the act incorporating the Bell Telephone Company of Canada the company is required to give the names of the shareholders and all the other particulars to this parliament, including all syndicates, bankers, companies and persons to whom such stock and bond issues were sold as well as particulars as to what was done with the proceeds from such sales, but this has never been done.
There is another bill now before the house which will compel the investigation of all companies owned or controlled by telegraph or telephone companies in Canada. This is a very necessary and proper bill, which I hope will be taken over and passed by the government this session. If this is not done the regulation of these companies will become a sham and a farce in this country. The first bill should not be allowed to become law unless the second bill is placed on the statute book at the same time, for obvious reasons. During the recent Bell Telephone rate case before the Board of Railway Commissioners it was conclusively proved that this company over a period of years has continually issued stock to its shareholders at the par value of S100 when that same stock was selling on the market at prices ranging from $125 to $193 per share, with the result that in addition to the dividend of 8 per cent the shareholders have benefited to the extent of the increased cash value of the stock. More stock has been issued and is still being issued from time to time than is necessary to obtain the actual money required, and to this extent financial authorities assert that the stock is watered. In order to pay dividends on this unnecessary capital the users of telephones have had to pay increased rates. This is simply making a gift to the shareholders at the expense of the treasury of the company. This practice should

not be allowed to continue; a provision should be included in this bill by which the general public should be given the first opportunity to purchase any of the additional stock issued by this company at the market price. Another provision should be included to prevent the company from using any of its capital stock or bonds in the purchase of the property of any other telephone company, because such dealings usually result in the rates being increased. The company should be prevented also from using the proceeds from the sale of stock for the purchase of old, used, second hand, salvaged material which has been repaired by the Northern Electric Company and reinstalled in the plants of the Bell Telephone Company, because the property assets and values of the company are affected in this way. It seems to me that if we are to have anything done with regard to these American-owned companies another Sir Adam Beck must be found; they are calling out for such a man to-day in every province of Canada. I would that Canada had a Mussolini to wield the big stick on some of these American-owned and controlled public utilities. He has said: "A country does not belong to those who inhabit it to-day; it is an inheritance from the past, a possession for the present and a trust for the future"; yet here we are binding posterity to excessive over capitalization and being asked to permit this American concern to increase its capital stock from $75,000,000 to $150,000,000 in violation of all the laws of this country and in violation of the recommendation contained in this Drayton-Acworth report which provides that before any of these companies are permitted to increase their capital stock a report should be made by the railway commission as to the necessity for such increase.
The subsidiaries of this company are a law unto themselves; the Northern Electric Company is under no public control. Another paragraph in this letter written by Mr. Reid, who was counsel for the government of Ontario before the railway commission, deals with the Northern Electric Company. If the second bill becomes law it will be possible to go into the affairs of the Bell Telephone Company and its subsidiary concerns and to lay all the cards on the table. It will enable an investigation to be made of the prices, profits, costs, expenses and rates in connection with the Northern Electric Company as well as the charges for telephone material, apparatus and equipment supplied to the Bell Telephone Company. The Northern Electric Company is owned and controlled by the Bell Telephone Company, manufacturing all the telephone apparatus required by that

Bell Telephone Company
company, but the Northern Electric Company charges the Bell Telephone Company such prices as it pleases for its apparatus and equipment, and there is no way of finding whether the profits and charges are reasonable or unreasonable, excessive or exorbitant. There is nothing to prevent the Northern Electric Company from raising the price of the equipment supplied to the Bell Telephone Company at any time they may see fit to do so. It has been maintained that we have no power, authority or jurisdiction which would enable us to investigate the affairs of this concern, because it is not a telephone company. This bill to which I have referred, therefore, should pass and become law.
There is another reason why it should become law. All the telephone companies of the western provinces are supplied by the same concern, the Northern Electric Company, and it becomes important for the telephone users of western Canada to know whether they are being charged excessive prices for telephone apparatus and equipment, and whether the profits made at their expense by this unregulated and uncontrolled monopoly are reasonable or unreasonable, excessive or exorbitant; and the same thing applies to the telephone companies in the maritime provinces.
I do not see any members of the Progressive party in the house. No doubt if it were about the peace department or some other academic resolution they would all be present; but when it comes to using the big stick on the Bell Telephone Company and the Northern Electric, which is selling apparatus to the municipally owned plants of Alberta, Manitoba and Saskatchewan, then there are only two or three or four Progressives in the chamber. Because they call themselves Progressives does not make them progressive. I hope they will be progressive on this bill. I see one of the Progressives, the hon. gentleman from Calgary, and I know he is for public rights and will be progressive in respect to this matter. I know that last year the junior member for Winnipeg put up a big fight on the Carillon electric light and power bill, and I think he should put up a fight on this bill also.
This particular Northern Electric Company is supplying the telephone companies of Canada with apparatus, and they hide behind a tariff wall of from 27 to 30 per cent duty on their apparatus, equipment and supplies. There is no reason why this duty should not be done away with entirely, because this duty is added to the price. The manufacture of this telephone equipment, apparatus and supplies would be no monopoly in Canada if there were
no duty, and, in addition, it would allow British manufactured apparatus and equipment of a better quality, finer workmanship and superior value to come into Canada and be used by Canadians, instead of their being compelled to use obsolete and antiquated apparatus.
There should also be a public inquiry and hearings before a committee of parliament dealing with these two bills. I am surprised that the province of Ontario should submit to the Bell Telephone Company. They did that before Sir Adam Beck was dead a year. They are very active over the Ontario Temperance Act and things like that, but when it comes to appearing before a committee against this monopoly which is taking millions of dollars a year out of the pockets of the people of Ontario, why was not the government of Ontario represented? Is it due to the fact that the' influence of Sir Adam Beck is lost and that what he stood for has no supporters to-day? I think you can count on your fingers all the supporters of Sir Adam's policy in Ontario. There should be a public hearing so that the telephone users and municipalities might be permitted to appear before such a committee and present their views on the methods and operations of these companies, and the manner of their dealing with stock and bond issues, their revenues, returns and accounting methods, so that they may come under more efficient and effective regulation and control by government authority. It is desirable to ascertain why there are always enormous surpluses and reserves in the Northern Electric Company, while at the same time there are large paper deficits in the Bell Telephone Company, which controls the Northern Electric and to which it pays large sums of money for apparatus and equipment, rendering periodical applications for higher telephone rates an apparent necessity.
All the apparatus, equipment and material purchased from the Northern Electric or through the Northern Electric is charged by the Bell Telephone Company to operating expenses or as a capital outlay to be paid for from the proceeds of the sale of its stock and bonds, and yet the Board of Railway Commissioners for Canada and the Bell Telephone Company and the Northern Electric Company say that these things and matters are all withdrawn from any inquiry or investigation by the railway commission; that that body has no right to examine into any such transactions and is bound without question by such prices as the Northern Electric Company sees fit to charge for such apparatus, equipment

Special War Revenue Act

and supplies. The commission did not go into this matter of financing at all. For that reason this second bill should not pass.
In conclusion I also wish to draw attention to the fact that in the United States a company known as the Western Electric, at Chicago and New York, is formed and performs the same work there for the American Telephone and Telegraph Company as the Northern Electric Company does in Canada. A labour paper published in Washington states that the American Federation of Labour are urging congress to probe the Bell Telephone Company across the border and the rates charged by this combine. This American workers' journal gives amazing facts as to how they crossed into Canada, and says that they fight labour unions. This paper, called * Labor in the issue of January 21, 1928, says on page 1:
The telephone business is virtually a monopoly. It is engaged in interstate commerce. It is a public utility, yet the United States government has exercised virtually no control over its practices. This is particularly true in regard to rates. This three-billion-dollar public utility, doing business across state lines in every state in the union, is exempt from that kind of regulation which means most to the public, rate regulation.
There is a splendid article here giving the low-down on the. telephone monopoly, one of the most profitable monopolies in the world. There is a large cartoon showing the telephone monopoly with its arms stretched out over the United States and Canada and saying "Well here I am! What are you going to do about it?" The article goes on to say that the American Telephone and Telegraph Company does seventy-two per cent of the telephone business, and dominates the rest.
The hour for private bills having expired, the Speaker resumed the chair.



SPECIAL WAR REVENUE ACT AMENDMENT

[Stage Direction]
The house again in committee on Bill No. 170, to amend the Special War Revenue Act- Mr. Robb-Mr. Johnston in the chair.
Section 1 agreed to.
On section 2.
Richard Bedford Bennett: What does section 2 mean? What sort of tax are you going to impose?


James Alexander Robb: This is for the better administration and collection of the tax. As I explained when the bill was in committee before, it was discovered that certain individuals imported different parts of an automobile, made it up for their own use, and thus
IMr. Church.]
escaped the tax which would have been paid had the automobile been manufactured in Canada.


Richard Bedford Bennett: But the clause states just the exact opposite of that.


James Alexander Robb: It is understood that when they bring in the parts and assemble them, they manufacture them.


Richard Bedford Bennett: The clause reads:
When goods of any class mentioned in schedule 1 are manufactured or produced in Canada-
Those words mean exactly what they say- "manufactured or produced."
-and are for use by the manufacturer or producer thereof and not for sale, such goods shall, for the purposes of this part, be deemed to have been manufactured or produced in Canada and sold, and the sale shall be deemed to have taken place when the goods are used or appropriated for use. The minister may determine the value of the said goods for the tax.
Think what that means. I have a factory in which I produce boots and shoes. One part of that factory produces, we will say, laces. When the lace goes into the shoe and the shoe goes out on the market, this clause applies. Surely that cannot be intended, because the operation is a completed one.


James Alexander Robb: That is not the intention.


Richard Bedford Bennett: But that is what the clause says.


James Alexander Robb: No. For instance, a bus company might buy a chassis and bring it in; it might buy another part-


Richard Bedford Bennett: Or manufacture it.


James Alexander Robb: -in Canada or import it.


Richard Bedford Bennett: The clause says, "manufactured or produced in Canada."


James Alexander Robb: It is not manufactured until it is assembled. They do not sell it; they use it in their own service, and they thus evade the tax which would be paid if they had bought it from a regular manufacturer. That is what this clause is intended to cover.


Richard Bedford Bennett: The clause says:
When goods of any class mentioned in schedule 1 are manufactured or produced in Canada-
Not imported.
-and are for use by the manufacturer or producer thereof-[DOT]
That is, he is producing or manufacturing them to be used by him in his business. They make a completed product.

Special War Revenue Act
-and not for sale, such goods shall, for the purposes of this part, be deemed to have been manufactured or produced in Canada.
Of course they are, because the clause says that they have to be manufactured or produced in this country. The thing is nonsense; an absurdity of that kind should not be put on the statute book without the protest, of any who understand the English language. Let the minister apply his common sense, as he said the other evening, as against the technical knowledge of someone else.


Herbert Bealey Adshead: Should the wording not be "not manufactured in Canada"?


James Alexander Robb: A chassis is not an automobile; it is a part of an automobile. It becomes an automobile when it is assembled, and the experience of the department has been that *people have been buying different parts and assembling them, and thus evading the tax.


Henry Lumley Drayton: That is the sales tax?


James Alexander Robb: Yes.


Richard Bedford Bennett: Will the minister do me this one favour and look at the clause. It reads:
When goods of any class-
A chassis is goods.
-mentioned in schedule 1 are manufactured or produced in Canada-
Manufactured does not mean assembled.
and are for nse by the manufacturer or producer thereof-	[DOT]
That is the man -who makes the chassis.
and not for sale, such goods shall, for the purposes of this part, be deemed to have been manufactured or produced in Canada and sold-


Mr. THORSON:: "And sold." That is the difference.


Richard Bedford Bennett: -and the sale shall be deemed to have taken place when the goods are used or appropriated for use.
That is not the case which my hon. friend has put. A man has a factory; he manufactures one part of an automobile in one part of the factory, another part in another, and then he assembles the automobile. This clause says that this shall be deemed .to be a sale of a part because the goods happen to be manufactured in Canada. As the hon. member for East Calgary has just pointed out, if you mean anything at all, you mean "not manufactured in Canada." It must be that or nothing.
56103-121J


Henry Lumley Drayton: Why does my hon. friend not simply say-
Be deemed to have been sold.
-instead of saying-
Be deemed to have been manufactured or produced in Canada and sold.
-when they have been manufactured or produced here?


Mr. STEWART (Leeds):: Is this what the Minister of Finance means? We will assume that an automobile manufacturer wishes to use in his business say a dozen tracks. He does not sell these trucks, but under this legislation he shall be deemed to make a sale of them when he uses them for the purpose of his business.


James Alexander Robb: That is not the intent of the clause.


Mr. STEW  ART@Leeds: That is what I understood the minister to say.


James Alexander Robb: It covers only passenger
vehicles. I repeat that it is intended to get after bus companies who buy different parts, assemble them, keep them for their own use, and under the act have heretofore evaded the tax.


Richard Bedford Bennett: Then let somebody prepare a clause that will cover what the minister wants.


John Wesley Edwards: Suppose you use the words:
When chassis of any class mentioned in schedule 1 are manufactured or produced.
The minister has admitted that chassis are goods. Suppose you use the word "chassis" instead of "goods".


William Daum Euler: There is no tax on chassis.
An automobile does not become taxable until it is an automobile, which means the assembling of the chassis with the other parts.


Richard Bedford Bennett: Chassis are goods.


William Daum Euler: But they are not adaptable
for passenger use until they are assembled with the other parts. Then they become taxable.


Robert James Manion: Suppose you left out a
couple of lines and let the clause read:
When goods of any class mentioned in schedule 1 are manufactured or produced in Canada-
Leave out the part modifying that, such goods shall, for the purposes of this part, be deemed to have been manufactured or produced in Canada and sold.
Special War Revenue Act

It simply states that when they are manufactured or produced in Canada they shall be deemed to have been manufactured or produced in Canada. Why repeat that? It has no sense as it is.


William Daum Euler: The schedule applies only
to automobiles adapted for passenger use. These chassis are not automobiles at all: they are only parts until they have been assembled, and that is the process of producing them. When the assembling is done, it becomes an automobile.


Henry Lumley Drayton: People have been making these parts here; the sales tax does not apply unless there is a sale, and so long as they use them of course there is no sale.


William Daum Euler: Exactly.


Henry Lumley Drayton: Then all I
am suggesting is that you simply say what you mean. Strike out the words, "be deemed to have been manufactured or produced in Canada," and simply say, "be deemed to have been sold." and then make the tax immediately applicable.


Richard Bedford Bennett: Does either the Minister of National Revenue or the Minister of Finance, think for a single moment that legislation of any value at all is being enacted when it is provided that if any goods are manufactured or produced in Canada they shall be deemed to have been manufactured or produced in Canada?


William Daum Euler: They are for the use of the manufacturer. You have to read it in conjunction with that.


Richard Bedford Bennett: That does not change it at all.


William Daum Euler: I do not think it makes any difference.


Richard Bedford Bennett: It makes all the difference in the world. You will not be able to collect duty under this section as it is.


James Alexander Robb: My hon. friends are both good lawyers, and for my part I am prepared to strike out the words, "manufactured or produced in Canada," so that it will read "deemed to have been sold."


Henry Lumley Drayton: That is it.


William Daum Euler: I move to strike out in the fifteenth line the words, "manufactured or produced in Canada and."


[Stage Direction]
Amendment agreed to.
Richard Bedford Bennett: The word "such" in line fourteen should also be changed.
Section as amended agreed to.
Section 3 agreed to.
On section 4-Change in number of tariff items.


Henry Lumley Drayton: What is the
effect of this?


James Alexander Robb: It is to conform with the
customs schedules.


[Stage Direction]
Section agreed to.
On section 5-Consumption or sales tax.
Henry Lumley Drayton: What is the
effect of this section?


William Daum Euler: This is merely to correct
an omission. Until now the wholesale licensed manufacturer who imported goods free could sell them free of sales tax, but where they were produced in Canada the sales tax applied. We want to make it clear that the sales tax applies also when he imports the goods.


[Stage Direction]
Section agreed to.
On section 6-Sales tax not payable on certain goods.
William Daum Euler: This provides that we shall
get the sales tax on liquors that are sold and claimed to be exported but for which no landing certificates or actual proof of export can be shown. It is the recommendation of the royal commission, and I think it is quite right. We have had one case decided in our favour in the courts, although the decision may be appealed. We claim that we are entitled to sales and gallonage taxes amounting to $5,000,000 from brewers and distillers, and we want to make certain that we do not have to go into the courts to collect what we think belongs to us.
I move, Mr. Chairman, that after the word "bond" in the twentieth line the following words be inserted, "by the manufacturer thereof."


Henry Lumley Drayton: I am not quite
sure that I understand what the minister has in mind. I assume, in the first instance, that he does not wish to do anything to hinder the export business of Canada, and that on the other hand he wants to keep Canadian costs down so that the Canadian producer may be well equipped to meet his foreign competitor. As I understand it the position is this: Notwithstanding everything that we have been doing, the minister is still of the

Special War Revenue Act
opinion that a great deal of liquor is illegally exported, and it is thought that we should get our tax on it.


William Daum Euler: No.


Henry Lumley Drayton: If that is not
the case, what else can there be in it, because there is to be no tax if it is shown that the export is legal? The section says that this is not to be applied to cases where foreign landing certificates satisfactory to the minister are produced as proof that the goods have been landed at the place designated in the export entry. I take it that what that means is simply this, that that certificate would show illegal exportation, not only illegal exportation so far as the laws of Canada are concerned-the minister shakes his head. Well then, the idea is that the department is of the opinion that notwithstanding everything that has been done towards aiding the United States in connection with their enforcement, there is still a considerable quantity of liquor illegally entering that country from Canada. Am I right in that?


William Daum Euler: No.


Henry Lumley Drayton: If I am not
right in that, what is the object of this amendment?


William Daum Euler: The words that have just been inserted, "by the manufacturer thereof," should clear the matter up. To be quite frank, the exportations of liquor now going out of Canada at Windsor or along the border to the United States are perfectly legal, but our contention is this, and this is the crux of it, that the manufacturers, the distillers or the brewers, are not the exporters. That is exactly the point upon which the case against Gooderham and Worts was fought out in the courts a week or two ago. We contend that the goods are sold in Canada to somebody who comes from the United States to, say, the port of Windsor; and because of the fact that the sale takes place in Canada it is subject to the sales tax. That is the whole story. We want to make absolutely certain that in future we can collect that sales tax. And why should we not? The exporters of liquor and beer and ale are now paying the excise tax of $9 a gallon, which they would not have to pay if they could prove that the goods were actually exported by them. Why should they not pay the gallonage tax and the sales tax? I see no reason why they should pay one and not the other. More than that, in many cases they collect the sales tax and do not turn it in to the government. They
collect that sales tax for the day when they may have to pay it by process of law, and then charge it against their income, thus escaping the income tax as well. Under those circumstances I do not feel that they deserve much consideration. When they make a bona fide export sale outside the country and send the goods out under the bond of a guarantee company, as we now demand, and show proper landing certificates-we are very careful that, they are genuine landing certificates-then they are exempt from this tax, as they ought to be, because it is a bona fide export sale. But with regard to sales that go across the border-and I am not trying to interfere with export trade-we do contend-and most legal men agree with us-that when that sale is made in Canada it is subject to sales tax.


Henry Lumley Drayton: That puts quite a different complexion on the matter from what I understood. My hon. friend contends that a local sale shall be taxed as such and shall not be covered up by a fictitious export entry?


William Daum Euler: Exactly.


Henry Lumley Drayton: He is quite right in that of course. Is that covered all along the line? For example, take imports of Scotch whiskey, is there a tax on the sale after it arrives here?


William Daum Euler: There is a tax on all importations.


Henry Lumley Drayton: I am speaking of the sales tax on the sale that takes place in Canada.


William Daum Euler: The tax is applied on the importation. It is just a single tax.


Henry Lumley Drayton: Let me put it the reverse say. There is a local tax sale here. What about the man who imports this Scotch whiskey and exports it to the United States? My hon. friend here is only getting at the manufacturers. Had he not better clean the whole thing up and get after the dealers?


William Daum Euler: We get the tax on the Scotch whiskey when it comes in.


James Dew Chaplin: Not if it comes in in bond.


Henry Lumley Drayton: We get the ordinary customs tax on the whiskey coming in, and we have the corresponding excise tax on the product of our own manufacturers. Now, take the case where a man brings in the whiskey and exports it, what machinery is there to cover that transaction?
Special War Revenue Act


William Daum Euler: We collect the duty when the whiskey comes in. We have got our revenue out of it; we are not particularly concerned after that.


James Dew Chaplin: Does the minister say that on goods imported and held in bond we get the excise tax?


William Daum Euler: No, when it is cleared.


James Dew Chaplin: What happens when goods are left in bond for a time and then exported?


William Daum Euler: I presume the hon. gentleman is refering to goods brought in in transitu.


James Dew Chaplin: In the case of liquor brought into a bonded warehouse at Halifax, then shipped to another bonded warehouse at Windsor, and thence shipped presumably to the United States; what happens?


William Daum Euler: I can best answer my hon. friend by stating that all those bonded warehouses are going to be discontinued; orders have already been given for the purpose.


Richard Bedford Bennett: That is a good answer.


William Daum Euler: There are no bonded warehouses in Ontario.


Richard Bedford Bennett: Section 6 provides:
Notwithstanding anything contained in the preceding subsection, the consumption or sales tax shall not be payable on goods,-
(a) exported,-
That is, exported in bond by the manufacturer thereof. The tax would still be payable upon goods-whiskeys-exported by one who had bought them and paid thereon the customs tax and the sales tax. He is a legitimate dealer and has a right to export them; but still under this section he would be liable for another sales tax, which is just what the minister says he does not desire. Is not that the position?


William Daum Euler: No. The tax applies only on the manufacture or production of goods in this country. On the importation he pays the sales tax.


Richard Bedford Bennett: Suppose he sells for export again.


William Daum Euler: There is no sales tax twice.


Richard Bedford Bennett: There should not be; but is that not the effect of the section?


Mr. SPENCER:: Could not this discussion be conducted a little louder so that all members may know what is going on?


William Gordon Ernst: We did not think you were interested.


Henry Lumley Drayton: What about the other paragraphs?
[Sib Henry Drayton.]


William Daum Euler: They are merely re-enacted; they are already in the act.


[Stage Direction]
Section agreed to.
On section 7-Reductions and refunds, etc.
William Daum Euler: The Justice department is
of the opinion that the following will better express what is desired, and I therefore move that this be substituted for section 7 as it
stands:
7. Section ninety-one of the said Act is amended by adding to subsection one thereof the following paragraphs:-
'*(d) When a manufacturer becomes licensed hereunder, of the tax paid in respect of any partly manufactured goods on hand at the date of his license, but only when such partly manufactured goods have been used in, wrought into, or attached to taxable articles manufactured for sale and sold;	_
(e) When a wholesaler becomes licensed hereunder, of the tax paid in respect of goods on hand at the date of the license but only when such goods are sold. The refund shall be computed at the rate of tax prevailing at the date of the license."
When a manufacturer became licensed under the act, not previously having held a license, he had to pay the sales tax. Now he becomes licensed, and when he sells after that the sales tax is collected. Therefore it might be paid twice. Consequently we allow him a refund or credit for the tax paid in the first instance.


Henry Lumley Drayton: Does the main
section apply for the refund or credit?


William Daum Euler: Yes.


Richard Bedford Bennett: Has the minister added
any exceptions to the sales tax this year by order in council?


William Daum Euler: None that I can recall-none whatever.


[Stage Direction]
Amendment agreed to.
William Daum Euler: We disposed just now of the sales tax on liquors which are evidently exported, but we have omitted to include the gallonage tax. I presume the committee will accept the following amendment:
That the following be inserted as section 8:
Subsection 3 of section 80 of the said act is repealed and the following substituted therefor:	.	.
(3) Notwithstanding anything contained in this section such excise tax shall not be payable when such automobiles or cigars are exported under regulations prescribed by the minister. The tax imposed by this section shall be payable on ale, beer, porter and stout unless such goods are exported in bond by the manufacturer thereof and foreign landing certificates, satisfactory to the minister are produced as proof that said goods have been landed at the place designated in the export entry.

Special War Revenue Act


Henry Lumley Drayton: Are we getting
automobiles mixed up with illegal liquor shipments?


William Daum Euler: When automobiles are exported there is a drawback.


Henry Lumley Drayton: Is there any
change in regard to automobiles?


William Daum Euler: No.


Henry Lumley Drayton: The whole effect is to apply the gallonage to this item under which the minister thinks we have been losing revenue?


William Daum Euler: That is all.


[Stage Direction]
Amendment agreed to.
William Daum Euler: I have another amendment; as section 9:
That subsection one of section 106 of the said act be repealed.
In 1927 a provision was passed whereby a penalty of five per cent was imposed upon those who did not make their sales tax returns each month. We find it impossible to calculate what the penalty should be until there is actually a sales tax return. The provision is not a very practicable one, as we have discovered, and we are therefore repealing it. There are still two penalties left. In the first, place we can proceed in the courts against the man who does not or will not make a monthly return; he can be fined. In addition to that there is the penalty of two-thirds of one per cent per month, or 8 per cent per annum for failure to pay so long as he does not pay. That is all. We are really reducing the penalty somewhat, but we have still the power to proceed and to fine a man for refusing or neglecting to make his returns. And of course there is the further penalty-if you care to call it a penalty-of interest at the rate of 8 per cent per annum.


Henry Lumley Drayton: This might be an appropriate occasion for the minister to let us know how he is getting on with the sales tax. We know from what has taken place in the past-I confess I am not at all up in the recent history of the matter-that some people altogether escaped paying the sales tax while the honest merchant was at an absolute disadvantage in comparison with a dishonest competitor. There was a large percentage of firms who, to say the least, were not very much troubled. My hon. friend, I know, wants to remedy that and I hope he is getting along pretty well in his endeavour. Perhaps he will tell the committee how the matter stands in regard to arrears. I refer
particularly to the arrears shown in Montreal, for example, in 1926. What has my hon. friend done?


William Daum Euler: I cannot at the moment give the exact figures, but perhaps I might tell the committee what we have done or tried to do. There were considerable amounts in arrear, some dating pretty far back, running into millions, in which must be included, of course, sales tax arrears against manufacturers of liquors and beers and wines. These are now in the courts. Excluding these, there is possibly still in arrears the sum of $2,000,000. It was considerably larger than that, as a matter of fact. As I explained in the house last year, we found it very difficult promptly to collect all arrears. In some instances they had been outstanding for so long a time that some of the firms concerned had gone into bankruptcy while others were absolutely unable to pay. So that our only hope of obtaining these revenues was to nurse them along and do the best we could with them. But we do not accept the statement of any business man that he cannot pay; we do not just take that at its face value. We send in auditors and fix the amount we think he can pay, and we see to it that he does pay. That is all so far as arrears are concerned. But we have made some changes to ensure that there shall be no further accretions to the arrears. All those liable to account for sales tax must make their payment at the end of the month succeeding the one in which the sale was made. If the sale was made in July the return and payment must be made by the end of August, and if the business man does not make that return he is prosecuted. If he does not make his payment by about the middle of the month he is given notice and requested to pay, but we do not waste a great deal of time. If he does not pay by the fifteenth of the month be is promptly sued for payment. There was some objection at first; the measure was thought rather harsh. It is working out pretty well, however, and I can assure the committee that we have not made one single exception. We take action promptly and invariably with regard to what we call current arrears.


Richard Bedford Bennett: Within what time do you take action?


William Daum Euler: Within about fifteen days.


James Dew Chaplin: Is it necessary to give
thirty days beyond the end of the month?


William Daum Euler: The statute provides that we must give thirty days' notice. Possibly that might be changed, but that is the present regulation. And within about fifteen days action takes place.
1U06
Special War Revenue Act


James Dew Chaplin: Let us take a concrete
example of goods having been shipped in the first ten days of the month. Do you give the man thirty days' notice beyond the end of that current month? That would mean fifty days. That is altogether too long; it is longer than a reasonable business house gets even with a cash discount. Goods that are ordinarily sold are sold on from fifteen to twenty days. I submit the time is entirely too long.


William Daum Euler: As a matter of fact most of them thought it was short enough, ibut I am quite prepared, if the committee thinks it advisable, to make the term shorter. It is working satisfactorily now. As the act stands to-day it is provided that the tax shall be paid not later than the last day of the first month succeeding that in which the sale was made.


James Dew Chaplin: I have suggested a concrete example. On goods sold in the first ten days of this month, April, the tax need not be called for until thirty days after the end of April.	[DOT]	!


William Daum Euler: That is, the end of May.


James Dew Chaplin: Yes, and that in my opinion is ridiculous.
Mr. EULiEIR: My hon. friend should take the month as a whole. 'Suppose the sale were made on the thirtieth day of April, as undoubtedly some sales will be made. It does not seem to me unreasonable to allow until the end of May, and that is only thirty days.


James Dew Chaplin: Most people in business pay twice a month, on the fifteenth and at the end of the month. Nearly all the merchants my hon. friend mentioned will pay that way, and that is the proper way for the department to collect the money.


William Daum Euler: Offhand I should say that if a sale is made on the thirtieth day of the month it might be rather hard to expect them to pay for the full month at the end of the thirtieth day, when perhaps they have not even made up their sales for the month.


James Dew Chaplin: If the minister would just follow me on the question of the fifteen days, it means that on the sales made from the first to the fifteenth of the month the money does not have to be paid until the end of the month, while on the sales made between the fifteenth and the thirtieth, the money is paid on the fifteenth of the month following.


William Daum Euler: On most seasonable goods credit is given for ninety days, and sometimes for as long as six months.


James Dew Chaplin: I would like to know where that is done; those people will not be in business very long. Most of the goods I have anything to do with are sold on a credit of ten days.


William Daum Euler: I should like to add that 97 ports out of 149 have absolutely no current arrears at all, and in the other cases steps are taken immediately or almost immediately to ensure that the amounts are collected. I have gone on the assumption that the concern which cannot pay its current sales tax is hardly worth nursing along; the tax is fair and should be paid promptly. We have reduced the old arrears considerably, and we are proceeding fairly satisfactorily with the remainder, doing the best we can.


Henry Lumley Drayton: My hon. friend does not quite get the point. This is not an ordinary matter of business at all; it is not any question of having time within which to get in your profits and look after your business and all that sort of thing. This money does not belong to the trader at all; it is received by him in trust. The money belongs to the country and should be paid at once; these accounts should not be allowed to run along at all. We have emphasized this principle time and time again. I know my hon. friend has a great many things to take care of, but I would make a suggestion to him. I do not know exactly how this is being enforced now; I do not know whether it is being enforced in the way the income tax can be looked after, simply by a certificate of non-payment with an execution issued offhand. There should be no need of going to court at all; there should be no delays of that kind. This money should be collected simply on the certificate of default, with no court standing between the people and their money. There is a great distinction between this money and ordinary commercial debts; here we have simply a trustee who collects for the people and who has no right to hold the money he collects; he should pass it on at once.


James Malcolm: I should like to make an observation in connection with this question. I think my hon. friend is rather severe when he speaks of this as trust money, it is trust money when the manufacturer collects it, but not until that is done; he holds nothing in trust until he gets it. With respect to what the hon. member for Lincoln (Mr. Chaplin) has said, probably in his business, goods are mostly sold at ten and fifteen days, but there is a tremendous amount of business in this country which is billed at the thirty days

Special War Revenue Act
first following. I know of a good many businesses running into millions of dollars where these are the shortest terms given a customer, and where a man collects sales tax for the Dominion of Canada without any recompense for the bookkeeping he has to do or the accounts he loses together with the sales tax. The thirty days first month following is not too long to give him. In some large businesses the terms may be ten and fifteen days, but in a great many concerns they are thirty days. In the dry goods business, selling for spring or fall delivery, and in the business in which I am engaged, the usual terms are ninety days, with the cash discount, to induce people to buy seasonal goods ahead of time. I do not think the thirty days first following is too long, taking the average of Canadian business, considering that thp manufacturer collects this tax with no payment for the bookkeeping he has to do, and also taking into consideration the fact that he gets no return for his losses.


Henry Lumley Drayton: But the tax is
not payable until it is collected.


James Malcolm: It would be if it were
paid as rapidly as my hon. friend from Lincoln suggests.


Henry Lumley Drayton: Not at all, this
is not a matter of commercial credit being given or withheld. As I understand it, it is the duty of the manufacturer to pay that money when he collects it, and he collects it at once.


William Daum Euler: No, it does not matter when
he collects it; he has to pay it in the time given.


Henry Lumley Drayton: Then this is
reasonable.


Richard Bedford Bennett: Nothing could better illustrate the undesirability of this tax than the discussion which has taken place this evening. It illustrates clearly that the only form of taxation which should be imposed to meet this situation is a turnover tax, if you have regard to that kind of tax at all. The point made by the hon. member for West York is one which I think might well be acted upon by the minister. Whether it be thirty days, sixty days or ninety days is not important, but he should have the power to ask for a writ of execution merely on a certificate, to receive the money which is being improperly retained in the hands of the man who has collected it.


William Daum Euler: In what court would you
proceed?


Richard Bedford Bennett: The Supreme court of
the province. The old writ of sequestration, which was issued at the instance of the crown for the purpose of gathering in all the property of a man indebted to the crown, is an illustration of the principle referred to by my hon. friend. How many cases are now outstanding; how many actions are now outstanding; how many suits have not been concluded, and how many efforts are being made to collect moneys due the crown? Over $2,000,000 is owing this country at the moment for sales tax.


William Daum Euler: There are between 500 and
600 actions pending in the courts.


Richard Bedford Bennett: My hon. friend has answered my question; there are 500 or 600 actions pending in the courts. Imagine the crown with that many actions in hand to recover money belonging to the crown! The old law's of a hundred years ago permitted the crown to take immediate and summary action with respect to matters of this kind. Immediately the money is actually in the hands of the person liable to pay he should be made to pay, for he is only a trustee with respect to that money. What the Minister of Trade and Commerce said is equally true; it is not right to harass a man to pay money he has not received.


William Daum Euler: How would you distinguish?
You cannot audit every statement.


Richard Bedford Bennett: Surely you can rely upon the honour of the man if, when the time comes to recover the money which is not paid within a given time, you simply say, "Well, we propose to issue a writ of execution which will *either bring us the money or a satisfactory reason why we have not received it."


William Daum Euler: How would you know when
the manufacturer or tbd wholesaler received the money?


Richard Bedford Bennett: By his own return.


William Daum Euler: He would not make a return of every individual sale. The terms may vary according to the different firms; one firm may give sixty days while another firm gives thirty, yet you must have some sort of uniformity in your system of collecting.


Richard Bedford Bennett: My friend has not yet grasped the point. As soon as the money is in the hands of the manufacturer it belongs to this country; that is the point. What happened during the days when I knew a little more about these things than I do at the moment? There was one firm in Toronto, for instance, which owed this country vast
Special War Revenue Act

sums of money. I am not sure that it has not since gone into liquidation. Had there been an efficient and effective control over that matter, that condition could not have arisen, because it was a business in which they got their money right at once. I do not want to mention their business. It was practically a cash business-cash within thirty days; they got that money from their customers, and, as the minister says, they set up their reserves and that kind of thing; then when the time came that the government wanted their money, the company wapted it in their business. The way to deal with such a case is in the summary method which is at least two hundred years old, by the issue of a writ of sequestration. The Postmaster General (Mr. Veniot) will remember that in New Brunswick the writ of sequestration was applied. I was a young man then and acted for the government there. The same principle could be applied here, the writ of execution where the minister is satisfied that the money has come into the hands of the company. I do not like this matter of paying five or six hundred lawyers. You recognize that lawyers all over the country are employed if they are favoured. If my information is correct, there are a vast number who should be sued, but who are not.


James Alexander Robb: There does not appear to be much difference between us on either side of the house as to the desirability of collecting the tax promptly. I think it is fair to my colleague the Minister of National Revenue to say that the arrears that we have been recently discussing and the number of lawyers employed in collecting those arrears are not due particularly to business since the minister took possession. I agree with the leader of the opposition as to the desirability of getting rid of this sales tax as rapidly as possible, and that is the policy we are proceeding upon.


[Stage Direction]
Amendment agreed to.
On the title.
Richard Bedford Bennett: Might it not be well to consider adding a section such as has been suggested by the member for West York, and leave the bill in committee?


James Alexander Robb: I suggest that we let it come out of committee, and then if we want to amend it, we can do so on the third reading.


Richard Bedford Bennett: No; if it is done that way the bill would have to be reprinted.
Progress reported.



DEPARTMENT OF NATIONAL HEALTH AND VETERANS' WELFARE


[Stage Direction]
Hon. J. H. KING (Minister of Soldiers' Civil Re-establishment) moved that the house go into committee to consider the following proposed resolution:
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.
Motion agreed to and the house went into committee, Mr. Johnston in the chair.
Henry Lumley Drayton: I think the minister might make some explanation. I would like to know what the idea really is. We now have a committee with very wide powers inquiring into what ought to be done in the interests of the soldiers. Has the minister considered having this question dealt with by that committee? The soldiers' re-establishment is a long way off from being completed. It might be well for the minister to consider the advisability of getting whatever light he can on this subject from that committee, which is now functioning.


Mr. KING (Kootenay):: The resolution is along the line of the suggestion by His Excellency on the opening of the session, that the departments of Health and of Soldiers' Civil Re-establishment be amalgamated into a single department to be known as the Department of National Health and Veterans' Welfare. The Department of Soldiers' Civil Re-establishment came into being in 1918, with a view to assisting the men who were then returning from overseas to re-establish themselves in civil life. Shortly after the war ended the department absorbed the Military Hospitals Commission and took over its functions. A little later they took over largely the staff of the Pension board and have been functioning accordingly. The experience of the last few years would indicate that the work of the Department of Soldiers' Civil Re-establishment to-dary is to a great extent that of health activities in reference to those men who were disabled overseas. It is true there is still some work being carried on in the matter of re-establishment. It is proposed by this amalgamation to maintain for a time at least

National Health and Veterans' Welfare
the veterans' bureau as a unit within the Health department, and the work will be continued probably along the lines followed from its beginning. The work of re-establishment, the work of administration as far as the Pension board is concerned, and the treatment of the vet shops, which as a matter of fact is health work, will be continued in the veterans' welfare bureau. As far as the bill itself is concerned, if when it reaches the second reading it is the view of the house that the matter is of such a character that it should be referred to the committee now dealing with soldier matters, I shall be very glad to accept that suggestion and have it so referred.


Mr. CLARK:: I would like to ask the minister the reason for the word "national" coming into the name, and why change the name from "Soldiers' Re-establishment" to "Veterans' Welfare"?


John Warwick King: I think my previous remarks dealt with re-establishment. As a matter of fact the department to-day is really a welfare department dealing with pensions, hospitalization and vetcraft work, which is a form of treatment, and some consideration was given to the question of changing the title. In amalgamating the two departments we felt that if we could call the new department the Department of National Health and Veterans' Welfare, that would probably meet with the view of parliament and also of the country generally.


Mr. LADNER:: Does the minister not
think that the term "Veterans' Welfare" might imply some sort of charitable organization? Would it not be better to have such a name as "Soldiers' Affairs," or something more proper and dignified and indicating in a better way the real purpose of the department? After all, the department will have to carry on a good deal of work which is not really welfare work as that is understood. The term "welfare" has a popular meaning, and it seems to me both undignified and hardly applicable to the business which the government has to do with respect to ex-service men and soldiers generally. It would be far better to use a name such as-and this has just come to my mind offhand-Department of National Health and Soldiers' Affairs, or Department of Health and Soldiers' Affairs. I think the minister will find, when he gets his bill through and the measure comes before the public, that the name "Veterans' Welfare" is not as appropriate as some others.


John Arthur Clark: I concur entirely in the
view of the hon. member for Vancouver
South, except possibly as regards the name "Soldiers' Affairs." I see no reason for changing the present name.


Leon Johnson Ladner: I concur in that.


John Arthur Clark: I understand this department will still embrace pensions?


John Warwick King: Yes.


John Arthur Clark: How is that veterans' welfare? It is not a dignified name. The designation should remain as it was, because "Department of Health and Soldiers' Civil Re-establishment" is a dignified name and one generally understood by the country. I see no reason for inserting the word "national". After all no one can have any doubt that the Department of Health refers to the health of the nation. Why not insert the word "National" before "Finance", before "Trade and Commerce", before "Agriculture"? For instance, why not have the "Department of National Interior"? We might just as well have National Secretary of State and so on, as the Department of National Health. There is no distinction whatever. This department obviously applies to the health of the nation and the word "national" is superfluous. To change the name from "Soldiers' Civil Re-establishment" to "Veterans' Welfare" would not be of any assistance in dealing with soldiers' problems. The old name is one recognized by the soldiers generally and it should not be changed to a name which, as my hon. friend has just said, implies something in the nature of charity.	[DOT]


John Warwick King: It does not. I
think it is important to adopt the designation, "Department of National Health," because we have provincial health departments in every province. It could be called the Dominion Health Department or the National Health Department. It is different from the Interior department and other departments of government and I think the change is warranted. I cannot see any great advantage to anyone in continuing the term "Soldiers' Civil Re-establishment", which is a long, cumbersome name, and one which does not to-day represent the activities of the department, because, as I have said, the major activities are not those of re-establishment. The name does not matter so much. The proposed name has been before the public for some months now and I have not heard through the press or correspondence any objection to the term "Veterans' Welfare." It should not be intimated for a
1910	COMMONS
National Health and Veterans' Welfare
moment that that name would indicate the setting up of a charity department. That is not the intention.


Leon Johnson Ladner: Have the public really
been apprised of the term "Veteran's Welfare?" I for my part did not know of it until I heard it to-night, and I think ninety-nine per cent of the people do not know of it.


John Warwick King: It is rather surprising that my hon. friend has not taken the trouble to read His Excellency's speech, because it is set out there that such was our purpose.


Leon Johnson Ladner: I know the source of the
speech.


John Warwick King: One would have
expected that my hon. friend, who is usually well informed, would be informed in that regard.


Leon Johnson Ladner: Is there any objection to
using the expression "Soldiers' Affairs?"


William Lyon Mackenzie King: That might be ambiguous.


Leon Johnson Ladner: It certainly has not the
implication of the term "Veterans' Welfare."


Thomas Langton Church: This amalgamation is not in the public interest. It will work out as a department of all health and no soldier. The public is disappointed at the way in which the soldier has been bandied about by this government. He was first tacked on to the Department of Militia. Then the government made a football of him, creating a new department, a Department of Soldiers' Civil Reestablishment. Sometimes the minister of that department was here; sometimes he was an absentee landlord. Now it is proposed to have a health department and to tack the soldier on to that. The government are making a political football out of him, and no economy will be effected by the proposed change. If there is to be a department it should be a department of returned soldiers. The returned soldier has not been treated as he should have been by the various governments that have represented the people of Canada. It takes months and months to get a soldier into a hospital. Some time ago I sent forward a letter from the Reverend Canon Skey, one of the leading Anglican rectors in the diocese of Toronto, requesting that some poor returned soldier who was out of his mind should be put in the Christie street hospital in my constituency. This man's wife had to go out to work. After the home had been visited on several occasions by the canon and others, it was felt that the returned soldier, who was 
suffering in body and mind as a result of the war, should be in the Christie street hospital. I wrote to the minister, but he was out of town. I wrote to the deputy and I received a reply that I could apply to the Board of Pension Commissioners, or some other high court of justice, or the privy council perhaps, and all that red tape before anyone had any power to take any action. We have to-day a proposed amalgamation. It seems that the returned soldier is the only agency to which the government will apply economy, although they are spending money like water in the Department of Public Works. Along the St. Lawrence river you can see a wharf almost every mile, and if anybody has not got a wharf in Ontario and Quebec he must have been derelict in his duty; but when it comes to effecting economies, the economy is always against the poor returned soldier. This wonderful Department of Health which is to be amalgamated with Soldiers Civil Re-establishment, what does it do? As a matter of fact most of the health work is done by the municipalities and by the provincial governments. It is they who maintain the hospitals, and when an epidemic comes along this government gets off scot-free and the work is shunted off on to the provinces and the .municipalities. In the city of Toronto there are thousands of returned soldiers out of work, and they are going in hundreds across to the United States, having been driven out of Canada by the economic and soldier policy of this government. In my constituency and in every constituency in Toronto a soldier has to pay a dollar and join the Liberal ward association to get a job even as a temporary clerk in the post office at Christmas. Now these departments are to be amalgamated under the high sounding name of National Health and Veterans' Welfare. In my opinion this new department is nothing but camouflage, but let me tell the minister that you can fool the returned soldiers no longer. The returned soldier is becoming sick and tired of being bandied about by this government from the customs to the post office from the Department of Soldiers Civil Re-establishment to the Civil Service Commission, and having to pay a dollar and join the ward association in order to get a temporary job at Christmas. A returned soldier could not be employed in the Toronto post office at Christmas unless through a Liberal patronage committee.
The returned soldier is made a political football of in Canada, and if there is one class of people for whom a separate department should be created and maintained, no matter what the cost, it is the returned soldier. But

National Health and Veterans' Welfare
he is the only person the government economises against to-day, at the expense of his health, at the expense of having no grave in which to rest his bones in the cemetery unless he pays a dollar and joins the ward association.
There will be no economy effected by this amalgamation. This new department is to be presided over by a minister of the crown, and no doubt it will be a nice easy department to preside over. All the minister will have to do is to attend the sittings of parliament, and then take a trip home, and let the deputy minister and the assistant deputy and a great retinue of officers and clerks carry on in the recess at the expense of the returned soldier. There will be an absentee landlord presiding over this high sounding amalgamation and conglomeration. Good-by and good night to the returned soldier if anything will be accomplished in his interests by such an innovation as this. No doubt under this new department the returned soldier 'will continue to get all the pick and shovel jobs, for that seems to be the favourite job which is handed out to the returned soldier, but when it comes to appointing someone to the senate, what a difference! Some young gentleman who served in the ward associations and not in the war is given the preference, and it is the same with appointments of judges. You talk about increasing the salaries of judges, but I ask what about giving some greater measure of compensation to those who risked their lives for the benefit of Canada and are now suffering in the poorhouses in the city from which I come, where they have to pass the hat around and hold tag days to get enough money to tide the returned soldiers over the winter months of the year.
Here we are considering a resolution to amalgamate the Department of Health with the Soldiers Civil Re-establishment into one single department, no doubt with a single object

to wipe the returned soldier off the map altogether. We can spend two and a half millions for the care of cattle, and millions more to put down bug and insect pests and hog cholera, but not a five dollar bill when a soldier gets sick. He goes to the hospital and cannot get medical treatment. I know dozens of men who have been turned away from the hospitals. I wrote to the chairman of the committee on pensions-I wish they were all as good as he is-regarding a deputation that was ready to come down from the city of Toronto, and I was told that the committee had no time to consider their memorandum of complaints which had been sent on to me as the representative of this soldier constituency of Toronto Northwest,
which includes the Christie street hospital, asking for reforms at the hands of this parliament. The committee had no time to consider their memorandum, but we have lots of time to discuss an amalgamation that, so far as the returned soldier is concerned, will not amount to anything, and you might just as well let him depend on charity, as he has to do very largely in the district from which I come. In the city of Toronto they have had to open soup kitchens for the unemployed and appeals are being made by different missions, including the Revillie one, which are seeking money from the business men in order to provide the returned soldier with a loaf of bread and clothing to cover his body over the winter months. On the front page of a recent edition of a Toronto paper you will see an appeal signed by the secretary of one of these societies and the Poppy day Committee asking that cast off clothing be sent to such and such an office, because there are many children of returned soldiers who have not enough clothing. If there is one department that should be a department by itself, presided over by an active minister who will give all his time to the work, it should be a department that will look after the welfare of the soldiers from coast to coast. They are dying off by hundreds and thousands every year, and the economic policy that is being followed by this government is depriving them not only of a living but of a pension as well. I was told by some of the Toronto university graduates who have just returned from the Olympic games that there is hardly anybody in Germany out of work. While we are talking about peace resolutions and all of that, Germany is taking care of her veterans. In Germany the veteran does not need to work at all. Doctor Hudson, a very fine young doctor of the Varsity team, told me he talked with many men in the city of Berlin, and they told him that their soldier policy was this, that all the veterans who fought in the late war were retired on a pension. The ablebodied young men are given employment under an arrangement by which in the event of trouble they are to be ready to enlist and go to the front again, but the veterans get a pension equal to their civil pay. In Canada from 25 to 30 per cent of our returned soldiers get no pension at all. Many of them are not 100 per cent efficient and cannot get work. They are out of work to-day in the Toronto district through no fault of their own. I protest against such economy. I say it is false economy, and the public do not ask for that kind of economy. If there is one place where economy is being practiced by this govern-
1912	COMMONS
National Health and Veterans' Weljare
ment to-day, it is against the returned soldier. In my opinion the health department should be an active department by itself. This country with only one-eleventh the population of the United States has about seventeen government departments as against seven or eight active departments in the republic. I wish to protest against this amalgamation. It is not in the public interest, and first and last it is not in the interest of the returned men.


Herbert Bealey Adshead: There is no one in the house who has a W'armer spot in his heart for the returned men than I have, and I may be permitted to answer my hon. friend who has just taken his seat (Mr. Church). The returned soldiers' committee of which I am proud to be a member is sitting on the cases of returned soldiers, and, irrespective of party, the members of that committee are endeavouring to bring in a report that will in every respect do full justice to our returned men. When we have brought in our recommendations, should the government see fit to reject them, then would be the time to condemn them in the terms which my hon. friend has employed; but until that time arrives and we have fully considered what shall be done in justice to our returned soldiers, I think such condemnation is premature.
In my opinion the title "Veterans' Welfare " savours too much of charity. Only today I received a letter from the city of Calgary asking for a small contribution to the Board of Public Welfare, which deals with charitable cases. Perhaps the returned men themselves might be able to suggest a better name. At any rate for the time being I would suggest to the minister that the title be held in abeyance until a more suitable name is forthcoming. As regards the other portion of the title of the proposed amalgamation, " National Health ", I think it is wisely chosen, because there are already provincial departments of health.


Robert James Manion: I wish to support what has been said by hon. members with regard to a change of the proposed title. I do not see any advantage in the word "National"; I think it is superfluous. In my opinion the title might very well be cut down to "Department of Health and Soldiers' Re-establishment." This title would be appropriate to the two branches forming the amalgamation, and would be recognized by the soldiers themselves as a continuation of the department that has carried on in the past. I am disappointed in one feature of this proposal- it does not bring about any economy. Some time ago I pointed out that there was an in-

creased expenditure in the two departments of some $35,000 although they are under one minister. I presumed they were united for purposes of economy, but, as is so characteristic with this government, no economy of management has resulted so far. I think the minister should decide without further discussion to pass the whole matter over to the committee dealing with returned soldiers' problems so that it may be fully considered by them.


Mr. BLACK (Yukon):: Has any demand been made by the returned men's association for this change of title to "Veterans' Welfare"? I would suggest to the minister that the soldiers' branch of the amalgamated department being the most important, if the present title must be changed the new united department should be termed " Department of Soldiers' Re-establishment and Health."


John Warwick King: I am desirous of
getting a name that will be appropriate to a department of the character now proposed. I notice that in 1918, when Sir Robert Borden introduced the measure to bring into being the Department of Soldiers' Civil Reestablishment, he stated that within a reasonable number of years it would probably go out of existence altogether. There is a feeling that we have arrived at the stage where this department could be amalgamated with the Department of Health and the two departments thus made more helpful to the whole organization. I suggest that the resolution be allowed to carry, and when the bill based thereon reaches second reading we can discuss the title and other matters pertaining to the amalgamation.


Robert James Manion: That is distinctly on the
understanding that the name which appears in the resolution will be open to discussion?


John Warwick King: Yes.


Arthur Edward Ross: I think there is
something altogether wrong in this resolution, because this is not a department of national health; that is, it cannot interfere in any way with provincial jurisdiction.


John Warwick King: It covers national health matters, that is all.


Arthur Edward Ross: Will the minister
explain how he could have interfered in the recent typhoid epidemic in Montreal, which was a menace to the health of the whole Dominion? I agree that there should be a federal health department, and if it is possible so to constitute it without interfering with provincial jurisdiction, I am agreeable to its

National Health and Veterans' Welfare
formation; but I fail to see how it can be made to function effectively. In these days an epidemic of typhoid fever or any other disease is a crime, and with all the scientific machinery now at our disposal it is inexcusable if more than a few days are required to find out the source of the epidemic. But I repeat, this Department could not interfere with provincial jurisdiction, and consequently the title "department of national health" is a misnomer. In the second place I object to the proposal to make the Department of Soldiers' Civil Re-establishment secondary to any other department of government as is being done here. When you associate it with this other department you are thinking of the enforcement of narcotic regulations and laws governing other offences and not of the real interests of the returned man. I believe also that it was promised, when the Department of Soldiers' Civil Re-establishment was formed, to keep it separate from any other department. In my opinion that department and its work should be independent of any other; nor should it be hidden under any other name. The department should be held prominently before all the people of the Dominion, and to make it an adjunct of a department of national health-to christen it at this late date a department of "veterans' welfare" -is to take a step in the wrong direction.
The work of soldier re-establishment has not diminished except to a very small degree. I do not know what departments are wiped out or are proposed to be wiped out by this bill, but I certainly think that this particular department should be kept prominently before the country. The mere fact that there is a special committee of the house to consider its affairs is sufficient pi'oof of its importance. I therefore again emphasize the desirability of keeping it independent of any other department. I should like to know who suggested that the affairs of the returned soldiers should not be considered by a special committee or that a special committee had not the time to deal with them. The members of the committee have not taken that stand. One man is as important to us as a dozen or a hundred; the case of one man is as worthy of consideration. I think it is a mistake to proceed with this resolution; I do not believe it is popular. Some little investigation held here -I rvish it had been under better auspices- may have been the reason for introducing this measure, but in my opinion the Department of Soldiers' Civil Re-establishment is important enough to give it precedence; nothing has been shown to warrant its being made secondary to any other department.


Mr. GEARY:: May I add to what the last speaker has said an expression of my own feeling to the same effect. If the minister woidd drop this resolution for the time being and let it stand on the order paper, considering the various changes that have been suggested, I think he would be doing a wise thing. "Veterans' Welfare" is not a propel name to give the department, and the men dc not want it. Why talk about veterans' welfare? They are not getting charity.


John Warwick King: It is not intended as charity.


George Reginald Geary: But the implication is there in the use of the word.


John Warwick King: Not at all.


George Reginald Geary: Of course it is. And it is
an Americanism. Veterans' welfare, like community welfare, and other terms of that sort is an Americanism, and one that carries in the public mind implications which should be avoided in connection with the veterans and their affairs. I do not suggest another word, but I do suggest that the minister would be well advised to see whether he could not think of something more appropriate. Moreover, I do not think that an important department such as this, affecting so many men, women and children, should be tacked on to any other department. If you want to have two departments presided over by one minister, well and good. It would not make any difference in expense if the two were managed under one minister, but to amalgamate the two departments would be to do something which would be resented. The fact that they were tacked on as an adjunct to some other department would not meet with the approval of the veterans, who are entitled to feel that their affairs are administered by a department concerned! mainly with their interest. So far as the words "National Health" go, I do not know w7hat national health is. It is a wide term that might be applied to the people of Canada as a whole rather than to the people of any particular province or city. But if you were to speak of city health I do not know that anyone would understand you, unless perhaps you had in mind something having to do with drains or sewers or public undertakings of that sort. It is sufficient to have a "department of health"; you need not limit nor extend the term. Certainly you do not so by prefixing the word "national." If the minister would take the matter under advisement with a view to meeting some of the objections that have been advanced, I think it would be satisfactory for the moment.
1914	COMMONS
National Health and Veterans' JVeljare


John Warwick King: I suggest that we pass the resolution and allow the bill to have its first reading, and on the second reading of the bill the question could be discussed. If it were the wish of the committee then to change the name it could be done. The resolution deals merely with the amalgamation, which is a proposal of the government, and which I have no doubt will receive the support of the house.


Leon Johnson Ladner: If we pass the resolution
as it stands do we not thereby adopt the name?


John Warwick King: The name could
be changed in committee on the bill.


Leon Johnson Ladner: Why not change it now?


John Warwick King: Not to-night.


John Arthur Clark: 
John Arthur Clark: Why not? It is the same principle. That applies to all the departments, and I suggest that if the minister is sincere in his desire to pass this resolution, these words should be dropped. He should also justify the amalgamation of these two departments by showing that some economy will be effected and that greater efficiency will result.


John Warwick King: The question of the name is open for discussion, and as I said before it is my desire to secure a name which will be suitable and which will properly indicate the functions of these two departments. I wish now to establish the principle of amalgamation. In regard to economies, these will result very considerably in the work of administration. It is true that the estimates which have been tabled do not show these economies, because the estimates were made up prior to the work of reorganization and amalgamation. That will be made plain when the estimates come up, and possibly on the second reading of this bill.


Robert James Manion: Does the minister suggest that when the estimates are being dealt with some reductions will be made?


John Warwick King: Yes, if the house thinks it wise; as yet we do not know what the economies will be, because the reorganization is not complete. We know that a considerable saving will be made in our audit branch, but a reorganization of this character

National Health and Veterans' Welfare
takes a very considerable time. If it is the desire of the committee we might amend the resolution by striking out the words "National Health and Veterans' Welfare" for the present, and when the bill is in committee a name will be substituted which we trust will meet with the approval of members on both sides. I think we are all in agreement that if we accept the principle of amalgamation it is desirable to secure a name which will appeal to those interested in the work to be done.


Thomas Erlin Kaiser: I have every sympathy with any and every effort put forth by the Dominion of Canada to make the path of our returned soldiers easier, yet I think that the government should begin to see the importance of national health. During the greater part of my life I have been connected with public health work, and I claim that our country has not even a vision of what can be done by an aggressive, well conducted and well versed department of health. Canada to-day spends about 35 cents per capita on public health, while in order to have efficient service an expenditure of about $2.50 per capita is required. That simply shows the great gap between what we are endeavouring to do now and what might be done. I have been very much impressed by the remarks with regard to the recent epidemic in the city of Montreal. If the Dominion government had had a means of marshalling the forces of the country to grapple with that epidemic, the very serious situation which existed never would have come about. We should have a department of epidemiology. The infant mortality and maternal deaths in this country are simply startling; there is sufficient work in either of these branches of the work to call for aggressive action. I would prefer to see the Department of Health absolutely separate, to take over the matter of national health in line with what other countries are doing. I think there is sufficient work in this Dominion to keep that department busy if they would only buckle down to it.


John Wesley Edwards: I am glad
the minister has agreed to leave out for the present the suggested name of this new department, because it does not ask us who vote for the legislation to commit ourselves to that name as would be the case otherwise. The objections which have been raised are very strong; at all events, they appeal to me as being such, but I am not prepared' to accept the idea of amalgamation, and I wish to express my opposition to that. From the standpoint of the amount of money which necessarily must be expended in looking after the soldiers of this country and from the stand-56103-122
point of the number of individuals directly or indirectly involved, which would include the women and children connected with returned or disabled soldiers, this department should stand alone. It should be a separate department with a minister and a deputy minister of its own. Under this proposed resolution the deputy will be deputy minister of Health and deputy minister of Veterans' Welfare. As far as the deputy minister of Health is concerned I do not think we could do better than the gentleman who occupies that position at present; he is certainly a very competent man, a medical man as you would naturally expect. I do not wish to place any limitation on his ability; probably he would efficiently fill the position of deputy minister of Militia or deputy minister of Veterans' Welfare, but it does seem to me that he will be more at home and more in his element while acting as deputy minister of Health than he would be in acting as deputy minister of Veterans' Welfare.


John Warwick King: Why?


John Wesley Edwards: For very
obvious reasons. He has been trained along medical lines, and for that reason is a very competent deputy minister of Health.


John Warwick King: Does my hon.
friend know that the deputy minister has had very considerable war experience and military training?


John Wesley Edwards: That may be, but he is not going to live forever; I suppose he has no eternal lease on life, and I am discussing the principle now. I am not saying that the present deputy minister of Health might not make a competent deputy minister of Veterans' Welfare, but I do say that a man whose whole training has been along medical lines would be more in his element in directing the affairs of the Department of Health, while a man who has had experience along military lines or who had been closely identified with soldier problems would be more at home as deputy minister of Soldiers' Civil Re-establishment. If there are any individuals in the Dominion of Canada who are entitled to special consideration it is those who fought and were disabled in the war. I have no objection to the gentleman who occupies the position of Minister of Health also bearing the title of Minister of Soldiers' Civil Re-establishment, but I do say there should be two distinct and separate departments, one dealing with soldier problems and one with health, each with a deputy minister. We owe that to the men who have sacrificed so much, and to their dependants,

1916	COMMONS
National Health and Veterans' Welfare
who in many cases must be considered indirectly as wards of the nation. I merely wish to say that while the minister apparently thinks we should adopt the idea of amalgamation, I wish to express my opposition to the idea. I do not think it is a wise one. There should be two distinct departments, and there should be a deputy minister for soldiers' problems and a deputy minister of Health as well.


George Reginald Geary: I suppose the question will be open later?


John Warwick King: Yes. The resolution will bring in a bill, and the principle of the bill will be under discussion.


Henry Lumley Drayton: Before we further consider the suggestion of the name, I wonder what is the real reason for the change? I do not think we have got it from the minister. Has the minister, for example, any reports that there will be better service, greater consideration given to that which is by all odds the more important department of the two, that of soldiers' re-establishment, which spends infinitely more money and requires infinitely more time than the activities which can be followed by a Dominion department of health? If we have any such reports, I think we should know what they are and who make them. At all events, at some considerable expense to the department of reestablishment there has been an investigation or a series of investigations made, I think, quite near where I come from, West York, and we have the Hunter and McGregor combination working there. Have they brought in recommendations for this?


John Warwick King: Not affecting this proposal.


Henry Lumley Drayton: Have they made any recommendations showing how better service can be given to the returned soldiers?


John Warwick King: No.


Henry Lumley Drayton: Will the minister let us have any reports there may be showing that there will be better service to the soldiers?


John Warwick King: There was a report a short time ago showing the nature of the work of the department. Anyone taking the time to read that report will realize that ninety to ninety-five per cent of the work of that department is health work. Then there was an investigation made some time ago by Mr. G. W. Scott, submitted on the 29th of October, in which he deals with the proposed amalgamation, and it is shown in that
*Mr. J. W. Edwards.]
report that there would be an advantage in the matter of economy and in the matter of efficiency in the amalgamation proposed.


Henry Lumley Drayton: Would the minister read the material sections?


John Warwick King: There are a number of recommendations. The recommendation dealing with pensions is one of them.


George Reginald Geary: It has nothing to do with pensions here.


John Warwick King: No, except that we will carry the work of pensions under the new amalgamation, as we do now. The general recommendations made by Mr. Scott- we cannot cover the situation fully unless we go more thoroughly into the report-are as follows:
(a) Giving to the Board of Pension Commissioners such staff as will enable them to function fully as an entirely separate body for the purpose of deciding upon the eligibility of pensioners and their dependants and calculating pensions payable.
And then he deals with transferring certain activities to the Department of Finance, and goes on to say:
(c)	All other activities now directed by the Department of Soldiers' Civil Re-establishment should be transferred to the Department of Health.
(d)	An official of the Department of Health should be appointed as secretary of the Board of Pension Commissioners.
Those are the recommendations which Mr. Scott made. In dealing with the affairs of the department, I think you will find he shows that the work is largely of the nature of treatment or health work, and the work of the vetcraft can be considered as a form of treatment; but on the whole that the amalgamation will be an advantage in the matter of administration, and also would lead to very considerable economy.


Henry Lumley Drayton: Who is Mr. Scott?


John Warwick King: He is associated
with Ross & Company, of Montreal, auditors.


John Arthur Clark: Whose is the other report?


John Warwick King: The annual report of the Department of Soldiers' Civil Re-establishment, the report, which will bear out my statement.


John Arthur Clark: Will the minister read the
report which recommends this amalgamation?


John Warwick King: Of the D.3.CR?


John Arthur Clark: Yes.

Privilege-Mr. Duff


John Warwick King: No; that shows
the number of cases, the number of clinics, the number of cases being re-established year by year, and as I say, it will show that 90 to 95 per cent of that work is health work among the men.


John Arthur Clark: I am glad the minister has
cleared up this last point, because when he spoke first it sounded as though 95 per cent of the work of the two departments was health.


John Warwick King: No, I did not
mean that.
Progress reported.


[Stage Direction]
At 11 o'clock the house adjourned without question put, pursuant to standing order.
Wednesday, April 11, 1928