1931-06-23

[Stage Direction]
Sixth report of the select standing committee on miscellaneous private bills.-Mr. Stinson.

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Mr. M. C. SEN.N (Haldimand):	Mr. Speaker, I beg to present the second and third reports of the select standing committee on agriculture and colonization.
Hon. W. R. MOTHERWELL (Melville):: Mr. Speaker, I understand that my hon. friend the chairman of the committee on agriculture and colonization is merely presenting his report to-day. I wonder if he is in a position to give the house any information concerning the date upon which the report might .be discussed and possibly adopted?


Mr. SENN:: I am not in a position to say just when the report will be moved and adopted.


William Richard Motherwell: It is merely presented to-day?


Mark Cecil Senn: Yes.



PENSION APPEALS


[Stage Direction]
On the orders of the day.
Mr. ALFRED SPEAKMAN (Red Deer):: Mr. Speaker, before the orders of the day are called, may I direct a question to the hon.

Minister of Pensions and National Health (Mr. MacLaren) ? In view of the large and increasing number of applications for pension and the number of applications which have accumulated and are waiting for a hearing, and in view also of the large number of appeals which have been taken to the Pensions Appeal Court by the Board of Pension Commissioners, in respect of favourable decisions rendered by the pensions tribunals, and the percentage of these appeals in which the favourable decision rendered by the pensions tribunals have been reversed by the Pensions Appeal Court, all of which circumstances have created a feeling of profound dissatisfaction amongst certain sections of our returned men, is the government still considering some possible amendment to the Pension Act, by way of meeting this situation, and to the regulations under which the act is being administered?


Mr. SPEAKER:: In view of the length of
the question by the hon. member and the time involved in answering I think it should be placed on the order paper.


Alfred Speakman: The question itself is
very brief and simple. I may add that I gave the minister a copy of it so that he might be familiar with the subject matter.


Pierre Édouard Blondin: The minister may answer now if he wishes.


Hon. MURRAY MacLAREN (Minister of Pensions and National Health):: I have before me a copy of the question which the hon. member so courteously forwarded to me. In answer I would say that probably tomorrow a resolution will appear on the order paper in reference to some amendments to the Pension Act. Such resolution will be brought forward with the object of meeting certain of those conditions referred to by the hon. member.



REMOVAL OF CATTLE

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On the orders of the day.
Mr. ROBERT McKENZIE (Assiniboia):: Before the orders of the day are called I should like to ask a question of the Minister of Indian Affairs (Mr. Murphy), based on a news item which appeared in the Ottawa Journal of June 22 to the effect that owing to the conditions of drought in some parts of Saskatchewan 1,000 head of cattle are to be moved from two of the reserves in a tuberculosis free area to the northern part of Saskatchewan where there is sufficient pasture. What provision has been made to prevent these animals from becoming infected while

Annuities Act
they are out of the tuberculosis free area, or what provision is being made for retesting them on their return?


Hon. T. G. MURPHY (Superintendent-General of Indian Affairs):: Mr. Speaker, I
saw the item in the press to which my hon. friend has referred, and I must say that it is not correct. The cattle referred to have not been moved, nor is it contemplated that they shall be unless conditions become worse than they are at present. The department is in touch with the situation through the commissioner in Regina. No definite plan has been adopted as yet towards the removal of the cattle.



TARIFF SCHEDULES


[Stage Direction]
On the orders of the day:
Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):: May I ask my
right hon. friend if we may count on having by to-morrow at the latest the comparative tables with respect to customs tariff schedules which he was kind enough to promise the house?


Right Hon. R. B. BENNETT (Prime Minister) :: I cannot make a definite promise because I am not certain. I will however inquire during the afternoon and give my right hon. friend more definite information.



SPECIAL WAR REVENUE ACT

[Stage Direction]
On the orders of the day.
William Lyon Mackenzie King: While I am on this subject, may I draw my right hon. friend's attention to schedule 3 appearing in the special war revenue resolution which contains a list of articles being repealed. There is 'nothing to indicate the commodities which were exempt under previous legislation. I would ask my right hon. friend if it might not be possible to have in a form which would enable the house to make comparisons a list of the commodities rvhich were exempt under previous legislation?


Richard Bedford Bennett: I do not think it has been customary to endeavour to undertake such a large order as that. However the information will be forthcoming when the resolutions are reached. In view of the change which has been made in connection with the mode of collection there will be some modifications, in any event. I think by the time the resolution is reached all the information the right hon. gentleman requires will be readilv available.



ANNUITIES ACT AMENDMENT


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Right Hon. R. B. BENNETT (Prime Minister, for the Minister of Immigration and Colonization) moved the second reading of Bill No. 90 to amend the Government Annuities Act.
He said: The hon. the Minister of Immigration and Colonization (Mr. Gordon) is absent from the -house attending the meeting of a committee. In view of that fact, coupled with the fact that the purpose of this bill is chiefly to carry out a departmental recommendation with respect to annuities, I venture on his behalf to move the second reading of this bill.
The house is familiar with the history of government annuities. The late Sir Richard Cartwright gave the matter a great deal of personal attention. Originally it was intended that the Government Annuities Act should provide for persons of small means who would secure an annuity for their old age. Gradually and later there came an increase in the amount that might be payable under the statute until at the last the present maximum of $5,000 was fixed. In view of the fact that the government itself defrays the costs of administration, and the rate of interest upon which computations jwith respect to annuities are made is -four per cent-which, as the house knows, is a very high rate-it has been suggested in many quarters that the fund is hardly solvent, because with the prolonging of life consequent upon modern scientific knowledge being applied to diet and hygiene, it is obvious that the old time computations of the period during which an assured might live must be based upon a lower interest rate than four per cent, which is the figure that has been used dn connection with our annuity tables. Therefore the actuaries of the department, having gone over the matter roughly, are satisfied that we should not carry so large an annuity as $5,000 without making an amendment of our rates. That, of course, is undesirable, and so the suggestion by those who have the responsibility for administration-from the standpoint of pure administration apart from policy -is that $1,200 would be a reasonable maximum.
There is another reason that has come to light recently and one I am sure the house will appreciate is a sufficient cause for action being taken. Under the statute making provision for the payment of these annuities it is provided that they are not liable to seizure for the debts of the annuitant, and there are not. lacking illustrations and inci
Annuities Act
[Stage Direction]
dents during the last few years in which fairly well-to-do traders have utilized the funds of their business for the purpose of acquiring an annuity that enabled them to live in comparative ease while their creditors found themselves unable to attach the moneys or use them for the purpose of receiving payment of their debts. Taking the matter all in all, the officials are of the opinion that [DOT]81,200 is a reasonable sum for us to carry under the circumstances and more in keeping with the purposes for which the statute was originally passed.
I move the second reading of the bill standing in the name of the minister, and if it is desired that it should be sent to a committee for the purpose of enabling representations to be made and more detailed discussion to be held, I am perfectly willing after the bill has passed the second reading to make a motion that it be sent to the committee on 'banking and commerce.
Hon. PETER HEENAN (Kenora-Rainy River):: Mr. Speaker, I am very glad to hear the concluding remarks of the Prime Minister that he is willing to send this bill to the committee on banking and commerce, because I think it is a very important measure. I am confident that no member on this side of the house will be opposed to the bill. As the Prime Minister said, the original act was introduced by Sir Richard Cartwright, and I believe the maximum annuity at that time was fixed at $600; subsequently the maximum was increased to $1,000, and then Sir Henry Drayton raised it to $5,000 in 1920. When introducing his amendment Sir Henry said that its main purpose was to secure some extra money at a reduced rate of interest. 1 do not think it is fair to let the impression go abroad that the annuity system is losing money. It may be that it is being administered at a loss, under the present scheme but it must not be forgotten that the revenue derived from the premiums is placed in the consolidated revenue fund and therefore earns no interest. I think to-day there is standing to the credit of the annuities branch in the neighbourhood of $25,000,000. If that money were set aside and drawing interest at five per cent it would produce an annual income of $1,250,000; if we allow for the four per cent the government applies to the money invested, amounting to about $1,000,000, there would still be $250,000 to the credit of the fund each year. Last year I think the administration expenses of the annuities branch, including commissions, advertising, and travelling expenses, amounted to only $111,000, which would still leave a credit balance of $139,000.

I have looked over these figures hurriedly, but if that be the case it seems to me it is hardly fair to suggest that the annuity branch has been run at a loss.


Richard Bedford Bennett: I did not say that.


Peter Heenan: I am speaking more particularly of statements made in the other house and of certain propaganda, which I am certain has been instigated by a few of the large insurance companies. While Minister of Labour I considered the curtailment of the sale of annuities at the maximum of $5,000. In fact it was upon my recommendation that the department cut down the commission on large annuities in order to discourage canvassers running after wealthy men to sell them these large annuities. In this way I think we effected some curtailment of the sale of the larger annuities. That is one reason why I think the government of the day ought not hastily to have introduced this amendment, but rather to have Waited until they had decided on a well-defined system in regard to the annuities branch. It was my view, and I recall the then Prime Minister (Mr. Mackenzie King) making the statement some time ago, that the annuities branch could well be extended so as to take in old age pensions, unemployment insurance and other insurance of a social character. I find that of the 1,772 annuity contracts 1,482, or 83-6 per cent, are for $600 ; 212, or 12 per cent are from $601 to $1,200; 38, or 2-2 per cent are from $1,201 to $1,500. In fact only nine of them are between $2,501 and $5,000.


Mr. GARLAND (Bow River):: Is that the total number of annuities to which we are now obligated, or is that the total number for the last year?


Peter Heenan: That is the total number in existence altogether. The point I want to make is this: Inasmuch as there are not very many wealthy men, comparatively speaking, taking advantage of this opportunity, we might have deferred amending the act until such time as the government made up its mind what it will do with respect to social insurance of all kinds. However, it may be that even yet some recommendation will be made in committee which may lead the government of the day to change its mind with respect to the bill. .


Mr. STEVENS:: Will the hon. gentleman
answer a question before he takes 'his seat, just to make clear the figures he was quoting? Does he mean nine per cent of the number outstanding, or that there were only nine in excess of $2,500?

Annuities Act


Peter Heenan: Only nine of the annuities.


Henry Herbert Stevens: Nine annuity contracts?


Peter Heenan: Yes.


Henry Herbert Stevens: The hon. gentleman is
sure of his figures, is he? I am afraid he means nine per cent.


Peter Heenan: No, that is from April 1
to March 31, for one year.


William Lyon Mackenzie King: Mr. Speaker, I
have just a word to say. First of all I wish to express the hope that the Prime Minister will adopt the course which he has suggested, namely, that of referring this measure to one of the select standing committees. I assume it will be to the committee on industrial and international relations.


Richard Bedford Bennett: No, the committee on
banking and commerce, I should think; it is a financial matter.


William Lyon Mackenzie King: I had rather
hoped it might be considered by the committee on industrial and international relations, which would be in a position to examine the measure in its relation to the social problems of the day. My thought has been for some years past, as the ex-Minister of Labour (Mr. Ileenan) has just mentioned, that the an-anuities scheme which was started many years ago by this parliament might be broadened out into a scheme of social insurance generally, to be administered by the federal administration, and that as such it might prove to be an important factor in helping to solve many of the social problems of the day.
When the Annuities Act was introduced, some doubt was expressed as to the advantage which would be taken of a measure of that kind. The statistics of the department now prove conclusively that the people of Canada generally are appreciative of legislation of the kind, whereby through making a certain contribution themselves towards unforeseen contingencies, the state is placed in a position to protect them in a time of emergency. Annuities soon become a form of old age insurance, and as such are of service to the state as well as to the individual, in the relief they afford in times of need to those who are of advanced years. If the Annuities Act performs a service in that regard, it seems to me the measure might be broadened out to include all forms of social insurance, as for example, insurance against accident or sickness or invalidity, as well as dependency in old age, in all of which ways it would serve a very great social purpose. It might, too,
be made to become the means whereby unemployment insurance at the instance of the federal government would gradually be introduced in this country.
I was going to venture the hope that the government would refer this measure to the committee on industrial and international relations, with an expression of desire that the committee would consider the measure in its bearing upon a larger scheme of social insurance. The reason I believe it is advisable that this should be done immediately is that if the larger scheme were contemplated it would, I believe, be a mistake to reduce the amount which might be contributed by individuals for the purpose of gaining the kind of protection which the measure thus enlarged would afford. I simply make the suggestion as one which I believe will be helpful. If it is not taken advantage of at the moment, I venture the prophecy that some day not far distant it will become a part of the social legislation of the government of the day.


Edward Joseph Garland: I am opposed to the second reading of this measure. I am of the opinion that the Prime Minister is doing a wise thing in suggesting that it be referred to a committee for further consideration. I hope the committee will see fit to amend it so as to restore the old condition. If the principle of government annuities is correct; if it is a sound principle-and I believe in it myself-I see no reason under heaven why it should be limited to men who are able to subscribe to the extent of securing an annuity of $1,200 a year or $100 a month. I do not see why the people in this country who want to take out annuities of from $2,000 to $5,000 should not have that privilege. However, I do agree that as far as it is possible any system of annuity should be made self-supporting, and if there are any amendments to be made either in connection with the terms of t'he contracts or the rates to be paid in order to make the whole scheme self-supporting, I am in accord with the view that this should be done.
I do not wish to discuss the matter further at this time, except to say that I regard the proposal coming from the other chamber as a reactionary one, calculated to be of more direct benefit to the private insurance companies of Canada than to the common people of the country. I look upon it as an evasion of government responsibility in connection with social insurance of every kind, or at least a modification of that responsibility, and I deeply regret the moving of this bill at all. If it had been in the form of a change
Annuities Act

in the rates or something of that kind, I could have sympathized with it and understood it, but it deliberately goes back to a rate of $1,200 instead of a maximum of $5,000, which I think is a retrogade step and one which will chiefly help the life insurance companies.


Mr. HENRI BOURASSA (Labelle):: Mr. Speaker, I think there is a good deal in what the hon. member for Bow River (Mr. Garland) has just stated. For my part, I agree with the Prime Minister on one point, that regard should be had to the current changes in the rates of interest, but on the other hand I also remember one of the most valuable suggestions made in this chamber some years ago by the z-ight hon. gentleman himself, when sitting on this side of the house. He then pointed out the advantage that would accrue to the government, to the public generally and to the clients of insurance companies should the government force the great insurance companies to invest a large proportion of their funds in government securities. Encouraging private citizens to take insurance directly with the government instead of with the insurance companies induces the public to invest their money for long terms with the government of the country. In this way the public can help sustain the public credit of the country.
With regard to the rate of interest, of course there is something to be said, but there is also this to be kept in mind, that the government do not have to pay all the charges supported by the private companies. They have not the same rentals for offices; they do not pay insurance on their buildings; they do not pay dividends to shareholders. The government thereby save a large proportion of the so-called fixed charges in connection with the management of these funds, and that is also the case in connection with the post office savings bank and other government administrative departments.
The observations of the ex-Minister of Labour (Mr. Heenan) and of the leader of the opposition (Mr. Mackenzie King) should also be taken into consideration. This is the only form of insurance so far carried by the government, but ultimately it will become the nucleus of the various forms of social insurances which the government will have to take over and operate before long. Whether we like it or not, we have to face conditions as they present themselves, in this or in any other country. Some forty or fifty years ago Sir William Vernon Harcourt, then chancellor of the exchequer, being charged with a tendency to socialism, replied, "I hate 
socialism but we are forced into it whether we like it or not." Well, this government has been forced into it, as was the previous government. Before making any change in this matter I think some consideration should be given to the future.
There is another point on which I agree with the Prime Minister. I refer to a more recent statement of his. At the beginning of the session he said, rightly I think, that the spirit of speculation was one of the causes of the present economic distress not only in Canada but in other countries as well. He was taken to task by hon. members to my left, and perhaps he made a mistake in connecting that statement a little too closely with the situation in the western provinces. But broadly speaking, he was absolutely right. The spirit of speculation is the curse of our times in Canada as well as in other countries.
Now, the establishment of insurance of this kind on a long term scale, postponing the reaping of sums invested with the government, is an inducement to people to save and is also a safeguard against speculation. It seems to me that we have a sufficient number of men of wealth, or at least men of fair means, who instead of throwing money into all sorts of wildcat schemes should be encouraged to invest with the government at a moderate rate of interest, and in such a way as not to get their money back until their old age, when they are supposed to be wiser, and before they become a charge upon the public. I do not think there is any necessity for restricting the limit of this insurance.
With regard to rates, that should be revised properly, bearing in mind what I have said as to the possible enlargement of administration. Once we have created various forms of social insurance under the management of the federal government, then the administration of all these departments will naturally curtail the proportion of expenditure carried by each of the departments. Secondly, I would make this suggestion to the government. It seems to me that it would be more proper and more in accordance with the present state of things in Canada, as well as with the spirit that should govern in these matters, that a limit should be defined as to the margin of these annuities which shall be exempt from income tax. I understand that at the present time any annuity paid by the government is exempt from income tax. Suppose the government brought in an amendment limiting the exemption from income tax to the sum of $1,200, and bringing under the operation of the Income Tax Act any surplus that might accrue. For example, an annuity of $3,000 would be exempt up to

Annuities Act
$1,200, but would come under the Income Tax Act at $1,800, and so on. That would establish a difference between the small annuitants, the labourer or the man of small means, and the man with a larger income.
A man of small means who had been able to invest any surplus over and above what was absolutely necessary to sustain him in his old age would continue to be exempt up to a certain point; but the man with the larger income would still be invited to invest his money with the government. He might take out a moderate or even a large annuity, but upon everything over and above $1,200 he would have to pay income tax in proportion to the amount of the annuity.
It seems to me that, taking all these things together, the department being considered the nucleus of a social insurance branch; the great advantage which the government has over private concerns in the maintenance of a little higher rate of interest; and the general advantage from all points of view, economic and social, of inviting men of large or small means to invest their money with the government in order indirectly to carry on the affairs of the country, instead of investing it in all sorts of speculation-taking all these things into consideration, I say, the government would be wise in not diminishing the amount of money which might be invested in annuities, but in making a certain proportion of the annuities subject to income tax.


Peter Heenan: I should like to correct the figures I gave a little while ago in answer to the hon. member for Bow River and the Minister of Trade and Commerce.


Pierre Édouard Blondin: The hon. member will do so with the consent of the house.


Joseph Henri Napoléon Bourassa: He is merely making a correction.


Peter Heenan: In order to have the record correct, I may say that the number of contracts in force on March 31, 1930, was as follows: immediate, 4,012; deferred, 6,171; or a total of 10,183. The amount of such annuities was $3,893,122.73. The amount^ received on account of the purchase of annuities from September 1, 190S, to March 31, 1930, exclusive of amounts returned to purchasers, was S24,860,087.95. The number of annuities sold last year, between $2,501 and $5,000, was 9.


Mr. G. G. COOTE (Macleod):: I should regret to see this bill in its present form become law; it would be certainly a retrograde step for parliament to sanction it as it stands. This would apply to joint annuities, and a limit of $1,200 a year is not sufficient. We hope that
the majority of our people will be able tt enjoy a larger annuity than that when they come to those years in which they must give up active work. I submit that it is wrong in principle to sanction the change proposed^ in this bill, and unless something is done to improve it, I certainly think it should be opposed on the third reading.


Mr. HEAPS:: I believe the Prime Minister stated that the present basis of annuities was not actuarially sound.


Richard Bedford Bennett: I did not say that.


Abraham Albert Heaps: I did not get his point clearly. Perhaps he would repeat it.


Richard Bedford Bennett: It had been suggested that as the statute stands it might not be regarded as actuarially sound at the interest rate provided for these annuities when they were instituted.


Pierre Édouard Blondin: Is the house ready for the question?	*


Richard Bedford Bennett: Before the motion is put I should like to make two or three observations. There appears to me to be some misapprehension on the part of some hon. gentlemen opposite. The ex-iMinister of Labour (Mr. Heenan) said that there were 4,000 outstanding, presently payable annuities. That means that 4,000 separate sums of money have been paid for the purpose of securing annuities payable from the date of the taking-out of such annuities until death or until a fixed period of time, that is, say the age of seventy, or whatever age may be decided upon. That would mean that out of the entire 10,000. two-fifths or 40 per cent were payments made to secure present annuities. The annuities are based upon two considerations, the earning power of money and the expectation of life. The earning power of money is a matter of prime concern at the moment only in so far as it affects the present payments, font one has to look into the future to ascertain whether or not that presently contemplated rate of interest can be continued over the period ot the expectation of life. It is just because of that single fact that this bill is before this house at the present time, for that and no other reason.
When Sir Richard Cartwright instituted annuities he provided for a maximum of $50 per month or $600 per year. Any hon. gentlemen who are interested can read what the purposes of the government were in placing this amount at $600 per annum to be paid at old age or otherwise, as the annuitant might elect. The reasons why that small sum was fixed upon are explained by Sir Richard Cartwright himself.
Annuities Act

The hon. member (Mr. Heenan) has explained very naively why the amount was increased at one particular period in this country's history. It did secure more money, in fact we have to-day some $23,000,000 or $24,000,000 in the treasury which has been paid in by annuitants under contracts by which the Dominion of Canada undertakes to pay presently so much per annum until a given contingency has arrived, or to commence the payments in futurity at the age of 50, 55 or 60 as the case may be. That is based upon this single consideration: that the actuaries were of the opinion that, having regard to the present and future earning power of money, it was safe for the country to make that contract and when the annuitants died or the age limit was reached the money would be exhausted and there would neither be a surplus nor a deficit. That is the science upon which these annuities are worked out.
Two things have supervened; one is the very condition mentioned by the hon. member for Kenora that not only is the annuity exempt from the operations of the income tax but it has become an incentive to some people, such as traders in a small way, who exhaust their resources to obtain some money to buy a presently payable annuity and the rest of their creditors can whistle. That is not fancy, it is a fact. When my hon. friend stated that .the number of present annuities was 4,000 out of a total of 10,000, it will be seen to what extent an effort has been made to buy annuities presently payable.
The reasons why the maximum amount was advanced to $5,000 have been given by the former Minister of Labour, but I am thinking of to-day. One must look into the future and be able to say that beyond peradventure a sum of money paid to-day by an annuitant will at any rate of interest which may be payable for money in the future-the future is the expectation of life-secure the payment of the sum contracted to be paid. As my hon. friend has said, there is no question at all of expenditure, nor is it a matter of moment, but having regard to the conditions to which I have referred no one will say that the rate is one which can with confidence and certainty be looked upon as other than a high rate, having regard to the changes which have taken place in connection with the price of money and the interest which it will earn.
May I put this further consideration to the house because it has become important as the days have gone by: It is not desirable that the rates should be increased in connection with these annuities. Nothing would be more detrimental to the general policy of the gov-
[Mr. Bennett. 1
eminent in granting annuities under this scheme than that the rate should be increased. I need hardly say to as well informed a house as this that in all questions of annuities the rate is determined by almost pure mathematics. There is practically no variation in the rates quoted by the insurance companies, and the government rate would undoubtedly be the same were it not for the fact referred to by my hon. friend, namely, that there was a disposition on the part of parliament when granting an annuity of $600 that the state itself should absorb the expenses-private enterprises make the expenses quite large-but it never was intended that the state should provide annuities on a large scale for those who are well able to take them from private enterprises and pay whatever premium might be demanded. In other words, the net result of the continuance of the rate which originally provided for a $600 annuity, based upon the earning power of .money looking into a long future being four per cent, has been, by increasing the annuity to $5,000, to make it a direct incentive to those who desire to secure the benefits from the state of what was intended for the man of small means. The very fact that 4,000 out of 10,000 annuities are of this class proves my contention.
This is a departmental matter, it is to insure against the necessity of increasing the rates for small annuities; it is to continue the system to which Sir Richard Cartwright gave so much time and attention, and which in my judgment-that does not add anything to it-is founded upon a sound consideration and appreciation of the facts which should govern any body in granting annuities, whether it be a private enterprise or public body. This has nothing to do with social insurance. The time will come when those matters will be considered on a contributary basis, which means that the contribution .made is the premium paid for the insurance granted, whether it be old age insurance, unemployment or invalidity insurance, or whatever it may be. Insurance of any kind involves a premium and the premium must be based upon some consideration of facts and not fancy. We endeavoured in the first instance to base our premium rate upon a due and proper appreciation of the state absorbing certain charges, for the benefit of the man in whom we desired to encourage the habit of thrift, but advantage has been taken of this not only with respect to income tax but otherwise, and the officials of the department have endeavoured to set a rate based upon the scheme which was originally launched

Annuities Act
and to provide an annuity of $1,200 which represents fairly now the $600 which was in the minds of those who put forward the scheme in the first instance. I do not believe that it is desirable to change the rates with respect to those who have secured the benefits of this system in the way of small annuities; it would be wrong; it would be unfair and they would think that there was something wrong with the system.
The hon. member for Kenora is quite right in saying that there is no question of the solvency of the system, nor have the expenses of running the system been very large, but in this, as in life insurance, one must think of the period of time during which the contract will exist, and that period of time is based upon the expectation of life of the annuitant. If my hon. friend misunderstood me I am sorry because all I was endeavouring to show was that in their desire to maintain the solvency of the system itself, the officers charged with responsibility decided after a rough actuarial computation that we should not have increased the annuity to the sum mentioned. It was done as the hon. gentleman has very fairly stated under exceptional circumstances.
I think the committee on banking and commerce is the proper committee to which the bill should go. The question of social insurance will come up in time, but this is a matter of pure mathematics, actuarial computations, and the determination of whether or not a system which was created for the purpose of ensuring a certain amount of confidence in the future on the part of those who had small sums of money, shall not be extended beyond a reasonable sum, namely $1,200, which in these days takes the place of the $600 originally provided for by the act.


Mr. EULER:: I have been trying to agree
with my right hon. friend's whole argument; but if he stated, as I think he did, that actuarially it is desirable that the amount be reduced from $5,000 to $1,200, and if this is entirely a mathematical matter, as it is, why is it not just as desirable so far as the $1,200 is concerned? Would the proper remedy not be to change the rates?


Richard Bedford Bennett: The hon. member for
North Waterloo has asked a question such as I would have expected him to ask, a very proper question. The reason is this: The original system was based upon annuities for, shall I say, the thrifty person of small means, and the state then felt that $600 could very well be taken care of without incurring any large expense, and that 4 per cent would probably
be a rate that would always be serviceable to the state. That was the general view taken of the matter. The officers of the department say that to-day $1,200 may well be regarded as the maximum sum that will take the place of $600 which was the maximum at that time. Actuarially they are practically on the same basis. I have told the hon. member that the principle that governed the creation of the system in the first instance is still to be maintained while the rate is to be continued. The payment of annuity costs, by the state is the slight contribution the state makes to the system for the purpose of encouraging thrift.


William Daum Euler: Not to take care of the man who is able to take care of himself.


Richard Bedford Bennett: No.


Peter Heenan: Is there in this bill anything which will prevent employers of labour from taking out annuities for their employees?


Richard Bedford Bennett: There is no change in
any particular and employers of labour will still, I hope and believe, avail themselves of this legislation for that very purpose.
Motion agreed to and bill read the second time.


Richard Bedford Bennett: That the bill be referred to the select standing committee on banking and commerce.


William Lyon Mackenzie King: I wish to move an amendment to substitute for the words "select standing committee on banking and commerce," the words "select standing committee on industrial and international relations." I understand it is not permissible, at the moment, to debate the amendment. I move it for the reasons I have mentioned.


Pierre Édouard Blondin: The clerk calls my attention to the fact that the motion, not being debatable, cannot be amended. He has not cited any authority for that. Accordingly the amendment cannot be put.


Mr. GERSHAW:: I was paired with the
hon. member for London (Mr. White). Had I voted I would have voted against the motion.


Mr. LAFLECHE:: I was paired with the
hon. member for Drummond-Arthabaska (Mr. Girouard). Had I voted I would have voted for the motion.


Mr. MANION:: I was paired with the hon. member for North Waterloo (Mr. Euler). Had I voted I would have voted for the motion.


Mr. MERCIER (St. Henri):: I was paired with the hon. member for West Hamilton (Mr. Bell). Had I voted I would have voted against the motion.


Mr. MERCIER (Laurier-Outremont):: I
was paired with the hon. member for South Toronto (Mr. Geary). Had I voted I would have voted against the motion.


Mr. GOTT:: I was paired with the hon.
member for Kent (Mr. Rutherford). Had I voted I would have voted for the motion

Halifax Harbour


Mr. BOTHWELL:: I was paired with the
hon. member for Hastings-Peterborough (Mr. Embury). Had I voted I would have voted against the motion.


Mr. BERTRAND:: I was paired with the hon. member for Toronto Northeast (Mr. Baker). Had I voted I would have voted against the motion.


Mr. BLACK (Halifax):: I was paired with
the hon. member for Chicoutimi (Mr. Dubuc). Had I voted I would have voted for the motion.


Murray MacLaren: I was paired with the
hon. member for Rimouski (Sir Eugene Fiset). Had I voted I would have voted for the motion.


Mr. TAYLOR:: I was paired with the hon. member for Brantford City (Mr. Ryerson). Had I voted I would have voted against the motion.


Mr. ROBINSON:: I was paired with the
hon. member for Portneuf (Mr. Desrochers). Had I voted I would have voted for the motion.



HALIFAX HARBOUR COMMISSION


[Stage Direction]
Hon. ALFRED DURANLEAU (Minister of Marine) moved that the house go into committee to consider the following proposed resolution:
That it is expedient to authorize a loan to the harbour commissioners of Halifax in an amount not exceeding $3,500,000 for 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 the debentures of the corporation to cover said loan.
Motion agreed to and the house went into committee, Mr. LaVergne in the chair.
Mr. CARDIN:: Has the minister before him a list of the proposed works contemplated by this particular vote?


Mr. DURANLEAU:: The new works to be started this season according to the estimates consist of thirteen small items amounting to only $386,000. This amount of $3,500,000 is to provide for those new works estimated to cost about $386,000 and also the -continuation of works which were authorized during the term of the late government. According to the estimates made by our engineers, the amount necessary to complete the works authorized by the late government is $2,728,384. When the new commissioners took office last September they learned that some works which had been started had not been authorized by the government. However we could do nothing but continue those works, because they were so far advanced, and also in order to relieve unemployment. The result is that another amount of $385,000 is required to terminate the unauthorized works which had been begun before the new commission came into office. There is also expenditure to be made for pier No. 5 over and above the amount of the contract. As the committee knows, there are two piers under construction at the present time, pier B and pier 5. We had to stop work on pier 5 on account of the fact that the contractors were not building it according to the plans and specifications, and on account of the further -fact that the specifications were not complete and there was danger of the structure being destroyed. Now we are contemplating calling for new tenders for a more complete pier, which will necessitate an increased expenditure of $288,000. It was found that the width of pier B, 260 feet, was absolutely inadequate to take care of two berths and railroad facilities. Therefore our engineers had to increase the width to 300 feet, which will necessitate an increased expenditure of $178,000 in round figures. Then, too, in the first estimates no provision had been made for contingencies and for interest on capital expenditure during construction; the amount necessary to look after these is estimated at $534,000. It will be seen that the sum of $3,500,000 is absolutely necessary to complete the work which was started before the present administration took office. This total includes also $3S6,000 to provide for certain work to be done this season in order to put the -wharf in such condition that it may be used. I shall be pleased to give any -further details that may be required when the bill is before the house.


Pierre-Joseph-Arthur Cardin: What does the minister mean when he says certain works were unauthorized? Does he mean that the plans and specifications had not been produced to the department for approval; or that certain work which had been started was continued after the appropriation was exhausted; or that work was undertaken on the initiative of the harbour commissioners themselves?


Alfred Duranleau: The works were started by the late commissioners on their own initiative without any authorization, although they contended that they had had some conversation with the minister of the department and the engineers and thought they had been authorized verbally, but this was denied by the officials. Therefore we contend that these works were started absolutely on the initiative of the late commissioners.
Halifax Harbour


Pierre-Joseph-Arthur Cardin: I understand that the
minister has not before him all the details, and I should not like to embarrass him at this stage in any way at all. But is he in a position to tell the committee if the works which were started by the late commissioners on their own initiative were works in regard to the general development of the harbour of Halifax, and were included in the general plan which has been in the department for several years?


Alfred Duranleau: If I remember well, the late commissioners contended that they had a general plan for the development of the harbour at a cost of about $16,000,000 and that the amounts authorized by parliament, first, $500,000 and then $5,000,000, were onlj' for the execution of the first part of the large scheme that we have had to modify for the time being.


Pierre-Joseph-Arthur Cardin: Is it not a fact that these plans covering the general scheme had been deposited with the Department of Marine for nearly ten years?


Alfred Duranleau: I do not know; but I am sure of one thing-the general scheme involving an expenditure of $15,000,000 has never been authorized by the department. There is no document on the files which tends to show any such authorization. The late harbour commissioners may have discussed the matter with the deputy minister, and they may have shown their general scheme to him, but there never was an authorization by the department to go ahead and incur those expenditures.


Pierre-Joseph-Arthur Cardin: I should not like to contradict the minister, but I am under the impression that the general scheme for the development of the port of Halifax, necessitating the expenditure of many millions of dollars, had already been approved by the department, but had not been put into effect. Do I understand the minister to say the late commissioners when they started the work on their own initiative contributed a certain amount of the expenditure out of the harbour revenues, or are all the accounts for those works due at the present time?


Alfred Duranleau: When we came into power I think the harbour commissioners were overdrawn to the extent of about $1,500,000. We helped them out as much as we could in order to continue the works which were under construction.


Mr. LAPOINTE:: This resolution, Mr. Chairman, is to authorize a loan of $3,500,000 to the harbour commissioners of Halifax, and they are to deposit their debentures to guar-

antee the loan. Do I understand that they have to pay interest to the government on the loans?


Alfred Duranleau: Of course all loans to harbour commissions bear interest. Some of the harbour commissions cannot pay interest because they have not sufficient revenue for the purpose. This loan will be advanced progressively during the construction of the work and no doubt it will bear interest. Whether the harbour commission of Halifax will be able to pay the interest only the future will disclose.


Ernest Lapointe: Then they cannot pay interest on this loan unless they collect dues on the boats which will use the harbour facilities; that is their only source of revenue?


Alfred Duranleau: They pay interest out of their revenues after they have paid their overhead expenses.


Ernest Lapointe: Has not my friend heard of a certain promise, that the harbours of Halifax and St. John were to be what were called national, free ports, and that it was a crime that rates should be charged on goods coming to those ports? Has not my hon. friend heard of such a statement being made at any time by anyone with whom he is related or connected?


Alfred Duranleau: I have not heard anything of the kind.


Richard Bedford Bennett: Nor has anyone else.


Alfred Duranleau: I know the harbour
commissioners have by-laws by which they collect dues.


Ernest Lapointe: This means the end of the free port, the national port?


Alfred Duranleau: For the time being.


Mr. VENIOT:: In order to put the matter properly before the house and have it thoroughly understood let me quote from the speech of the Prime Minister at Halifax on July 3:
Halifax and St. John should be national ports. They, belong to the people of Canada. They should be great, free, open ports.
Then, speaking at St. John, he said:
The port of St. John should be a great free port, a national port, and towards the implementation of this object I give my pledge. It is said that I am opposed to the port of St. John as at present operated. I am opposed to the collection of tolls in this port which prevents it from being built up. _My ambition is to see this port the cheapest in the world.


Mr. DUPUIS:: I did not hear who made that promise.

Halifax Harbour


Peter John Veniot: The present Prime Minister of Canada, then leader of the opposition, on June 30.


Richard Bedford Bennett: What are you quoting from?


Peter John Veniot: I am quoting from the St. John Telegraph and the Halifax Herald.


Pierre-Joseph-Arthur Cardin: About a month ago I asked for the production of the order in council appointing Sir Alexander Gibb to make an investigation into all the harbours of Canada. The Prime Minister at the time was not quite sure whether an order in council had been passed or whether Sir Alexander Gibb had been retained through correspondence, but he promised to table the correspondence if there was any. I quite understand that due to the pressure of business he may have forgotten it, so I would ask him to be kind enough to lay on the table of the house a copy of the correspondence and a copy of any order in council which might have been passed.


Richard Bedford Bennett: The hon. gentleman is quite right; I had overlooked it. I looked up the matter, and there is no order in council There was correspondence carried on with the High Commissioner in London, and there were some telephone calls, I think. I will give the substance of it as my memory serves me. First of all there was a cable to have the High Commissioner call upon Sir Alexander Gibb to see if he would be free to accept the retainer. Then there was a reply, after the High Commissioner had seen Sir Alexander Gibb, and a definite agreement that he could send his officials in May and later come himself. There was a telephone call to the High Commissioner to complete the matter, and Sir Alexander Gibb and his officers came out accordingly.


Mr. POWER:: May I ask what were the
instructions given Sir Alexander Gibb?


Richard Bedford Bennett: The instructions were
twofold. First of all he was to ascertain to what extent the existing facilities could be extended and utilized for the purpose of serving the respective territories in which they were situated, especially having regard to the national character of those upon the sea coast. I am speaking from memory now. The second part of the instructions was whether any suggestions could be made as to the manner of administration of the several ports.


Charles Gavan Power: Those instructions doubtless were given in writing?


Richard Bedford Bennett: The instructions, if my
memory serves me, were given by the Minister of Marine to the engineers. Sir Alexander expected that he would consider this problem without in any sense having his activities curbed or restrained by a government, and that he would determine how these ports could best be made into national ports in every sense of the term, including Vancouver, St. John, Halifax and, in the summer time, Quebec and Montreal.


Charles Gavan Power: And Three Rivers?


Richard Bedford Bennett: Yes, I had forgotten the hon. member's port. The port of Casgrain also is not overlooked.


George Gibson Coote: If the convention between
members in the other end of the chamber could be carried on in a little louder tone we would be able to get the drift of what is going on, but we cannot hear a word.


Pierre-Joseph-Arthur Cardin: Do I understand that the
scope of this investigation does not cover the port of Vancouver?


Richard Bedford Bennett: I said Vancouver. I am
sorry the hon. member did not hear me.


Charles Gavan Power: But surely, Mr. Speaker,
some instructions in writing have been given, or there must be a minute of the privy council or something in writing which the house could see, which might be produced on the table of the house, permitting us to understand and fully comprehend what is the commission of Sir Alexander Gibb.


Richard Bedford Bennett: I should think he was
instructed in exactly the same manner as Mr. Frederick Palmer was instructed; he was asked to come out and report upon these harbours. I think there is a written minute, not of council, but which the Minister of Marine has, with respect to the two matters into which he was to inquire. If you employ technical men it is not wise to endeavour to circumscribe their activities, and this gentleman is regarded as one of the foremost in his profession. He has been asked to report upon these ports, having regard to the two points which I have already mentioned and which I need not repeat. In no sense has it been suggested to him the particular part of the harbour at which he should look, or the particular way in which he should consider it. He is to consider it from the standpoint of a Canadian national activity.


Peter John Veniot: In that respect you gave
him a free hand?


Richard Bedford Bennett: Exactly.


Charles Gavan Power: The circumstances are not
quite the same as those under which the
Halifax Harbour

gentleman referred to by the Prime Minister came to Canada. He was asked to decide on the respective merits of two ports. Sir Alexander Gibb, as I understand it, was asked to come here and generally recommend to the government what position should be taken, or what policy should be followed, with regard to the ports on the Atlantic and Pacific coasts, and on the St. Lawrence. He is not instructed further than to tell the government what they should do. Will the Prime Minister tell me if I am correct in that statement? His job, in other words, is to devise a policy for the government; is that it? I am asking the question without endeavouring to insinuate that the government is not capable of carrying on, but I should like the Prime Minister to give me some kind of an answer to what I think is a very reasonable question.


Richard Bedford Bennett: The policy of the administration will be settled when it is in possession of the information which Sir Alexander Gibb will furnish. In the meantime, with a free hand he is to look over the physical conditions and report upon that plan which, in his judgment, will best insure-as I think I mentioned to my colleague-continuous development of the ports in question, looking forward for twenty-five to fifty years.


Charles Gavan Power: I am sure every member of this house, and particularly those interested in maritime matters, will approve of the statement of the right hon. Prime Minister, but is it not a fact that the question of freedom from dues is something which, after all, should be a matter of policy of the government? If that is the case, I am assuming that Sir Alexander Gibb will advise the government as to whether or not these ports are to be free. I wonder whether the Prime Minister will take his advice if he says that these ports, in order to maintain their staff and to carry on their business, must impose certain tonnage dues, moorage charges, wharfage and so on. If the Prime Minister is not prepared to follow his advice and to take his counsel on matters of this importance, I wonder what the usefulness of Sir Alexander Gibb is and why he has been brought here at all. I might ask the Prime Minister to tell us what he had in mind when he urged so strenuously during the last election that these ports should be free. Did he mean that they should be free from customs dues or free from tolls?


Richard Bedford Bennett: If the hon. gentleman were always serious it would not be so difficult to answer him; it would be much

easier, I daresay. Surely he does not seriously think that they would be free from customs duties.


Charles Gavan Power: The only known free ports in the world are ports which are free of customs duties, such as Hamburg. That is the meaning of the term.


Richard Bedford Bennett: That is not the meaning of the term.


Charles Gavan Power: In the mind of the right hon. gentleman.


Richard Bedford Bennett: That is not the meaning in which the term has been used. It has been properly pointed out that the harbour of Quebec has made no payment of interest to the government on the enormous expenditures that have been made, which expenditures have been used very largely under the auspices of my hon. friend, for purposes largely political. And it was felt that perhaps the time had come when an effort should be made to lift the administration out of politics. As regards the harbour of Halifax, if it is desired to discuss again what transpired there before the last election, that will be done. But the matter at the moment is sub judice and we will leave it at that.


Ernest Lapointe: That is not an answer.


Richard Bedford Bennett: I am coming to the answer. I am wondering whether the hon. gentleman wishes it.


Ernest Lapointe: That is a nice way to avoid it.


Richard Bedford Bennett: I am not avoiding it. I still say that I have an ambition that these Atlantic ports should be free, and I mean just what I said: free ports where ships can come and go without paying tolls. That is exactly what I meant.


Ernest Lapointe: Does the right hon. gentleman know of any port in the world which is free in that sense?


Richard Bedford Bennett: I certainly do. Hamburg is a free port-


Charles Gavan Power: It is not free in that sense.


Richard Bedford Bennett: Does the hon. gentleman know of his own knowledge?


Charles Gavan Power: Yes.


Richard Bedford Bennett: Who told him?


Charles Gavan Power: From having read every dictionary in the world.


Richard Bedford Bennett: Dictionaries are not the
source of information to which one should go

Halifax Harbour
to find out what the situation is in the port of Hamburg. I took the trouble to inquire
of a gentleman who transacts business in that port. He may have been misinformed, but he told me what was meant by a free port. And the meaning of the term is as I have stated. The term free port means free of tolls, and I still have an ambition that these ports may be free of tolls. The money has been expended and they cannot possibly pay interest on the investment made. I do not think the house listened with as much attention as possibly the country will to the statement of what took place in Halifax before the last election with respect to the expenditure of moneys. The Minister of Marine pointed out that contracts had been made, and when I hear hon. gentlemen opposite talk about parliamentary control and authority, it vastly amuses me to recall the exact record of what transpired a few months before the last election in connection with the harbours of Halifax and St. John. We are not discussing St. John to-day, but when the time comes I shall read to the house a letter written by the ex-Postmaster General with respect to that harbour. It is interesting reading in the light of subsequent events.


Peter John Veniot: Do you mean that as a
threat?


Mr. ERNST:: No, a promise.


Richard Bedford Bennett: Exactly, a promise.


Peter John Veniot: Do you think I am afraid
of it?


Richard Bedford Bennett: I did not suggest the
hon. gentleman would be.


Peter John Veniot: I am prepared to meet the
right hon. gentleman.


Richard Bedford Bennett: Very well; I will meet
my hon. friend at Philippi. Now, it might be desirable to get away from politics in discussing these harbours.


Charles Gavan Power: Who started it?


Richard Bedford Bennett: It is easily known who
did.


Charles Gavan Power: The Prime Minister did.


Richard Bedford Bennett: When?


Charles Gavan Power: The Prime Minister went
out of his way to allege that there had been some political activity in the port of Quebec, simply because I asked him a straight, honest question, which he wished to avoid. If he wants to talk politics in relation to Quebec harbour, I will do so.


Richard Bedford Bennett: I cannot restrain the
hon. gentleman-


Mr.   POAVER@: He may investigate the
harbour until he is blue in the face, but if he will give me an investigation into the last ten months as compared with the ten years previous, I am willing at any time to have such an investigation made.


Richard Bedford Bennett: Now that the hon. gentleman has made that statement, I hope he feels better. I was merely observing that it would advance the interest of the ports to avoid acrimonious political discussion.


Charles Gavan Power: Why did you start it?


Richard Bedford Bennett: The records are there,
with respect to Halifax, St. John and Quebec. Let us hope that out of these vast sums that have been expended we may be able to create ports that will be of some service to the Canadian people. At the moment we are discussing the harbour of Halifax, and the grant of $3,500,000 in connection therewith. That involves questions with respect to the report of Sir Alexander Gibb in reference to that harbour and to others as well.
The ex-Minister of Justice asked a question with regard to the term "free" in relation to the ports of Halifax and St. John. I explained exactly what was meant by that word when I made statements in both Halifax and St. John, and it will be found that I said, free from tolls of every kind. And I still believe that these harbours should be free if we are to make them the national asset we should like; because, in the winter, this country's grain must pass through them if it is not to pass through the port of a foreign country. They must be free if we are to compete successfully with ports that have been heavily subsidized in one way or another, and in some instances, in a foreign country, by Canadian money. In connection with our own railway systems, we have abandoned our efforts-and properly so-in a neighbouring state, and are now devoting ourselves to two ports in our own country. And we are doing so not for a local but for a national purpose, in order that the grain, not moved out of the great lakes in the fall of the year, may find access to the markets of the world at the lowest possible rate. And this applies not only to grain but to other commodities as well, both outgoing and incoming. It is one of my ambitions, if I have any-and I confess to having few- that these harbours should be free ports, and I have given some attention to them in that sense.
One of the matters I took up with my colleague at the earliest opportunity after coming back from England was the question of securing the services of an eminent authority

Halifax Harbour

to report upon these ports, because I felt that we should adopt something in the nature of the plan that prevails in Southampton, or the port of London authority, or the port of Liverpool. The port of Liverpool commission is independent, and in Southampton their operations are based upon a plan made years ago. In other words, our plan looks to a gradual, steady and continuous development over perhaps half a century. What I did suggest in connection with the work of Sir Alexander Gibb, whom I have not seen personally, was that this work might be carried on looking towards a development over a period of half a century-culminating not today or to-morrow, and involving the expenditure not merely of a million or two million dollars, providing a port suitable for immediate necessities, but looking to the long future. It was on that basis that he was asked to make his report. I do not know whether a quarter of a century or half a century was mentioned, but it was certainly a long period of years. We look forward to a development such as has taken place at Southampton, affording room for expansion as necessity may arise. At Southampton, for instance, in connection with the work commenced last year, they are looking to the provision of facilities for the accommodation of a ship of 1,000 feet, the new Cunard boat. That is one of the things they are already doing. I had hoped that, so far as these ports of ours are concerned, we might be able to treat them in that way, so that as our development expanded we might be able, without scrapping what had already been accomplished, to plan for further growth within a period of forty or fifty years. Town planning is carried on with a general conception of the needs of community, and these harbours should be built upon a similar plan. When as a young man I first went to London that port was not regarded as having the facilities of, say, the port of Liverpool, but the port of London, notably under the chairmanship of the late Lord Davenport, became a wonderful place. The character of the work carried on there is beyond any description which could be made by an hon. member of this house in a few minutes. I look forward to something of that sort in respect to these harbours. Enormous sums of money have been expended on the harbour of Montreal, but this is neither the time nor the place to discuss what in my judgment has imperilled that port; this can be discussed at another time. On the Pacific coast we have Vancouver and New Westminster. Every hon. member knows exactly what has happened at New Westminster;

we have either to find $300,000 or the elevator will topple over the brink. New Westminster has not paid its interest charges, but it is not charging tolls. Vancouver has paid interest on its securities. Whether or not we can develop these ports to the extent which we would like and charge tolls, I cannot at the moment say. That is still my ambition and I shall endeavour as far as I can to secure its realization. This is all I can usefully say with respect to these matters.


Charles Gavan Power: Mr. Chairman, leaving aside for the moment the question of free ports, I must comment upon the right hon. gentleman deliberately going out of his way to point the finger of scorn at the haifoour of Quebec. That harbour is not (paying its interest, but I do not believe the harbours of Halifax or St. John are paying their interest. My right hon. friend might have mentioned those harbours while he was at it. Perhaps Vancouver is paying its interest, but the Prime Minister tells us that he wishes the day to come when none of these harbours will be obliged to pay interest charges and that they will not have to exact any tolls or moorage charges from the shipping of Canada. If that is his ambition, and he says it is, I do not see why he attaches any blame to those harbours which have not the revenue and are not likely ever to have the revenue sufficient to pay their way. I think it has been the policy of every government and of every party in this country for many years to develop these ports as national ports. Coming back to the question of free ports, any dictionary or encyclopaedia will indicate that a free port is nothing more or less than a bonded warehouse. The free port of Hamburg and such others are ports in which goods come from all over the world to foe held without the payment of customs duty until such time as they are taken out.


Mr. CAHAN:: Mr. Chairman, I have
knocked around the world a lot


Charles Gavan Power: Much more than have I.


Charles Hazlitt Cahan: I was brought up in a maritime province where we had shipping sailing all over the world, and I always heard the mariners say that such and such a place is a free port, meaning that there were no port dues exacted with respect to entry of shipping sailing to or from that port. It is a common expression among mariners.


Charles Gavan Power: Will the hon. gentleman
name one?	,


Charles Hazlitt Cahan: There are many of them.


Ernest Lapointe: Which ones?

Halifax Harbour


Charles Hazlitt Cahan: There certainly used to be in my younger days.


Charles Gavan Power: I can name one, the port of Riviere du Loup.


Charles Hazlitt Cahan: When we were discussing this matter before I raised a question with the former Minister of Marine (Mr. Cardin). I stated that Quebec would never be able to pay the interest upon the bonds then outstanding and the further bonds to be issued. The former minister said that he had in view the development of a scheme to make Quebec a free port in that sense, and he made a promise to the house to that effect. I remember that statement being made when criticism was-


Pierre-Joseph-Arthur Cardin: I never promised a free port.


Charles Hazlitt Cahan: No hon. member in this
house and no one out of the house ever understood the right hon. leader of the government, when speaking of free ports, to mean ports which would be free from customs duties.


Ernest Lapointe: I know that.


Charles Hazlitt Cahan: That seems to me to be utter nonsense, and that idea certainly never circulated in the cities of St. John or Montreal where the precise use and meaning of the term is understood.


Ernest Lapointe: We all know that.


Charles Hazlitt Cahan: If the hon. gentleman knows that and knows that that is the exact, accepted meaning of the statement made by the right hon. gentleman, why this nonsensical criticism?


Ernest Lapointe: My hon. friend has
always been very courteous to his opponents, and especially so since he has taken over the responsibility of a minister, but he seems to have forgotten himself. We understood what the right hon. gentleman meant. We understood that he was conveying to the people of Halifax and St. John the idea that no one would pay any rates on the goods which would come in or go out of those ports. That is why I asked him whether he knew of any big port in the world where such a situation existed, and he answered "Hamburg." I know that Hamburg is a free port, but not in that sense. Hamburg is a free port in the sense conveyed by the hon. member for Quebec South; it is free from customs duties. The goods are kept there in bonded warehouses and duties are collected when by direction of either the importers 22110-1861
or the exporters they are taken out. There has been an agitation in the city of Quebec that that port should be made a free port. I remember a lecture given by the Hon. Frank Carrel on this point, but he never argued that no dues should be collected. His idea was that this port should be similar to Hamburg. I repeat that it is impossible to open the ports of this country which have cost millions of dollars and make them free from any tolls. I should be amazed to hear that any such plan exists, and in spite of what the Secretary of State has said, I still ask him to name one port in the world where such conditions exist.


Charles Hazlitt Cahan: The hon. member has gone to some pains to refer to my discourtesy, but 1 think no hon. member has ever treated the house with greater courtesy than I have during the five or six sessions of parliament that I have been here.


Ernest Lapointe: Except to state that
everyone else is talking nonsense.


Charles Hazlitt Cahan: The hon. gentleman was talking nonsense on the occasion I made that remark, and he has not and is not likely to forget it.


Ernest Lapointe: The hon. gentleman is accepting to-day what he said last year was nonsense.


Charles Hazlitt Cahan: I am perfectly prepared to discuss that issue with the hon. member, and I am prepared also to discuss his references made on the platforms in the province of Quebec during the last campaign.


Ernest Lapointe: That would be pleasant.


Charles Hazlitt Cahan: The hon. gentleman quite forgot himself in that campaign. As I have told him before, I am perfectly prepared to meet him either in or out of this house. I was then speaking in connection with another question.


Charles Gavan Power: Am I the one who was
talking nonsense?


Charles Hazlitt Cahan: I was not suggesting that.
The hon. member for Quebec South was, I thought, simply asking a question with regard to free ports, playing upon that in a sense in which he at least had good grounds for believing the term had not been used by the Prime Minister. I know the ports of Halifax and St. John well and I know the matter has been discussed in times past of making those ports free in the sensfe, not of being free from customs duties, but of being free to shipping entering and leaving free from port dues. I do
Halifax Harbour

not pretend to know now, but I daresay X can find port after port which in the last twenty-five years has been made free from port and harbour dues to vessels entering and leaving. I know there were several ports of that kind in the West Indies, Central America and South America in times past, where our traders sailed, and I believe that to be the sense, and the only sense, in which the term "free port" was understood in the maritime provinces during the last election campaign. I have discussed, not in St. John, but in Halifax, with a number of merchants the question of Halifax being a port which would be free from port dues of that kind, that is, wharfage and harbour dues. But I never in my life heard it suggested that Halifax or St. John should be free in that sense in which St. Thomas in the Danish West Indies used to be a free port or in the sense in which Hamburg is a free port, namely, that goods entering would be free from customs duties, or that it should be a "free port," so that goods might be imported or exported without any import or export duties being exacted. That idea has never been prevalent in Halifax and I doubt if it was ever prevalent in St. John. I doubt if the words used by the Prime Minister could have been interpreted in that sense, and when I was using the word "nonsense," I thought it was nonsensical to give that meaning to the terms used by him.


William Lyon Mackenzie King: My hon. friend did not understand what was said.


Charles Gavan Power: I think my hon. friend is
making a mistake in regard to experience the world over, and perhaps in his knowledge of the maritimes, but in the closing words of his remarks he said it was nonsensical and anybody who knew anything about maritime matters or who had even lived in Montreal or Halifax, should know better.


Charles Hazlitt Cahan: I did not use those terms
at all.


Charles Gavan Power: The hon. member referred
to people living in Montreal as having some maritime knowledge.


Charles Hazlitt Cahan: I do not think I referred to Montreal.


Charles Gavan Power: I think a reference to Hansard will show that is what he did say.


Charles Hazlitt Cahan: I thought I was very precise in my terms in saying I did not believe any person living in Halifax or St. John-


Charles Gavan Power: Or Montreal.
rMr. Cahan.l


Charles Hazlitt Cahan: I do not think I used the
word "Montreal." Montreal was not in my mind at all, but if I did, it will show.


Peter John Veniot: Montreal is not in it with
St. John or Halifax in any case.


Charles Hazlitt Cahan: It may not be, but the
burden of the criticism is that this statement was made in order to influence public opinion in St. John and Halifax.


William Lyon Mackenzie King: My hon. friend has not properly comprehended the criticism from this side. None of us is attributing to the Prime Minister the statement that he was going to make Halifax and St. John free ports in the sense in which Hamburg is a free port.


Charles Hazlitt Cahan: I thought that was the
suggestion of the hon. member for Quebec East.


William Lyon Mackenzie King: My hon. friend is mistaken. What we are saying is that the Prime Minister sought to leave the impression that Halifax and St. John would be ports at which no tolls would be collected.


Charles Hazlitt Cahan: That is what I understood it to be.


William Lyon Mackenzie King: That is the view we took of the impression he tried to convey.


Charles Hazlitt Cahan: Then I withdraw what I said to the hon. member for Quebec East, because I thought he was giving the other interpretation to the words of the Prime Minister.


Ernest Lapointe: Not at all.


Peter John Veniot: As I was the one who gave the quotation, it might be well to give it again so as to show that nobody was attempting to misrepresent the words of the Prime Minister. He said:
I am opposed to the collection of tolls in this port.
He was then speaking in St. John. I read that quotation just as I read it now and used the word "tolls." It was not the intention of anybody to try to leave the impression that the Prime Minister, speaking as leader of the opposition on the 30th June last in St. John, and on the 3rd July in Halifax, was referring to customs dues.


Charles Hazlitt Cahan: Will the hon. member put his question to the hon. gentleman on his right? How did he understand it?


Charles Gavan Power: I understood the Prime Minister when he made that speech was trying to pull somebody's leg. I repeat: When he used the term "free port," there is only one dictionary definition, and that is a port where goods are allowed in free. When the Secretary of

Halijax Harbour
State says it is nonsensical to speak of a free port in that sense, I say that he does not know what he is talking about.


Charles Hazlitt Cahan: I did not say that.


Charles Gavan Power: That is exactly what he did say. He said it was nonsensical for me to say that the term "free port" meant a port in which no customs duties were collected. One of my friends has taken the trouble to send for Larousse Illustre.


Charles Hazlitt Cahan: That is a good authority on French but not a very good authority on English terms.


Charles Gavan Power: Port franc: "Port ou les marchandises peuvent etre deposees et transiter sans payer des droits de douanes."
Port ferine: "Port dans lequel les navires de commerce ne peuvent eommercer. Port protege contre les mauvais temps."
Ce n'est pas la meme chose.
This is from the Encyclopaedia Britannica:
Free ports. A term applied to ports, or more usually zones within ports, in which vessels can load and unload, and commercial and even manufacturing businesses can be carried on, without any active control by the fiscal authorities.
Is that nonsensical, I ask my hon. friend? I find it in the Encyclopaedia Britannica. The author of this must have travelled all over the world and had some experience, so I hope my hon. friend will not say that he was saying something nonsensical. The article continues:
In a free port no import or export duties are levied, the only charges being for services rendered, i.e., wharf dues, et cetera.
I commend that to the Prime Minister.
It is only when goods pass from the free port area into the hinterland for consumption that import duty is payable.
The Prime Minister was evidently talking boloney -when he was making that statement, because he did not know what he was speaking about.
But when goods have been worked up in the free zone, duty is in some cases only payable on the raw material as originally imported and not on the finished product as crossing the customs frontier.
And so on. Then the article goes on to tell about what happened during the middle ages and so on, and how these ports came to be created and how the term entered into the language of my hon. friend. Under the title "Hamburg" I find the following:
The free port at Hamburg is a survival of the freedom of trade which existed under the Hanseatic League. Hamburg is a sovereign state, and as such entered the German Empire when this was formed in 1871.
And so on.
Merchandise can be brought into the free port free of duty and customs examination, and stored, repacked, sorted, etc., at will, and then either reshipped or sent into Germany as the conditions of the market may suggest. In Hamburg alone among German free ports is manufacturing permitted, but this is no great advantage except for ship repairing.
I think that quotation from the encyclopaedia will explain what I have said, and at least gives a clear understanding of the words we have been using to-day. It would seem that they are not so nonsensical after all.


Charles Hazlitt Cahan: I suggested that my hon.
friend's remarks concerning the words used by the present leader of the government were nonsensical.


Charles Gavan Power: Surely when the Prime
Minister used the words "free ports," he meant something.


Charles Hazlitt Cahan: The people who listened 'to him in the city in which he was speaking understood he Was dealing with the question of freedom from port charges and not customs charges. There is such a thing as freedom from port charges. I have heard the expression "free port" used for the last fifty years by maritime men in every part of the continent, both north and south, and they do not refer to freedom from customs duties, but freedom from port charges. That is the sense in which the term was used, and I suggested that to give any other meaning to the words of the right hon. leader of the government was ridiculous.


Mr. YENIOT:: There is not one part of
the continent of North America free from port charges.


Pierre-Joseph-Arthur Cardin: Before the resolution
passes may I be permitted to say that I do not agree with the alarming words of the Prime Minister regarding the imperilled position of the port of Montreal. The port of Montreal is not by any means imperilled. True, its revenues have dropped to a certain extent on account of the state of depression through which the country is now passing. Canada like other countries is affected by the prevailing depression, and although hon. gentlemen opposite are now willing to admit the fact, they were not so willing during the election campaign. The port of Montreal is by no means imperilled; it has been prosperous in the past and is prosperous to-day. I have no doubt that the Prime Minister had in mind the matter of the bridge, -but that matter might be discussed at some other time. The picture of conditions,
Halifax Harbour

in the port of Montreal is far from being as black as it is painted by hon. gentlemen opposite. Fortunately it is much brighter than the Prime Minister tried to indicate.
I am quite in accord with the remarks of my right hon. friend concerning the general development of all the ports. It is absolutely desirable that that development be carried eiut according to a general scheme well prepared and well effected by competent men. In justice to the harbour commissioners we have had for many years I think I may truthfully state that they have all worked under a general scheme for the betterment of the harbours of which they were in charge. From year to year the different harbours were developed on general plans and specifications according to the amount of money they could get and according to the returns received from tolls and harbour charges. Concerning the particular harbour of Halifax now under discussion, I am sure that there is in the Department of Marine a general plan of its development.


Richard Bedford Bennett: Going back to the days
of the deep water terminals?


Pierre-Joseph-Arthur Cardin: Yes. All the works which have been undertaken in Halifax for many years are in conformity, generally speaking, 'with that general plan which was approved many years ago by both parties in this house. So far as the general program is concerned, I do not think we can lodge any very strong criticism. The Minister of Marine said that a certain amount of the work in Halifax had been undertaken without the authority of the Department of Marine or the sanction of the government. That may be, but hon. members of the committee ought to bear in mind that according to the law establishing the harbour, the commissioners have a right to begin work of their own which they hope to pay for from the revenues derived from . the harbour. The harbour of Halifax borrowed money from the bank, which I am sure looked into the affairs of the harbour commissioners of Halifax before advancing any money without guarantee on the part of the government or the Department of Marine.
Under the circumstances, personally I have no objection to the resolution which is proposed. I think the resolution is justified because I have always been of the view that the ports of St. John and Halifax, as well as all the other harbours which are under commissions at the present time, ought to be looked after properly according to the means and necessities of the country. True, we have a large number of harbours, but we have not too many. Their establishment

has been justified and as a parliament we ought to do all we can to develop them normally and reasonably. They are entitled to all the development which up to the present time has been granted to them.
I understood with other hon. members on this side of the house that during the campaign when the present Prime Minister used the term "free port" he meant a port free from tolls. In fact his statement was so pleasing to the electors of the two great provinces concerned that it worked greatly to his benefit. If the system described by the Prime Minister is established for the two ocean ports of St. John and Halifax, the ports of Montreal and Quebec should receive similar treatment. In the port of Montreal large sums of money have been spent. I think it would not be fair to handicap the port of Montreal which, in effect, is a national undertaking, and I suggest that the port of Quebec also be considered. Advances made by this parliament to the port of Quebec were not made in the dark. It was publicly known and mentioned in this house on many occasions that that port had not been able in the past to pay the interest on the money advanced to it. When I was Minister of Marine I introduced two or three bills providing for advances of money to the harbour commissioners of Quebec, and the statement was clearly and openly made that the interest on advances previously made had not been paid and that the port of Quebec would not for many years to come be in a position to pay such interest. The advances were approved by parliament, however, because all members agreed that that port, just as much as any other port in Canada, should be considered a national port, a national undertaking, and that even though we could not expect a return through the tolls and dues collected, -it was no greater mistake to advance money for its development than to advance money for the building of canals. So that when the Prime Minister is considering the possibility of declaring the ports of St. John and Halifax free ports, he should not forget the ports of Quebec and Montreal. I would further suggest that he would remember also the port of Vancouver. Indeed I venture to say that if he were to forget that far western port he would hear from an hon. member who sits very close to him on the government benches, and I have no doubt that hon. member would strongly urge that the same system be applied to the port of Vancouver.


Ernest Lapointe: Oh, there would be no discrimination.

Redemption Loan


Pierre-Joseph-Arthur Cardin: No, there should not.


Ernest Lapointe: There would not be.


Pierre-Joseph-Arthur Cardin: No. I regret having spoken so long, Mr. Chairman. In closing may I ask the minister if Sir Alexander Gibb has already arrived in Canada, and if at the present time he is working on the harbours?


Alfred Duranleau: Sir Alexander Gibb has not yet arrived. He has however sent his partner, Mr. Beaver, along with two young engineers. Since they have been here they have received the assistance of my chief engineer Mr. Cote; Mr. Tibbits, superintendent of harbours and Mr. Dansereau, who went over the ports with Mr. Beaver and his engineers. They are gathering all the information that is available for the use of Sir Alexander Gibb on his arrival here about the middle of July. I think the. hon. member for Richelieu is mistaken when he states that the harbour commissioners of Halifax have power to start works without any authorization by the Department of Marine. All plans and specifications for any contemplated works must foe deposited with and approved by the department before construction is begun. I go further. The revenues of the harbour commission of Halifax have not been sufficient to pay their overhead expenses, so surely they never could have intended to undertake the *construction of works that they would finance out of their revenues. They have sought to *obtain money from the government for unauthorized works. Those unauthorized works are still uncompleted, and ever since the harbour commissioners started their construction they have been trying to get loans from the government. So obviously they never intended to meet the capital expenditure out of their own revenues. ,


Pierre-Joseph-Arthur Cardin: I still think the act constituting the commission contains that power.


Clarence Joseph Veniot: This may be a little out of order-, Mr. Chairman, but may I ask the minister when he intends to take up resolution No. 26, to authorize the loan of 83,500,000 to the St. John harbour commission?


Alfred Duranleau: It will be taken up very soon. As my hon. friend knows, there was a very disastrous fire on the St. John waterfront the day before yesterday.


Clarence Joseph Veniot: That is the reason for my question.


Alfred Duranleau: I expect it will be necessary to study the new situation which has been brought about by the fire before we proceed with the resolution, because practically the whole wharf was burnt.


Clarence Joseph Veniot: 
Alfred Duranleau: I hope, that the fire loss stated by my hon. friend may prove to be exaggerated.


Peter John Veniot: If the newspaper description of the losses is correct, I have sufficient knowledge myself of the port to know that $3,500,000 will not cover those losses.
Resolution reported, read the second time and concurred in. Mr. Duranleau thereupon moved for leave to introduce Bill No. 103, to provide for a further loan to the Halifax harbour commissioners.
Motion agreed to and bill read the first time.



REDEMPTION LOAN $750,000,000

[Stage Direction]
Right Hon. R. B. BENNETT (Minister of Finance) moved the second reading of Bill No. 100, to authorize the raising by way of loan of certain sums of money for the public service.
He said: Mr. Speaker, I explained the purposes of this measure when the bill was introduced. It merely provides that authority be granted to the governor in council to borrow to the extent of $750,000,000. In 1928, it will be recalled, the former Minister of Finance (Mr. Robb) received authority to borrow $500,000,000, and the, recent conversion loan exhausted that authority. The maturities during the next few years amount to upwards of $750,000,000. and in order that if favourable opportunity arises it may be taken advantage of for the purposes of continuing conversion
Redemption Loan
[Stage Direction]
or making such loans as may be required, this legislation is introduced. In other words, the authority to borrow $750,000,000 will replace on the statute book the authority that was given to borrow $500,000,000, which is now exhausted.
Motion agreed to and the house went into committee, Mr. LaVergne in the chair.
Sections 1 to 3 inclusive agreed to.
Preamble agreed to.
On the title:
George Gibson Coote: I wonder if the Prime Minister could give the committee a statement of the loans which will mature during the next two years.


Richard Bedford Bennett: I think during the session I have furnished the house with that information. There is an estimated amount of $14,469,100 of the 1931's maturing on October 1 of this year to be provided for. The renewal loan of 1922, which is due on November 1, 1932, and which amounted to $73,323,150, has been converted to t'he extent of $37,287,400, leaving $36,035,750 to be cared for. The victory loan of 1918, due on November 1, 1933, which amounted to $446,659,950, has been converted to the extent of $278,025,100, leaving $168,634,850 to be provided for. The victory loan of 1919, due November 1, 1934, which amounted to $511,910,650, has been converted to the extent of $286,043,500, leaving $225,867,150 to be provided for. The fifty-year loan of 1884, due on June 1, 1934, in London, at par of exchange amounts to $23,467,206, which will be provided for bysinking fund except to the extent of approximately $5,000,000. The loan of 1915-1935, due August 1, 1935, in New York, for $874,000, will have to be provided for in its entirety. The loan of 1926-1936, due February 1, 1936, in New York, for $40,000,000, will have to be provided for in full, and the war loan of 1917-1937, amounting to $90,166,900 also will have to be provided for in full. The victory loan of 1917, due December 1, 1937, amounting to $236,299,800 will have to be provided for in full at maturity, making a total of $817,347,550 which must be provided for between now and December 1, 1937. The present bill provides for that part of the loan which will mature between now and the end of 1934.


George Gibson Coote: Will this bill cover all the
remaining issues?


Richard Bedford Bennett: As I pointed out, it will not cover the whole of the 1937 issues, but will cover all loans maturing up to the end of 1934.


George Gibson Coote: I wonder if the Prime Minister has a statement which will show what part of these loans is payable outside of Canada?


Richard Bedford Bennett: The loan due on August 1, 1935, is payable in New York, and the loan due on February 1, 1936, is payable in New York also. The first four loans I mentioned, namely those of 1931, 1932, 1933 and 1934, all are payable in Canada. The 3^ per cent loan due June 1, 1934, is payable in London, while the loans of 1937 are payable in Canada. It is quite certain that of the loans due in Canada the major part are held by Canadians or by organizations or companies, mainly insurance companies, carrying on business in Canada, who are required by law to hold certain types of securities. One company alone, I think, holds for its reserves in Canada something like $15,500,-
000.


George Gibson Coote: Has it been decided whether the bonds which are coming due and which are payable in Canada will be renewed by bonds payable only in Canada?


Richard Bedford Bennett: That is a question which I am sure the hon. member will realize I cannot answer at the moment. I can only say that of the approximately $640,000,000 converted last month, all the bonds are payable in Canada both as to principal and interest. None of the coupons are payable outside of Canada, nor is the principal sum of the several bonds payable outside this country.


George Gibson Coote: Then, Mr. Chairman, I
should just like to say that I trust the Prime Minister, in future bond issues, will make the bonds payable only in Canada. I think it would be well for Canada to have our bonds held in this country, instead of outside.


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


[Stage Direction]
Right Hon. R. B. BENNETT (Prime Minister) moved the second reading of Bill No. 102, to amend the Consolidated Revenue and Audit Act.
He said: Mr. Speaker, when the bill was introduced I promised to make an explanation to the house of the provisions of the proposed measure. The existing Consolidated Revenue and Audit Act has been on the

Revenue and Audit Act
statute books since 1878 practically in its present form. In fact, if the wording of the act of that year is compared with that of the present act it will be found to be almost identical, and if the curious will look back to the British act of 1866 he will there find the origin of our present statute.
Of course it is a far cry from 1878 to the present time, and during that period many changes have been introduced in accounting, largely because of the increase in volume. In 1930 the business of this country amounted in one month to practically the whole or more than the whole volume of business in 1878. It therefore involves, of course, much more work and, I think, a much more complicated form of accounting because of the size of the country and the fact that the population, sparse as it is, is scattered over a vast area.
The officers of the Department of Finance have, as a matter of fact, been engaged for some time-before the advent to power of this government-in an endeavour to deal with the problems of accounting. In the last few months a very earnest effort has been made to coordinate the activities of all those who have been engaged in this work, and the result has been that a measure has been drafted which was circulated to the heads of the several departments; and after much consideration, the elimination of a proposed section here and the addition of a few words there, we have now the measure which is submitted to the house. It is one upon which a good deal of work has been done by the 'permanent officials of the department and -I think I can say this without fear of being misunderstood-also no inconsiderable amount of work by the head of the department.
In the act of 1878 there occur these words:
For the more complete examination of the public accounts of the dominion, and for the reporting thereon to the House of Commons, the Governor General may. under the great seal of Canada, appoint an officer, to be called the Auditor General of Canada.
That is the genesis of the law providing for the appointment of the auditor general. We have not had very many auditors general in this country. They have usually held office for a long term of years and they are, or they should be, entirely free from any governmental control. The section in question is maintained in the new revision, but cognizance i3 taken of the magnitude of the public service and the inconsistency of requiring an officer to perform administrative duties while at the same time acting as a judge of the administration's actions.
The auditor general, in practice, must commit himself to the propriety of the expenditures, by applying on behalf of a disbursing department, to the Minister of Finance, for a letter of credit. But as he then loses control over the credit thus established, if payments are improperly made by the departments, his redress is to make an adverse report to the House of Commons. Moreover, as the act now stands, the auditor general may, to all intents and purposes, be excluded from any intimate knowledge of the activities of the Department of Finance.
I confess to the house that I found it, and still find it, somewhat difficult to understand just why the statute was framed in the form in which it is. Of all departments to which in my judgment the auditor general should have the freest access, the Department of Finance is the one. But as it stands, he has less freedom of access to that department than to almost any other department of the public service. The change which we have now recommended relieves the auditor general from any responsibility over the administration of the public revenues and expenditures, but it broadens his audit control, giving him the right to investigate every activity of the public service and particularly those of the Department of Finance, while control of all expenditure commitments is to be vested in a central organization. This central control is to be accomplished by the creation of a new division, headed by an officer to be known as the comptroller of the treasury, appointed by the governor In council but removable from office for misbehaviour. In other words, he holds his office during good conduct.
To give the comptroller directive control, the practice of expenditures by letters of credit will to a great extent disappear. I apprehend that members of former governments are familiar with the practice now prevailing; but I doubt whether most hon. members realize that after the estimates are passed the department applies for a letter of credit and with that letter of credit, authorized by order in council, it enters upon the expenditure of the amounts for which it receives credit. For instance, department A may apply for a letter of credit for $10,000,000. The responsible officer places, with the bank or a bank, his letter of credit and proceeds then, through his own accounting staff, in his own office, as a separate and distinct part of the machinery of government, to deal with and disburse that money. In my judgment, that is not sound administrative finance. Whether or not this measure commends itself to the house, I am not in a position to say,
Revenue and Audit Act
[Stage Direction]
because the house has not yet had an opportunity to consider it in detail. I presume, however, that every hon. member believes that centralised control with respect to the estimates voted by parliament is absolutely essential if we are to maintain that relation between appropriations on the one hand and expenditures on the other. And we have endeavoured to deal with it in that sense.
If you will analyze the bill, you will find that while the practice of granting letters of credit has disappeared, there will be substituted therefor, through the accounting branch, what we believe will be efficient and effective control over all expenditures made on behalf of the Dominion of Canada.
I need hardly say-and I make this statement in no critical sense-that during the years the accounting branches of the several departments have engaged a very large number of employees, men and women. Once you have a letter of credit granted to a department, you have made that department almost an independent branch of government. It keeps its own accountants, bookkeepers and accounting staff, and the only control which this country has over these expenditures is exercised after the expenditures have been made, and through the auditor general's office.
One of the real problems which I, speaking personally, experienced in connection with the accounting system of the country at the moment arose out of the fact that it was almost impossible to ascertain what sums of money we were obligated to pay at a given time. For instance, when the right hon. gentleman came into power he could not, by applying to any officer in the Department of Finance, ascertain what sums of money were due for payment within a particular time. He knew, of course, what the estimates were; he knew what the charges against the consolidated revenues were by statute. But he could not, as one should be able in a business, inquire of a given official, "What do your obligations to-day amount to?" Nor could that official say, "The obligations to-day amount to blank dollars".
Need I point out to this house that in the United States they have from day to day a statement from the treasury. I suppose it is within the memory of most hon. members- they must have seen it in the daily press- that a statement comes from the treasury department indicating the receipts and expenditures and the balance which is maintained upon a basis of very complete accounting, such as cannot develop under the system which we now have in vogue.
There is one other difficulty and it is this. As matters stand to-day, not only was the right

hon. gentleman unable to ascertain the fact to which I have directed attention, but on August 7 it was impossible for his successor to ascertain the exact financial situation so far as obligations and liabilities were concerned. That is to say, he was not able to ascertain just what the position was with respect to the several appropriations mentioned and designated in the estimates. And I take it that the proper system of accounting would be to maintain an appropriation ledger containing a statement of each several appropriation of public moneys and that the payments made from time to time should be charged against that, so that at the end of the day's business if I desired information I might be able without much difficulty, assisted with modern mechanical devices, to ascertain the exact position with respect to our payments out on the appropriation made. That is one of the ends aimed at by this legislation.
The treasury board is an integral part of our government and financial system. I need hardly say to the house that that board is comprised of members of the administration and the deputy minister receives an additional compensation for the duties he discharges as secretary of that board.
William Lyon Mackenzie King: My right hon. friend refers to the Deputy Minister of Finance?


Richard Bedford Bennett: Yes, the Deputy Minister of Finance. It has been found at times that when the proper officers sit down, with the members of the government who comprise the treasury board, to prepare the estimates, there is some difficulty in ascertaining the exact obligations which must be met in the incoming year and which have arisen out of the balance of contractual obligations created in the year just passed. Under the system I have mentioned that was inevitable. Frequently we have had supplementary estimates at the close of the fiscal year, or main estimates for the new year which are swollen by expenditures jvhich really belonged to the former year. I gave an illustration of that the other day. I do not mean to reflect in any sense upon the administration of my right hon. friend, but this difficulty has arisen because of a system which is illustrated by the department of the King's Printer. That department is supposed to collect from the other departments from month to month the accounts which have been rendered for printing done, but one knows that when the answer is given that all goes into the same pocket and must come out of the same till, it is not easy to maintain that strict accountability which is the basis, in my judgment, of the maintenance

Revenue and Audit Act
and sound conception of public obligations. This bill provides that no contract may be signed or a commitment entered into unless the comptroller of the treasury certifies that there is an unencumbered balance under the appropriate vote available to defray such charges as will fall due during the fiscal year.


William Lyon Mackenzie King: Hear, hear.


Richard Bedford Bennett: I was quite certain that my right hon. friend would say "hear, hear" to that, because I happen to know, not from what he has said publicly ibut, if he will permit me, from what he has said privately, that he concurs in the statement that that is the only basis upon which sound accounting in this country can be maintained. No contract or obligation shall be valid unless it bears upon its face a stamp of some kind indicating that it has been entered by the comptroller of the treasury. If I or any minister desires to know what the position is, there is a record which will indicate the financial position from day to day.
The comptroller acts as a check upon the spending departments, the auditor general acts as a check upon him, because the cancelled cheques immediately flow into the joint control of the auditor general and the Minister of Finance. In addition, the auditor general is now given complete freedom in the examination of the vouchers, records and banking accounts, and may also place his officers in any department in order that he may be fully informed during the course of his audit. At the present time, strange as it may sound, the freedom of investigation by the auditor general into many accounts is very limited. It is only with the *permission of the Minister of Finance or the treasury board that he makes an audit of the following accounts:
(a)	the accounts of all receipts of revenues forming the consolidated revenue fund of Canada;
(b)	the accounts current with several banks and financial agents of Canada;
(c)	the accounts relating to the issue or reduction of loans;
(d) the accounts writh the several Indian tribes, known as the Indian fund;
(e)	the accounts with the several provinces forming the Dominion of Canada;
(f) the accounts with the government of Great Britain;
fg) the receipt, expenditure, sale, transfer or delivery of any securities, stamps, Canadian or other government stock or annuities, provisions or stores; and
(h) public accounts which do not relate directly to the receipts or expenditure of the Dominion of Canada.
We propose to change that. While in practice the auditor general has been encouraged to audit many of these accounts, it is not fitting that such audits should be by invitation. Therefore, the new sections make it obligatory in some cases, discretionary with the auditor general in others, that regular audits be made, and to provide for the future, the treasury board is to be vested with power to enlarge the list of activities which the auditor general shall report upon to parliament. In this way it is hoped that full scope * may be given to the auditor general to perform the duty laid upon him by the section which creates his office.
We have endeavoured through the revision of old and the addition of new sections to meet the present day requirements of a public service functioning throughout an area of over 3.000 miles from coast to coast, and at the same time to provide means whereby the growth of the country may be met without the invention of subterfuges to circumvent statutory provisions which, if too narrowly drawn, would defeat the purpose for which they were designed.
It is proposed that the bill shall come into general effect on April 1, next, but provision is made whereby the change may be made gradually throughout the balance of the present fiscal year. In other words, we shall not endeavour by any revolutionary act to change the existing system but rather, by applying the principles I have indicated, bring all the departments under the provisions of the statute.
I may say that the departments of the public service have been circularized as of June 15, for the number of employees engaged on expenditure accounting, both at Ottawa and outside of Ottawa. The record shows that there are 898 people thus engaged at Ottawa, and 411 outside of Ottawa, and that these are in receipt of salaries amounting to $2,211,211. I have before me a statement showing the number of employees engaged in accounting in the various departments. The employees in the auditor general's department have increased to 193, with 18 temporary employees, making a total of 211 receiving annual salaries amounting to $388360.
It is proposed that the drafts made upon the public treasury to liquidate obligations created shall be in the form used so largely in other countries, that is, drawn upon the Receiver General of Canada and made payable at all banks in the country, as provided b}' the Bank Act, without charge.
I think those are the general provisions of this bill, of which I now move the second reading.
At six o'clock the house took recess.

Civil Service-Returned Soldiers
After Recess
The house resumed at eight o'clock.



CIVIL SERVICE ACT AMENDMENT


[Stage Direction]
The house resumed from Tuesday, June 16, consideration in committee of Bill No. 18, to amend the Civil Service Act (returned soldiers' preference).-Mr. Boulanger-Mr. MacDonald (Cape Breton South) in the chair.
On section 1-Preference to Canadian nationals only.
Charles Gavan Power: I beg formally to move the amendment which I suggested last week, as follows:
That section 1 of Bill No. 18 be stricken out and the following be substituted therefor:
1. Subsection 4 of section 29 of chapter 22 of the Revised Statutes of Canada, 1927, is repealed and the following is substituted therefor:
4. In all examinations for entrance into the civil service, the persons named on such special list, who are found to possess the necessary qualifications, shall be named in the order of merit on the list of successful candidates above all other candidates, and all other persons who have been on active service overseas, in the military or naval forces of His Majesty during the late war, and were at the time of their enlistment or at the date of the passing of this act domiciled in Canada, who have left such service with an honourable record, or who have been honourably discharged, or when any persons who have served overseas as aforesaid, have died owing to such service, the widows of such persons, and who, in either case, obtained sufficient marks to pass such examinations, shall, irrespective of the marks they have obtained, be named in the list of successful candidates next after any candidates who are in the special list mentioned in subsection 2 of this section, and above all other candidates.


Mr. MACKENZIE (Vancouver):: I regret
that in this case I cannot support either the original bill as introduced by my good friend the hon. member for Bellechasse or the amendment moved by the hon. member for Quebec South. Amongst ex-service men in Canada there is no one who has a higher reputation for having rendered wonderful service in their interests than the hon. member who has just moved the amendment. For the last ten years the house has had the benefit of his wide experience, assistance and advice.
I should like, however, to direct the attention of the committee to the exact significance of what is being done. The effect of the amendment just moved is this: it tones

down materially the original clauses of the bill and confines the preference practically to Canadians and to imperials who were domiciled in Canada in 1914. In other words, as I construe the amendment-and my hon. friend will correct me if I am wrong-the only ones who are excluded by it are imperials who may come to Canada after the date of the passing of this bill.
Since 1919 two distinct preferences have been accorded ex-service men in Canada. The first I should like to call a primary preference and the second a secondary preference. The primary preference is to be found in subsection 2 of section 29 of the Civil Service Act. and with the permission of the committee I shall read that subsection:
The commission shall prepare and maintain a special list of persons in receipt of pensions by reason of their services in the war who,
(a)	have from causes attributable to such service lost capacity for physical exertion to an extent which makes them unfit efficiently to pursue the avocations which they were pursuing before the war;
(b)	have not been successfully reestablished in some other avocation; and
(c)	desire to be placed on such list.
I wish to make clear that there is a primary disability preference list both for Canadian and imperial soldiers, and for allied soldiers, provided they come within the terms of section 33 of the act. The secondary preference is contained in section 29, subsection 4. Without in the slightest degree intending so to do, I think my hon. friend conveyed an erroneous impression when he mentioned the Portuguese, Russians and other allies who might compete with former Canadian exservice men. If my hon. friend will turn to section 33 of the Civil Service Act he will find the following:
No person shall, without the authority of the governor in council, be admitted to any examination unless he is a natural born or naturalized British subject, and also has been a resident of Canada for at least three years.
Before one may undergo an examination the primary requisite is that he must be a British subject and must have been in Canada for at least three years.


Mr. GUTHRIE:: That is the law.


Ian Alistair Mackenzie: Yes,
but under the act the governor in council may authorize the employment of specially qualified technicians. The situation is that no one to-day can receive a preference unless he or she is a British subject. Therefore the danger from the somewhat fantastic list of allies mentioned by my hon. friend is really eliminated, and we come down to the dues-

Civil Service-Returned Soldiers
tion of discrimination against imperial veterans, those belonging to the British empire.
At this point, in an absolutely non-partisan spirit I wish to make one suggestion to the committee. For the last ten years, in fact since 1919, the House of Commons has been very generous indeed in the consideration of the problems of the organized ex-service men of Canada. Year after year we have had committee after committee appointed. There was a royal commission to investigate the problems of civil reestablishment, and in every single instance so far as my memory serves me and if I am wrong some hon. member will undoubtedly correct me the organized ex-service men of Canada have been consulted in regard to any proposed change in veterans' legislation. Last year, under the excellent leadership of my hon. friend from Quebec South, we had in the work of the committee and in its report to the house one of the most inspiring incidents in Canadian parliamentary history: the splendid report of the committee was adopted unanimously by parliament. To-day in Canada we have the Canadian Legion representing practically all the organized ex-service men in the country. So far as my knowledge goes, that organization has not been consulted regarding the amendment now before us. For ten years we have given a preference to imperial soldiers, and the only possible effect of the amendment of the hon. member for Quebec South would be to eliminate those who come to Canada after the passing of this act. The number of these men is being reduced year after year. The Canadian Legion and other organized ex-service bodies are prepared to discuss this matter and to send recommendations to parliament as they have in years gone by. Next August or September in the city of Toronto the annual convention of the Canadian Legion will be held and will deal with this very point. The biennial conference of the British Empire Service League representing ex-service men throughout the whole empire is to meet in Toronto in a month or two to discuss problems affecting the ex-service men throughout the British Empire. In view of all these considerations my suggestion to the mover of the amendment and the sponsor of the bill is that we might very well postpone consideration of the matter for at least a year, or until we have ' concrete and comprehensive recommendations from the ex-service men of Canada in convention assembled.
If the matter were urgent I should be pleased to deal with it immediately. I do not
believe a single member of the committee has received a specific complaint in regard to the present preference. At the last biennial conference of the British Empire Service League held in Canada in the year 1925 that great leader of the British army, Sir Douglas Haig, was in attendance. This year we will have with us the great leader of the British navy during the war, Earl Jellicoe, now leader of the British Empire Service League. It would be most unfortunate and at best a futile gesture if at this stage, and in view of the forthcoming conference of empire service men, parliament were to eliminate the preference which for the last ten years Canada has shown. Almost seventeen years have elapsed since the outbreak of hostilities, and any hon. member of this house-and there are many of them-who visit weekly the meetings of ex-service men throughout Canada must recognize the fact that the war veterans are now more or less old men. Those who are qualified by strength and physical capacity to compete in civil service examinations are year by year getting fewer in number.	[DOT]
I appeal most sincerely to the committee to recognize that in days gone by we have had the benefit of expressions of opinion of the Canadian ex-service men regarding these matters. They are a body whose views are of great value and assistance to any government, no matter what government it may be. The desire of ex-service leagues is to do the best they can for ex-service men. I am sure no injury will be done if we lay this matter over until next year when we may have before us the considered recommendations of the exservice men, and we will not be in the position of altering our considered policy on the eve of the convening of the biennial conference of the British Empire Service League.


Robert James Manion: For once in my life I am entirely in accord with the remarks of the hon. member for Vancouver Centre. It seems to me that the proper thing to do with a matter of this sort, which has caused a great deal of heart-burning on both sides of the house, would be to follow the suggestion of my hon. friend opposite. Everybody desires to be eminently fair in matters such as this, and to my mind the fair thing to do is to put it over for another year. Had my hon. friend not made that suggestion I should myself have done so. I happen to know that some of the higher officers of the Canadian Legion to-day are opposed to any change at the present time. I agree with the hon. member from Vancouver that we should wait until the legion has held its annual meeting and has the opportunity of discussing
Civil Service-Returned Soldiers

the piatter and from their standpoint making a decision upon it. At the present time in Canada there is great dissatisfaction because of the legislation which was passed last year affecting the returned men. In making that statement I have no desire to criticize the government then in power; as a matter of fact the report of the committee was based upon recommendations of the officers of the legion itself, it was non-partisan and was brought in with the intention of doing what the committee considered best for the returned soldier. Notwithstanding that, however, there is a certain amount of dissatisfaction. In view of these considerations and of the fact that the legion officers so far as I have been able to hear from them are opposed to this bill, I think it might well stand over for another session. Certainly neither the returned soldiers nor many other persons will suffer by the delay because so few are affected by the bill. Unfortunately I have to go to a meeting of the special railway committee; therefore without delaying the debate I wish to put myself on record as believing that this bill and the amendment thereto of my hon. friend from Quebec South (Mr. Power) might well be allowed to stand over until next session.


Alfred Speakman: I do not propose, Mr. Chairman, to discuss the bill or the amendment at present, but merely to endorse the suggestion made by the two hon. gentlemen who have just taken their seats. While I do not belong to the legion, I have been in very close touch with its members for some years, and a few days ago I discussed with a number of officers the subject matter of this proposed legislation. They authorized me to support the suggestion that has just been made. It is one of those bills which has a very close connection with the work of the legion and in which naturally they are very closely interested. During the ten years that I have been a member of this house it has been the practice to invite suggestions from the legion as to any legislation which affected their membership, and they will be very glad to have a similar opportunity of discussing this bill. As has already been said, their convention takes place next August, and upon the agenda for discussion is this very question of civil service preference. So far as I can see no individual will be prejudiced by the bill standing over for another session, but by our taking this course the men who are chiefly interested both personally and on behalf of their imperial comrades will be assured an opportunity of considering the subject and reaching some definite conclusion upon it. Therefore I think the house will be well

advised without further discussing the merits of the bill to grant that very reasonable request of allowing the bill to stand over until next year, when the officers of the legion will be in a position to make suggestions with regard to it.


Charles Gavan Power: To prevent any misunderstanding, Mr. Chairman, as to just what this amendment purports to do, perhaps I had better review the bill and the amendment itself. The bill in section 1 proposes to amend section 29 of the Civil Service Act, which is chapter 22 of the revised statutes of Canada. It is proposed to add subsection (5), which to a considerable extent would do away with the returned solders' preference. I understand that the returned soldiers generally throughout the country and the Canadian Legion were opposed to this bill on account of the section which my hon. friend from Bellechasse (Mr. Boulanger) intended to add. An agitation- sprang up and various commands of the legion made requests to members of this house and to others to oppose the bill. Then on May 19 I said that if the bill reached committee I would propose a certain amendment-the amendment which is now before the committee. The amendment does not seek to do away with subsection 2 of section 29, which my hon. friend from Vancouver Centre (Mr. Mackenzie) read, and which gives a particular preference to those who have been injured and are unable to pursue their former vocation and to those who have not been successfully reestablished. The amendment does not propose to touch those men at all. It does not propose to touch section 33, which states that only British subjects may enter the civil service of Canada. But it does propose to amend subsection 4 of section 29. Subsection 4 was originally inserted in the Civil Service Act in 1919. By it the people of Canada gave a preference in the civil service appointments: first, to Canadian soldiers; second, to soldiers who had served in the army or navy of His Majesty; third, to soldiers who had served in the allied forces. I propose by my amendment to take away that preference from those who served in the allied forces. I also propose that the preference which has been given to imperial soldiers shall cease as to any who come here after this date.
There does not seem to be anything in that section which would wreck the British constitution or call for a consultation with anybody in the dominion. The thing is perfectly plain. If the house desires to vote against that principle there is no necessity to go out-

Civil Service-Returned Soldiers
side and consult anybody about it. Since when have we in this house set u,p outside the confines of parliament a kind of soldiers' soviet which must be consulted when we wish to pass legislation? As a matter of fact when pension legislation was brought before this house representatives of the returned soldiers' organizations came before committees which dealt with that legislation. They were treated courteously and their representations were listened to; sometimes they were accepted, sometimes not. But it is an altogether new theory in our parliamentary practice that before we pass any legislation which might directly or indirectly affect certain soldiers, and as I have already explained, will not affect Canadian soldiers and will not affect any imperial soldiers who are now domiciled in Canada,-that forsooth we should wait until the members of the Canadian Legion meet Earl Jellicoe and their imperial comrades in August and decide whether or not we, the parliament of Canada, shall continue to give a preference to people who are now living in England. It seems to me that the case is perfectly plain. It is a matter of indifference to me whether or not this amendment passes, but I wish to make perfectly clear the purport of the amendment, and to show that there is no intention whatsoever of offending any particular class of people Who served in the late war, or of taking away from them any rights which they may have. Those who are British subjects and who served in the army of the empire will prej 'serve their preference provided they are domiciled in Canada now. Those who served in the allied forces will be affected. I know my hon. friend said that the amendment Would not affect ex-service men of the nations which I mentioned, but there is nothing to prevent a Czechoslovakian, a Russian, a Frenchman, a Greek, or a Chinese, or a Japanese, provided they have been naturalized, from taking advantage of this preference, and I do not think it is the view of this house, nor is it the view of the people of Canada, that we should be any more generous to the people of any other nation, particularly at the expense of our own citizens.


Mr. RINFRET:: I fully realize, Mr. Chairman, that it is always a delicate matter to deal with questions in which returned soldiers are involved, but at the same time I think it is the duty of every hon. member to state his position very clearly in a matter of this kind. I have no hesitation in saying that I endorse very fully the stand taken by the hon. member for Quebec South, and also his amendment. In saying this I am not only expressing my opinion as a member of the house but I am drawing on my experience as Secretary of State, under whose supervision comes the work of the Civil Service Commission.
There are two points I wish to make very briefly in connection with this bill and amendment. In the first place, let us not forget that the principle at the basis of the Civil Sendee Act is merit. The act states that candidates to the civil service shall be appointed on merit; there is to be no political or family influence of any kind to interfere with the merits of the respective candidates. An exception was made in favour of returned soldiers, whether imperial or Canadian, as my hon. friend has said. We must not lose sight of the fact that this exception is not in conformity with the principle at the basis of the Civil Sendee Act. Very often, in Montreal and elsewhere, I have seen young men who were candidates at examinations for the civil service; these young men were fully qualified and possessed the necessary merit to be appointed, yet they would see candidates, returned soldiers who were perhaps 35 or 40 points below their marks, appointed in their places. I realize that this may have been a good after-war measure, but the first point I wish to make is that no matter how worthy that principle may be it comes in direct conflict with the very foundation of the Civil Service Act, which is that merit shall prevail over every other consideration.
It therefore follows-and this is my second point-that while we may all desire to give that preference to returned soldiers when it is warrantable, we should not extend the field of preference but should rather try to restrict it as much as is commensurate with those other principles of preference which already exist in favour of soldiers. We have dealt with our returned men; we have enacted pension and other legislation in their favour. Will any hon. gentleman in this house tell me any field other than the civil service in which there is legislation in favour of imperial men, or men from Australia or New Zealand or any other portion of the empire, or even from the other allied forces? If it is all right to give a preference to a returned man of the imperial army who is not domiciled to-day in Canada, why not vote a pension for him? Why not make available to him the other advantages we have granted the returned soldiers in Canada? The time has come when that preference, which is in direct opposition to the principle of merit, the basis of our Civil Service Act, should be firmly restricted to Canadian soldiers already domiciled in
Civil Service-Returned Soldiers

Canada, and to no others. We do not vote pensions for imperial soldiers or Australian soldiers, so I maintain we should no longer give a preference in civil service appointments to soldiers other than those who strictly belong to Canada. We do not send our men overseas to enjoy a preference in English civil service appointments; we do not send them to other parts of the empire. Last year, or two years ago, the House of Commons agreed to that modified application of the principle of preference in connection with the bill having to do with the Department of National Revenue. There are certain classes of employees under the Minister of National Revenue, who are appointed by him, and a provision similar to the amendment of my hon. friend from Quebec South was adopted. In other words, it was decided that preference should be given only to Canadian soldiers domiciled in Canada.
'-No very serious inconvenience may be caused by waiting another year, but I do submit that we meet to achieve results. This matter has been before the house for many years; year after year the bill has been moved, but no results have been obtained. I believe the amendment of the hon member for Quebec South is quite in conformity with the conditions as we find them to-day, and as far as I am concerned I shall not only support his amendment but shall also recommend very strongly to the committee that we deal with this matter at once and limit the preference to soldiers who are domiciled in Canada. I think that will meet with general approval.


Mr. ROSS:: Mr. Chairman, I do not desire to discuss at any great length the principle of this bill, but I regret that at this time, there should be any such discussion at all. It is now thirteen years since the armistice, and we are going to deal with men who are just at the age limit of thirty-five years, beyond which they may not enter the civil service.


Charles Gavan Power: We are not dealing with any man who is now in the service.


Arthur Edward Ross: Within another year or two any man not now resident in Canada will be altogether beyond the age limit within which he may enter the civil service, because he must be domiciled in Canada for one year. I wonder if the committee realize that now they are going to legislate with regard to men over thirty years of age.


Ian Alistair Mackenzie: The
youngest would be at least thirty-three now.


Arthur Edward Ross: You are going to deal with men who are within a year or two of the age limit

within which they may enter the civil service. Surely this house might consider that point and forget any further discussion for the present. Another year or two will put these men beyond the limit, and I think that view should have the sympathy of every hon. member of this house and every person out of it.


Mr. DENIS (Translation):: Mr. Speaker, I wish to congratulate the mover of this bill amending the Civil Service Act which grants a preference to veterans. I think that it is the proper time to enact such a bill. Ever since the Conservative party is in power, we have heard on many occasions the cry of "Canada First". Since the Conservatives favour the policy of "Canada First", they should appoint "Canada First" men to positions in the civil service.
I have no objection however, to the amendment of the hon. member for Quebec South (Mr. Power). To grant a preference to Canadian veterans residing in Canada, means simply doing justice to the patriotism they displayed in the Great war. On the other hand, in giving this preference, care should be taken that public affairs will not suffer from the appointment of persons who might prove incompetent. As the present government prides itself in giving the country an exemplary administration, it should discriminate in the choice of its employees. This preference should only be granted to those who are capable of rending efficient service.
I am in favour of the amendment which purports to grant a preference to Canadian veterans domiciled in Canada. I fail to see why we should grant this preference to veterans of other countries or those of other British nations. We should keep our civil service positions for Canadians residing in Canada.
Again I wish to congratulate the mover of this bill. He is inspired by a truly Canadian spirit, he is patriotic and, perhaps, more sincere than this government.
Mr. LaVERGNE: I have been led to believe in Canada first, especially during and since the last campaign, and to-night I still hold to that principle-Canada and Canadians first. I must say that the amendment proposed by the hon. member for Quebec South is most generous. I know of no legislation similar to this in England, South Africa, Australia or New Zealand. I may be wrong many times, but I certainly do believe in being loyal to one's principles; and if we are true to our principles we must first stand by our own nationals. In my opinion, it is false sentiment to speak about the empire or things imperial in relation to this bill. Someone

Civil Service-Returned Soldiers
must begin somewhere, and as I say, I know of no other dominion that has passed legislation such as is proposed here. So far as I am concerned, I will vote for the amendment, because half a loaf is better than no bread. But I should prefer to have the bill as it was. I believe in Canada first.


Mr. BOULANGER:: I am sorry I cannot
agree to the postponement of this bill until next session. The matter has already been before this house on two occasions. It was introduced last year and owing to the necessity for closing the house in rather a hurry it was not passed. But I presented it again this year at the beginning of the session. It has been before hon. members for a considerable time and anyone who wanted to study it has had ample opportunity to do so. Moreover, the principle is not new. As the hon. member for St. James pointed out a moment ago, the very principle embodied in this bill was adopted unanimously by the house in 1928, when the revision of the National Revenue Act was before the house. The amendment was moved by my hon. friend from Quebec South. He proposed that the veterans' preference be restricted to Canadian veterans and his amendment was adopted on May 16, 1928. If hon. members wish to refer to Hansard they will find the report in volume 3 of 1928, at page 3064. They will see that the amendment restricting the veterans' preference to Canadian veterans was moved by my hon. friend and was adopted unanimously. That was more than two years ago. This principle was embodied in the bill presented last year and the same bill was presented again at the beginning of this session. I do not see, therefore, any necessity for postponing the matter another year for the purpose of giving the house time to study the principle of the bill, because it is a principle with which the house is perfectly familiar-a principle which, as I have shown, was adopted by the house more than two years ago.
Let me say a word to my hon. friends who are fearful of the bill because, as they suggest, it is the thin edge of the wedge towards abolition of the veterans' preference. I would point out to them that the bill is the best means we could possibly have of retaining the veterans' preference. If they wish to retain that preference in favour of Canadian soldiers, I ask them to vote for the bill; because once it is known throughout the country that we grant, in our civil service appointments, a preference not only to our own soldiers but also the soldiers of all the allied armies which took part in the war, there will be such an outcry against the 22110-187
veterans' preference that strong demand will be made for its abolition. The result will be that the whole preference will go by the board-not only the preference in favour of imperial soldiers, the preference in favour of the soldiers of South Africa, Australia, New Zealand, and other dominions, but also the preference in favour of our own Canadian Veterans. I say to my hon. friends, therefore, that if they want to retain the preference to Canadian soldiers they must be sensible about it and restrict it to our own veterans, citizens actually domiciled in Canada.
There is no allied country that has been so generous as we have been. Neither South Africa, New Zealand, India, nor any other part of the empire has given us any preference in its civil service. Try to get a job in the civil service in England, or in South Africa or Australia. Say to the authorities there, "I fought for you during the Great war. I came to your rescue." They will say, "That was very nice of you and we thank you very much. But we have to look after our own citizens first in appointments to our civil service." What others do for themselves I do not see why we should not do for ourselves.
There have been great abuses of the preference in favour of imperial soldiers. I cited some facts when I presented the bill for second reading. We have imported from England at least twenty prison guards. We brought them in directly from England and gave them jobs in our penitentiaries in preference to our own Canadian citizens-men who had been living here all their lives, paying taxes and contributing their efforts to the advancement of the country. We imported these prison guards and gave them jobs in our penitentiaries when Canadian soldiers could have done the work as well. We import other classes also into the civil service, engineers, surveyors, map draftsmen, and so on. I obtained a list at the last session on a return, and if hon. members are desirous of seeing it I can supply them with copies. They would be edified to see how many, I will not say foreigners, but non-Canadians, have entered the civil service without complying in the least with the requirements of the Civil Service Act.
It seems to me that in times like this, when there are so many people out of work looking for jobs, to earn their daily bread for themselves and their families, we should at least

2946	COMMONS
Civil Service-Returned Soldiers
restrict appointments in the civil service to persons living in Canada. That is all we ask.


Mr. McGIBBON:: I wish to say just a
word regarding this bill. I think the best thing I can say for it, the thing that appeals to me most, is the fact that it was introduced by the hon. member for Quebec South. The worst thing I can say about it is that I do not think it is any good. This applies only to those who might be said to be prospective newcomers to this country and who now of necessity must be well over thirty years of age. That class is again restricted to the few who would be applicants for civil service positions, and a still further restriction would be made to the number who would be successful in obtaining such positions. Those affected would be very few indeed, so few that it is hardly worth the time of this house to discuss this matter.
If this resolution has any merit, which I doubt very much, this is not the time to introduce it. We are facing a time of great unrest in Canada. We know there is dissatisfaction, whether rightly or wrongly, among the returned men, and we know that any action taken will be misinterpreted and the parliament of Canada will be blamed for doing something which in our wisdom or unwisdom we had no intention of doing. The returned man knows that to-day in the labour market he suffers a great handicap, first, because of his physical disability; second, because there is a prejudice-I do not think I am using too strong language-against a man with a disability, and, third, in times like these there is a prejudice against giving a job to any man who is at present on a pay list, and if he is drawing a pension he is on a pay list.
I have a very high regard for the intentions of the mover of the amendment. I have sat with him on committees for ten or twelve years, and I have always found him to be fair and judicial, both to the returned man and to the country, and I emphasize the latter. But I think he has rather abused our confidence. We who sat with him on committes had a great deal of sympathy for him. We felt that he had not been justly treated by his own party. We felt he was one of the outstanding men on his own side of the house and we knew that he had served overseas with distinction. However,
I am afraid he has abused the confidence we placed in him during the last election, * so I hesitate to pay him any further compliments because I may be confronted with a similar situation.
TMr. Boulanger.]


Charles Gavan Power: That will do for the
present.
Mr. MoGIBBON:	I say in all seriousness
that this is not the time to bring in legislation of this kind. In the past, legislation pertaining to soldiers has always received the unanimous consent of all parties and I agree with the hon. member for Quebec South that we do not need to wait to consult the soldier bodies or any other bodies before introducing legislation which we consider to be in the interests of the people of Canada. On previous occasions these soldier bodies have come back to the committee and asked that we reverse our ruling and go back to the previous practice. They admitted their mistake and I think in the future we would be doing well, not only by the soldiers but by ourselves, if we carried out our own ideas.
These men are fast passing away; they are dying at the rate of about 150 or 200 per year. I was staggered a few weeks ago when I Was told that there were not 150,000 men living to-day who had seen service in France. Those who remain are year after year becoming more disabled and crippled because of the infirmities suffered in service and I do not think in their last hours, in their last days or their last years we should pass legislation which will make them think we are growing careless of their interests and that this is the thin edge of the wedge which will ultimately deprive them of all preference which they have enjoyed in the past. If there were any ills time is rapidly curing them, and all this parliament and country has to do is simply nothing; these ills, if they are such, will be righted. For the life of me I cannot see just what this amendment is going to accomplish. The number concerned will constantly decrease until but few possible applicants remain, and, as I said before, I do not think it is worth the time of this house to consider the matter. I concur heartily in the sentiments of the hon. member who introduced this amendment, and I have done so in the past, but I do not think that this is the time to introduce an amendment of this kind.


Mr. TURNBULL:: Mr. Qhairman, I have
been looking at the amendment proposed by the hon. member for Quebec South (Mr. Power) and while he interprets the amendment to mean that it shall apply only to those who come to this country from this time on, I cannot see it in that way.
Progress reported.

Revenue and Audit Act



REVENUE AND AUDIT ACT

[Stage Direction]
The house resumed consideration of the motion of Mr. Bennett for the second reading of Bill No. 102, to amend the Consolidated Revenue and Audit Act.
William Lyon Mackenzie King: Mr. Speaker,
may I ask my right hon. friend if it is his intention to have this bill referred to a committee after the second reading?


Richard Bedford Bennett: Mr. Speaker, it was my purpose to ask that the bill be referred to the committee on banking and commerce, because I thought that that might expedite discussion. Before it came back to the house and was considered in committee of the whole, hon. members would have had an opportunity to attend the committee where Mr. Sellar on behalf of the department would give any information which might be required with respect to the actual operation in practice of the various sections referred to in the bill.


William Lyon Mackenzie King: fiscal year are similarly voted for that particular period. I make these observations not by way of criticism of the proposed measure but rather by way of commendation of what I believe to be the object of it, and in the hope that my right lion, friend and his colleagues will by way of example follow hereafter the rule which they are. now laying down for others.


Richard Bedford Bennett: If no other hon. member desires to speak, I should like to make this observation. My right hon. friend is entirely in error with respect to the Welland canal transaction. He will, I suppose, insist until the crack of doom that he is right, just as he does with respect to no part of the war cost having been paid out of current revenues. The Minister oi Finance at that time conclusively proved that there were expenditures for the war period that were paid out of current taxation. Nevertheless, the right hon. gentleman declines to be convinced.
In this instance the fact is that there was a contract extended by the right hon. gentleman's government for the construction of a section of the Welland canal, and the sum of $7,000,000 was voted for the purpose of meeting the claims of the contractors under their several contracts for the fiscal year ending the 31st March, 1931. The contract contained a provision whereby the contractors were to finish their work by a given date and it was also provided in the contract itself that if they went forward and finished their work within the term of the contract, they of course could not be paid during that fiscal year any moneys further than were appropriated by parliament. In this particular instance the contractors expanded their effort and earned $2,000,000 within the time limit of their contracts and the notices called for by the contracts were given, pointing out that they could not receive their pay until parliament had voted the money either in supplementary estimates or in regular estimates in the subsequent year. That is what happened; the contract provided for it and the men were paid accordingly. I know, of course, how hopeless it is to endeavour to induce my right hon. friend, having taken the position he has, to admit that these facts bring the matter entirely without the case which I was endeavouring to make this afternoon. Had the analogy been complete as contended for by the right hon. gentleman, it would have been a case in which the government that succeeded his, provided by a contract for an expenditure of additional sums of money. That, as I have

said, was not the case. All that happened was that the contractors, strictly within the letter of the contract, by endeavouring to complete it within the term fixed therein, thereby earned additional money which, under the terms of the contract itself, could not be paid until it was voted by parliament. I make that statement merely because I cannot think the right hon. gentleman desires to leave an erroneous impression. Yet the facts are there so that he who runs may read, and a wayfaring child need not err therein. We can put it as strongly as that. The "wayfaring" is good.
With respect to the second matter, namely, unemployment relief, we have threshed that out so much I am not going to refer to it further than to say that we lived up absolutely to the obligations imposed upon the government by parliament and laid before the house, within the time limit set by the statute, a report of the moneys that had been appropriated and expended. I was very careful to point out last year that inasmuch as appropriations would be made that might not be wholly expended, it must clearly be meant that they be made out of the $20,000,000 itself.
I am grateful to the right hon. gentleman for his general acceptance of the principles of the proposed measure, and I assure him that if it becomes law it is quite clear that neither this nor any other executive will be able to get a cheque past the Comptroller General under the circumstances to which he alludes, for the simple and obvious reason that unless there is a credit to the appropriate item, the cheque will not issue. That is the whole purpose of the measure. It binds alike the government and the officials of the various departments.


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

[Stage Direction]
Right Hon. R. B. BENNETT (Minister of Finance) moved the second reading of Bill No. 101, respecting the establishment of the Royal Canadian Mint.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. LaVergne in the chair.
On section 1-Department of Finance Act amended.
Richard Bedford Bennett: Hon. members will
observe that it is intended to add as part II of the Finance Act the sections dealing with the transfer of the mint. The sections contained in the bill will become part of the Finance Act.

New Westminster Harbour


Mr. SPENCER:: What is the main object
of taking over the mint? Will we make money by it, or is it taken over merely for convenience?


Richard Bedford Bennett: The main object, I think my hon. friend will agree, is a most laudable one, namely to provide that Canada shall have control of the property known as the Royal Mint, in the construction of which we spent the sum of $650,000, and which at the moment is a branch of the Royal Mint at London. If the present bill is passed the Royal Mint, as the Royal Canadian Mint, will .come under the Department of Finance. Hon. members will understand that heretofore the department to which we are referring was part of the Royal Mint because we coined sovereigns, but, having discontinued the coinage of sovereigns, when the bill is passed we will be free from any responsibility with respect to the Royal Mint. I think the reasons for the bill are apparent.


Henry Elvins Spencer: I am very glad the bill
has been introduced.


Mr. CAMPBELL:: I understand the property is that of the federal government?


Richard Bedford Bennett: Yes.


Milton Neil Campbell: The institution however was operated by the Royal Mint?


Richard Bedford Bennett: Yes.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
On section 3-Comes into force by proclamation.
Richard Bedford Bennett: The reason for section 3 is to provide for the winding up of existing business, and for those who are entitled to superannuation. When the mint was established a working arrangement was made with respect to those matters. 'If the bill now before us is passed it will become law when all these matters have been disposed of. At the instance of the Chancellor of the Exchequer I saw the Deputy Minister of the Mint and I am informed that matters have all been satisfactorily adjusted. The actual transfer however will depend upon a fixed date after which further responsibility will not attach to the imperial authorities and we ourselves will assume obligations which rest upon us under the agreement through which the mint was originally established.
Bill reported, read the third time and passed.



NEW WESTMINSTER HARBOUR


[Stage Direction]
Hon. ALFRED DURANLEAU (Minister of Marine) moved that the house go into committee to consider the following proposed resolution:
That it is expedient to authorize a loan to the New Westminster harbour commissioners not exceeding $300,000, to complete the grain elevator structure and facilities on the south side of New Westminster harbour and provide for payment of outstanding indebtedness chargeable thereto or arising therefrom, 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 such loan; and the loan available to the corporation shall be for the amount of expenditure certified by an officer of the Department of Marine who shall have supervision and control of all expenditures.
Motion agreed to and the house went into committee, Mr. MacDonald (South Cape Breton) in the chair.
Mr. REID:: Be fere this resolution is adopted I should like to ask the Minister of Marine one or two questions. How is it proposed to pay 'back this money, or have any arrangements been made for paying it back?


Alfred Duranleau: It will be paid back
out of dues, the same as any other harbour commission.


Thomas Reid: Is it a fact that the minister
purposes to put on harbour dues in the port of New Westminster?


Alfred Duranleau: I think so; I think
it is the intention to do that.


Thomas Reid: I am not going to object to
the lending of $300 000 to complete the grain elevator, but I must register a vigorous protest if any dues are put on in connection with the harbour at New Westminster.
I should like to refer to one or two objections concerning the placing of dues. The Fraser river has always been clear of dues and this has been largely the means of building up the port of New Westminster. We have come to the point of development where a great many of us believe that if dues are imposed the river shipping will be affected and turned away from that port probably to ports to the south of us. I should like to point out to the minister the position in which the city of New Westminster would find itself if through the imposition of dues shipping was affected. In 1911 there was little deep sea shipping through the port of New Westminster. At that time preparations were being
New Westminster Harbour

made for the use of the Panama canal. On the completion of the Panama canal the city of New Westminster spent considerable money on its docks, in anticipation of shipping activities. It was not until after the war that the Panama canal began to be effective as a route for shipping, and from that time shipping began to increase on the Fraser river. For that reason the port flourished and a few years ago the city guaranteed the interest on $300,000 in connection with cold storage facilities and also gave a fixed assessment of $5,000 on property worth over $2,000,000, That assessment was guaranteed for a period of ten years. In addition the city agreed to take $30,000 worth of space in the cold storage plant. At the present time the city of New Westminster has not been called upon to pay any of that guarantee. But I have it on good authority from the owners of vessels who are using the port and the cold storage facilities that the imposition of dues would have a very serious effect. The fact that New Westminster has been a free port has always made it attractive to ship owners. Now it is proposed to impose dues to cover up some of the blunders that have been made in connection with the building of the elevator. We all asked for an elevator, but we are not responsible for the mistakes made by those who had charge of its location and construction, and it is very unfair that the port should be penalized on this account. I certainly'register a very strong protest against the imposition of dues. The trade of our port has been growing year by year until for the past fiscal year we had large ocean going vessels call almost every day, due mainly to the fact that the port is free. Let me read a resolution passed by the city council of New Westminster on March 12, 1931, a copy of which was sent to the hon. minister. It is in these words:
Press despatches state the chairman of the Westminster harbour board has filed application with you for permission to increase present rate of harbour dues on this port. As you are aware the city of New Westminster has recently achieved importance as a deep sea port due altogether to the activities of the Pacific Coast Terminals Limited in which the city of New Westminster is heavily involved financially in addition to the city's own investment of half a million dollars in dock construction all within city limits. The Westminster harbour board has had no part in nor rendered any practical assistance in this port development work at the city of New Westminster where over ninety per cent of all port business originates and arrives. The construction of an elevator by the harbour board across the river in south Westminster in an isolated location away from all the traffic movement of the port and at a cost of eight hundred thousand dollars was an experimental undertaking by the 
harbour board entirely divorced from the port a('t.ivitics of the city of New Westminster and while we have no objection to the imposition ot whatever charges appear necessary and proper m traffic moving over the elevator facilities we respectfully but strenuously protest against surcharges imposed on port traffic developed by this city and its complemental organization the Pacific Coast Terminals Limited to support the experiment carried out by the harbour board without the consent or approval of the citizens of New Westminster. Additional dues would be to handicap traffic in using port facilities without any resulting benefit to the city.
That resolution indicates the feeling of practically all the citizens not only of New Westminster but of the surrounding municipalities against the imposition of dues, for this port has been free from its inception, and to make the proposed change would mean driving away much of our shipping to other ports. We claim that the port of New Westminster should not be penalized on account of the blunders made during the construction of the elevator.


Alfred Duranleau: Mr. Chairman, whether or not dues will be imposed rests with the harbour commissioners of New Westminster. Of course, we have control over the commission, but we do not want to exercise that control too rigidly. As the hon. member says, the elevator was an extravagant experiment made 'by the commission. .


Thomas Reid: Yes.


Alfred Duranleau: Well, this government had nothing to do with that undertaking, for it was initiated in 1928 under the former government and the structure was completed in April, 1930-before we came into power. The hon. gentleman is right as to the cost of the elevator being over $800,000; to be exact, it cost $821,000. The commission sold $700,000 of debentures at 95 and a fraction, on which they realized $671,000. Now, as the hon. member knows, the elevator started to sink into the river, and no one will rent space in such an unstable structure. The commission contend that if repairs were made to the foundations to the extent of $50,000 or' $60,000 they would be able to rent all the available space, and it is said the rental would provide sufficient revenue to pay interest on the loan.
I do not know. To-day we are faced with this situation. The commission owe certain moneys which they cannot repay unless they borrow from the government; and they must repair the foundations, otherwise the elevator will be of no use. Under the circumstances I think it is a matter of urgency that the government should lend the commissioners the $300,000, provided the money is well spent- and the elevators put into good order.

New Westminster Harbour


Thomas Reid: I am not objecting to the
spending of the money-something must be done to clear up the situation so far as the *overdraft of the commissioners in connection rvith the elevator is concerned. But is it also proposed to pay the commissioners a salary from now on?


Alfred Duranleau: I do not think they have made application to the department for that purpose.


Thomas Reid: The bill before me presented to the minister says so. Does the minister intend to impose dues? I think he said "yes."


Alfred Duranleau: I thought it was the commission's intention to ask for the imposition of dues. Whether that request would be acceded to or not has yet to be decided.


Thomas Reid: When the application was made by the New Westminster harbour commission for the imposition of dues, the chairman alone constituted the whole commission.


Ian Alistair Mackenzie: One man government.


Thomas Reid: There were no other commissioners acting; one had died, and the other was occupied elsewhere. The latter was the appointee of the city council. As the minister knows, two of the commissioners are appointed by the government and one by the city council. The commissioner appointed by the city council was not present when this resolution was sent to you making application-


The CHAIRMAN:: Order. Hon. members
must address the chair.


Thomas Reid: I am sorry, Mr. Chairman.
When this resolution was presented to the minister there was only one commissioner present. The other commissioner had died and the commissioner appointed by the city council was I believe on duty elsewhere. The city council are protesting with all the force at their command against the imposition of -dues. They have a great deal at stake here, and the entire cost of the elevator was not entirely due to the sinking. The sinking was bad enough, but there were other causes. The Prime Minister spoke of investigations into certain harbours. I would not be averse to an investigation into the handling of this elevator by the commissioners; in fact I would second the motion very happily, because I am not entirely satisfied, nor do I know all the details in connection with the construction of this elevator. I am pleased to have it there, but to begin with it is in the wrong place. At the suggestion of the
chairman of the board the site was picked out, and he has been practically conducting the whole affairs of the commission.
I am not objecting to this loan going through, because I think it is required, but I do protest against the imposition of dues there. If this is to go through, together with the imposition of dues, I would ask that it stand until I have had time to look through the files in connection with the construction of the elevator.


Mr. NEILL:: It is quite evident, sir, that there will have to be harbour dues collected at this port; they must pay interest on this $300,000 loan, and I understood the minister to say there were bonds to the extent of some $700,000 as well. Then the harbour commission must be paid also, so it is quite apparent that there must be haibour dues collected. As the hon. member for that district says, it will divert business and ships, principally lumber ships, elsewhere. I hope that is so;
I hope they put on big dues and divert the trade elsewhere, because the only other place in British Columbia suitable for lumber is Port ALberni, which is the third largest harbour in the world. It is a natural, landlocked canal or haibour thirty miles in length. It does not need to be dug out yearly, like Victoria harbour; it does not need to be buttressed and mattressed up like the river in my hon. friend's constituency. It will not cost anything, and it will not need harbour commissioners; there will be very little^ for them to do. The business is growing rapidly. There is a magnificent government assembly wharf at Port Alberni, one of the largest government owned in Canada, and there is every facility for increasing trade. I sincerely hope the trade will go in that direction.


Thomas Reid: I do not want in any way to
jeopardize this loan of $300,000; I am merely directing the attention of the minister to the seriousness of the imposition of dues on that port, and to the fact that the city of New ATestminster has a great deal at stake in the development of this port. They feel that the imposition of dues will be detrimental to the port. The elevator will have to be paid for, certainly; we would like to see grain going in and out of it all the time, but I am drawing the attention of the minister to the fact that the imposition of dues will affect shipping trade at that point.


Alfred Duranleau: The protests of the
city of New Westminster will be taken into serious consideration when we study the question of whether or not dues will be imposed. As to the expenditures in connection with
Pacific Fishermen-Mr. Hanson (Skeena)

repairs, it is the intention of my department to see that the moneys are rightly spent. We will have someone there to follow the work and see that it is done properly, so I think everyone will be satisfied.


Mr. LUCAS:: I should like to ask the minister in what year the harbour commissioners were appointed at New Westminster.


Alfred Duranleau: I could not say; I do not remember whether or not one member was appointed after this government came into power. I think it is the old commission still in office.


Thomas Reid: The present chairman and one of the commissioners have been in office for a number of years. A new commissioner was appointed last year, following the death of the former commissioner.
Resolution reported, read the second time and concurred in. Mr. Duranleau thereupon moved for leave to introduce Bill No. 104, to provide for a loan to the New Westminster harbour commissioners.
Motion agreed to and bill read the first time.



SUPPLY-PACIFIC FISHERMEN PISHING CONDITIONS ON BRITISH COLUMBIA COAST -STATEMENT BY MB. HANSON (SKEENA)

[Stage Direction]
Hon. HUGH GUTHRIE (Minister of Justice) moved that the house go into committee of supply.
['I move that the committee rise, report progress and ask leave to sit again.\nProgress reported.\nOn motion of Mr. Guthrie the house adjourned at 10.58 p.m.\n\nWednesday, June 24, 1931.']
Mr. OLOF HANSON (Skeena):: Mr. Speaker, I should like to bring to the attention of the house a very important question which I think should be considered by the government. I refer to the condition of the fishermen on the Pacific coast, extending from Washington to Alaska. I have a resolution before me which was unanimously adopted at a mass meeting held in Prince Rupert, and which has received several endorsations from public bodies, which I am not going to take time to read. However, I desire to place on Hansard the resolution:
. a mass meeting held in the Moose Hall ln 1 rmce Rupert, B.C., on June 12th, the fmmwmg resolution was unanimously adopted: Whereas the prices of halibut and salmon presently obtained are not proportional (or below any proportion) to the cost of fishing operations, and
Whereas the principal market for Canadian halibut and salmon is in the United States which is protected by two cents duty against Canadian halibut and salmon, and \\ hereas the Canadian fish buyers have already declared that they cannot pay any higher prices for halibut and salmon than those prevailing now,

Be it resolved that a subsidy of two cents per pound is the minimum assistance necessary tor Canadian halibut and salmon industries to carry on and to prevent any further aggravation ot already disastrous business depression, and
Be it further resolved that copies of this resolution be sent to the Prime Minister, Minister of Fisheries, Olof Hanson, M.P., A. W. Neill, M.P. and local public bodies for endorsation and action.
The situation outlined here is endorsed by such public bodies as the board of trade, and I have a good many telegrams which I will' not attempt to read.
This is something that the government should take very seriously into consideration. The production of salmon and halibut on the Pacific coast, we know, exceeds the consumption in Canada. Our Canadian fleet have developed a very good business and they are looking for a market; and their only market for halibut is the United States. The United States has imposed a duty of 2 cents per pound on fish going into that country, and in addition to this handicap which our fishermen have to face, this government has raised a tariff against everything which the fishing industry requires in order to carry on its business. Our fishermen must have gasoline, hooks, rubber boots, special clothing and so on, and naturally a duty against these articles must operate to their disadvantage. They are receiving 2 cents less for their fish and they have to pay about twice as much as their competitors for the necessary equipment to enable them to catch their fish. The Canadian government has seen fit to extend some assistance to the farmers of western Canada, but no consideration has been given to the fishing industry. I submit that the government should do something to keep the Canadian fishing fleet alive. It does not seem right that, besides receiving less for their fish, they should be expected to pay more for their equipment.
Prince Rupert is the logical point geographically through which to ship to the market fish caught in the North Pacific waters, and it derives a certain benefit from the fact that the fleet come into that port. And as the terminus of the Canadian National railway is at Prince Rupert, it is a great source of revenue to the Canadian National Railways to have the American fleet land their fish there for transportation to the markets. The handicap under which our Canadian fleet is working is one with which I am quite familiar, and it is a serious problem. The question is whether or not the government should take steps to prevent the American fleet from landing their catches at the port of Prince

Pacific Fishermen-Mr. Neill
Rupert. But that would mean a considerable loss to the merchants of that city as well as to the Canadian National Railways. Prince Rupert depends upon the fishing fleet, however, and it seems to me that every loyal Canadian should stand behind our own fishing fleet as much as possible. I would therefore suggest to the government that they make some adjustment in the present situation with a view to putting our Canadian fishing fleet on the same basis as the American fleet. I am not here to criticize or to say how this should be done, but I should think that negotiations with the United States government in an effort to abolish the 2 cents per pound duty on Canadian fish would probably help to solve the problem.
Just to illustrate the difficulties our Canadian fishermen have to face in competition with our neighbours to the south of us, I might mention one item-gasoline. At the present time the price in Prince Rupert, for the same quantity of gas, is 88 cents as against 25 to 30 cents in Seattle. This item alone .will give the house an idea of the impossibility of competing with the American fleet, especially when we remember, as I have already pointed out,'that the Canadian fishermen get 2 cents less for their fish. There are hon. members on both sides of the house who have the same information that I have in regard to this subject, and I am sure they will assist me in my efforts to have the present situation improved. The resolution passed by the fishermen's association will show how urgent it is that something should be done, and done shortly.
I wish to quote briefly from a report that appeared in the Vancouver Sun:
Prince Rupert Mob Bars U.S. Fishboat
Prince Rupert, May 18.-The American halibut boat Estep, laden with a catch of halibut, was last night denied the right of tying up alongside a dock in Prince Rupert with a view to selling her fish on the local exchange this morning.
As the vessel came alongside, it is stated, she was met by a mob of fifteen or sixteen men who warned the skipper not to tie up or else his lines would be cut.
This is a serious situation. I am not a bolshevik and I certainly do not believe in revolution, but I submit that in the face of a situation such as this it is imperative that something should be done. Our fishermen should be allowed to earn a few dollars in the fishing season to enable them to live during the coming winter. Otherwise they will become a charge on the government. I have done my best to explain the situation, to show how very serious it is, and I trust that the government will give the matter very careful attention.


Alan Webster Neill: The situation outlined by the last speaker is one that must command the sympathy of everyone who is at all familiar with it. It comes home particularly to me, not only because I know the district, but because, if you sub stitute the word salmon for the word halibut, the situation as indicated by the hon. member for Skeena is entirely reproduced in the district I represent. The hon. member referred to a meeting at which the resolution was passed. This was not any hole and corner meeting passing resolutions in the dark; it. was a large meeting reported in the newspapers. Among other things they decided that all their halibut boats as they came from the banks-they go out on eight or ten day trips-would have to be tied up, because it does not pay them to go out at the price of gas, and with the price they receive for their . fish. A number of the boats had been already tied up, it was stated, and the rest would be tied up too. The Alaskan fishermen were agreeable to the proposal that fishing should cease for a ten day period between trips to keep down the production of fish, but the boats operating from Seattle were opposed to that. There is a genuine and rather bitter feeling among the fishermen and it is very widespread. The hon. member referred to the American fishing fleet, and the suggestion of violence if they tied up. There is no doubt about it that the situation at the present time is acute. We have no market for our halibut in Canada. It all goes to the United States, and the catch centres around Prince Rupert. A large number of American fishermen find it to their profit to ship halibut into the United States in bond through Prince Rupert, and the Prince Rupert people derive great benefit therefrom. They supply boxes, the labour of salting and cleaning, and so forth. And a much smaller number of Canadian fishermen do the same thing. The trouble is that there is a duty of two cents per pound on Canadian fish going into the United States and the result is that the American fisherman ships his fish through in bond and does not have to pay the two cents duty while the Canadian fisherman coming along to his own home port receives two cents per pound less than his American competitor, an alien and foreigner. In years gone by it was not such a bitter thing because the price was up around 15, 16 and 18 cents per pound, but now when it is down to five, six and eight cents per pound, two cents per pound makes the difference between a loss and the ability to operate.
Naturally, as men will, they turned to the nearest and most obvious remedy, and they have asked by this resolution that the govern-
Pacific Fishermen-Mr. Neill

ment bonus them to the extent of two cents per pound in order to put them on a par with the American fisherman. It is quite natural that they should take that point of view, but we with a larger knowledge of international relations and law must consider whether it would be wholly wise or have the beneficial effect which we as well as they desire. I have before me the American tariff. The item which refers to this matter is number 303, and its effect is that if any country importing goods into the United States in any way .bonuses the producer or manufacturer of those articles, then in such case in addition to the duties otherwise imposed by the act, a sum equivalent to the net amount of such bounty or grant shall be added to the duty. The result would be that if we gave our men a bonus of two cents per pound, automatically they would have to pay four cents per pound on fish going into the United States. That would be the automatic result and would not require any process of law. In that case, our men would be no better off than before.
There is another method the adoption of which might put our men on a par, and that is the imposition of a port tax on American fishermen bringing their fish into Prince Rupert. That would not be considered to be in the nature of a bonus, and would put the fishermen on a level. However, that suggests another danger: the American fishermen might put on a fast carrier to ship their fish direct to Seattle. The ultimate and only market is in the United States; there is no market in Canada. In that case the town of Prince Rupert would be a heavy loser because it would lose all the trade derived iby the handling of this large American supply. Speaking roughly, out of 30,000,000 pounds caught in a given period, 22,000,000 pounds would be American caught and the balance Canadian. Such action would hit the town of Prince Rupert very heavily.
It has been contemplated by the Department of Fisheries for many years to take such action in the hope that the American fishermen, who would be deprived of a livelihood, would use their influence with the politicians at Washington to get the two-cent duty on fish going into the States taken off. That would be a highly desirable thing and is really what our men want. Unfortunately we cannot compel the Americans to change their tariff. Another factor to be considered is the wholesale fishing interests centred around Seattle. They are much more powerful and have greater influence than the fishermen scattered up and down the coast. For years they have been trying to bring pressure to bear on Washington to have the fish going 
through Prince Rupert stopped altogether, and I am afraid that any suggestion of this port tax might be the last straw which would enable them to use their influence in order to have all fish stopped from going through Prince Rupert. All these things must 'be considered before any action is taken. In the meantime, I think it would be much better if we made friendly representations to the United States. We have a capable ambassador there and this matter might be taken up in a friendly way. Adjustments might be made, such as the granting of a small item in connection with the St. Lawrence waterway, or other matter and a beneficial result might be obtained.
I have been referring to the condition of the halibut men, which condition is paralleled by that of the trollers to the south, who handtroll for salmon. I speak now more particularly of the west coast of Vancouver island. American trollers come up from Seattle and troll the banks which are just outside our territorial waters. They meet our men who have come out from Vancouver island and they fish on a common basis. Very often the American boats run into our harbours at night and then go out in the morning, which process is continued until their boats are filled, when they go to Seattle where there is the only market for spring salmon. Our men receive two cents per pound less for their fish than do the Americans and, as I said before, two cents per pound on a price of four, five and six cents per pound is a great deal. The American has another advantage, he is able to obtain his gasoline much cheaper, and gasoline makes up 35 per cent of the cost of operating these boats. He obtains his gasoline for less than half of the price paid by the Canadian fisherman. That is reason enough for the government doing away with the tax which they placed last September on gasoline. I remember the hon. member for Shelburne-Yarmouth (Mr. Ralston) pleading along with myself that the government should not impose a tax. At that time there was no tax on the class of gasoline used by these men, but one was put on despite our efforts. There was a duty imposed of 2} cents per gallon and we were told the legend that the price would not go up in spite of the tariff being raised. That beautiful fantasy has now passed into the realm of the classics; it has gone back into the same class as the oriental metaphor we read about in the description of battles by the biblical historian. He would say that the Israelites or the Philistines were in number as the sands of the sea when perhaps the total strength would not exceed

Pacific Fishermen-Mr. Neill
50,000 or 100,000 fighting men. That is the same sort of beautiful imagery which obtains when we are told that the tariff will not increase the price. However, it has gone by the board.
If the price were raised only 2i cents per gallon it might not be very milch, but the Customs Act contains a provision which increases this difference in price. I have not the time at my disposal to read the whole provision, but its effect is that if they do not get you under one item they will get you under another. The provision states that in no case shall the value for duty be less than the actual cost of production at the place of shipment plus profit, etc., We say to the United States:	You do not know your own
business, you do not know the price of your own gasoline; we will settle what the price is and what profit you shall make. Our men are barred from going over to Seattle and buying gasoline at six cents per United States gallon, which is equal to 7'2 cents per imperial gallon. The customs men were told that that was the price at which it was selling all over the United States, but they replied: They do not know their own business, there is a rate war on. How do we know there is a rate war on? That price is universal from one side of the country to the other. Do they not know their own business? We might as well go to some foreign nation and interfere with their tariff. The government said, "There is a rate war on and we will not believe the evidence before our eyes, that thousands of gallons are being sold every day at that price." I read the other day in the newspapers that Brazil had put a tax of 10 shillings per sack on coffee, and either the whole or a part of that 10 shilling tax was to be devoted to buying coffee and taking it out to sea to dump it in order to keep up the price of the coffee remaining. Why do not we go down there and interfere with that practice, and say: That is not the way to do things?
As a result of our monkeying with the tariff, by way of dumping duty there is a duty to-day of 8.5 cents per gallon. When our men run into Seattle with their fish the logical thing is to bring gasoline back, but the present duty- duty alone-on gasoline is about 10 per cent higher than the total price to the American consumer. The duty is 8.5 cents per gallon, and we have to pay that in addition to the price. The American is able to purchase it at 7.2 cents per gallon, which make a nice situation. That does not sound much like "Canada first". Our fisherman is paying 10 per cent more in duty than the United States
fisherman pays altogether and yet the latter competes with us in the same water and receives two cents per pound more for his fish. Is it any wonder that these men about whom my hon. friend from Skeena speaks are getting ugly? As I said before, the cost of gas is about 35 per cent of the cost of operating these boats. To put it roughly, it will mean, instead of paying 35 cents on the dollar for gas, they will have to pay 75 cents. Hon. members can appreciate that when the price of fish has fallen as it has. I am advised by recent letters that the United States, I think it is the local state government, is proposing to help their own fisherman out; they are going to relieve him of a 5 cents state tax which they imposed. I had better not tell the government this or they will be wanting to impose another duty of 5 per cent. It appears to me that we are insisting on the United States raising their own tariff.
I want to give one or two quotations indicative of the situation to show that I am not exaggerating the case in any way. It does not matter to the house whom these letters come from, but I am prepared to give the names if necessary. This is from one letter I have received:
Our fish prices on the grounds now is as low as 5 cents per pound dressed, head on; fishermen paying 24 cents per gallon for gas cannot even hope to make a living out of the trolling so we must get some relief on our gasoline.
Another man says:
The United States government is assisting their fishermen over these hard times, while our government is trying to cripple our fishing industry. The fish prices this year are less than half of last year's prices, while gas prices are only 2 cents less than last year's prices at the oil stations here. The trollers here have made nothing and a number of fishermen have no gas to go out fishing with. God only knows what is going to happen, one sure thing the government will have to keep them and their families this coming winter. I would ask you in the name of the fishermen to use all your power in getting this dumping duty taken off gasoline.
I might say that every one of these is from a representative of some association of fishermen and not from an individual. This is another letter:
This gas dumping duty is working a hardship on the fishing industry of British Columbia, and instead of helping conditions is just doing the reverse. If the government does not take this matter in hand and give the industry a chance to stabilize itself they will have all these trollers on the bread line next winter. Why cannot the government put gas on the free list for commercial fishing purposes and make the oil combines in Canada come down to reason; there is no reason whatsoever why we should have to pay 24 cents a gallon for gas in British Columbia-
Pacific Fisherman-Mr. Neill


Pierre Édouard Blondin: Order. I hesitated to
interrupt the hon member, but it is out of order to discuss resolutions to be proposed to the committee of ways and means. The hon. member is now discussing the tax to be put on gasoline by a revision of the tariff.


Alan Webster Neill: There is nothing in the tariff resolutions about gasoline. I am urging that there should be. I am absolutely in order.


Pierre Édouard Blondin: I understood the hon member for Comox-Alberni to be discussing an item in connection with a tariff to be imposed on gasoline.


Alan Webster Neill: No; I want an item put in to strike out the tax. I am talking about conditions in the fishing industry on the coast of Vancouver island, and the question of the tariff is not within three thousand miles of the question I am discussing.


Pierre Édouard Blondin: The tariff on gasoline.


Alan Webster Neill: The tariff imposed last September. There is nothing in the present budget about gasoline. The letter I was quoting continues:
There is no reason whatsoever why we should have to pay 24 cents a gallon for gas in British Columbia when the American troller can get his for 8 cents per gallon, besides he gets 2 cents per pound more for his fish. How' do you expect us trollers to be able to make things meet with this competition from the American troller, and all on account of the dominion regulations? Instead of helping conditions they are making them worse.
This is another long telegram to the same effect:
Do your best to have gas admitted on the free list to commercial fishermen. Otherwise the government will have fishermen on the bread line for next winter.
There is no concerted action in connection with these telegrams and letters; they are the spontaneous expression of men who are feeling the situation very keenly. What we want, to put it bluntly-I am not talking about the budget-is action on the part of the government by way of putting gasoline on the free list.
It is all very well, as I said a minute ago. to go to Washington. That is good and proper and may be highly successful two years from now, but two years will be consumed before results are obtained. A port tax might or might not work, but putting gas on the free list for commercial purposes is something concrete that we can do right now to keep thousands of men off the bread lines next winter. This is the situation not only on the west coast of Vancouver island about which I have

been speaking, but also in Skeena, my hon. friend's constituency, halfway up the coast of British Columbia where it was reported the other day the gill netters for spring salmon had to go out of business because they could not make any' money at 5 cents per pound for fish and 25 cents a gallon for gas. Who is going to keep them next winter? Is it not better to enable these men to earn their own living than to have to feed them? The other day the Prime Minister sent out his Minister of Labour, a very capable man, to British Columbia to look into the labour situation. He held meetings at Vancouver and Victoria, where a large number of the towns of that province were represented; I saw the names of many of them. Were the fishermen represented there? I did not notice it if they were, and yet the fishermen would be equal in number to the total inhabitants of three or four of what we call cities but what are known in the east as villages. But the fishermen were not represented at all. It is the duty of the Minister of Labour to return to Ottawa and report conditions to the government. When he comes to the fishing conditions, what has he to say? He has to say he does not know the first thing about them. The Minister of Labour held a meeting out there-I will not take time to go fully into it, but it was reported in the press-of the various municipalities. This was strictly a meeting-and I want to emphasize this lest I get stranded again on the rocks of the budget-for the purpose of dealing with unemployment and how to overcome it. Amongst others present was Colonel Villiers who controls practically all the public coal mines on Vancouver island. He made the statement that if he could get one dollar or SI .25 a ton bonus on coal, unemployment conditions among the miners on Vancouver island would disappear or at least be much helped. Without expressing any opinion about the budget at all-they were .discussing the matter from the point of view of unemployment-the Minister of Labour said there was a good deal of strength in that point of view and he would be pleased so to report to the government. That was without question by way of relieving unemployment. As much money as would be spent in keeping these men idle would keep the mines going and the men working. Surely to keep them employed would be the better proposition. The government should send a man out there who knows something about fishing conditions and who has an open mind.

Supply-Secretary oj Slate
I am not casting any reflection on the Minister of Labour, but he has no time and the government should send a man out who can find out what the situation is amongst the fishermen.
They received hardly any relief last winter because they had a little money and they endeavoured to scrape along, but they have nothing now and what will the situation be by November? The government is going to spend millions and we shall be glad to vote them for the relief of unemployment There is no criticism in that regard, but when the money is spent, what shall we have received for it? We shall have just the same situation next year-a large number of dissatisfied men, because people who do unemployment relief work with few days at small wages are always discontented. They can-n6t help being dissatisfied as to the past and hopeless as to the future. The human mind can encompass no more desperate or horrible situation than for a man or a woman or a community to be entirely hopeless as to the future, with nothing in sight, no opportunity to earn a living. What wonder is it if these men, as we are so pleased to say, become bolshevists! Would it not be better, instead of spending millions to keep these men more or less idle, to spend a few hundred thousand dollars to assist these men to help themselves? If you wish to know the blunt truth, I would say: Give us the $1.25 bonus to which we are entitled on that coal on Vancouver island and the miners will take care of themselves; remove the duty on gasoline and the fishermen will be able to earn a living. By the one policy you will find idleness, relief work, dissatisfaction, stagnation of business and everything of that sort; by the other, you will see work and encouragement, new life and hope for these men to go ahead in the desperate struggle they have been making in the past in trying to make a living, something they would far rather do even at a pinch, than be employed on unemployment relief work. Such a course will encourage them to renew the battle in an effort to bring about a return to normal conditions. Even if some of the profits of American capitalists interested in the oil business in Canada were shaved by ever so little -and it would not be very much, owing to the fact that the fishermen are not so very numerous-would it not be better to give the fishermen a chance by taking off the duty on gasoline than to give special unemployment relief? I commend the situation to the government.
Motion agreed to and the house went into committee of supply, Mr. MacDonald (Cape Breton) in the chair.



[Stage Direction]
Secretary of State-salaries, $366,670; contingencies, $74,000.
Louis Édouard Fernand Rinfret: .May I ask the Secretary of State the reason for the increase? I have learned that there is no increase in the number of employees either in the Secretary of State's branch or in the Companies branch. There is a small increase however in the amount of the vote.


Charles Hazlitt Cahan: No new officiate have been appointed in the Department of the Secretary of State. The increase is accounted for by oeijain promotions made by the Civil Service Commission where vacancies have occurred. Those of lower grades after passing examinations have been appointed to the higher grades, and the promotions, combined with the statutory increases from year to year, and certain reclassifications, make up the entire difference.


Louis Édouard Fernand Rinfret: May I inquire whether the increase in receipts of the Companies branch, which was very marked in 1929 and 1930, has kept up in the same degree for the past year?


Charles Hazlitt Cahan: I can say that in the last
fiscal year there was an increase over previous years. Concerning the last few months however I cannot give definite information. I had that information before me but I am not now able to find it. I think as a whole during this year the number of incorporations has not diminished.


Louis Édouard Fernand Rinfret: When I was in charge
of the department we had very often to take the clerks from other branches and send them to the aid of the Companies branch where the activity was very marked. If business in the Companies branch has diminished, my hon. friend may be in a position to decrease the number of clerks.


Charles Hazlitt Cahan: I am sure my hon. friend
does not wish me to follow the example of the Department of the Interior and dismiss officials in order to decrease the number on the staff. As a matter of fact my impression is that the incorporation of companies which pay higher fees is not increasing, but the large number of companies which have a lower capitalization and pay lower fees is increasing. I am instructed by the chief executive of the Companies branch that the work of that office really requires more assistance than is being given. This year particularly however
295S
Supply-Secretary of State

I did not feel justified in asking for a larger vote for the Companies branch than was given last year, except to provide for ordinary statutory increases.


Louis Édouard Fernand Rinfret: I am grateful to my hon. friend for his reply, because he has allowed me to put myself right as to my exact meaning. Having some knowledge of the very fine staff in the Department of the Secretary of State I would not want for one moment to see happen in that department what has happened in another department. I think my hon. friend is aware however that some of the vote under the heading "contingencies" for clerical assistance and sundries has sometimes been used to supply clerks to help either the Naturalization branch or the Companies branch. I do not think I am wrong when I say that the Naturalization branch has been much more active since the coming into force of the old age pension regulations, because to receive a pension the applicants must in the first place establish the fact that they are British subjects. During the time I was in the department the work was increased to such a degree, through the demand for certificates, that we had to secure more help for that branch. I have no doubt that the minister has had the same experience. The same statement applies to the Companies branch. I am informed by the minister however that although he is not demanding any additional help, except what he may 'receive through sundries, he is quite satisfied that ' the staff will be sufficient for the work.
I have another question to ask the minister which I believe might properly be asked at the present time. I notice that there is no amount in the estimates this year for the adjustment of war claims. I am quite aware that expenditures of the alien property custodian are paid not out of a vote of this house but out of the revenue or income derived from the property itself. Could the minister tell me whether there has been a decrease In the staff of that branch of the department, and what is to be expected for the future?


Charles Hazlitt Cahan: There has been a decrease of five or six employees in the reparations branch. We hope within a year to dispense entirely with that branch and every effort has been made to close it. As a matter of fact a supplementary estimate will have to be brought down to provide for the payment of reparations claims.


Mr. RIN  FRET@: That is, under Commissioner McDougall?


Charles Hazlitt Cahan: Yes. As a matter of fact the commissioner informs me that before this house prorogues he hopes to be able to furnish me with an additional number of decisions dealing with nearly all the civil claims which were presented before January 1 last. I believe there are also about 400 soldiers' claims for damages arising out of illegal treatment while they were prisoners of war in Germany. The findings in this case cannot be presented to the house before the close of this session. Hearings will have to be continued throughout the summer months, and the best I can hope for is that they will be completed during the present fiscal year. Every effort is being made to that end. I am hopeful that provision will be made in the supplementary estimates for the payment of the awards in the civil cases which have already been heard; and although no decision has been reached in the matter I hope provision will also be made for payment of the awards in connection with the soldier claims so far as they may be decided during the present fiscal year. But this depends upon the action of the government, first, in preparing the supplementary estimates, and then upon the vote of parliament to that end. Because it must be remembered that these payments are being made year by year out of the consolidated revenue fund, and that, that fund is supplemented by our receipts under the Young plan, being a small percentage of the payments of Germany to-Great Britain.


Louis Édouard Fernand Rinfret: As my hon. friend has
stated that there is likely to be an item in the supplementary estimates covering these claims, I do not propose to press the discussion further at present. But I wish to point out that his method is somewhat different from ours. We were blamed severely by several, hon. gentlemen opposite-I can see them now -for not paying the awards sooner than we did; but we were desirous that members on. both sides might have an opportunity to read the report. In this instance my hon. friend has followed another course. Commissioner McDougall, whom he appointed, has made an interim report, and his recommendations were followed and the awards paid before the house had ever seen the interim report. I may tell my hon. friend that the half million dollars vote which was placed by us in the estimates last year was not intended to meet any future claims but to cover special cases which were then and still are before the exchequer court. These were cases which had been dealt with by the late Commissioner

Su-pply-Secretary oj State
Pugsley, and the bill which I introduced in the previous session contained a special clause under which those cases could be referred to the exchequer court. But my hon. friend- no doubt in perfect good faith and perhaps on the advice of the officers of the department- used that half a million dollars to pay claims recommended by Commissioner McDougall in his interim report. Now the minister tells us there will be a vote in the supplementary estimates to cover further decisions, but we will not know anything about those decisions before the payments under them are made. If the minister will state that the interim report will be laid on the table of the house before any payments are made on the awards, well and good; but I think unless he brings down that second report-if I may so term it- he should not ask for a further vote this session.


Charles Hazlitt Cahan: If my hon. friend and those associated with him wish to postpone an appropriation of that kind, I am afraid I have a colleague in charge of the Department of Finance who perhaps might be very willing to follow his suggestion. But as a matter of fact I had no knowledge of the hon. gentleman's personal intentions as former minister of the department. When I took charge I found that an appropriation had been made in the estimates the year before of $500,000. There were no conditions attached to it, and I was informed by the officials that the vote was to pay such awards as might be made during that fiscal year. As a matter of fact the interim report was submitted to council and the awards were approved by council before any payments were made. If my memory is correct, the report was then laid upon the table of the house.


Mr. STEWART (Edmonton):: After payments were made.


Charles Hazlitt Cahan: All I know is that no payments were made until the order in council had been passed. I remember that on the very same day that I asked for a copy of the report to be placed before the governor in council for approval I asked also for a separate copy that I might lay it on the table of the house. Before doing so I waited until the order in council had been passed approving the report, but my memory certainly is that soon after being approved by the order in council the report was placed before the house. The cheques were then made out, but in order that they might all be issued on the same day they were dated as of the following Saturday. During the present year I think it is intended to follow the same procedure. These awards are made by the commissioner and are then approved by the governor in council. Nothing in the faintest degree savouring of partisanship enters into this matter. If the awards are approved by the government, the government will take full responsibility for the payments and will make the payments in the interim. I am sure there are a large number of people throughout the country who will expect this to be done. Payments will be made out of an appropriation to be included in the supplementary estimates of this session.


Louis Édouard Fernand Rinfret: I would urge my hon.
friend, if it is at all possible, to have Commissioner McDougall make a further interim report covering the work he has performed since he made his last report, so that it may be laid on the table of the house. If I am not mistaken those payments were made last fall or this winter before the house was convened.


Charles Hazlitt Cahan: My hon. friend is quite mistaken.


Louis Édouard Fernand Rinfret: I am pretty positive.


Charles Hazlitt Cahan: My hon. friend is entirely
mistaken. He will have to take my word for it.


Louis Édouard Fernand Rinfret: I am not so sure as to
last fall, but I am sure as to last winter.


Charles Hazlitt Cahan: He will have to take my
statement as to that.


Louis Édouard Fernand Rinfret: Payments were made before the house met last March.


Charles Hazlitt Cahan: My hon. friend is mistaken: they were made some two or three days before the close of the fiscal year on March 31st last. That is why I was rather hastening the return of the awards made by Commissioner McDougall. That is why, as soon as possible after I received the commissioner's report, I brought it to the attention of the governor in council. I remember that this house was sitting when the governor in council passed the order approving of those awards; I am sure of that because I came here from the council chamber, and asked that a duplicate copy be prepared for me so that I might lay it on the table of the house, and I think I laid it on the table at an early day. Certainly I did so as soon as it was available.


Louis Édouard Fernand Rinfret: Certainly the awards were paid before this house had any opportunity to discuss them. That is the whole point. I am asking my hon. friend, if he intends to ask for another vote, in the supplementary

Supply-Secretary of State
estimates, to do his best to have another interim report tabled from Commissioner Mc-Dougall, covering the further claims upon which he may have decided. As for last year's payments, it was not only a question of intention; I will go so far as to say there has been a misinterpretation by the officers of my hon. friend's department in the appropriation of this money. There was nothing in the bill passed by this house a couple of years ago even to suggest that the government would appoint a new commissioner to investigate any further claims which arose after the final report of Commissioner Friel.


Charles Hazlitt Cahan: Might I reply to that at once? I do not wish to go into that matter in detail, but my hon. friend must have assumed that further claims were to be heard, because a great number of them were filed in the department awaiting hearing and adjudication when I arrived there last August.


Louis Édouard Fernand Rinfret: I do not admit that. They were not awaiting a hearing; they were awaiting a decision by the government as to how they were to be dealt with. There were many classes of claims which were discussed when the bill introduced by the former government was put through. I am quite sure of my ground when I say that no provision was made at the time to meet claims which had been filed after the final report of Commissioner Friel was made. I may tell my hon. friend that I am not so far away from him as I may seem. The matter had been discussed by the government of which I was a member, and it had been practically decided that we would appoint a commissioner, but it was the intention to ask from this house, by way of an estimate, an amount sufficient to pay the new commissioner.


Charles Hazlitt Cahan: How could I be aware, of that intention?


Louis Édouard Fernand Rinfret: There was nothing to authorize my hon. friend to do otherwise, except, I repeat, a misapplication of the money that had been voted as a balance to deal with war claims coming under the bill adopted by this house.


Charles Hazlitt Cahan: There was nothing filed in the office, and there is nothing in the office now, to indicate any such intention in the mind of my hon. friend. Furthermore, his own officials in the department advised me to the contrary. I was told by the proper officers as to what my duty was in the premises, and I followed their advice.
Mr. IllN FRFT: I repeat that there was not the least authority in the department to

permit my hon. friend either to appoint a new commissioner or to make those payments. I may tell my hon. friend that the reason we did not ask the house for an amount sufficient to pay a new commissioner was that when we decided to hold a general election we did not think it would be proper for a commissioner to be going around different parts of the country hearing certain cases while the election was pending.


Charles Hazlitt Cahan: But you intended to proceed as soon as the elections were over and you were returned to power.


Louis Édouard Fernand Rinfret: Yes, by asking the house to vote a sum sufficient for the salary of the new commissioner. In the first place I claim that there was no authority for this government to appoint a new commissioner, and certainly there was no authority for the government to make payments before this house had an opportunity to discuss the matter. I do not like to protest, because I am not against the payment of the claims, but I wish payment had been made in the regular way.
The other point I wish to make is this: I was blamed, as Secretary of State, and the previous government were blamed, for delay. The delays came about mainly because we wished to proceed in the regular way.


William Gordon Ernst: Nonsense.


Louis Édouard Fernand Rinfret: We had to file the report, as the hon. member for Queens-Lunenburg knows; we had to give hon. members time to read and digest the report and we had to put through the bill. There was a good deal of discussion in connection with the bill; it had to be adopted by the Senate, and all these things had to be done before any payments were made. In this case, however, my hon. friend chose the easiest way by appointing his own commissioner, sending him away to hear the cases and paying the awards before the house even approved of the appointment of the commissioner.


Charles Hazlitt Cahan: So far as my memory goes, this house never approved of the findings of Mr. Friel or Mr. Pugsley; those were approved by order in council and money was voted by parliament to cover the awards.


Louis Édouard Fernand Rinfret: There we are in full agreement.


Charles Hazlitt Cahan: We followed the same procedure. What would have been the result if we had delayed? If we had not proceeded, as I was advised by the permanent officials of the department we should proceed, and as I was advised by the auditor general and

Supply-Secretary of State
the law officers I was entitled to proceed, to-day my hon. friend would be blaming me for having held up payment of these awards. I went in there to clean up the work of this department as far as I could, and I have cleaned it from top to bottom in connection with this business. I hope, with health and strength, during the ensuing summer, to end these reparation claims and have them finally settled, so that we will have no further trouble or difficulty with them. That has been my aim; I was told that was my duty, and I have spent day after day until late at night, from early morning, performing that duty.
I do not wish to discuss the former commissioner, but when I went to the department I found a commissioner who could not go on with the work; who had certain disputes outstanding as to his commission; who alleged that he had been orally authorized in certain ways and who, I think, was quite unwilling to go on under the circumstances and carry out his work. I made a compromise with him in regard to his personal claims, which he was then proceeding in the exchequer court to recover. I saw by the correspondence that there was an entire difference of opinion between the commissioner and my predecessor; I saw that there was some dispute as to my predecessor's views with regard to the compensation payable to the commissioner; I saw that the Minister of Justice had given an opinion contrary to that of my hon. friend, and I thought the best course was to compromise the commissioner's claim, close it up and end it without further discussion.
I hope my hon. friend is not going to force me into a discussion of the final arrangements with Commissioner Friel and the conditions under which they were made. There were a large number of claims filed. The department was prepared to go on and deal with them. Mr. Friel having declined to go on except under conditions with which my hon. friend had refused to comply, a new commissioner was appointed, a full settlement was made with Commissioner Friel and a release in full taken for all his claims. The new commissioner proceeded with his work; he has carried it on assiduously from day to day and week to week. Those claims were outstanding; they were recognized by the then government, as they are recognized by the present government; and it seems to me it is the duty of the Secretary of State to secure a final winding up of all these claims at the earliest possible date. That I have been endeavouring to do.


Louis Édouard Fernand Rinfret: I do not want to prolong this discussion unduly, but there are two 22110-188
points in connection with which I disagree entirely with my hon. friend, and other points in connection with which I disagree to a certain extent.
The two points in connection with which I disagree with him are these: In the first place I do not admit that my hon. friend has followed, as he has said, the same procedure in connection with this new commissioner as we followed in connection with the old. I have explained very fully that we tabled the report of the former commissioner; it was read by the house and studied by any hon. member who desired to do so. Later on I brought down a bill, and following that an estimate, covering the claims which had been heard and the decisions which had been tabled in the house.


Charles Hazlitt Cahan: After protests had been
made time and again because of the delay.


Louis Édouard Fernand Rinfret: Perhaps so; perhaps we
were a bit slow in doing all that, but my contention is that my hon. friend has proceeded too quickly. He has appointed a commissioner when there was no salary voted for him; he has received a report from that commissioner and has paid the awards recommended without the house being given the opportunity of discussing them. Perhaps they were right. I have no fault to find with any of them. But that is not the only point in regard to which I disagree with my hon. friend. We have here an instance of the same form of government against which we have protested in other cases. The minister has followed the example of his leader and has dealt with the matter without the least regard for parliament. He did not see fit to wait until parliament should authorize him, either by a majority or unanimously, to go on with the work. He has dealt with the matter in his own way. In his own inimitable style he has undertaken to clean the department-and I do not admit for a moment that it needed cleaning to that extent. But once he got there he thought he had become czar or mikado of the Secretary of State's department and he went ahead with the work of cleaning up. And he cleaned it up so fast that he forgot that before doing anything of the kind it was his duty to come to parliament and receive authorization. I do not wish to take issue with my hon. friend unnecessarily; I have a great respect for him. But in the heat of discussion he sometimes uses words that are beyond the bounds of discretion. This afternoon he thought that the ex-Minister of Justice was nonsensical-


BFVIfcXJl EDITION
[Stage Direction]
Supply-Secretary of State
Charles Hazlitt Cahan: I did not say so. My hon. friend cannot get by with that. What I said was that it was nonsensical to assume that the people of St. John and Halifax would put a certain interpretation upon what the leader of the government had said. I never said that the ex-Minister of Justice or anyone else was nonsensical. I withdrew it as a personal remark with regard to the hon. member for Quebec South, who elicited it. But I said it was nonsensical to assume that, under the conditions in which the statement was made, the people would put upon the words of the Prime Minister the interpretation which was then suggested.


Louis Édouard Fernand Rinfret: Well, let that pass. Now the hon. gentleman tells me his duty was to clean up the department over which I had presided. He could not wait for parliament to authorize him. He could not follow the ordinary course and submit a bill or an estimate, taking parliament into his confidence. He had to do the work before parliament met. That is why I have raised the question. It is another instance where this government has simply taken into its hands an authority which does not belong to it. It has not waited for parliament to authorize the course it has taken. Without going into the past, I was merely asking the hon. gentleman to table a report by Commissioner McDougall before asking the house to vote a further amount to pay the awards that were allowed. I merely wanted him to take parliament into his confidence. I do not think it would be right for my hon. friend to ask for half a million to meet decisions which Commissioner McDougall may arrive at this fall. With every sympathy for the claimants, I say that the claims should wait until parliament knows something about '*hem and passes upon them.


Charles Hazlitt Cahan: My hon. friend has raised an issue. This parliament never approved of the awards made by Mr. Pugsley-


Louis Édouard Fernand Rinfret: Certainly it did.


Charles Hazlitt Cahan: Or Mr. Friel.


Louis Édouard Fernand Rinfret: Certainly.


Charles Hazlitt Cahan: I beg the hon. member's
pardon.


Louis Édouard Fernand Rinfret: Parliament passed a bill
based on that very report. If my hon. friend will look at the statute he will find that the bill mentions the report.


Charles Hazlitt Cahan: It mentions the report.
But that appropriation of $500,000 had no conditions attached to it.


Louis Édouard Fernand Rinfret: That was a revote of a balance.


Charles Hazlitt Cahan: It was not appropriated
for any specific purpose except to pay illegal warfare claims on proper findings. That was the opinion of the permanent officers of the department, who so advised me. The matter was taken up with the auditor general and the claims were paid. Personally I am glad they were paid; otherwise life would have been quite unhappy for me in view of the protests made against delay by members on both sides of the house. Now, what we propose to do is this-and there is no misunderstanding about it. I have asked the treasury board, the Minister of Finance, to enter an amount in the supplementary estimates to pay, during the present fiscal year, these reparation claims arising out of illegal warfare. I do not know whether the report dealing with, I believe, some 70 civil claims, will be ready before this session terminates. But I have urged the commissioner to prepare an interim report to the fullest extent possible and at the earliest practicable date, so that parliament may be duly informed. But there are 400 other claims outstanding, and I do not know what the decision of the Minister of Finance or of the governor in council will be with regard to those. I should think the proper way would be to make an appropriation, out of which we may pay during this fiscal year any of these 400 claims upon which awards are made by the commissioner, which are approved by order of the governor in council, and for the payment of which the government takes full responsibility when once the parliamentary appropriation is made. If my hon. friend thinks that is not the proper course, that we should allow the claims, from one end of the country to the other, some 400 or 500 in number, to wait until the ensuing session to have the awards brought before parliament and dealt with individually, well that is a program of another colour which did not occur to me as being a suitable one.


Louis Édouard Fernand Rinfret: If my hon. friend brings
in an appropriation this year and gets the consent of parliament to have money voted to meet incoming claims, at least he will have the authority of parliament. I may disagree with him on that point, and I shall discuss the matter further. But if a majority of the committee votes the estimate, at least there is nothing with which to reproach him. That, however, is not what my hon. friend has done with respect to the claims to which I have alluded. He has paid them before parliament has passed upon them.

Supply-Secretary of State


Charles Hazlitt Cahan: I was in ignorance of the previous working of the office. I went there and followed my hon. friend. I have endeavoured, so far as I could, to administer that office without fear or favour, and in each case I have rendered my very best judgment. I was advised by the departmental officers and by others, down to the auditor general, that that was an appropriation with which to pay reparations-that it had no condition tied to it but was available for the purpose for which it was used. I acted on that advice, knowing nothing of the views which my hon. friend holds. I followed that course, and if I did what was reprehensible I stand condemned.	,
Air. MACKENZIE	(Vancouver):	The
minister has informed the committee that Commissioner McDougall intends, if possible, to file a further interim report dealing only with civil claims. I speak from personal knowledge when I say that the commissioner has already heard many claims throughout Canada with respect to maltreatment of soldiers when prisoners of war, and J[ urge upon the minister, if at all possible, to have the commissioner make an interim report in regard to such of these cases as he has already decided-not civilian cases, because they will be dealt with in any case. I suggest that it would be well to have an interim report in regard to prisoners of war who suffered maltreatment. I can assure the minister that I know of hundreds of cases in the west, cases of real hardship, which I believe will be allowed by the commissioner, either in small or large degree. It would be a merciful service rendered these men if the decisions could be brought down at the earliest possible moment and the moneys paid.


Charles Hazlitt Cahan: We have been taking these cases in order of precedence. A number of civil cases were left over and the hearings were completed. The awards are now being prepared. In regard to the prisoners of war, none of the oases have yet been decided, and I will tell my hon. friend why. I have had nothing to do with the hearing of these cases but I have taken a great interest in them. In many instances I have read the evidence. There is no doubt in my mind that many of our soldiers who were prisoners of war suffered very much, but owing to the lapse of years their impressions now as to the extent of their sufferings while prisoners of war are in some cases,-I do not know just the word 22110-188i
-almost fantastic. I have insisted that in respect to each claim made by prisoners of war, in addition to hearing their evidence, the records should be searched and their present statements, so far as possible, should be checked with the statements which were made, of which there is an official record, when they came back from Germany as prisoners of war; checked with the medicaTexamination which then took place, and checked also with their evidence at the later examinations which were made when they applied for pensions, because many of these men have so applied. There was not only the hearing b*y the commissioner in charge, but we also had expert medical and surgical advice which was supplied by the Department of Pensions. This work of research into the military records has taken a great deal of time, but I felt that in justice to this country and in justice fo the claimants themselves, those records should be carefully searched before an official award was made. The difficulty and delay in making that search with respect to some hundreds of men is the only reason why the awards have not been finally prepared in the large number of these military cases.


Charles Gavan Power: I think it is a most extraordinary statement we have just heard from the hon. Secretary of State. He tells the committee that if a soldier who has a claim in respect of ill treatment received in Germany makes a statement, he finds that that soldier is liable to make such a fantastic statement-


Charles Hazlitt Cahan: I did not say that.


Charles Gavan Power: -that he has to have the statement checked-


Charles Hazlitt Cahan: I said that some of the
statements made now as compared with the reports which were made when they came out of Germany appeared to me in some cases to be-I searched for the word-perhaps fantastic. Perhaps "exaggerated" would be the better word. In order to check such statements I know of no other way than to check them with the military records and find out the real facts as contained therein.


Charles Gavan Power: I will take the statement of my hon. friend, although I am not quite sure that that is what he said. The procedure which he is following is this: He requires far more corroboration for the story told by a soldier who has suffered ill treatment in Germany than he does for any other class of person who has claimed under these reparations.
Supply-Secretary oj State


Charles Hazlitt Cahan: Not at all.


Charles Gavan Power: We have had men coming
before the commissioner to make claims because they fell into the water when some boat was torpedoed and wrecked; they got their feet wet, but here are men who spent two to three years in prisons in Germany and because they make a claim to the government for ill treatment the Secretary of State orders that that claim be checked up with the documents which he received, presumably from Germany, with documents in the possession of the pension board, with documents and statements given-


Charles Hazlitt Cahan: I wish we had the German records, but we have not. We have only the statements made by these prisoners to the military officials when they returned.


Charles Gavan Power: My hon. friend has not had to do with pension legislation at .all.


Charles Hazlitt Cahan: I am not dealing with pension legislation.


Charles Gavan Power: If he had he would know
that the soldier was so glad to get out of the army that he was willing to give any statement at the time of his discharge. I have not the slightest doubt that such was the case with the prisoners of war, and I object most strenuously, and I think many other hon. members of this house will object also, to meting out to these men different treatment from that given to others who have claimed under these reparations.


Charles Hazlitt Cahan: There is no different treatment at all.


Charles Gavan Power: Far more corroboration is
being asked for their stories than was asked for the stories of men who claimed because they happened to be on vessels which were wrecked. They got their feet wet or lost a trunkful of luggage and the evidence shows that the most ridiculous claims were made and allowed without any corroboration being necessary. I think the Secretary of State should give at least equal treatment to those who suffered while bearing arms for their country.


Charles Hazlitt Cahan: I move that the committee rise, report progress and ask leave to sit again.
Progress reported.
On motion of Mr. Guthrie the house adjourned at 10.58 p.m.

Wednesday, June 24, 1931.