1932-05-24

MOTION FOR CONCURRENCE IN FOURTH REPORT OF FINDINGS OF COMMITTEE IN INQUIRY INTO PRICE OF GASOLINE

[Stage Direction]
The house resumed from Monday, May 23, consideration of the motion of Mr. Young that the fourth report of the select standing
committee on banking and commerce, on the reference as to the price of gasoline, be concurred in.
Mr. E. J. YOUNG (Weyburn):: In moving concurrence in the fourth report of the select standing committee on banking and commerce, I wish first of all to draw the attention of the house to the wording of the reference, which reads:
That, in the opinion of this house, the price of gasoline to the Canadian consumer has for some time past been too high and that this matter should be referred to the select standing committee on banking and commerce to investigate and report.
The question with which the committee had to deal was this: Are we in Canada paying too much for our gasoline, and, if we are, what is the reason? The committee reasoned that if we are paying too much for our gasoline it must be that somebody connected with the refining of gasoline or somebody connected with its distribution-or both -is getting too much for his services.
During the calendar year 1931 we imported 84,000,000 gallons of gasoline on which duty was paid, and during the same year we imported some 32,000,000 gallons on which no duty was paid. Now, all of that 32,000,000 gallons which came in duty free was imported by refiners. In order to prove that statement I would refer the house to section 272 of the customs tariff as amended at the short session in September, 1930. It reads:
Natural casinghead, compression or absorption gasoline, lighter than -6690 specific gravity at 60 degrees temperature, when imported by distillers of petroleum for blending with other gasolines distilled in Canada:	British preferential tariff, free; intermediate tariff, free; general tariff, free.
Let me explain what natural casinghead gasoline is: it is gasoline as it comes from the earth. In that state it is not suitable for use in engines; it vaporizes too easily. But it has been found that by mixing it with other gasoline it can be used quite satisfactorily. It is not the raw material of any manufacturing process; it is gasoline, and the only treatment it requires is to pour some other kind of gasoline in with it.
This section 272 provides that refiners of gasoline may import that form of gasoline duty free, but anybody else who is importing it must pay a duty of 2J cents per gallon, plus whatever dumping duties the government sees fit to impose. I should like hon. members to picture to themselves for a moment two distributors of gasoline located on opposite corners of the same street, one of them a branch of a refining company and the
Banking and Commerce

other an independent distributor. Both these distributors are selling identically the same product, namely, a mixture of Canadian refined gasoline, with casinghead gasoline imported from some other country. The government says to one of these distributors, "You may bring in your gasoline free of duty," and to the other it says, "For the same kind of gasoline you must pay a duty of 2i cents per gallon plus whatever dumping duty we see fit to impose."
I ask you to consider for a moment what the effect of that would be on an independent distributor. How can any independent distributor hope to survive and do business under such conditions when the government allows his competitor to bring in his gasoline duty free while it insists on the independent distributor paying a duty of anywhere from 2J to 5 cents a gallon? Yesterday the announcement appeared in the press that the price of gasoline had dropped 4 cents in New York, and the despatch reported that this was due to the competition of independent distributors. No such thing could happen in Canada because the government here has specifically said to the independent distributors, "We will not allow you to remain in business; at any rate, we will not allow you to bring in your product at the same rate as we allow the refiners to import the very same thing."
I contend, therefore, that I am justified in the statement that all of the 32,000,000 gallons of duty-free gasoline imported last year was imported by the refiners. Some 84,000,000 gallons of dutiable gasoline was brought in, and I presume it was brought in by the independents. That is only about one-eighth of the total consumption, so that seven-eighths of the consumption passes through the hands of the refiners. The committee reasoned, then, that since the refiners held such a large proportion of the market, they must look to that source to investigate whether or not we are paying too much for our gasoline.
The largest refiner in Canada is the Imperial Oil Company. They are such a large factor in the market that whatever they do the others must generally fall in line with, so that the committee decided that if they investigated the Imperial Oil Company first to find out how they were faring, they would have a pretty good idea as to what was happening with the others. They investigated, securing the services of a firm of chartered accountants, competent men who looked into the affairs of the company. I have here a summary of their findings, and I will give it to the house: (a) That the company has not been guilty of any cost-loading; (b) The
TMr. Young.]
company has been honestly and soundly financed; (c) That marketing costs in this country are too high; (d) Variations in price during the last three years are based not on refining costs but on variations in the price of crude oil and on increases in various forms of taxes, freight and exchange; (e) That lower prices of gasoline in the United States and Canada, which appear to arouse the wrath of our people, are due in large measure to tax evasions on the other side of the line; (f) That the zoning basis of establishing prices tends to favour districts remote from refineries rather than those that are close; (g) That in some districts the spread between the wholesale and retail price is entirely in the hands of the retailers; (h) That the average profits of the Imperial Oil Company after paying all refining and marketing costs is 1*01 cents per gallon; and, (i) That no further expense should be incurred in continuing the investigation.
Those are the findings of the committee and they are based on the evidence produced. That was as far as the committee could go in investigating. They found that the companies were not taking excessive profits; they were not dishonestly managed; that variations in prices were due not to variations in the cost of refining but to variations in the cost of crude oil and changes in freight rates, taxes and so forth. But there is one thing which the committee did not and could not investigate, nor could they be expected to investigate it, and that is the question whether the Canadian refineries are efficiently managed, or whether, on the other hand, the oil-refining industry is one that can be profitably carried on in Canada. The committee could not investigate this question because there is no one in Canada who could give evidence in that regard; the only persons in Canada who could give evidence as to the efficiency of the refineries are the refinery men themselves. No person in Canada is capable of informing us whether our refineries are as efficient as the refineries in other countries. The committee, therefore, could not investigate that phase of the situation.
But there is one infallible test which we can apply to determine whether or not our refineries are efficient, and it is this question: Can we buy gasoline cheaper anywhere else? If the refineries of other countries can sell gasoline cheaper to us than we can get it from our own refineries, then one of two things is true: Either they are more efficient than our refineries, or the refining of gasoline is better adapted to other countries than ours. The question is, Can we or can we not buy gasoline

Banking and Commerce
from somebody else cheaper than from our own refineries? In answer to that question I would refer the house to the evidence of Mr. O. B. Roger, of the Shell Oil Company. It will be found at page 411 of the evidence given before the committee. Mr. Donnelly is questioning Mr. Roger:
Q. You could buy from American concerns, as I have just said, for between 4 and 5 cents, and yet you are paying 6?-A. Yes; but then we would have been subject to dumping duty. The regulations provide that gasoline must be imported at the price in the bulletin.
Q. Instead of giving it to the government you give it to the American companies?-A. Yes.
What does that mean? It means that under the amendment to the Customs Act passed by this house in September, 1930, the government has power to fix the value for duty on gasoline. They did so. They fixed a certain value which they informed the importers they must pay for their gasoline, and if they did not pay that price they were subject to dumping duty. The Shell Oil Company was able to buy gasoline at 4 and 5 cents a gallon in the United States. That was lower than the price fixed in the bulletin, and the Customs department said to them, "If you buy at that price in the United States we will make you pay in the form of a dumping duty the difference between that and the bulletin price. But if you see fit to pay the extra price in the United States to the refiners over there you will be exempt from the dumping duty. We don't care whom you pay the extra price to, but we insist upon your paying it." Could further evidence be required that we are paying for our gasoline more than is necessary when the customs officials deliberately say to importers, "You must pay more and we don't care whether you pay it into the revenue or to the American manufacturer, but we insist on your paying it." The Shell Oil Company had to add that to the price they charged for their gasoline. Referring to page 413 of the evidence, I find the hon. member for Swift Current (Mr. Bothwell) examining Mr. Roger in connection with gasoline coming from the Dutch West Indies, as follows:
Q. What would your freight be on that from the Dutch West Indies to Montreal?-A. I should say nearly one cent a gallon, perhaps a fraction under a cent, but approximately a cent. I should say the freight, as far as my memory serves me, fluctuated somewhere in 1931 around 29 cents a barrel.
Q. At this price, that would bring it up to about 6-40 cents an Imperial gallon?-A. Excluding duty and sales tax.
Here again we have evidence that the same company could bring gasoline from the Dutch West Indies and lay it down in Montreal at 6-40 cents per gallon if it were not for the
duty. No further evidence should be required to prove that we are paying too much for our gasoline. If further evidence is required, I refer the house to the statement made by the Minister of National Revenue (Mr. Rvck-man) when his estimates were going through to the effect that certain men from Montreal had come to him and stated that they wanted to bring gasoline in from Roumania. What answer did he give? He said: If this gasoline is being dumped, you cannot bring it in. What did he mean by dumping? Under the new definition of dumping as set out in 1930 by the minister, it means the selling in Canada of gasoline or of anything else at a price lower than that at which our own manufacturers are willing to sell for. Time and time again the government has deliberately insisted that the people of this country pay more for their gasoline than they want to pay.
I want to say a few words in defence of Imperial Oil Limited. This company has been criticized quite severely, and in my opinion unjustly for their action in curtailing production in the Turner valley oil field. The market in western Canada for gasoline has fallen off considerably during the last year or two and Imperial Oil Limited found it necessary to reduce its purchases in the valley by about half. For that they were very severely criticized; people said that they should use Canadian produced gasoline, that it should be shipped down to eastern Canada instead of importing similar gasoline from the United States. The company put out an explanation in its own defence. This was to be found in most of the filling stations in western Canada and I shall read in part from a copy I secured. It reads:
The cost of the Turner valley product, plus freight rates, are such that the product cannot compete with other gasolines except within a freight radius of Calgary. Turner valley gasolines laid down at the Sarnia refinery of Imperial oil, within reach of a large consuming market, would cost on the present basis of prices and freights $5.97 per barrel. Casinghead gasoline which is equivalent to the product of Turner valley, on the basis of prices existing in the mid-continent field and of established freight rates would cost $3.62 per barrel. It is obvious, therefore, that the amount of naphtha drawn from the Turner valley must depend entirely upon the consumption of gasoline within that area of the western provinces where favourable freight rates prevail.
I think that is a very fair and just statement of the case. The company states quite clearly that if they were to use Turner valley gasoline and ship it to the parts of Canada where there are markets for it, it would cost them $2.35 a barrel more than the United States product. Very properly they take the stand that they could not incur that extra
Banking and Commerce

cost and add it to the burden borne by the consumer in this country. I say that that is a very fair and proper attitude for that company to take. But I ask this question of the Prime Minister (Mr. Bennett) and I want an answer: If it is right, if it is fair, if it is in the public interest that Imperial Oil Limited should be allowed to buy its supplies where they can be bought the cheapest, why is it not right for the common people of this country to do the same thing? That is the question to which I should like an answer. I think I have proved that the price of gasoline in this country is too high and the cause of this high price is the duties and dumping duties imposed by the present government. The additional cost which we are paying is not going into the treasury, in many cases it is being paid to foreign manufacturers.
Mr. Speaker, I beg to move that the report be concurred in.
Moore (Ohateauguay-Huntingdon), Morand,
Murphy,
Myers,
Nicholson,
Peek,
Pettit,
Pickel,
Porteous,
Robinson,
Ross,
Ryckman,
Sanderson,
Sauve,
Shaver,
Short,
Simpson
(Simcoe North), Simpson
(Algoma West), Spankie,
Spence,
Sproule,
Stevens,
Stewart (Leeds), Stewart (Lethbridge), Stirling,
Stitt (Selkirk), Sutherland,
Tetreault,
Thompson
(Simcoe East), Thompson (Lanark), Totzke,
Tummon,
Turnbull,
W npcp
Weir (Melfort), White (London), White (MountRoyal), Willis,
Wilson,
Wright.-83.
++NAYS
Messrs:
Mr. R. TV. GRAY (West Lambton): Mr. Speaker, I move that the house do now proceed to the orders of the day.
Mr. \OUNG: Mr. Speaker, that motion is out of order; there is a motion before the chair.


Mr. SPEAKER:: A motion for reading the orders of the day has preference to any motion before the house.


Mr. GARDINER:: Mr. Speaker, on a point of order; is the motion to proceed to orders of the day seconded?


Pierre Édouard Blondin: It is seconded by Mr. McPhee.


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


Mr. McDADE:: I was paired with the hon. member for Laprairie-Napierville (Mr. Dupuis). 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. MacLEAN:: I was paired with the hon. member for Rosetown (Mr. Loucks). Had I voted I would have voted against the motion.


Mr. CAYLEY:: I was paired with the hon. member for Brant (Mr. Smoke). Had I voted I would have voted against the motion.

Radio Broadcasting


Mr. RHEAUME (Translation):: I was
paired with the hon. member for Berthier-Maskinonge (Mr. Barrette). Had I voted I would have voted against the motion.



RADIO BROADCASTING


[Stage Direction]
On the orders of the day:
Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):: Before the orders of the day are called, I might say to the Prime Minister that I have received a wire from one of the members of the local legislature of Saskatchewan stating with respect to the control of radio by a commission that the hon. member for Saskatoon (Mr. MacMillan) has wired to his city that one of the radio stations is to be located in Saskatoon. That, in the mind of the member who wired me, indicates that the decision will not be made by technical men, but will be actuated by political motives. I know nothing of the matter except the representation in the telegram, and I am sorry the hon. member for Saskatoon is not in his seat, because I should like first to have asked him if he personally sent the wire referred to. May I ask the Prime Minister, although I am sure it is not necessary to ask the question: Was the wire authorized in any way?


Right Hon. R. B. BENNETT (Prime Minister) :: I assure the right hon. gentleman that no such telegram has been sent with my knowledge or consent, either direct or indirect, and I have no reason to believe that any determination of any question of this kind has ever been thought of by the administration. I can assure him further, although I have received large numbers of letters indicating that particular individuals should be appointed to certain positions, I have replied that this matter has not yet been considered; that the bill has not been finally passed in the house, and further that so far as employees were concerned, this matter would have to be decided by the commission itself.



BUSINESS OF THE HOUSE


Hon. E. N. RHODES (Minister of Finance) :: I did not wish to raise a point of order while the leader of the opposition (Mr. Mackenzie King) was putting his question just now, because I knew in any event he would be able to get the leave of the house. But in view of the motion which has just been passed, we are in the orders of the day and therefore 41761-209
we cannot, as would usually be the case, submit questions before the orders of the day are called. I raise this point of order just so that a precedent will not be created, if Your Honour rules, as you should, that it is not now competent to raise questions on the orders of the day.


Pierre Édouard Blondin: In my view, the motion just passed makes the next order of business the orders of the day. Out of deference to the leader of the opposition and the Prime Minister, I made no objection while they were both on their feet. A few minutes ago the Secretary of State (Mr. Cahan) would have spoken, but I stopped him and I think the next proceeding of the house is to read the orders of the day.


William Lyon Mackenzie King: It was quite unwittingly
that I overstepped the rule, but I thank Your Honour and the hon. Minister of Finance for not having raised an objection, and for according me the privilege of bringing up the matter which, of course, might as well have been brought up when the radio broadcasting bill is further considered in committee as will I expect be the case a little later in the day.


[Stage Direction]
Hon. C. H. CAHAN (Secretary of State) moved the third reading of Bill No. 99, to amend the Civil Service Act.
Edward James Young: I move in amendment that the house do now revert to motions.


Mr. GUTHRIE:: That is out of order.


Edgar Nelson Rhodes: If I may rise to a point
of order, obviously the motion of the hon. member for Weyburn is out of order; it is a negative of a motion which was decided by the house by vote just a moment ago.


Edward James Young: There have been two orders of the day since then.


Hon. PETER HEENAN (Kenora-Rainy River):: Mr. Speaker, with respect to the-


Mr. WOODSWORTH:: We have no idea
of what business is being transacted.


Peter Heenan: With respect to the third
reading of Bill No. 99, I desire to make just a few observations, because yesterday I attempted to get some information from the minister in charge of the measure and unfortunately we were not able before lunch to proceed with the bill in committee. Yesterday, while the bill was in committee, I endeavoured to ascertain the procedure that is

Civil Service Act

to be followed in connection with the appointments of postmasters to positions in offices that have a revenue of less than S3,000- I am not opposing the bill but what I wanted to be sure of at that time was that the preference for returned soldiers would be continued as it was prior to this enactment, and the reason I rise at this time is because the returned soldier preference in the constituency that I have the honour to represent is being entirely overlooked.
In 1920, a resolution passed the Ontario legislature unanimously, in effect, that in all cases returned soldiers were to get the preference in appointments to permanent positions within the jurisdiction of the government of Ontario. Only recently a sheriff has been appointed in Kenora by the Ontario government, and the occupant, while a very good citizen in every way, is not a returned soldier. I have received many letters from returned men in my district telling me that they had no knowledge whatever that that position was about to be filled, and further that it was filled on the recommendation of the executive of the Conservative association for the district. There were two other appointments. The office of registrar for the district was vacated twice, and while the position was filled in both cases by very good citizens the returned soldiers in the district did not get an opportunity of appointment to those two vacancies. Again only recently, about a month ago, the mayor of Kenora was appointed to a provincial government position, and he is not a returned soldier. Those positions were filled upon the recommendation of the executive of the Conservative association for that district. What [ wanted to say to the minister was this: If :ederal government positions are going to be filled in the same way, I think the minister will agree that I have reason to look askance at the protection that is afforded to the returned soldier in the matter of preference in appointments. How are the returned soldiers in that large district going to know where to apply? Are they to apply to the Postmaster General, to the member for the district or to the Conservative executive, and even if they know where to apply, what guarantee is there that the returned soldier preference will be maintained in appointments to these positions?
That is the only observation that I have to make, Mr. Speaker, and I am sorry that the bill was reported out of committee before I was given an opportunity of ascertaining beyond the shadow of a doubt that the returned soldiers in that district, and it is the only district that I have the right to speak for,

would get a square deal in federal government appointments.


Mr. E. J. GARLAND (Bow River):: I am opposed to the third reading of this bill, Mr. Speaker, because of two clauses that it contains. One of them I referred to when the discussion on the resolution was before the house, and at that time Your Honour will recollect that I moved to delete the clause referring to the exemption of revenue post offices up to $3,000. When the bill was before the house yesterday I disagreed with the administration in the amendment which was proposed by the Minister of Finance to modify section 11. It is not my intention at this time to prolong the debate unnecessarily. I simply wish to move, therefore:
That Bill No. 99, an Act to amend the Civil Service Act be not now read a third time but that it be referred back to the committee of the whole for the purpose of amending it by striking out section 10-and by striking out section 11, substituting for section 11 the wording of the section as contained in the first reading of the bill.
May I explain that section 10 is the one referring to the exemption of post offices with revenues -up to $3,000. Under the first reading of the bill hon. members will recall that section 11 carried out the unanimous desire of the committee, the unanimous desire of every civil service organization which appeared before that committee, and the desire of many other people. As it stood at the first reading of the bill section 11 took away from private secretaries to ministers the special privilege which had been accorded to them under the amendment to the act moved some years previously. My motion is therefore to restore section 11 as originally drafted in the amendment this year, and I sincerely trust that the house will see that the merit system, to the extent at least of the improper changes being made to this bill- and I use the word "improper" advisedly- be not interfered with.
Mr. E. R. E. CHEVRIF.R (Ottawa): Mr. Speaker, I shall have to vote for the motion now before the house so that the bill may be referred back to the committee. I will so vote in the hope that before the committee the section dealing with private secretaries may be brought back to its previous form, and at the same time in the hope that the committee will not alter the section with reference to postmasters as recommended by the special committee.


Mr. J. L. BROWN (Lisgar):: Mr. Speaker, I find myself in somewhat the same position in regard to my vote as the hon. member for

Civil Service Act
Ottawa. I should like the matter to be referred to the committee, however, in the hope that section 10 may be eliminated from the bill, and that the amendment to section 11 as introduced to the house yesterday may be confirmed. When section 10 was under discussion in committee I expressed my sentiments in regard to the purpose of that section. I should like to repeat my views however in regard to statements made yesterday concerning the possibility of retaining returned soldiers' preference. I think the hon. member for Kenora-Rainy River (Mr. Heenan) has given a good illustration of how matters have worked out. We have seen how a similar pious wish has worked out in regard to appointments made by the legislature of Ontario. I am quite satisfied that no matter what regulations are framed, when it comes to actual operations the matter of returned soldiers' preference will work out in the present instance as it worked out in the province of Ontario, as described by the hon. member for Kenora-Rainy River.


Hon. ERNEST LAPOINTE (Quebec East):: Mr. Speaker, I am exactly in the same position as my hon. friend from Lisgar. I cannot support the motion because I am opposed to deleting from the bill the amendment carried yesterday.


Mr. MOTHERWELL:: The same here.


Some hon. MEMBERS:: Question.


Peter Heenan: Mr. Speaker, I am wondering if the minister in charge of the bill would take this opportunity to make a statement. He did not speak before, because already he had moved third reading. I do not wish to repeat my statements of yesterdaj' with regard to the assurance which should be given to returned soldiers, but as the house seems to be quieter than it was when I spoke previously I should like to repeat a few statements. May I point out that in the year 1920 a resolution was passed unanimously by the Ontario legislature to the effect that returned soldiers would receive the preference in all permanent positions. In the riding I have the honour to represent they are not getting it. I should like to pass over to the minister a letter which will indicate what is going on. I do not wish to make it public because in my opinion the condition it discloses is a disgrace. This letter from the Canadian Legion at Fort Frances indicates *what is going on. I am not blaming the government, because I feel sure neither the Prime Minister nor any other member of the government would tolerate what is happening among the ranks of their own followers. I should 41761-209J
like to pass this letter over to the minister so hat he may have an opportunity of reading it; it is not my desire to make it public at this moment, because the matter is altogether :oo disgraceful. I am convinced when the minister sees what is contained in it he will realize why I have taken this position. The resolution passed by the Ontario legislature was unanimous; and I regard it as an order of the house. Notwithstanding that fact the returned soldiers are not receiving preference in that district. It may be that in the town of Kenora the members of the legion are satisfied-I doubt it-but hon. members must bear in mind that the district of Kenora is very large, and positions may be .filled without returned soldiers in other parts of the district knowing anything about them or getting consideration.
The position of sheriff is a district position; the sheriff appointed is a very eminent citizen, notwithstanding the fact that he is a Conservative. He is not a returned soldier. The position of district registrar has been vacant twice, and is now filled by a gentleman who is not a returned soldier. The mayor of Kenora, the gentleman who has sent telegrams to the effect that I deliberately falsified facts, has only recently received his appointment. I regard that appointment as compensation for the telegrams he sent out saying that I was not telling the truth in eastern Canada with respect to such matters as I am now speaking about. He is not a returned soldier. So far as I can understand the persons who will make recommendations to the Postmaster General are those who are now recommending to the provincial government, the appointment of men who are not returned soldiers.
Yesterday the minister in charge of the bill took a very fair position. I think if the Conservative executive, the member for the district, or the defeated candidates are to make the recommendations with respect to the filling of positions the government ought to let that fact be known. Otherwise, 1 may have to vote that the bill go back into committee.


Hon. C. H. CAHAN (Secretary of State):: The letter which the hon. member has shown to me does not deal with federal affairs. I cannot deal with Ontario political affairs, because I am not responsible therefor in any way.


Peter Heenan: But the minister will see-


Charles Hazlitt Cahan: Therefore, the complaints made in this letter, which I am not allowed to read to the house, are complaints of which I cannot take cognizance.
With regard to the bill now before the house, it provides that the preference estab-
Civil Service Act


[Stage Direction]
lished by section 29 of the Civil Service Act, that is, the preference granted in favour of the persons mentioned therein, shall be applied in respect of appointments to such positions. That preference is reaffirmed and reincorporated into the amending bill. I have not the slightest doubt that the members and officials of the government who will carry this measure into effect will give due consideration to the statutory enactment of the parliament of Canada, to which the ministers of the crown who administer the act are responsible. That is all I can say.
[Stage Direction]
Weir (Melfort), White (London), Willis,
Wright.-77.
Mr. PORTEOUS:: I was paired with the hon. member for Southeast Grey (Miss Mac-phail). Had I voted, I would have voted against the amendment.


Mr. ELLIOTT:: I was paired with the hon. member for South Waterloo (Mr. Edwards). Had I voted, I would have voted against the amendment.


Mr. GEARY:: I was paired with the hon. member for Laurier-Outremont (Mr. Mer-cier). Had I voted, I would have voted against the amendment.


Mr. ANDERSON (Halton):: I was paired with the hon. member for Toronto West Centre (Mr. Factor). Had I voted, I would have voted against the amendment.


Mr. FRASER (Cariboo):: I was paired with the hon. member for South Huron (Mr. McMillan). Had I voted, I would have voted against the amendment.


Paul Mercier: I was paired with the hon. member for West Hamilton (Mr. Bell). Had I voted, I would have voted against the amendment.


Mr. MULLINS:: I was paired with the hon. member for St. Boniface (Air. Howden). Had I voted, I would have voted against the amendment.


George Manning McDade: I was paired with the hon. member for Laprairie-Napierville (Mr. Dupuis). Had I voted, I would have voted against the amendment.
Motion (Mr. Cahan) agreed to and bill read the third time and passed.



WAYS AND MEANS


[Stage Direction]
Mr. E. N. RHODES (Minister of Finance) moved the second reading of Bill No. 95, to amend the Customs Tariff.
Some hon. MEMBERS:: Carried.


Edward James Young: Mr. Speaker, I move that the house do now revert to motions.


Pierre Édouard Blondin: The house has already by resolution proceeded from motions to orders of the day, and I do not think it can undo what it has done in that respect, at this sitting. The second reading of Bill No. 95 was carried.
Motion agreed to and bill read the second time.


Edgar Nelson Rhodes: I move, Mr. Speaker, that you do now leave the chair for the house to go into committee on Bill No. 95.

Special War Revenue Act


[Stage Direction]
Motion agreed to, and the house went into committee, Mr. LaVergne in the chair.
Bill considered in committee, reported, read the third time and passed.

[Stage Direction]
Hon. E. N. RHODES- (Minister of Finance) moved the second reading of Bill No. 93, to amend the Income War Tax Act.
William Lyon Mackenzie King: Is this the bill that proposes the two per cent excise?


Edgar Nelson Rhodes: No, this is the income tax bill.


William Lyon Mackenzie King: I beg your pardon; I had not heard the title.


[Stage Direction]
Motion agreed to, bill read the second time, considered in committee, read the third time and passed.

[Stage Direction]
Lion. E. N. RHODES (Minister of Finance) moved the second reading of Bill No. 102, to amend the Special War Revenue Act.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. LaVergne in the chair.
On section 1-Part III repealed and reenacted.
Thomas Merritt Cayley: Mr. Chairman, I should
like to Tefer again to the matter of the taxation of net insurance premiums. I referred to this matter yesterday and the minister asked me to defer my remarks until the bill was before the committee. It seems to me that there is some injustice in taxing the net premiums of foreign companies doing business in Canada two per cent, while the net premiums of Canadian companies are taxed only one per cent. I can understand that the government may have in mind the fact that these foreign companies do considerable business in Canada, but I remind the minister that the premiums paid to foreign companies are paid by Canadian policyholders. This is actually a tax upon Canadian policyholders. I think the government had in mind the New England mutuals which do business on a small premium, perhaps the smallest of any company operating in that class, but I think these companies are to be commended for the splendid methods they have adopted in the carrying on of business. They endeavour not only to pay fire losses but to prevent fires. They have an organization of inspectors and expert engineers who are continually on the job doing what they can by way of advising factory owners how to improve their premises
and reduce fire hazards. I bring this matter to the attention of the minister because I think my previous remarks, I believe on the resolution, might have been misunderstood. These companies are called foreign companies, yet they are doing Canadian business just the same as the Canadian companies.


Edgar Nelson Rhodes: I do not think that this tax in actual practice will prove to be an unfair burden on the foreign companies because it must be borne in mind that these companies carry a select class of risks. In the main their premiums are very small and the yield of the two per cent tax will not be comparable to the yield of the one per cent tax in the case of Canadian companies. I point out to my hon. friend that if Canadian policyholders do not desire to pay the two per cent tax, they can insure in companies where they will have to pay only one per cent. Another argument in favour of this tax, and one which I think demonstrates that there is no discrimination against these companies, is the fact that they have no office staff, they support no taxpayers in the form of employees and pay no income tax whereas, on the other hand, the Canadian companies do all these things. I understand that the foreign companies have not taken any exception to this tax, and I think that is the best evidence that in their judgment they feel they have not been discriminated against. I have no recollection of any complaint coming in on this score so I must assume under these circumstances that there is a reasonable acceptance to the tax on the part of the companies in question.


[Stage Direction]
Section agreed to.
Sections 2 to II inclusive agreed to.
On section 12-Excise tax of three per cent on duty paid value.
William Lyon Mackenzie King: Under this
section the special excise tax of one per cent imposed by the act of last year is increased to three per cent. I wish to repeat what has been said frequently, that this tax really is an increase of duty, that there is in reality an increase of three per cent in the customs tariff on everything except a few articles enumerated in the schedule. In delivering his budget speech, the Minister of Finance took no little credit to himself and the government for not having imposed any increased duties *this session. Had he been in the chamber when I was delivering my speech I would have drawn his attention specifically, as in fact I mentioned particularly, that in that statement he was entirely mistaken, that, as a matter of fact, the government this session by increasing the excise tax, which is a
Special War Revenue Act

British Empire has a foundation that is impregnable so long as we firmly maintain, in connection with the affairs of each of the self-governing parts of the empire, the conception of fiscal autonomy, along with all other forms of autonomy which we now so completely enjoy. But to surrender something, however small, which will in the least restrict the freedom of the self-governing dominions in their trade negotiations with other countries, or which will occasion a sense of restraint as to the obligations which in a fiscal way are binding as between the different parts of the empire would, I fear, have the opposite effect from that desired by those who wish to see the British Empire continue to grow in unity and strength as the years go by. I will quote in connection with the opinion I have here expressed the words of one whose name in these matters should carry a good deal in the way of authority with hon. gentlemen opposite. I have here a quotation from Sir John Willison's Life of Sir Wilfrid Laurier. Referring to a statement which the late Mr. Joseph Chamberlain had made as to the only form of zollverein Mr. Chamberlain thought would be of any real service to the British Empire, the author gives his opinion, which may be regarded as expert opinion, of the effect of any zollverein upon the development of the British Empire. The statement of Mr. Joseph Chamberlain, to which Sir John Willison refers, is as follows:
I believe the only form thait would meet with the slightest favour would be an imperial zollverein, in which there would be free trade between the portions of the empire and duties as against strangers.
Sir John Willison at page 307 of his Life of Laurier says:
It is necessary to add, at the risk of misunderstanding, that it is not easy to conceive a zollverein arrangement that will not restrict the freedom of the colonies

Colonies they were called at that time, now dominions:
-and tend with changing circumstances to produce irritation and unrest; and that the trade relations between Great Britain and the colonies will probably be better controlled by concurrent legislation than by a joint tariff.
I submit that that paragraph is one deserving of very careful consideration by members of the ministry who will be representing Canada at the forthcoming Imperial economic conference. The conception of a zollverein that Joseph Chamberlain had was a tax that would operate as against foreign countries, but to be of any value it would have to be accompanied by complete free trade within the British Empire itself. I do not assume that the present ministry will consider at the forth-
coming conference any development of trade on the basis of free trade within the empire. They have said over and over again that they would not. On the other hand, I do think from the statements made by the Prime Minister in England, and made in this house since, that it is quite conceivable that what the government is not prepared to consider on a free trade basis they may have in mind seeking to bring about on a "Canada first" basis, on a protectionist basis instead of on a free trade basis. In other words, it is conceivable that they will seek to have the British Empire develop on the basis of each of its self-governing parts having protective tariffs so high as to make impossible the importation of goods that are produced or manufactured by itself, and that they will seek to exclude foreign goods by raising still higher the existing tariff against foreign countries. That would be an imperial zollverein on the basis of high protection. A policy of that kind I believe would be fatal not only to trade within the empire but fatal to the future development of the empire in other respects, and I think this is the best moment at which to give expression to that view.
I repeat again, I hope my hon. friend will to-day, on Empire day, make at least a gesture of an attitude which really means that the government desires to see trade within the British Empire furthered through the reduction of duties in a way which will permit of the flow of commodities into this country, to be accompanied by a similar flow from this country into all other parts of the empire. I hope the minister will give us some assurance that at least something of the kind is in the minds of the ministry, or, better still, that at the approaching conference they may have something of the kind to propose.


Edgar Nelson Rhodes: I am quite sure that the right hon. leader of the opposition will not misunderstand me if I do not at this stage of the session attempt to reply to him at length, or that on the other hand he will not take exception if my reply is quite brief.
I am at one with my right hon. friend when he expresses a desire for trade within the empire. I do not think he need have any misapprehension thait it is in the mind of the government to erect a wall, as it were, around the empire, for the exclusion of trade with the rest of the world. While I have always been a strong advocate personally of empire trade, and I believe much can be accomplished for the benefit of the different dominions through the stimulus of empire trade, I have never understood that that meant that we were to

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trade exclusively within the empire and that it was to prevent us from trading with the world at large.
I have read the article by Sir Robert Had-field in the Dalhousie Review to which my right hon. friend referred, and I hasten to assure him that whatever merits or demerits may attach to the three per cent tax, it has no reference whatever to a revolving fund which is designed to be an adjunct to an empire zollverein. As a matter of fact, I think my right hon. friend has some misgiving upon the point. I beg to assure him there is nothing in the minds of the government with respect to the three per cent excise tax upon imports other than a desire to raise revenue. My right hon. friend has said the three per cent excise tax is a tax upon the people of this country; in great part, that is so. It does not always follow however, that the importer pays the tax. It is true that the importer goes to the customs house and takes out the goods; he goes through the physical act of paying money into the customs for the goods he takes out. It happens in many instances however that the tax is actually borne by the exporter. The mere fact that we have to apply the dump in certain instances is evidence of that fact.
May I point out to my right hon. friend, that whether this is a good or a bad tax the fact remains that the treasury of this country is in need of funds. We must raise revenue from some source, and if we do not raise it in this way we will raise it in some other way. In the last analysis the only money which comes into the treasury comes through taxation. That point therefore I do not think has any very marked bearing upon t'he argument. I can add very little, probably nothing, to what I said last night in reply to my right hon. friend with respect to the three per cent tax. Certainly I do not think it can be properly regarded as an added impost by way of customs when it is applicable to those commodities which are duty free. No one would suggest for a moment that a three per cent customs tariff would be any barrier worthy of consideration.


Ernest Lapointe: But it is added to the
tariff.


Edgar Nelson Rhodes: Yes; upon all goods in connection with which there exists an impost, and to which is added the excise tax, my right hon. friend's argument would have bearing. I would add, however, that it is applied to duty free goods. Furthermore I can add only what I said yesterday, namely that I do not think the other dominions within the empire
have regarded this impost other than as a revenue tax.
Arising from the remarks of my right hon. friend, only one other thought occurs to me, and that is to assure him that if we enter the Imperial economic conference, as I think we all ought to enter it, with a desire in our hearts not to drive a bargain but to enter into undertakings which will be mutually advantageous-


Ernest Lapointe: Hear, hear.


Edgar Nelson Rhodes: -we will be serving this country best. I think that is the attitude in which we are prepared to enter the conference. After conversations, if it is found that the three per cent tax requires further consideration I have not the slightest hesitation in saying to my right hon. friend that the government is not wedded to it, other than as a necessity of the moment, as a means of taxation.


John Livingstone Brown: I should like to have an explanation so that hon. members may know the meaning of the section. It says that there will be an excise tax of three per cent on the duty paid value. I presume that means that in the case of an article valued at S100 already bearing a tariff of 35 per cent the tax will be levied upon the $100 plus the $35, making it an equivalent to a four per cent tax on the invoice price of the goods. That seems to be the only construction which could be placed upon the wording. Does "duty paid value" mean the duty set forth in the Customs Act, and not dumping duties which may be added. I think we may very readily conceive that if the policy which has been put into force by this government is followed-that of raising duties by order in council, and levying dumping duties to such an extent that they exclude trade altogether-and the tax is paid on such goods, a very high tax may be the result.


Edgar Nelson Rhodes: The hon. member for Lisgar will find a definition of "duty paid value" if he will turn to section 85 of the Special War Revenue Act. At that place the definition is as follows:
"Duty paid value" shall mean the value of the article as it would be determined for the purpose of calculating an ad valorem duty upon the importation of such articles into Canada under the law's relating to the customs and the customs tariff w'hether such article be in fact subject to ad valorem or other duty or not, and in addition the amount of the custom duties, if any, payable thereon: Provided that in computing the "duty paid value" of tea purchased in bond in Great Britain-
And so on. I think that paragraph clearly defines the term about which the hon. member
Special War Revenue Act

has asked. I would say to him however that the three per cent excise tax upon imports is not applied to the valuation created by the dump.


John Campbell Elliott: I wish to direct a question to the minister with regard to the tax on telephone calls. As I understand it there is a general tax of six per cent. Does that apply to all calls, whether or not they are under twenty-five cents?


Edgar Nelson Rhodes: Yes.


John Campbell Elliott: Does that mean that on a twenty cent call there would be a tax of six per cent?


Edgar Nelson Rhodes: Yes.


John Campbell Elliott: And on a twenty-five cent call there would be a tax of five cents?


Edgar Nelson Rhodes: No; the tax of six per cent is applicable upon customers' accounts. That is to say, at the end of each month their long distance bill will be subject to a six per cent tax. The five cent tax applies to public pay stations, whether or not they have attendants, obviously at those places the sales tax would not be applied.


John Campbell Elliott: I take it, then, that on a local telephone call where connection with some other telephone company is necessary, and there is a charge of say, ten cents, there would be a six per cent levy thereon.


Edgar Nelson Rhodes: Yes; if that ten per cent charge is on a long distance call, there would be a tax of six cents on ten such calls.


John Campbell Elliott: I should like to urge upon the minister the fact that great hardship will be suffered by the people who are operating and patronizing local telephone stations. If there is to be a tax on calls on which the charges are only ten cents or fifteen cents, calls coming within the definition of "long distance calls" as described in the act, a great deal of bookkeeping will be necessary and very little revenue will be derived. The tax would be a nuisance to the people conducting telephone systems, and will constitute just that much more burden upon those who have to pay it. I am wondering if the minister would not consider eliminating taxes on telephone calls, unless the charges are over twenty-five cents, or even fifteen cents.


Edgar Nelson Rhodes: I may state to the committee with the utmost frankness that the method I had in mind in the first instance was to tax no message under 25 cents, and then make,it a graded tax. But the telephone companies themselves pointed out to me that
IMr. Rhodes.]
this would bring about unequal taxation and would cause them more difficulty than would be the case if we applied the straight 6 per cent tax to monthly accounts. That idea had not occurred to me; it arose from a decision arrived at during a convention in Winnipeg. The suggestion was made the other evening, in committee on the resolution, that even in the case of the 6 per cent tax it ought not to apply except to messages over a certain amount. The companies pointed out to me that to attempt to carry this out would double the cost of collection to the company, and they stated that the cheapest, the simplest and the most effective method was the one which they suggested, that is, the 6 per cent tax.
Of course all taxation is a burden, but there is this to be said, that in the case of a 25 cent call made by a subscriber his tax would foe li cents, which is not an excessive sum. On the other handj if you started out with a 5 cent tax on a 25 cent call the burden would be much more excessive. 1 admit that in the rural districts where conditions are not at all good every additional cent of taxation is a burden; but the difficulty in the imposition of a tax of this kind is to avoid some hardships, however slight they may be. I do not know conditions in the area in which my hon. friend lives, but I can speak of conditions in my native province, where there are many rural telephone lines owned by the farmers themselves, in many instances covering very wide areas. Those who use these lines will not pay any tax at all, because they have no long distance calls. When they install their telephone they have the run of the entire countryside covered by the system, so they at least will be spared. In any attempt to impose a tax such as this it will ' be found to impinge at some point, but taking it on the whole I think this is the fairest and most equitable method, which will result in the fewest injustices. At all events, after having had the tax in force for a year we will know a great deal more about it than we know now, and if we find that my hon. friend's fears were well founded we can remedy the situation next session.


John Campbell Elliott: I have here a resolution, of which no doubt my hon. friend has received a copy, from the Canadian Independent Telephone Association protesting against this six per cent charge. I was surprised to hear my hon. friend say that no objections to the tax have been raised by the telephone association. I know that in the section of Ontario from which I come there is the strongest objection, first as to the additional burden that is being imposed and also as to the difficulty of work-

Special War Revenue Act
ing it out on telephone messages where the charges are small, such as I have referred to. I do think it would not affect the revenue materially, and it would save a great deal of trouble, if my hon. friend could see his way clear to exempting from that tax even telephone calls costing less than 15 cents.
At one o'clock the committee took recess.
The committee resumed at three o'clock


John Campbell Elliott: Just before the committee rose we were discussing the question of taxes on telephone calls of 15 cents or under. I hoped I had the minister practically converted to the idea that the cost of upkeep in connection with the levying of a tax on 15 cent calls, which would be about nine-tenths of one cent each at the six per cent rate, would amount to as much as the total taxes that would be collected as a result of this imposition. I would again urge upon the minister that this falls upon a class who are at the present time carrying about all they can bear in the way of taxes, and in many cases a little more. It will cause a good deal of friction and difficulty, and it cannot possibly bring much revenue. I was going to suggest to the minister that possibly he might see his way clear to do something in connection with the proviso in subsection 2 of section 25 of the act:
Provided further that the tax imposed by this subsection shall in no case be greater than 25 cents on any one call.
He might add, provided also that no tax shall be imposed on calls of 15 cents or less.


Edgar Nelson Rhodes: Before the adjournment hour my hon. friend, inadvertently, I am sure, quoted me as having said something which certainly I did not intend to say, and which I do not think I said. If I remember correctly, he said that I had stated that no companies objected to this tax. I did not say that. What I said was that this form of taxation had been put forward because of representations made by companies. As regards the cost of administration, the telephone companies assured me that the method which is proposed in this measure is the one which will be most convenient, least expensive, and least difficult to handle. I do not assert my own views as of any value, but I may say that I approached the subject with an open mind. My idea was solely to tap a source of additional revenue. I do not think the fears of my hon. friend will be justified if the bill is passed in its present form, either as regards difficulty in collection or as regards the burden imposed. While, perhaps, it would be desirable from many points of view to exempt messages which pay a low toll, on the other hand, they are messages in respect to which the taxation is very light indeed. So that whatever method may be suggested, we are bound to encounter difficulties. I am satisfied, however, that on the whole the legislation which is now before the committee presents the minimum of difficulty.


Mr. MARCIL:: Some time ago I had the pleasure of sending on to the minister a communication from the Gaspe and Bonaventure Telephone Company, a local concern operating in the counties of Gaspe and Bonaventure, connecting with the New Brunswick system at Campbellton. They object to the tax on small tolls. Under the present system, if you telephone to a municipality adjoining the one in which you reside you have to pay a toll, but I understand that if a user is charged a toll of one dollar he has to pay six per cent.


Edgar Nelson Rhodes: Yes.


Charles Marcil: He may telephone six times at fifteen cents a call and pay only six cents.


Edgar Nelson Rhodes: Yes. If he had 10 ten cent messages the tax would be six cents.


Mr. NICHOLSON:: Can the minister give me an interpretation of what long distance calls might mean in circumstances like the following? I understood the minister to say this morning, with regard to local telephone organizations in his own province of Nova Scotia, covering a wide area, that there would be no long distance charge because of the fact that the citizens themselves controlled the system. They were local telephone companies with no outside or long distance connection. In the district of northern Ontario there are six or seven local township telephone organizations. The farmers themselves and the citizens in the villages group together into a small local system and there is a company that unites the whole group on Manitoulin island exclusively. One township connects with another through this non-metallic line, I may say. They have no chance of connecting with the Bell, no possible connection except in that district. Would a call from one township circuit to another township circuit by this company line come under the tax of six per cent in respect of calls of ten cents or fifteen cents, in one township or the other, as the case may be.


Peter Heenan: I have a letter from the commissioners of a system similar to the telephone system to which my hon. friend has referred. Along the Rainy river there are quite a number of municipalities and they
Special War Revenue Act

all practically own their own little telephone systems, all of them being joined in a larger rural organization. A message from one of these municipalities to another some distance away would be regarded as a long distance telephone call; it is so now. These people are poor farmers who are clearing jack pine lots. They would not mind paying on a long distance call to Winnipeg, a distance of 200 miles, but when they communicate from one municipality to another, going through each other's exchange, it is hardly fair to burden the residents in that part of the country with the extra taxation. The letter is signed by A. Sutton, secretary of the municipality of Chappie. I thought I would bring this matter up, and perhaps the minister can give me an answer when he replies to the hon. member for East Algoma.


Edgar Nelson Rhodes: As I understood it, if the annual charge which the individual subscriber pays for telephone use permits the unlimited use of that telephone, within the circuit owned by the company, no matter how far it may go, how wide an area it may cover, then none of these messages would be subject to the tax. But if the subscriber is called upon, by reason of connection with other companies, to pay what is known as a long distance toll, then that long distance toll would be subject to the tax. I cannot speak with regard to the situation on Manitoulin island; I shall have to make a more careful inquiry. It would be impossible to give a correct interpretation with regard to an individual district. If that is what is known as a municipal owned line and the subscribers have the unlimited use of the service, then they would not be subject to the tax, but if it involves an additional charge when they connect up with another area, the tax would be imposed.


Mr. SPOTTON:: Mr. Chairman, I desire to express my appreciation of the change the minister has made. I think it is a very fair arrangement but I agree with the hon. member for West Middlesex (Mr. Elliott) when he says that you can scarcely call a ten cent toll a long distance feeder charge. I have in mind certain farmers' telephone companies who have their centrals located out in the townships. In some cases these centrals are six miles or more from the marketing towns. A line goes into town to connect up with the Bell telephone and there is generally a charge of five or ten cents for this connection. I do not think such a call can be called a long distance call. I know there would be probably many difficulties in working this out but I suggest that the minister leave the door open for the officials to use their discretion. fMr. Heenan.]
I have one case in mind of a telephone company with its head office in a town of about five thousand. A charge of ten cents is made for a connection with the Bell telephone. These companies are doing a country business which the Bell telephone has refused to do. I had something to do with the formation of a telephone company twenty-five years ago, and I know that at that time the Bell telephone was out- to crush every movement for an independent telephone system. However, these companies finally got on their feet and now the Bell Telephone Company sends its representatives around to try to help them out. I am afraid an opportunity will be afforded to the Bell Telephone Company to buy these companies out; it will be another step towards a complete monopoly. If these switching charges and calls to marketing towns could be left out of the definition of a long distance call, I think a great deal of the annoyance would be eliminated. I do not think a ten cent call should be considered a long distance call.


Edgar Nelson Rhodes: I stated at an earlier period, I think when we were in committee on the resolution, that it was my judgment that a switching or service charge as such would not be subject to the tax. That is my interpretation of the bill, but if the call is what is known in the terminology of the telephone company as a long distance call, then it would be subject to the tax. There may be instances where service charges are not to be confused with long distance charges, and in that regard I can see no difficulty. I may say that if the situation as just outlined can be dealt with administratively there will be no desire on the part of the government to work hardship upon those users to whom my hon. friend has referred.


Mr. SPROULE:: Many of these rural lines
are owned by the municipalities or are run under private ownership and the Bell Telephone Company will have nothing to do with them except to exchange calls, perhaps for a five cent charge, but this charge is listed as a long distance call. I assume the minister was referring to the Bell telephone people when he said that it would be easier to figure a six per cent tax, but I do not think this company deserves much sympathy. They have lowered salaries but they have not lowered rates, and I think it is about time they should do something to meet the needs of the agricultural people. I would not have so much objection to the tax being applied on calls costing from twenty-five cents up, but I do not think it should be applied to these five-cent exchange calls. Those people who have

Special War Revenue Act
been economizing to build these rural lines are going to be directly hit by this tax. I can understand the minister's difficulty in raising revenue, but I think he must admit that this tax will cause a great deal of confusion. I suppose the Bell telephone people will expect remuneration for collecting this tax and when they are through with their charges I do not suppose the government will get very much out of it.


Mr. MORAND:: There is another phase of this matter to which I should like to refer. The Bell Telephone Company has set up exchanges in the towns ten or fifteen miles out from many cities, and a charge of ten or fifteen cents is made on all calls. Most of the business in these smaller towns is done with the larger cities and although the yearly charge may not be so great, these ten cent charges mount up considerably. These charges are listed on the bills as long distance calls but in my opinion they should not be subject to this tax. These calls are made in the ordinary course of business, because of them the cost of the telephone is very high and if an extra six per cent tax is added it will make the cost exorbitant to these telephone users.


Mr. COOTE:: I protest again against this
tax and ask the minister if he will not drop it now, and not to entertain the idea of continuing it a year. In Alberta we have a government owned telephone system which is dependent for patronage principally upon the farmers. As everyone knows the farmers have had a very difficult time, the price of wheat having dropped to one-third its former level. The farmer has been advised to go into mixed farming, and many of these farmers are today producing more butter and eggs than they ever did before. They are finding great difficulty in paying their telephone bills with eggs at two cents a dozen and butter at thirteen cents a pound, and they will find it still more difficult if the government imposes a tax on telephone charges. These people must put in long distance calls when they want a doctor, hospital or other emergency service. The situation to-day is so bad that many of the farmers have been forced to take out their telephones and those who are endeavouring to retain their telephones should not be penalized at this time with a tax of this nature. It is absolutely foolish for the government at the present time to impose on the Canadian people a tax of this kind. They are in no condition whatever to pay it; the only way in which they can get their money is through the sale of those commodities of which I have spoken. Let me repeat, so that this may sink into the minds of some
hon. members: with eggs at two or three cents a dozen at country points, these people cannot pay any more for their telephones than they are now doing, and it is not right for us to tax out of people's homes, those conveniences which they have been at great expense to install. That is what we are doing to-day and I want to protest very vigorously against it.


Edgar Nelson Rhodes: I do not think a six per
cent tax upon telephone tolls will have the effect of taxing telephones out of their homes.


Miss MACPHAIL:: Yes, it will.


Edgar Nelson Rhodes: I am not for a moment
suggesting that a six per cent tax is not an additional obligation to be met, but I would ask that the question of the rate be deferred for a little while. I shall revert to it before we take the bill out of committee. I am making some inquiries with respect to the question whether we can meet this situation in an administrative way. If not, I shall endeavour to suggest an amendment which will, I think, meet the great majority of the objections of members of the committee.


Agnes Campbell Macphail: I could not hear the
minister's last statement, but if the six per cent tax still stands, I want to say once again that it is a foolish tax, certainly from the government's point of view. May I point out that it will not endear the government to users of telephones, but the government, of course, must take that risk, no matter where it gets the tax. It is true that farmers are taking out telephones by the score, and this additional cost will persuade many more of them to take out their telephones. This is a very bad thing for the telephone companies, because in my constituency they are at present losing whole lines of telephones, and I presume this is only typical of what is going on in other places. If that is the situation, may I point out to the minister that we are just adding to our unemployment problem. Fewer people will be working on our telephone lines, and the whole process of tightening up business will continue. We take another turn on the spiral downward. Therefore I think this tax is extremely foolish; it will not bring in any appreciable amount of money and it will be irritating to those who have to estimate it, to the farmers and to the telephone companies. I am not sure whether the amount it will bring in will, even from the government's point of view, be worth all the irritation it will cause. I say to the minister quite sincerely: It will undoubtedly increase the number of telephones that will be taken out all over Canada.
Special War Revenue Act


Edgar Nelson Rhodes: I can assure the hon.
member for Southeast Grey that the government is labouring under no delusion on the ground of the popularity of either this or any other taxation measure. In fact, I do not know of any tax which is popular. The problem of all governments is to find a tax which may be least objectionable. But my hon. friend did not, I think, hear what I said. I said that I am making inquiries at the moment to see whether we can deal with the matter administratively so that the smaller tolls will not be subject to tax. If we find it cannot be met in that way, before the bill is taken out of committee I shall propose an amendment which, I think, will meet the objection.
Just one other word if I may. This is not a small matter, because the tax is estimated to bring in a minimum of three-quarters of a million dollars a year and in normal times it would bring in more than that.


John Campbell Elliott: My hon. friend is not
referring to the tax the removal of which we have suggested?


Edgar Nelson Rhodes: I am referring to the tax
on long distance tolls. Whether it is a wise tax or not I cannot say, but our neighbours to the south, in meeting their difficulties, are imposing a similar tax, so we are not breaking new ground.


Mr. BOYES:: I wish to make just a few remarks in connection with this tax on telephone calls. I have been interested in the observations made by several speakers in regard to local telephone companies and the transfer charges. I thank the minister for the change which he has made in connection with the tax on telephone calls. In the first place it was suggested that on all telephone calls from fifteen cents upwards we would have a tax of five cents. This is now changed to the present method. But the suggestion that I wish to offer and that, I believe, might be in some respects a solution, is that we eliminate the tax on all calls up to possibly twenty-five or thirty cents. It has been suggested that the exemption should be even higher than that.
I understand now that the proposition is that calls amounting to fifteen cents and upwards shall all be taxed at the rate of six per cent. If we would eliminate from the tax all calls, say up to twenty-five or thirty cents, we might then eliminate those transfer charges which have been mentioned by a number on this side of the house.


Edgar Nelson Rhodes: As a result of the inquiry I have made, I have not altogether satisfied myself that we can deal with this matter

administratively, so I am going to propose an amendment to section 25 to read as follows:
By adding after the word "call" in line 30 on page 7, the words "costing more than fifteen
cents.
That will eliminate from a percentage tax all tolls up to and including fifteen cents.


Mr. RYCKMAN:: I move accordingly.


The CHAIRMAN:: This amendment should come on section 25. We have passed that.


Edgar Nelson Rhodes: We shall have to move reconsideration. The amendment is to clause 3 of the bill, paragraph 25.


Armand Renaud La Vergne: Mr. Ryckman moves:
That clause 3. paragraph 25, be amended by adding after the word "call" in line 30, the words "costing more than fifteen cents."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 12-Excise tax of three per cent on duty paid value.
George Brecken Nicholson: I should like to draw the attention of the Minister of Finance to another excise matter. In this morning's Ottawa Journal, in the first column on the front page, there is an article headed "Canada stands to lose millions by United States action.' The action is to place an excise duty on lumber and copper going from Canada to the United States and this virtually means a prohibition in relation to both of those commodities.


Mr. SPENCER:: Reciprocitj'.


George Brecken Nicholson: 
Edgar Nelson Rhodes: I must ask my hon. friend from East Algoma to excuse me but I must rise to a point of older. If my hon. friend is to have the right to indulge in a debate which ought to be made either upon the budget or on a motion to go into supply every hon. member of this house will have that right. I submit that whatever merit there may be in my hon. friend's argument, and I am not questioning the merits in the slightest degree, he is dealing entirely with matters of tariffs. The bill before us has no reference to tariffs. It deals with taxation. It is a bill to raise revenue, and my hon. friend I am sure will not think me disrespectful if I do not reply to the argument he has made. It will be quite competent for him to make his argument at a later stage on a motion to go into supply, but by no stretch
of imagination can it be brought within the four corners of this bill and much less of the section we are now dealing with, and it is only fair to the committee, Mr. Chairman, that I should bring that to your attention.


George Brecken Nicholson: I have no desire to transgress the rules of the house but I submit that what I am dealing with is strictly an excise matter because I am dealing with the excise tax on our products entering the United States. I submit further that the right hon. leader of the opposition before the adjournment at one o'clock spoke for forty minutes and discussed everything within the scope of tariffs and taxation, the Imperial conference and arrangements that might be made for an interchange of commodities not only within the empire but writh the outside world as well. However, I am content to leave the matter for the present until the house goes into supply, but I shall bring it before the house before prorogation.


[Stage Direction]
Section agreed to.
On section 13-Monthly returns of taxable sales.
Mr. EULER:: I notice that by subsection 3 the penalty has been reduced from twenty-five to ten dollars. What is the reason for that?


Edgar Nelson Rhodes: There is no reduction, but a minimum penalty is fixed.


William Daum Euler: I note that the explanation on page 16 of the bill says that the section has been further amended to provide a minimum penalty of ten dollars instead of a maximum penalty of not more than twenty-five dollars.


Edgar Nelson Rhodes: Discretion is left to the magistrate to impose a penalty ranging from ten to one hundred dollars.


[Stage Direction]
Section agreed to.
Sections 14 to 19 inclusive agreed to.
Bill reported.
Mr. RHODES moved the third reading of the bill.
William Lyon Mackenzie King: Just before the bill is read the third time, Mr. Speaker, I should like to make another appeal to my hon. friend the Minister of Finance (Mr. Rhodes) and through him to the ministry with respect to considering if even yet it might not be possible to exempt from this special exoise tax or customs tax, as it really is, goods being imported into Canada from other
Special War Revenue Act

parts of the British Empire, thereby making self-evident to all parts of the empire and to the world at large the desire of our country to further inter-imperial trade by preferences. May I say to the government that "now's the day and now's the hour." This is Empire day. We are in the last hours of the session, and we are on the eve of an Imperial economic conference. Action of the kind taken by the government at this time would, I submit, create a very favourable atmosphere for the purposes of the conference and would be furthering in a concrete manner the introduction and extension of the preference.
There is one other aspect which I should like to call to the attention of hon. gentlemen opposite. There could be no finer evidence of the unanimous desire of members of all political parties in this House of Commons to further the development of trade within the empire by preferences than an action of that kind. I am sure if the ministry found it possible to take that step all hon. members on this side would support them, heartily. There would go out to all parts of the empire to-day, a declaration from this parliament, that all parties were united on a policy of empire preference, all united in action taken by the government which would give preference to all parts of the British empire. If done, it would anticipate as well the atmosphere which we hope will prevail while the conference is in session.


Richard Bedford Bennett: As the Minister of Finance (Mr. Rhodes) has already spoken in moving the third reading of the bill, I think it is perhaps appropriate for me to make a few observations. Those of us who have followed the proceedings in this house; those of us who followed the speeches throughout the recess of the right hon. gentleman who has just spoken, will realize that a very short word of four letters would describe the utterances to which we have just listened. But I shall not use that word; it may not sound well in this parliament. Those of us who read the speech delivered at Barrie, and the speech delivered at Winnipeg, and the utterances delivered in this house know just how much value to attach to the observations to which we have just listened. This gesture-this fine talk-* this-


An hon. MEMBER:: Say what you mean.


Richard Bedford Bennett: I shall say exactly what I mean. It is just calculated for external consumption, in the hope that someone may cable it to some newspapers, and have it noised
[Mr. Mackenzie King.)
throughout the world. Everybody in the house knows it; there is not a single member of this house who does not know it. Because, to rise on the third reading of a customs tariff bill and make a suggestion of that kind is only open to one construction. We are all familiar with it. The government has no intention at this stage of changing the policy which the Minister of Finance presented with his budget to this house, which has not only passed the resolution but has passed the bill now standing for third reading. And when it stands for third reading we have a repetition of what has been said at least three times in my hearing-I do not know how many times before-and there is an effort to add strength to it by repeating it. Does anyone think, anyone who is a serious member of this house-does a single hon. member think that the remarks of the right hon. gentleman are for any purpose but the hope of impressing someone?


Ernest Lapointe: It is a great answer.


Richard Bedford Bennett: But it is a true answer.


Ernest Lapointe: What a spectacle.


Richard Bedford Bennett: It is based on fact, and it seems to have disturbed the mind of the exMinister of Justice whose speeches in this house with respect to the empire are so edifying, but whose speeches made elsewhere are not so edifying. There has not been a single moment since this conference was suggested that hon. gentlemen opposite have not in every way in their power belittled it. They followed that course until they found it was an actuality. Now, confronted with the fact that it is an actuality they are endeavouring to make political capital out of it. The people of this country have intelligence; they understand. Everybody understands it, and everybody who reads the press reports understands it. If it is the desire of the right hon. gentleman, for the tenth time, to enter into a long discussion, to prostitute the glorious traditions of a great holiday for the purpose of making political capital out of it, I am content. No one believes for a moment that it accomplishes anything. The government in introducing this measure must have given some consideration to it; the Minister of Finance must have understood it when he presented it to this house. The budget was voted upon, and the number of votes recorded must give at least some indication of the general attitude of mind in this house and in the country.
Now, on the third reading, it is suggested that a change be made. No such change is contemplated; if it had been it would have

Montreal Harbour Commission
been made before the bill was introduced. Having passed through this house, first as resolutions and now as a bill it will stand for third reading. Of course it will go through as it is, as it has been adopted by the house, without change.


Ernest Lapointe: Mr. Speaker, I sincerely hope the
people of Canada will read the answer the right hon. gentleman has just delivered.


Richard Bedford Bennett: So do I, so do I.


Ernest Lapointe: His remarks have been
made in reply to a suggestion by the leader of the opposition that Canada should follow the example of Great Britain at the present time, before the Imperial economic conference, and exempt from this additional taxation on imports the products which might come from Great Britain or from the other dominions. The suggestion has been to follow Great Britain's plan with regard to products from Canada. My right hon. friend the Prime Minister has not given a single reason why this should not be done. He has merely thrown a heap of abuse on the head of the right hon leader of the opposition.


Richard Bedford Bennett: Hear, hear.


Ernest Lapointe: I myself have not been
free from the lecture by the Prime Minister. Let me tell him only this, that after listening to his vituperations of to-day-


William Richard Motherwell: That is the word.


Ernest Lapointe: -no one could wonder at the qualification applied to him two years ago by a member of the British government.


Richard Bedford Bennett: That is the reason we are having the conference.


Ernest Lapointe: If my right hon. friend
opposite attends the Imperial economic conference in the same spirit he has exhibited today, and the same spirit exhibited two years ago, I am afraid it will be a failure.


Richard Bedford Bennett: You hope so, anyway.


Ernest Lapointe: I only hope that my
right hon. friend will stabilize his nerves a little bit during the next two months and that he will be in a better position to speak intelligently and reasonably on the great problems with which he will be confronted.


Some hon. MEMBERS:: Carried.


Ernest Lapointe: We will not stand this
abuse any more.


Richard Bedford Bennett: I would not, if I were
you.


Ernest Lapointe: And I won't.


[Stage Direction]
Motion agreed to, and bill read the third time and passed.

[Stage Direction]
Hon. ALFRED DURANLEAU (Minister of Marine) moved the second reading of Bill No. 98, to amend the Montreal Harbour Commissioners' Act, 1894.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. LaVergne in the chair.
On section 1-Harbour property vested in crown.
George Gibson Coote: Will the minister say a few words in explanation of the bill?


Mr. DURANLEAU:: On the first reading
I gave a brief explanation, but if my hon. friend so desires I shall be veTy happy to supplement it. The object of the bill is to vest in the crown all the properties belonging to the harbour commissioners of Montreal. I refer to all those properties within and outside of the limits of the harbour of Montreal. Both shores of the St. Lawrence river are within the limits of the Montreal harbour. A few years ago, to cope with the developing trade, the harbour commissioners were obliged to extend their facilities beyond the harbour limits; for instance, the extension of No. 3 elevator is outside the boundaries of the harbour. By its original act, 57 and 58 Victoria, chapter 48, sections 20 and 21, the harbour commission of Montreal has the right to expropriate property outside its limits in order to extend its facilities. At present all the facilities within the limits are vested in the crown^ and the purpose of this bill is to remove the anomaly of the facilities outside the limits being vested in the harbour commission.


Robert Gardiner: Is there legislation limiting the area of the harbour?


Alfred Duranleau: Yes.


Robert Gardiner: Are the limits defined therein?


Alfred Duranleau: Yes, the limits of the harbour were defined by statute 4 and 5,



Montreal Harbour Commission
George V. At certain points the property is too narrow to erect any building, so the commission were granted power, by expropriation or otherwise, to acquire facilities outside the limits.


Robert Gardiner: Would it not be better to take into consideration some time in the future the possibility of extending the area of the harbour?
Mr. DURANLEAU; When we have acquired the necessary area for the extension of the harbour facilities we might ask parliament to extend the limits.


Robert Gardiner: Are these facilities outside the present limits of the harbour commission?


Alfred Duranleau: Yes.


George Gibson Coote: This bill will vest in the government all property now owned by the harbour commission, elevators and everything else?


Alfred Duranleau: Yes.


George Gibson Coote: Then does not the government assume all the obligations of the commission?


Alfred Duranleau: We do not assume any responsibility. The properties are in the name of the crown, but they are administered by the harbour commission.


Robert Gardiner: The corporation-the harbour commission-would have to be sued?


Alfred Duranleau: Yes.


George Gibson Coote: If the property is vested in the crown the commission will have no assets.


Alfred Duranleau: The harbour commission have no other assets than those which they are administering at the present time, and those are the assets of the crown.


George Gibson Coote: Then they are simply administering the assets of the crown?


Alfred Duranleau: Exactly.


George Gibson Coote: Then must not the crown assume all the liabilities?


Alfred Duranleau: Through the harbour commission, because the act constituting the commission makes them responsible, although the properties are vested in the crown.


George Gibson Coote: At the present time are all the liabilities of the harbour commission guaranteed by the crown?


Alfred Duranleau: The liabilities of the harbour commission which are guaranteed by the crown were guaranteed by special statute.

Eor instance, the crown was authorized by parliament to endorse the bonds for the Montreal bridge. In the absence of express guarantee there is no responsibility.


George Gibson Coote: Has the minister any information as to the value of the properties owned by the harbour commission affected by this bill?


Alfred Duranleau: Yes; their value is about $2,500,000.


George Gibson Coote: Including the Montreal harbour bridge?


Alfred Duranleau: No; the property expropriated for the approaches of the bridge, but not the bridge itself. The main part of the bridge is within the limits of the harbour.


William Daum Euler: By this action is the crown assuming any greater liability than it would have had without this bill?


Alfred Duranleau: No.


William Daum Euler: Nothing more?


Alfred Duranleau: No.


William Daum Euler: They are not taking over any liabilities for which they were not responsible heretofore?


Alfred Duranleau: No. All the other properties have been vested in the crown for years, and we have never been troubled with any responsibility concerning those properties.


William Daum Euler: That is, any obligations entered into by the harbour commission were also obligations of the Dominion government?


Richard Bedford Bennett: As guarantors.


William Daum Euler: In all cases?


Alfred Duranleau: When we were guarantors.


William Daum Euler: Were any securities issued for which the crown did not guarantee payment; and if so, are they now taking over those securities for which before they were not responsible?


Alfred Duranleau: No. By this bill the crown does not assume any additional responsibility. The only responsibility it takes is under statute as in the case of the bonds for tbr harbour bridge.


William Daum Euler: But I presume that in future the crown will guarantee everything because it owns all the properties.


Alfred Duranleau: The crown has always held all the property of the harbour commission within the harbour limits, and that constitutes the bulk of the property.

Montreal Harbour Commission


William Daum Euler: When any obligations were issued by the Montreal harbour commission did the crown, always guarantee payment, or did it do so only in some instances.


Alfred Duranleau: We do not guarantee the obligations of the harbour commission except by statute. The ordinary liabilities of the harbour commission were never guaranteed by the crown.


William Daum Euler: All right. In future by reason of the fact of taking over the property, will the crown become guarantor where formerly it was not? I am trying to find out whether the crown is assuming greater liability than ordinarily it had before.


Alfred Duranleau: I do not see that the crown is assuming any more responsibility than it has had up to date. We are only dealing with certain facilities that are not now vested in the crown.


William Daum Euler: Were there any obligations in connection with these additional facilities; and if so, does the crown now assume those obligations?


Alfred Duranleau: I do not think so.


William Daum Euler: It is rather important.


Alfred Duranleau: For instance, I do not see that there can be any liability with respect to these properties, because the harbour commission does not borrow money on them by way of mortgage.


Charles Marcil: As the minister represents the south shore of the St. Lawrence in the city of Montreal, naturally he is very much interested in the progress that is being made in connection with the harbour. If I understand correctly, the object of the bill is to cover certain purchases of land made by the harbour commission for the approaches of the bridge which are not now included in the limits of the harbour.


Alfred Duranleau: Not only those properties, but other properties which were purchased, for instance, in connection with the extension of elevator No. 3. This extension is outside the limit of the harbour. It has nothing to do with the approaches to the bridge.


William Daum Euler: Does this action with regard to the Montreal harbour differ from that with regard to the other harbours of Canada? Is an exception being made here?


Alfred Duranleau: No, it is the same
thing.
41761-210|


Charles Marcil: I see a lot of complaints
in the Montreal press that proper advantage is not taken of the Montreal bridge for the reason that the public have not the facilities they should have. I should like to know from the minister what kind of traffic goes over the bridge. Is a street railway system contemplated, and is there any access to St. Helen island's park, which is the most popular resort for the poor people of Montreal? Is any special inducement being held out to traffic generally? For many years before the construction of the bridge, the only communication between the south shore and the north shore was by means of a ferry running from Longueuil to the foot of St. Mary's current, but later on, with the enlargement of the Victoria bridge, a siding was placed on the bridge whereby some traffic was allowed to pass. That ultimately became insufficient and now I should like to know whether all the facilities which it is possible to give the public are being taken advantage of through the erection of this bridge, which has cost a large sum of money. I should think that the minister, representing that part of the province of Quebec which abuts on this bridge, would be delighted to give the public all the facilities possible. Will he give us an idea what kind of traffic goes over the bridge?


Alfred Duranleau: As is well known,
there is a middle space on the bridge which is used by automobiles, and on each side there is a sidewalk for pedestrians. Between the sidewalks and the middle of the bridge used by automobiles there is a space for the installation of tracks for a tramway. Last year, instead of the tracks being installed, an agreement was entered into with the Montreal Tramways Company for an autobus service on the bridge, the fare being ten cents, with the right of transfer on the lines of the Montreal Tramwa3rs. A citizen leaving the south shore, Longueuil, for instance, pays ten cents and enjoys first class bus service; and when on the Montreal side he can travel on the main lines of the Montreal Tramways Company. The people of Montreal and on the south shore are quite satisfied with the service that has been provided. There is a five or six minute autobus service on the bridge. We had an eight months' agreement and at the present time there is under consideration another agreement for a certain number of years. I know that the city of Montreal some time ago requested the harbour commission to permit children to go to St. Helen island free. The matter is now under discussion, but this committee will
Soldier Settlement Act

realize that the expenses in connection with that bridge, as well as the interest to be paid on bonds, were so considerable that we must be careful about the revenues of the bridge. We must see that it will bring in as much revenue as possible in order to reduce and, if possible, to discharge the deficit.


Charles Marcil: Are horse-drawn vehicles
barred from the bridge? Farmers do not own automobiles and they would like to cross.


Alfred Duranleau: Yes; such vehicles
are allowed at a reasonable rate.


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

[Stage Direction]
Hon. W. A. GORDON (Acting Minister of Immigration and Colonization) moved the second reading of Bill No. 100, to amend the Soldier Settlement Act.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. LaVergne in the chair.
On section 1-Transfer of lands to province or municipality.
Mr. REID:: In the supplementary estimates there is an item of $394,497 for payment of taxes in three provinces only. Is there any item in the estimates in respect of other provinces?


Mr. GORDON:: The item in the estimates to which the hon. gentleman refers is in fulfilment of an arrangement, sometimes called an agreement, which was entered into on March 29, 1930, among what is known as the Union of Western Municipalities, with respect to the payment of taxes on soldiers' lands. As I explained when the bill came up for first reading, it has been pointed out to the department that it is very questionable whether the department had the legal right to pay taxes other than taxes upon lands occupied by settlers as defined in the act. The item in the supplementary estimates to which reference has been made is to pay taxes in accordance with the agreement then entered into.


Thomas Reid: Why was not British Columbia included? That province, a few years ago, made representations to the Dominion government and also to the Canadian Union of Municipalities. I notice that in the supple-mentaries the reference is to Manitoba, Saskatchewan and Alberta.


George Gordon: This bill now has general
application all over Canada. I cannot give any information with respect to the negotiations that preceded the entering-into of that agreement.


[Stage Direction]
Section agreed to.
Sections 2 and 3 agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
The house resumed from Monday, May 23, consideration in committee of Bill No. 97, respecting the Waterton Glacier International Peace Park-Mr. Murphy-Mr. LaVergne in the chair.
On section 1-Proclamation.
William Richard Motherwell: Mr. Chairman, the
committee will remember that last evening I was in search of information with respect to this park, and I was able to obtain some from the remarks of the Minister of the Interior (Mr. Murphy). In justice to the bill and in justice to myself I do not think there is anything which would justify my opposition, in fact I think I will be obliged to support the bill but I regret very much the circumstances under which it was brought into existence. Why was it necessary to convert two previous national parks into an international peace park at a time when the Turtle mountain peace garden was just developing through the initiative of the people themselves? If ever a movement started spontaneously and with the real spirit of peace behind it, it was the Turtle mountain peace garden. When men put their hands in their pockets and get behind a proposition of this kind, it shows they have faith in the proposition. It is a comparatively easy matter for a body of Rotarians to shout for a park on the boundary line between the two countries when it does not necessitate their paying out any money. They appeal to the respective governments to go to it, they say they are behind it and forget the effect it may have on other proposals. There seems to be a desire on the part of larger bodies represented by the Waterton Glacier International Peace Park to thrust themselves into the front, at this time regardless of the effect it may have on other similar enterprises. The government will have to change its attitude unless it wants to be considered guilty of pre-natal strangulation of the Turtle mountain peace garden. That is what it is, particularly when it is realized that the

International Peace Park
birth date is due in less than two months July 14. The government should attempt to retrieve itself from occupying that unenviable position. Why is it necessary to move at this time? Are either of these parks, Waterton or Glacier in Alberta and Montana respectively, going to run away in the meantime? They have been there from time immemorial and they will be there after we have all passed away. The government should have waited at least until the birth date of the Turtle mountain proposition instead of butting in at this critical time.
It would seem as though this government cannot do the smallest public service without putting its foot in it. It disregards entirely the biblical injunction to "let not their good be evil spoken of." This park in Alberta is a good thing but no one can contemplate it without feeling that it has been conceived in a wrong spirit, one quite contrary to the spirit of peace. It seems to me a most astonishing thing that no matter what this government does it seems to go at it in the wrong way. That may be due to some innate cussedness on our part over here, but-


Some hon. MEMBERS:: Hear, hear.


William Richard Motherwell: -I can refer to a dozen instances like this, although this is the most recent outstanding ease of acting in haste and repenting at leisure. If ever a body of men went at a thing wrong end foremost, it has been hon. gentlemen opposite in connection with this park. I should like to read to the committee a telegram which shows how some of our Dakota friends feel about this matter. This telegram was sent by the representatives of the Protective Peace Garden Association of North Dakota to Hon. Gerald P. Nye, of the United States Senate.
It reads:
The United States section of the International Peace Garden Protective Association comprising the towns of Saint John, Rugby, Dunseith, Bottineau, Souris, including all religious, fraternal and social service organizations of the entire Turtle mountain area in mass indignation meeting assembled, vigorously protest against the prior passage in the United States Senate of the Glacier-Waterton Peace Park bill being as it is a parasite originating in and subsisting upon the very life blood of the international peace garden Turtle mountain project from whose prior inception and organization the former has purloined its crest, motto, synonym and ideal and thus masked is invading an international field sacred in the arts of the Bchool children and the men and women of both countries. It is a heart-thrust that must be averted. Surely Senator Walsh, an executive committee member of the peace garden project, will see the deception being practised, denounce it and withdraw the measure.
If the government could see its way clear to adopt that course without defaulting in its international agreement with the United States, that is what it should do in justice to itself and to the Turtle mountain proposal. If the government believes in having only one park between the Rocks' mountains and Winnipeg, then it must continue with the one represented by this bill and pay no regard to the proposition at Turtle mountain. If it believes in two parks, why should not both parks be treated alike? In view of the international obligations which apparently have been entered into with respect to this Alberta foothill park, that is the only course which can be followed in fairness to the province of Manitoba and that part of Saskatchewan which * was behind Manitoba. Turtle mountain should be made a national park and treated the same as the other one-Watertown glacier. Will the Minister of the Interior say that he will be good enough to take this matter under his, as we call it, very serious consideration? If it does not do that, then I am afraid he must be prepared to face trouble in Manitoba in the future. He will be preparing nails for his own political coffin. I have no such designs against the minister because for some reason or other I rather respect him. He is rather the opposite to some of the rest of us, he is a patient and mild mannered man. I know he would not tramp on a fly or a spider, and because of that I know I shall not receive the same kind of offensive reply as my right hon. leader did from the Prime Minister when he offered certain suggestions a few moments ago. In my opinion the only solution of this problem is to convert Turtle mountain peace garden into a national park, provided of course that the members of that organization of which I am a member-the international peace garden committee-are agreeable. Turtle mountain is being put in a relatively subordinate position to the park at the foothills of the Rockies, and nothing but disaster can result to the former unless some such proposal as I have suggested is taken up. The Prime Minister and the Minister of Finance naturally do not want to entertain any proposal that will involve further financial outlay at this time. Let them at least make the statement that possibly that might be the best solution and they will be pleased to enter into negotiations with respresentatives of the Turtle mountain peace garden with that end in view. I do not care a continental what the government does with the suggestion. That is the best proposal I can think of, and unless it or
International Peace Park

something better is followed, some hon. members from Manitoba are liable to be badly hurt as a result of the government's blundering action in this respect.


Richard Bedford Bennett: The ex-Minister of Agriculture is unduly concerned about this situation. The matter was first brought to my attention by a suggestion that the congress of the United States desired to name the park which is contiguous to the Waterton park in Alberta, a peace park, and as regards the use of the word "peace" between countries that are contiguous, it seems to me no harm can be done if the word is used many times. What I said to the Minister of the Interior was substantially what was read last evening by the ex-Minister of Agriculture from a letter of the Under-Secretary of State, namely, that if the United States congress enacted the legislation in question and gave to the park on the United States side of the forty-ninth parallel of latitude the name "Waterton Glacier International Peace park," we would be prepared to do so with respect to that portion of this area that comprises the Canadian park, now known as the Waterton park. But I made it clear that this action would not be taken until after such action had been taken by the United States and the bill had been signed by the president.
In order to show the good faith of parliament, the Minister of the Interior placed the bill upon the order paper and it stood there, not for any reasons such as the suspicions of the hon. gentleman suggested last evening, but until the president had signed the bill passed by the United States congress. That bill was signed, I think, some ten days ago. After it had passed the Senate and the House of Representatives, it stood for some time unsigned. When the Minister of the Interior was advised that the bill had been signed by the president, he proceeded, when the opportunity offered, with the introduction of his bill, and I am sorry that the hon. gentleman last evening suggested that the minister made no explanation, for he did make a concise and clear explanation of the reasons for taking the action. The bill now stands for further consideration by the house.
Waterton Glacier park is some 700 or 800 miles west of the suggested peace garden. It seems rather strange to suggest that an open park, through which runs the boundary line between two countries, which is to be maintained on the Canadian side as a park as heretofore and on the United States side as a park as heretofore, but bearing the name "International Peace park," and which is between 700 and 800 miles west of the peace

garden, should be inimical or destructive to the value of that peace garden. For my part I cannot follow that reasoning. I cannot understand in the least how it can be said to interfere with the peace garden in any way, shape or form. One is a natural park, just as nature has left it, except that roads have been constructed, hotels erected and various means taken to render its natural beauties more available to those who visit it. That is the Waterton park; that is the Glacier park. Now that they are merely to be known as one international peace park for the purpose of indicating that a boundary line passes through the park and divides two great countries and two great peoples who have lived in peace for many years and who, we all hope, will continue ever to live in terms of amity, good-will and peace, how that can affect a peace garden between Dakota and Manitoba, I am unable to understand. The very fact that the Minister of Agriculture in this government and the ex-Minister of Agriculture, are both, I believe, members of the executive or directing body of the peace garden organization; that the peace garden park, if you call it a park, because it is a garden, is very near the constituency of the Minister of the Interior in the province of Manitoba and that this peace park is west of the peace garden not only by part of Manitoba but the whole of Saskatchewan and is well towards the mountains in Alberta, should, it seems to me, in itself indicate that the government is not endeavouring, to "use the language which the hon. gentleman used last night, to play any favourites with regard to those organizations. In the one instance a name is given to an international park and the word that has been introduced is "peace" -international peace park-toy the action of the congress of the United States and the parliament of Canada. In the other case a voluntary organization, much to be commended, has established a peace garden some 800 miles east of that, between the state of Dakota and the province of Manitoba. That is the position.
I have recited the circumstances under which this bill finds a place upon the order paper and the exact reasons for its introduction, and certainly so far as I am able to understand from any persons with whom I have talked and who know the circumstances, they find it a little difficult to realize why you should imperil the existence of the one by giving a name to the other.


William Richard Motherwell: I like the recital which the Prime Minister has given. If it had been given last night, it would have been news to me, but now that we have the in-

International Peace Park
formation from the Minister Of the Interior and others, there is nothing new in his recital. Still, I thank him for it. Apparently the Prime Minister is unable to enter into the conception of the Turtle mountain proposition. It originated four years ago with the spirit of peace within it, and the people who were interested in it were prepared to put their money behind it, the same in Dakota as in Manitoba. Just as this first proposition is on the point of being born-July 14- another project, international in nature, national at the present time, but proposed to be made international, has sprung into existence. It would be, if you like, a very commendable enterprise at any other time later than this; but not having by any means been born necessarily of a peace conception it is going to assert itself regardless of all consequences to the smaller enterprise at the Turtle mountain. I may be a fatalist or something of that nature, but I believe no great good can come of anything that is born of hate, jealousy, strife, or of any improper motive, and before this government can hope for any great results from any proposal they choose to designate a peace proposition, it should be originated with peace motives behind it. Whatever the present motive may be, there is no doubt what will happen to the Turtle mountain proposition unless it is sponsored by something stronger than private enterprise at a time like the present. Even supposing we had sufficient capital to take care of it at the outset how are you going to maintain it from month to month and from year to year when it has to live largely on private givings and under the shadow of such a great enterprise 'as the one proposed by (his bill? Last night I used the expression "park at the foothills," as if on a parity with the Turtle mountain project, but I must admit I did not know then the extent of its present development. I have not one word to say against the proposition referred to in the bill, but it is coming into existence at a crucial time when it simply means the death of the other proposition. I speak of what I know fiom experience in such matters, and I speak of what the hon. gentlemen on the treasury benches must know. To finance privately a proposition of this kind now is one thing, but it was a vastly easier thing four years ago. Then it was thought nothing of to undertake a great proposition like that at Turtle mountain, but to do it now is an utter impossibility as I see it, and that is why I am urging the government to back up a little and start over again, and do for Turtle mountain what they are proposing to do in this bill for Waterton-Glacier peace park. Then you will
really start on a peace basis with some chance of promoting peace, but as I indicated last night I do not see much object to be gained by precipitating disappointments and friction between the Canadian provinces for the sake of promoting peace between parts of Canada and parts of the United States. I am sorry if the Prime Minister cannot see that point of view. I can understand him refraining from entertaining any proposition which means more expenditure at this time. I do not know that my proposition would involve immediate expenditure. I do not even know if it would meet with the approval of the Turtle Mountain Peace Garden committee.


Charles Hazlitt Cahan: They have never applied for governmental action. .


William Richard Motherwell: I know they have not, and that is all the more reason why they have my entire sympathy. I have been in undertakings, not so huge as that but of the same nature, where the undertaking depended upon the voluntary offerings of individuals and I know what has happened to some of them, and how some of them hit me. I know just about what the finish of this Turtle mountain peace garden will be unless the government metes out the same kind of financial treatment in the one case as in the other.


Richard Bedford Bennett: Might I assure the hon. gentleman that no commitments as to expenditures on this park as a peace park have been given or asked for-not any; and nothing has been added to the expenditures that ordinarily are made in Waterton park, nor has it been requested. It is merely the question of a name because the two parks are contiguous and are known as the Glacier park on the one side and the Waterton park on the other.


William Richard Motherwell: I am aware of that but a large expenditure has already been incurred and further expenditures will no doubt be incurred, for some development must take place in order to indicate and emphasize the international aspect of the park after this ' bill goes through.


George Gibson Coote: I would like to commend the government for their action in making Water-ton park part of an international peace park. If I could I would gladly say something to allay the fears of the hon. member for Melville. I do not suppose I could do that except by assuring him that here are two parks lying opposite each other on the two sides of the international boundary, on the one side Glacier park, and on the other side Waterton park. Waterton lake itself, which is the
International Peace Park

reason for that district being preserved as a national park, lies in the centre of Waterton park and extends into Glacier park, with about half of it in each park. It is an ideal site for an international peace park. There are some seven or eight hundred miles between this new international peace park and the peace garden, and I would suggest to the hon. member for Melville that when he goes west this summer he come out to Alberta and we will take him down to Waterton and show him this new international peace park. I am sure that if he could only see the location and the surroundings he would withdraw all opposition to this bill. He might still press for some assistance for the peace garden, but that is an entirely different matter. I do not think that the formation of the park asked for in this bill should be held up in any way because the hon. member for Melville may think that some assistance should be given to the peace garden. The two do not conflict at all, and I think it was a very happy suggestion to make these two parks an international peace park.


William Richard Motherwell: Did my hon. friend hear the telegram that I read a few moments ago, sent to a United States senator by the people of Turtle mountain on the Dakota side? They feel about the same way as I do. I am not holding up this bill, and I have no thought of doing so. I would vote for it at once if it came to a vote. I think it is an excellent idea, but why should not similar treatment be meted out to Turtle mountain when nothing less will suffice to bring it into existence and maintain it under the new conditions occasioned by this bill. That is my view, and if my hon. friend will come down to Saskatchewan or on a visit to Turtle mountain I shall be very glad to accord him all the courtesies, but I am afraid that unless the government supports the proposition I shall not have that pleasure.


Mr. MURPHY:: Just one word in regard
, to this project and I promise not to detain the committee or defeat the passage of my own bill. When the committee rose last night I was saying that along our international boundary we have many monuments and memorials to the peace that has existed between this country and the United States for one hundred years. One such memorial is located on the boundary line between British Columbia and the state of Washington, at White Rock, British Columbia, and at Blaine in the state of Washington. We have also the international peace bridge between Bridgeburg, Ontario, and Buffalo, New York, and we hope 
that this summer will see brought into being these two other memorials, namely, the international peace garden located on the boundary between Manitoba and North Dakota and the Waterton Glacier international peace park on the boundary line between the province of Alberta and the state of Montana. I do not share the fears of the hon. member for Melville that simply by naming this area as an international peace park we are in any way jeopardizing the success of the peace garden idea. I do not share those fears for this reason:	The peace garden idea was brought
into being through the voluntary efforts of citizens who are interested in promoting peace between the two countries, and in inculcating in the minds of the young the idea of peace for which all right-thinking people are striving. I do not see how, simply by naming an area some eight hundred miles to the westward as an international peace park, we are in any way jeopardizing the peace garden project. I agree with the Prime Minister that this does not interfere with the other project at all. It does not interfere in the slightest with the sentiment that has brought the peace garden idea into being. When we have people so much interested in bringing home to the minds of the young the ideal of peace, surely they are not going to cease their efforts now when their ideal has so nearly reached its consummation.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Ball reported, read the third time and passed.


[Stage Direction]
The house resumed from Wednesday, May 18, consideration in committee of Bill No. 94, respecting radio broadcasting-Mr. Bennett- Mr. LaVergne in the chair.
Richard Bedford Bennett: 
Mr. STEWART (Edmonton):: I think
those would be generous salaries.


Richard Bedford Bennett: It all depends. I move
that the blanks in subsection 2 of section 3 be filled in with the figures "$10,000" in the second line and "$8,000" in the last line thereof.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Richard Bedford Bennett: The hon. member for
Quebec South is not in the chamber, but may I say that after discussing the matter with my colleagues it was thought desirable, for this session at least, that the bill should stand without any provisions for superannuation, either payments or allowances. It was thought desirable to let it stand for this session.


Armand Renaud La Vergne: Shall I report the bill
as amended?


Richard Bedford Bennett: No; there are two other
sections. I would ask hon. members to turn to section 14, subsection 2. It was thought that the language in subsection 2 was hardly appropriate, that it was not proper to say that "parliament shall not" do anything. The amendment proposed is, "the moneys appropriated for such purposes shall not exceed" the estimated revenue from receiving licences. I have handed the chairman a copy of the amendment. The words I have given, namely, "the moneys appropriated for such purposes shall not exceed," would take the place of the words "parliament shall not appropriate for such purposes any sum in excess of."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Paul Mercier: The fee is
two dollars?


Richard Bedford Bennett: Yes. I would now direct the attention of hon. members to section 16. After the word "AH," the first word in section 16, it is proposed to add the words "revenues of and," to permit the Auditor General to audit the revenues.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Richard Bedford Bennett: With the consent of the
committee I purpose to add a new section 17, to bring the whole act under the operation of the Consolidated Revenue and Audit Act of 1931. I think the reason is obvious. As the expenditures are only such sums as may be voted by parliament, and as they are to be paid to the credit of the commission from time to time, it is essential that the Auditor General and the audit department should have control.


Ernest Lapointe: That is section 17?


Richard Bedford Bennett: Yes.


Armand Renaud La Vergne: Has the amount of
salary been placed in the bill?


Richard Bedford Bennett: I have asked that the
figures be added. The new section 17 would read as follows:
The commission shall be subject to the provisions of the Consolidated Revenue and Audit Act, 1931.


William Lyon Mackenzie King: All right.


[Stage Direction]
Section agreed to.
Richard Bedford Bennett: Owing to the fact that
we have inserted a new section 17, the present section 19 will be section 20. It will be recalled that the hon. member for Quebec South drew attention to the fact, as did the exMinister of Trade and Commerce, that as it read the section might be open to a wrong construction. I shall read the suggested section which will meet those difficulties:
20. Each assistant commissioner shall devote such time as may be necessary to the performance of his duties under this act, and shall not (except in respect of the compensation received by him as an officer or employee under the commission) have any pecuniary interest, either direot or indirect, individually or as a shareholder, partner, officer or employee, in broadcasting or in the manufacture or distribution of radio apparatus. .
I think that meets the difficulties pointed out by the hon. members I have mentioned. I move that the section I have just read, which will be the new section 20, taking the place of section 19 appearing in the bill, be accepted.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Richard Bedford Bennett: If the difficulties mentioned by the hon. member for North Waterloo have been overcome, as I think they have, perhaps the house will consider the language of the oath which I shall now read:
I do solemnly swear that I will faithfully, truly and impartially, to the best of my judgment, skill and ability, execute and perform the
Radio Broadcasting

office of chief commissioner (or as the case may be) of the Canadian Radio Broadcasting Commission, and that, while I continue to hold such office I will not accept or hold any other office or employment (add in the case of an assistant commissioner "except as an officer or employee under the commission") or have any pecuniary interest, direct or indirect, individually or as a shareholder or partner, or otherwise, in broadcasting or in the manufacture or distribution of radio apparatus.
I think that meets the situation about which my hon. friend spoke.


William Daum Euler: I think so.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Armand Renaud La Vergne: Shall I report the bill as amended?


William Daum Euler: There is a matter to which I should like to draw the attention of the Prime Minister. Perhaps it is not strictly in order, but as the estimates of the Minister of Marine have been passed I may be permitted to say what I have to say. One of the purposes in establishing the radio commission was to preclude any possibility of Canadian radio broadcasting stations passing under foreign control. I am told on very good authority that that principle has already been violated. A certain station on the border has been granted a licence; it is entirely under American control, and the whole purpose of the station is to broadcast in the territory of one large American city. I am informed that one of the new channels which we were so glad to obtain, instead of being used for Canadians, is used for the benefit of Americans. I make these remarks reluctantly, but if the report to me is true I certainly think action should be taken. Perhaps the hon. member for East Essex could give some explanation.


Richard Bedford Bennett: Does the hon. member
suggest that this has happened since the measure was introduced?


William Daum Euler: Very recently.


Richard Bedford Bennett: I think my hon. friend
is wrong.	[DOT]


William Daum Euler: While the officials of the
company controlling the station are Canadians, I understand that all the capital invested in it is American, and the officers who have to do with the business part of the station are on the American side.


Raymond Ducharme Morand: You are wrong.


William Daum Euler: I am quite open to correction-but am informed that the programs are all originated on the American side, and what is supposed to be a newly-acquired Canadian channel is really being thrown back for the use of our American friends.


Richard Bedford Bennett: I think my hon. friend
must be in error, at least with respect to the last part of his remarks, for I inquired of the minister whether any licences had been issued and he told me there had been no changes at all. So far as the first part of his observations is concerned, it is quite obvious that under this act the commission will have control.


William Daum Euler: Quite so. I am speaking
only of the use that might be made of the station in the interval before the commission gets to work. The licence was issued a year or a year and a half ago, and no use was made of it until later on American capital was interested. The construction of the station, I am told, is by American capital, and all the officers live in the city of Detroit. I might as well be definite-it is the station at Windsor. The capital is entirely American; the management is entirely in American hands; any revenues will go into the United States. The district to be served is the American side-Detroit. The Columbia Broadcasting Corporation have acquired control, I understand. Their purpose is to serve the city of Detroit, where they cannot themselves obtain a licence. I should regret very much if it were true that a Canadian broadcasting channel-and we have not as many as we should like-had after all been turned back to our American friends. I am saying this entirely in the interests of radio, and I trust a satisfactory explanation can be given.


Raymond Ducharme Morand: The hon. member for
North Waterloo (Mr. Euler) knows a great deal more about this station than I do myself. Channel 540 which is being used in Windsor was allotted some time ago to the city. It is a shared channel with Washington. Under this bill very definite power is given the commission to allocate channels to those parts of the country where they can be best used. It is certainly news to me that the station in Windsor is really a Detroit station, and I am quite sure it will also be news to those who are fathering the station. The station is built outside the city of Windsor, it is a Canadian station, and it will have to conform to all the provisions of the bill. Whoever is responsible for the broadcasting will have to submit to the rules and regulations of the commission.

United States Excise Duties


William Daum Euler: Quite so.


Raymond Ducharme Morand: I do not know what
capital has gone into the station. I do know the directors are Canadian, with the exception of one. The studio is in Windsor; I did not know there was a studio in Detroit. If it is the intention of these people to have a Detroit station in Windsor, undoubtedly they will find themselves obliged to comply with the rules and regulations of any commission that may be set up under this bill. I am quite satisfied that the intention is to give to that part of the country Canadian radio broadcasting-something which we have never had. In the city of Windsor we have never been able to get any programs from any part of Canada. It is no innovation for the Columbia company to give sustaining or advertising programs in Canada; they already have a station in Montreal-La Presse-and another in Toronto. I can assure my hon. friend that I am just as much interested in Canadian broadcasting as anyone can be, and I should be the first to resent the installation of a station in Windsor for the purpose of using it for Detroit.


Richard Bedford Bennett: I will ask the Minister
of Marine to read the remarks that have been made when we are in supply, and an opportunity will be afforded to mention the matter.
Bill reported, read the third time and
passed.



UNITED STATES EXCISE DUTIES ON COPPER AND LUMBER

[Stage Direction]
Hon. E. N. RHODES (Minister of Finance) moved that the house go into committee of supply.
George Brecken Nicholson: 
William Daum Euler: And mahogany.


Mr. CHAPLIN:: It does not come from the United States.


William Daum Euler: It comes through there.


George Brecken Nicholson: Canadian birch, maple, beech and ash will make just as good furniture with as good a finish, in three-quarters of the uses to which they are put, as either mahogany or walnut. If you go into some of
United States Excise Duties

our best buildings recently put up in Canada you will find that they are completely finished with Canadian birch. As two illustrations I will mention the Royal York hotel and what is known as the east block of the Parliament buildings in Toronto; they axe finished from top to bottom with Canadian birch.
The lumber industry as between the two countries has been on an equal basis; there has been no duty either way. My hon. friend from Macleod (Mr. Coote) suggested that this action on the part of the United States was reciprocal, being due to something that we had done. As a matter of fact, nothing has been done by the Canadian government in relation to either lumber or copper to bring this about.
I rose for the purpose of appealing to the government to take some action before this parliament prorogues to protect the Canadian industry as far as it is possible to do so. The opinion of the Canadian Lumbermen's Association is that if there is some evidence of determination on the part of the government to reciprocate, to use my hon. friend's word, it is possible that the bill will not pass the United States congress. It has passed the United States senate by a vote of three to two-36 against 24-and in the interests of Canadian workmen and of an industry which is second to no other industry in Canada in the matter of exports, I submit that proper action should be taken. The exports of forest products from Canada in 1930 and again in 1931, both in volume and in value, showed that lumber was the leading commodity in this country. Surely, therefore, under these circumstances it deserves some action when the United States senate or government, or whoever is behind the move, will deliberately set out to place an embargo against Canadian products.


William Daum Euler: I would not yield to my hon1. friend for East Algoma (Mr. Nicholson) in trying to protect a legitimate Canadian industry, but unfortunately we are here up against the proposition that what is one manufacturer's finished product is another manufacturer's raw material. 1 am speaking for the users of this raw material in my own city and in other parts of Canada. For example, the furniture makers in Kitchener, in the constituency I have the honour to represent, are having a very difficult time; some twenty-five furniture factories find it sufficiently hard now to make both ends meet. I should be glad to see the Canadian furniture makers use Canadian lumber. It would be a good thing if they could use

more Canadian birch and maple, and I am surprised to hear that there is sufficent oak in Canada of the kind they require, because they have been importing from the United States oak, as well as gumwood, mahogany and walnut. If they could adapt themselves to the use of Canadian lumber I should be only too glad to see them use the home product, but I would suggest to the government that they go very slowly in making any tariff changes which at the moment would embarrass an industry that finds it exceedingly difficult to make both ends meet. I offer this suggestion to the government for serious consideration before they take any drastic steps in the direction suggested. I submit that they should consider how it would affect the furniture industry.


Mr. B. M. STITT (Nelson):: I am in agreement with the hon. member for East Algoma (Mr. Nicholson). In my constituency there is one of the largest lumbering and manufacturing plants in western Canada, and owing to the American tariffs which were put into force two years ago this plant, which employs 1,000 men in the woods in winter and 500 in summer has had to curtail its activities considerably. Seventy-five per cent of its product is shipped to the United States, and 1 am fearful of what will happen under the new duty. Last winter 1,000 men were kid off and had to be kept by the federal and provincial governments. The domestic market in the west has about disappeared. Driving 300 or 400 miles through western Canada last year I did not see one building under construction, because the farmers have lost their purchasing power and cannot buy.
In connection with copper, I find myself in about the same position. We have the Hudson Bay Mining & Smelting Company, with an investment of $21,000,000, employing 1,200 men, working three shifts a day including Sundays. The Sherritt-Gordon mine in my constituency was forced to close down a week or two ago owing to the low price of copper, and I am afraid that this new duty on copper will result in the Hudson Bay Mining & Smelting Company taking the same course. If that happens, it will ibe nothing short of a tragedy.
I quite agree with the hon. member for North Waterloo that the government should be careful in whatever action it takes. It [DOT] has occurred to me that it would be well for the government to approach the United States in a spirit of friendliness. Seeing that the books are about balanced in regard to copper; seeing that we import a little more than we

Beauhamois Power Project
export, we might enter into some friendly agreement. At any rate, I have confidence in the government and I hope that something satisfactory will 'be brought about without resorting to retaliatory tariff increases.


Mr. A. E. MUNN (Vancouver North):: I am in accord with the hon. member for East Algoma (Mr. Nicholson). I am rather familiar with the lumber industry, and I can say that that industry has been hit harder than any other individual industry in Canada, not excepting agriculture during the present depression. We appreciate the farmer's troubles and we should all be very glad to see the farmer more .prosperous because that means business for us. But the lumber industry has been hard hit, and I hope that the government will watch developments carefully and do everything they -can to .protect that industry in Canada.
I will not go into the question of hardwoods. As the hon. member for East Algoma has said, we could get along without some of the American hardwoods by using native hardwoods. On the coast in British Columbia the American market has been our best .market for lumber and shingles, and if a duty is imposed on these it will put us out of business for the time being until we can find markets elsewhere.
The copper business has also been hit very hard. In my riding, Vancouver North, there is the largest copper mine under the British flag, giving employment to 1,200 or 1,500 people. They are still operating, but if this duty is put on copper they will be forced out of business, temporarily at any rate, and goodness knows for how long. I do sincerely hope that the government will take proper action in this matter. They have not heard very much from the poor lumberman; they have heard from the farmer and others; but as a lumberman I appeal to them to do everything possible to protect the industry in Canada.



BEAUHARNOIS POWER PROJECT

[Stage Direction]
ducted by the committee of the other house as well as by a commission appointed by the Ontario government, and I did not feel that I would be justified in discussing the subject while these investigations were proceeding. In view, however, of the nearness of the close of the session I am afraid I shall have to proceed irrespective of the fact that the Ontario commission is still sitting and taking evidence. The matter I wish to discuss is in connection with the Beauharnois project, and I intend to deal with it more from its present position than from the point of view of anything which has taken place in the past.
I am desirous of discussing this matter primarily because of the statement made by the Prime Minister (Mr. Bennett) on April 18. On that occasion the Prime Minister gave us some information which had not been previously at our disposal, and I wish first to invite the attention of the house to some of the references made by the Prime Minister at that particular time.
The Beauharnois project was investigated last year by a committee of this house. Since then many things have occurred and the Prime Minister was good enough to give us certain information. I do not intend to go into the details of what the Prime Minister said, but I should like to call attention to one or two important statements. The statement with regard to the agreement entered into between the Beauhamois Light, Heat and Power Company and the Beauharnois Power Corporation appears at the bottom of page 2103 of Hansard. The following is a portion of section 6 of the agreement:
(a)	for the payment of any of the obligations and liabilities assumed by the corporation under the said agreement dated the 31st day of October, 1929, between the corporation and the Beauharnois power syndicate, which obligations and liabilities are hereby assumed by the company as hereinafter set forth, or
(b)	for the payment of expenditures from time to time made or proposed to be made, either by the company or by any subsidiary company or companies of the company.
Robert Gardiner: Mr. The agreement continues over to the next Speaker, before you put the motion to go page, but I think what I have read will into supply I should like to discuss a very suffice for the moment. In the agreement it important matter, and it is my intention be- is stated that the Beauharnois Power Cor-fore concluding to move an amendment to poration, the holding company, will turn over the motion. I regret having to deal with this to the Beauharnois Light, Heat and Power question towards the end of the session; I Company the sum of $22,250,000. That is realize that hon. members feel that the time the amount which we understood had been has come when the business of the house turned over to the company after the sale should be concluded and we should get away of $30,000,000 worth of collateral trust bonds, as soon as possible, but I did not take it up Hon. members will remember that the inearlier because investigations were being con- formation given to the house last year was
33i>0
Beauharnois Power Project

other works appurtenant to said canal, now executed or hereafter to be executed, are hereby declared to be works for the general advantage of Canada.
That, of course, is declared under a certain section of the British North America Act with which I shall deal later.
I hold in my hand order in council PC. 504 which was approved by His Excellency the governor general in council on Tuesday, March 1, 1932. I wish to call the attention of the house first to section. 26 of this order in council, which contains two clauses that I am going to read to the house and then point out their implications. The first clause of section 26 reads as follows:
(1)	That in case it shall be judicially determined that His Majesty has any property right in or the right to use or to grant the use of the waters of the river St. Lawrence for the development of hydro-electric power by the diversion of said waters which is authorized by the first hereinbefore recited act of the parliament of Canada, then and in such event the company shall pay to His Majesty such compensation therefor by way of annual rental as the governor in council may from time to time determine, and shall comply with all orders, rules and regulations which may be made by the governor in council with respect to the rentals to be paid to His Majesty, the sale of such power, the regulation of the price thereof and all or any other matters dealt with by or under the Dominion Water Power Act or Acts in amendment thereof.
That first clause deals, of course, with the question whether His Majesty has any property rights in these waters. When we come to the second clause of section 26 we have another situation. That clause reads as follows :
(2)	That in case it shall be judicially determined that the parliament of Canada has legislative jurisdiction over or in respect of the use of the waters of the river St. Lawrence for the development of hydro-electric power by the diversion of said waters, which is authorized by the first hereinbefore recited act of the parliament of Canada, then and in such event the company shall comply with all orders, rules and regulations -which may be made by the governor in council with respect to the sale of such power, the regulation of the price thereof, and all or any other matters dealt with by or under the Dominion Water Power Act, or Acts in amendment thereof.
That clause deal's with the legislative powers of parliament, and that is the distinction between the two clauses. It will be noted that both these clauses deal 'practically with the question of regulation and control, more particularly of the sale and the price of the power. When in May, 1930, I had the privilege of first bringing this matter to the attention of the house, the .present Prime Minister waxed eloquent as he pointed out that in the order in council P.C. 422, which had been passed by

the King government, there was no clause which had anything to do with or contemplated a restriction of the price which these people might demand for their power. Now, Mr. Speaker, in this order in council P.C. 504 the situation is exactly the same. There is only a slight difference between the two orders in council in that respect. The only difference is that this order in council P.C. 504 does to some extent contemplate the possibility that at some time a decision will be .made on this matter, and if that decision is favourable either to His Majesty in the right of the' dominion or by virtue of the legislative powers of this parliament, then it will be competent under this order in council for the government to take such action as may be necessary to regulate the price to be charged for this electricity. I merely wish to call the attention of the house in passing to the fact that so far as the control of the price of the electricity to be sold by this company is concerned we have nothing at the .present time which gives the federal government authority to determine what that price shall foe or whether it is a fair price or otherwise. That is the situation with regard- to that particular order in council.
I come now to the question which is probably the most important of all, namely the question of ownership of this power. There is no doubt at all, Mr. Speaker, that the ownership of this power is in dispute. If anyone thinks that that is not so, all I have to do is to refer him to the factum prepared by the Attorney General of Canada and submitted to the Supreme Court of Canada in 1928. I have a copy of that factum in my hand, and I find on turning to the last page that it is signed by Messrs. Lucien Cannon, N. W. Rowell, Charles Laurendeaiu, H. J. Symington, C. P. Plaxton, Vincent C. MacDonald.
A colleague suggests that it was a good outfit, and I believe that it was. When I study the different arguments which were put before the supreme court I must admit that these legal gentlemen made a very good job of the case which they had placed before them by the government of the day.
Turning to the factum we find that there were ten different questions submitted to the supreme court. It is not my purpose this afternoon to deal with all these questions or with the argument which the Attorney General put up on behalf of Canada before the supreme court. I shall deal only with those questions which I think are pertinent to this Beauharnois project, and I am going to take the time to make a few citations in order that the house may be made acquainted with the

Beauharnois Power Project
argument and possibly see the reason why some action should be taken in the near future with regard to these matters.
This reference to the supreme court, as I have already said, was primarily for the purpose of securing from the court an opinion as to the rights of the dominion as against the provinces in so far as the waters and water powers are concerned. In order that the principles set out in this factum may be thoroughly undSrstood it would be well for me to say at this point that in my judgment the St. Lawrence river is not merely an interpro-vineial river, but an international river. As the river flows through more than one province, it is an interprovincial river. It is an international river also because of the fact that we have certain treaties with the United States in regard to it, and one of the most important points in one of those treaties to which I desire to call the attention of the house is this: Article XXVI of the treaty of Washington of 1871 reads in part as follows:
The navigation of the river St. Lawrence, ascending and descending from the 45th parallel of north latitude, where it ceases to form the boundary between the two countries, from, to. and into the sea, shall forever remain free and open for the purposes of commerce to the citizens of the United States, subject to any laws and regulations of Great Britain or of the Dominion of Canada, not inconsistent with such privilege of free navigation.
It will be seen by that, Mr. Speaker, that the citizens of the United States have the right of free navigation on this river. That right arises by treaty between Great Britain and the United States. Therefore, when I make the statement that in my judgment this river is not only interprovincial but international in character, that is the ground for my statement. Furthermore, there is the treaty of Washington of 1909. By that treaty, an international board of commissioners was set up. When it comes to a question of navigation on the St. Lawrence river, any possibility of impediment, any question of free ascent or descent of that river by the citizens of the United States or Canada, must be submitted for decision, under the treaty of 1E09, to the international joint board. Therefore on that ground also we have in the St. Lawrence not only an interprovincial but an international river.
The part of the factum which deals with the St. Lawrence river particularly, and can be read more or less in conjunction with the present development of the Beauharnois project, will be found on pages 53 to 91. I refer the committee more particularly to page 60. paragraphs 83 and 84; page 61, paragraphs 41761-211
84 and 85, and paragraph 2 on page 62. At page 53 we find question 4, one of the ten questions in the factum. It is as follows:
By section 108 of the British North America Act. 18(57, and the first item of the third schedule thereto, the following public works and property of each province amongst others, shall be the property of Canada, namely, "canals with lands and water-power connected therewith."
Has the province any proprietary interest in or beneficial ownership of or legislative control over the water-power which, though connected with the said canals, is created or made available by reason of extensions, enlargements or replacements of said canals, made by the dominion since confederation and which is not required from time to time for the purposes of navigation?
In attempting to argue in favour of the dominion in respect to the determination of this question the Attorney General of Canada made reference to section 108 of the British North America Act, which reads as follows:
The public works and property of each province enumerated in the third schedule to this act shall be the property of Canada.
There is referenlce here to items numbers 1 and 5 in the third schedule to the British North America Act. Number 1 is as follows:
Canals, with lands and water-power connected therewith.
And number 5:
Rivers and lake improvement.
It will be argued of course-or it could be argued,-that there may be some question whether this particular work might come under that section. I wish to place before the house the following argument: Under section 108 of the British North America Act, the canals and improvements owned at that particular time by the provinces became the property of the Dominion of Caniida when confederation was completed. As example, one might mention the Trent canal in Ontario, or the! old Beauharnois canal in Quebec. Incidentally the section in the British North America Act which deals with that question states that the waters incidental to these canals become the property of the dominion.
That is onel phase of the situation. Some hon. members might even go so far as to say that canals constructed since confederation; by the expenditure of either provincial or dominion public moneys, together with water powers connected therewith, should belong to the dominion and not to the provinces. Furthermore it is generally conceded that any replacements of the various canals existing at confederation which passed to the dominion,



Beauhamois Power Project
or enlargements or extensions thereof, shall also belong to the dominion, together with the water-powers in connection therewith. Let me given an example of that possibility. On the Beauhamois section we have what is kn'own as the St. Louis feeder. The St. Louis feeder passed to the Dominion government at confederation, and for over thirty years it has been collecting rentals from the people who leased the feeder. Ii so far as the Beauhamois canal is concerned, one might argue that it is a replacement of the St. Louis feeder. If that point of view is taken there can be no question that the rentals from the water passing through the Beauhamois canal belong to the dominion. On the other hand it may be argued that the new Beauhamois canal is a replacement of the old Beauhamois canal which became, the property of the Dominion of Canada by virtue of section 108 of the British North America Act.
Hon. members will recall that the old Beauhamois canal became obsolete, and was replaced by a new one, the Soulamges canal, on the north side of the river. Now it is proposed that because of the. possibility of our entering into am agreement with the United States to provide a deep seaway on the St. Lawrence river, this new Beauhamois canal should become part of the deep seaway. Are we not justified in arguing tha-t the new Beauhamois canal is a replacement of the old one, or a replacement of the Soulaiiges canal which to-day is the property of the Dominion government? That is the argument which the attorney general 'on behalf of the then government placed before the supreme court. So far as I can see, his argument in that regard was well taken.
There is another point of view I should like to bring to the attention of the house which arises out of the action of this parliament last year in declaring the new canal to be a work for the general advantage of Canada. In the order in council before me provision is made, further, that at some time in the near future title shall be granted in the canal by the Beauhamois Light, Heat and Power Company to the government of Canada. By that title the dominion will become owners of the canal. By virtue of the legislation passed last year declaring this work to be to the general advantage of Canada I cannot for the life of me see how any argument can be lodged against the contention that the dominion owns the waters flowing through that canal. Of that, in my judgment, there is no question. Let me deal with it under another part of the British North 
America Act-schedule 3. This schedule covers "provincial works and property to be the property of Canada.'' Paragraph 1 reads:
Canals, with lands and water-power connected therewith.
Paragraph 5:
Rivers and lake improvement.
I submit this would enable the government to contend that the water flowing through the new Beauhamois canal is the property of the dominion because of this work being first of all declared to be for the general advantage of Canada.


Armand Renaud La Vergne: Order. The
hon. member has spoken forty minutes.


Robert Gardiner: Mr. Speaker, it is my purpose to move an amendment before I take my seat, and it being equivalent to a want of confidence motion, I claim this exempts me from the application of the forty minute rule.


Armand Renaud La Vergne: The hon. member would be right if he had moved an amendment, but not having done so, it is for the house to decide whether he shall proceed.


Robert Gardiner: It has always been the practice for the member to move the amendment before sitting down, but I will move it now and continue my remarks.


Armand Renaud La Vergne: I have no objection, but the hon. member's time has expired and he can proceed only with the consent of the house.


Robert Gardiner: I must confess, Mr. Speaker, that the rule has never been so interpreted before. However, I am in Your Honour's hands. I will send you a copy of the amendment in order that you may satisfy yourself that I intend to move it.


Armand Renaud La Vergne: I do not desire to force the hon. member to cut short his observations, especially on this question, but standing order 37 reads:
No member, except the Prime Minister and the leader of the opposition, or a minister moving a government order and the member speaking in reply immediately after such minister, or a member making a motion of "no confidence" in the government and a minister replying thereto, shall speak for more than forty minutes at a time in any debate.
The hon. member has spoken forty minutes without moving a want of confidence motion. Therefore I must apply the rule. Having exhausted his time, only by unanimous consent may he move his amendment.

Beauharnois Power Project


Richard Bedford Bennett: On the point of order,
I understand that His Honour the Speaker has already ruled this session that unless a motion of no confidence is moved within the forty minutes, obviously the member who has the floor cannot proceed beyond that time. The rule says that "a member making a motion of no confidence in the government" may speak more than forty minutes. Having exhausted his forty minutes without having made such a motion, the hon. member cannot proceed further. So far as I am concerned, I have no objection, but the rule of the house must be clearly understood.


Armand Renaud La Vergne: By unanimous consent I suppose the hon. member may proceed.


Some hon. MEMBERS:: Carried.


Richard Bedford Bennett: I suppose the reason is
obvious. Non constat that the member would be excluded from the rule by the amendment he proposes to move. The amendment must be read first in order that the house may be seized of the matter under discussion.


John Livingstone Brown: Mr. Speaker,
on former occasions when a similar situation has arisen the motion of no confidence has been moved after the moving of the government order to go into supply, and therefore the forty minute rule did not apply to the hon. member moving such amendment. Had not the hon. member for Acadia been preceded by the hon. member for East Algoma, he would have seen the necessity of moving his amendment within the forty minutes.


Armand Renaud La Vergne: I have read the amendment to be moved by the hon. member for Acadia, which I understand is for the appointment of a royal commission. Of course, I have had to peruse it hurriedly, but I fail to see that it is a motion of want of confidence.


Robert Gardiner: Will you permit me to read my amendment, Mr. Speaker? Then I shall be quite willing to place myself in the hands of the house.


Armand Renaud La Vergne: As the hon.
member knows, I want to be as fair as I can, but I must apply the rules. He has exhausted his time and can proceed only by unanimous consent. As far as his proposed amendment is concerned, I fail to see that a motion asking for the appointment of a royal commission can be interpreted as a motion of no confidence in the government.


Richard Bedford Bennett: You might call it six
o'clock, Mr. Speaker, so that the point may be considered during recess.
At six o'clock the house took recess.
41761-211J
After Recess
The house resumed at eight o'clock.


Robert Gardiner: Before the house rose
at six o'clock, Mr. Speaker, a question was raised by the Deputy Speaker as to whether I was in order in continuing to speak-


Pierre Édouard Blondin: Is the hon. member speaking to a point of order?


Robert Gardiner: No. I am bringing to your attention, sir, what happened before six o'clock, and I desire to have your ruling on the question. This afternoon, when the motion was made for the house to go into committee of supply, some other hon. members discussed a certain question but no motion was placed before the house. After they had finished discussing that particular question, I rose to discuss the Beauharnois project, and I intimated at the time I rose that I intended to move an amendment to the motion to go into supply. After I had spoken for forty minutes, the Deputy Speaker ruled that, inasmuch as that allotted time had elapsed, I was not in a position to continue. I thought that under the rules I was entitled to go on, inasmuch as I had intimated my intention to move an amendment. The question was left in that stage when the house rose at six o'clock, and I should like to have your honour's decision with reference to the Deputy Speaker's ruling in that regard.


Pierre Édouard Blondin: If, as the hon. member
states, he had spoken forty minutes, it is not within the rule, standing older 37, for him to speak any longer, and he has no right to continue his address, even to move an amendment or to make a motion. Standing order 37 is explicit:
No member, except the Prime Minister and the leader of the opposition, or a minister moving a government order and the member speaking in reply immediately after such minister, or a member making a motion of "no confidence" in the government and a minister replying^ thereto, shall speak for more than forty minutes at a time in any debate.
I cannot see that the hon. member comes within any of these exceptions.


Edward Joseph Garland: Except by unanimous consent.


Robert Gardiner: Would not the amendment come within the rule, in so far as a vote of no confidence is concerned?


Pierre Édouard Blondin: I have read the proposed amendment and I do not regard it as a motion of want of confidence.
Beauhamois Power Project


Mr. ALFRED SPEAKMAN (Red Deer):: In order to overcome this difficulty, and in order that the hon. member for Acadia (Mr. Gardiner) may again speak, being then within the rule, inasmuch as he will speak to the amendment, I propose, without debate, to move the aforesaid amendment. Seconded by the hon. member for Camrose (Mr. Lucas), I move:
That the motion be amended by striking out all the words after the word "that" and substituting the following therefor:
inasmuch as parliament by enacting chapter 20 of the statutes of 1932 declared the Beau-harnois canal and the works appurtenant thereto to be a work for the general advantage of Canada it is the opinion of this house that the government should proceed without delay to determine the legality of the claim of the province of Quebec to own the water-power created or made available or to be created or to be made available by the diversion of water through the Beauharnois canal and to charge rentals therefor, and should it be determined that the ownership of such power is properly vested in the dominion-then this government should submit, ait the earliest possible date, the necessary legislation enabling the government to exercise the said rights of ownership to nationalize the whole project in order to protect the national interest and for this purpose to create a federal hydro-eleotric commission.
And further in the opinion of this house that the government should without delay take all necessary and proper steps to determine whether or not the act passed by the legislature of Quebec granting the charter of incorporation of the Beauharnois Light, Heat and Power Company and the amendments thereto are ultra vires of the province of Quebec.
And further in the opinion of this house a royal commission should be appointed to investigate the reasons for and the manner of the payments made out of and ultimate disposition of all moneys derived from the sale of the $30,000,000 worth of collateral trust bonds issued by the Beauharnois Corporation Limited, and to investigate the prospectuses, statements, circulars and advertisements issued by and/or used with the concurrence of the first board of directors of the Beauharnois Light, Heat and Power Corporation Limited and which were used in the sale and disposition of the said $30,000,000 worth of collateral trust bonds, with all necessary and appropriate powers and to report back.
I have not prepared myself to speak on the subject, and I have no intention of further delaying the house, but I move the foregoing amendment in accordance with the rule.


Charles Hazlitt Cahan: I rise to a point of order.
The proposed resolution involves a very large and almost unprecedented expenditure of money by way of nationalizing the Beauharnois power project and developing and extending it, and such a resolution can be introduced only by a member of the government, with the approval of His Excellency

the Governor General, who should recommend it to the house.


Robert Gardiner: Speaking on the point
of order, Mr. Speaker, may I call your attention to the fact that in the amendment proposed by my hon. friend from Red Deer (Mr. Speakman) it is stated very emphatically that "in the opinion" of this house the government should do certain things. It does not command the government, which, of course, the house cannot do, to do those things, and with that proviso "in the opinion of this house," I submit that the resolution cannot be construed as one which involves the expenditure of money.


Pierre Édouard Blondin: In my opinion the objection raised by the Secretary of State (Mr-Cahan) is well taken. The amendment is a duplicate of the amendment sought to be moved by the hon. member for Acadia, and as I read it, it is not a mere abstract resolution which does not involve a future grant. It does not say that the government should consider taking the procedure outlined, but if carried is a direction of the house to the government to take proceedings necessarily involving grants of public moneys: First, to determine the legality of a claim of the province of Quebec; secondly, to determine whether an act of the legislature of Quebec is ultra vires or not; thirdly, to appoint a royal commission-all three of necessity involving the expenditure of public money.
For that reason, in my opinion, it is not in order for a private member to move the resolution, nor would it be in order for a member of the government to move it without following w'ell-defined procedure relating to the presentation and discussion of such resolutions, as defined by standing order 60 of this house, which further safeguards the principle by prohibiting the consideration and debate of a motion which involves any public aid or charge upon the people, even when made by a member of the government, upon the day it is made, and provides that it shall be adjourned to a future day and then be referred to a committee of the whole house before any resolution or vote of the house do pass thereupon.
"Bourinot, at page 406, quotes section 51 of the British North America Act, as follows:
It shall not be lawful for the House of Commons to adopt or pass any vote, resolution, address, or bill for the appropriation of any part of the public revenue, or of any tax or impost, to any purpose that has not been first recommended by a message of the governor general in the session in which such vote, resolution, address or bill is proposed.

Beauhaniois Power- Project
The constitutional provision which regulates the procedure of the Canadian commons in this respect applies not only to motions directly proposing a grant of public money, but also to those which involve a grant.
And Bourinot says further:
No cases can be found of any private member in the Canadian commons receiving the authority of the crown, through a minister, to propose a motion involving the expenditure of public money. No principle is better understood than the constitutional obligation that rests upon the executive government, of alone initiating measures imposing charges upon the public exchequer.
In my opinion this resolution if passed would be a direct order from the house to the government to do certain things which would involve an expenditure of public money. Therefore, I say such a resolution is not in order when moved by a private member.


Edward Joseph Garland: Mr. Speaker, I think it is to be regretted that the resolution was not framed in the language which would permit Your Honour to rule it in order. However, I can imagine no question of recent years which has so stirred up public indignation and given rise to such scandal as this whole question of Beauharnois. "I believe that there is no government in Canada to-day that does not regret that it has parted with some of those natural resources for a consideration wholly inadequate and on terms which do not reflect the principle under which the crown holds natural resources in trust for all the people." That eloquent declaration of this basic principle is in the words of the Prime Minister (Mr. Bennett) uttered not long ago. I submit to Your Honour and to the house that this whole project, conceived in greed and bom in political corruption, is now about to die of illegality. I propose to show, in the first place, that the act of the province of Quebec incorporating the Beauharnois Light, Heat and Power Company, and the amendments thereto, are completely outside the powers of the legislative assembly of that province and that therefore the acts themselves and everything permitted thereunder have no legal foundation, and any securities issued, works done or constructed under the authority of those acts are without legal backing. I submit further that the dominion parliament alone has the right to pass the necessary legislation to empower such works and undertakings as are involved in this development. I take as my authority the British North America Act, and I refer hon. members to section 92, which sets forth the powers of the provincial legislature. Subsection 10 of section 92 reads as follows:
Local works and undertakings other than such as are of the following classes:-
(a) Lines of steam or other ships, railways, canals, telegraphs, and other works and undertakings connecting the province with any other or others of the pi'ovinces, or extending beyond the limits of the province.
Clause " c " of this subsection reads as follows:
Such works as, although wholly situate within the province, are before or after their execution declared by the parliament of Canada to be for the general advantage of Canada or for the advantage of two or more of the provinces.
What is my authority for the statement that such works as these are outside the jurisdiction of the province of Quebec? I draw the attention of the house to a definition of that particular section of the British North America Act given in Clement's Canadian constitution, third edition, 1916, page 731. The paragraph is headed Companies' "Objects," and reads:
The purposes or objects to be served by incorporation are, like the possible subjects of legislation, numberless; but it may not be quite useless to consider some possible objects which touch closely the class-enumerations of the British North America Act. The "works and undertakings," for example, mentioned in section 92, No. 10, have been described by the privy council as physical things. Such of them as extend, actually or potentially, beyond the limits of a province are within the exclusive control of the parliament of Canada: and are manifestly not provincial objects for the establishment. control, and operation of which a provincial company could be incorporated. And the same remark applies to such undertakings as, though entirely located in one province, have been declared to be for the general advantage of Canada.
The act passed last year by this house put the whole development of this canal and all works and appurtenances thereto outside the jurisdiction of the province of Quebec. The principle declared in Clement's stamps it as an object other than provincial. Clement is clear and his opinion has been cited in privy council cases. I submit that this government should take into careful consideration the result of the legislative action in connection with this question. We should be careful in examining this matter to distinguish between works and undertakings and services. Businesses may be conducted for the purpose of service. The T. Eaton Company may be incorporated by a province and send its catalogues and ship its goods to other provinces. That does not constitute it an interprovincial company, nor does it place it outside the powers of a province to incorporate. But where a company is incorporated with powers to extend its own lines its own material


Mr. POULIOT:: Does not the same question apply to the Ontario hydro?


Edward Joseph Garland: I would not be at all surprised if it did. In regard to the power and canal works on the St. Lawrence river, I am absolutely convinced that as they are interprovincial, nay more, international in character, they are not within the competence of either Quebec or Ontario. There is no doubt in my mind on that point and I am glad the hon. member raised it.
A further fact in connection with this case is this: it was referred to by the hon. member for Acadia this afternoon. This canal is not an isolated canal. It is not a canal in the sense that some canal, say, down in the mari-times would be, or possibly a canal out in the province of Alberta. This canal is already declared to be a link in the great waterways project, the deep seaway. Have I authority for that? May I submit to the house that the original incorporation of this company under section 11 of chapter 72 of the statutes to which I have referred stated that the company shall be empowered to construct a canal not exceeding 150 feet English measure
Beauharnois Power Project

in width. Such a canal might have been regarded as so unimportant as possibly to be within the competence of the province of Quebec, but subsequent amendments, as in section 6 of the act of 1910, entirely changed this and gave the company power to widen the canal to 300 feet or to build a new canal 1,100 feet in width. It is getting bigger all the time, you see. Finally the act of 1930 gave the company power to construct a canal of the magnificent capacity of approximately 4,000 feet in width, capable of taking the entire flow of the St. Lawrence. This clearly indicates to me, and I hope to hon. members of this house, that the scope of the work was not a mere provincial canal or an irrigation ditch or anything of that kind, but a work to fit in with and be a part of the great deep seaway of the St. Lawrence. This view is upheld by many authorities. Almost every engineer who has been called upon to advise upon the matter has declared that it is such a link in the deep seaway and must be so regarded. Engineer Holgate, Engineer Acres, the report of Mr. St. Laurent to the minister of that day, have so held. But I do not have to go back to the opinions of these men. This government has decided it, and the previous government has decided it. I quote from the words of the right hon. leader of the government as reported at page 2113 of Hansard of April 18, 1932. He said:
We have indicated, as I said at the very threshold of my observations, that as the project was by common consent, alike by the late administration and by this, treated as an undertaking that was a link in the St. Lawrence waterway and that the canal should be a canal that would be available to navigation if as and when that undertaking is proceeded with-
A link, mark you. Again on the same page he says:
But having regard to the relation of this enterprise to navigation and to its being a unit in the development of the St. Lawrence waterway,-
And so forth.


Charles A. Stewart: I have no
objection to my hon. friend stating that the present government have designated it as a link in the canal system, but he is under a misapprehension in asserting that that was definitely stated by the previous government. If my hon. friend will look at the agreement he will see that I am correct.


Edward Joseph Garland: If there is any hon. member in this house who has any doubt as to the intentions of the company or as to the knowedge on the part of those who were interested in granting the lease as

to the intentions of the company, then I shall be glad to hear an explanation from my hon. friend from West Edmonton (Mr. Stewart). No public man of intelligence who studies this thing will be deceived in that matter. There is no question that the late administration did know that the Beauharnois Power Company did actually offer to the late government this canal free of charge to be a part of the deep seaway, and hon. members know it was so and it was accepted as such.


Charles A. Stewart: I do not
wish to interrupt my hon. friend, but they did not definitely state it was to be accepted as such although constructed for the purpose.


Edward Joseph Garland: I will leave my hon. friend to explain it. The Beauharnois . Company itself had no delusions in the matter, for in many of its prospectuses it stated definitely that the canal would be a link in the deep seaway. I have here, for example, the best known of these prospectuses, entitled Physical Facts and Financial Figures. They are well worth reading, especially the financial figures. They are very illuminating. Some time in the future, politicians and historians will look back upon this whole affair as one just as fantastical as any fairy tale that came out of the Arabian Nights. At page 6 of this prospectus the company says:
In providing deep water navigation in its power canal the Beauharnois Power Corporation is providing one of the major links in the deep waterways by canalizing all the wholly Canadian section of the river, save for the stretch around the Lachine rapids at Montreal.
It must be clear already to hon. members who have been studying this question, and most of them I presume have been, more or less, that an undertaking such as this, anything that is so interconnecting, provincially speaking, as this, anything that is so international as this, obviously is not within the power of the province of Quebec to decide upon, nor can it be within the power of the province of Quebec or for that matter the province of Ontario, to legislate in respect to such matters. If further support of my argument in this regard is required I would refer hon. members to the factum presented, as the hon. member for Acadia (Mr. Gardiner) stated this afternoon, on behalf of the late administration to the Supreme Court of Canada. At page 106 of the factum, paragraph 135, we find the following:
Linder section 91. No. 29, and section 92, No. 10 (a), of the British North America Act, actual or constructive extension beyond the limits of a province is a necessary feature of the work or undertaking in order to confer

Beauharnois Power Project
legislative jurisdiction upon the dominion parliament concerning same or to incorporate companies with objects in relation thereto, but as to the latter, it is now well established that it is the potential scope of the authorized objects and not the area of their actual exercise or operation which determines the character of the work or undertaking as being federal and where the authority conferred covers works or undertakings which may extend beyond the limits of a province, such works or undertakings are therefore non-local and fall to the exclusive jurisdiction of the dominion by virtue of section 92, No. 10 (a).
Then they cite certain cases. That was the position taken by the late administration and presented in the form of a factum by the Solicitor General for the Dominion of Canada before the Supreme Court of Canada. These legal gentlemen who made up the representatives of the government further stated at page 107, paragraph 137, of the factum:
The attorney general-
What attorney general? The Attorney General of the Dominion of Canada, the former attorney general:
The attorney general, therefore, submits that the parliament of Canada has legislative power under section 92, No. 10 (a) to authorize the Dominion government to construct and operate power works in interprovincial rivers provided the authority so conferred contemplates works which by themselves or their transmission lines physically extend beyond the limits of a single province or physically connect with works or lines in another province or which, though locally situate within a given province, form part of a general power undertaking authorized by the legislation and which includes, in fact or contemplation, similar works or lines or operation in one or more provinces and that for such purposes the Dominion parliament may confer power to purchase or expropriate provincial crown lands whether lying in the bed of an interprovincial river or otherwise.
There are clauses innumerable in the factum which bear out my contention that in the opinion of the late government, in the opinion of the attorney general and the group of lawyers who pleaded this factum before the supreme court, this parliament and this parliament alone had rights to legislate both in respect of power and canalization in connection with this project. By the way, the question of connection, the connecting work or undertakings comes in at this point. We see that in the act of incorporation the company has the potential right, or is supposed to have the potential right, to extend its works and undertakings into another province. But is there any evidence that it intends to use that right? All I have to do is to refer to the statement made to-day by the hon. member for Acadia that already the company has entered into contracts with the Hydro Electric Commission of the province
of Ontario for the sale of power to them. How can they supply power? The only way under heaven power can be got from the Beauharnois development to the province of Ontario is by wires, and those wires must connect. If they connect even within the province of Quebec with the Ontario power line they become interprovincial in character.
Mr. LaVERGNE: The contract is sufficient.


Edward Joseph Garland: That is
quite true; the contract alone is sufficient to prove definitely the interprovincial character of this company. As I have already indicated, the fact that this is a link in a deep seaway canalization scheme also removes the project from the ambit of provincial legislation. A study of the map will reveal that this canal connects lake St. Francis with lake St. Louis. Lake St. Louis is a provincial lake, situate wholly within the province of Quebec. Lake St. Francis, however, is not only an interprovincial lake but it is international. A part of that lake is within the boundaries of the United States of America; a large part of it is within the province of Ontario. This canal, when completed must breach the dyke on the shore of lake St. Francis, and the minute it does that it becomes an interprovincial and international connecting link, a part of the connecting whole. It cannot be separated. When a project of this kind cannot be separated by itself within the limits of a province it ceases to be provincial in character, and becomes interprovincial.
Many authorities are at my disposal. I have not time to quote at length, but would refer hon. members to a case previously mentioned to-day. I refer to the argument of the late administration through the mouth of its attorney general. It is all there. But, more than that, the plans of the joint board of engineers show, as I have just indicated, that this project is interprovincial and international. To what extent? One third of lake St. Francis-that enormous amount, Mr. Speaker-one third of lake St. Francis is within the province of Ontario; almost the same amount is within the United States of America. Any movement of water from that lake via a canal such as the one proposed interferes with treaty obligations, and by virtue of that one fact becomes a matter within the sole jurisdiction of the dominion parliament.
I now come to the matter of treaty obligations, and the question whether or not they are important. I could cite case after case, report after report, dealing with this matter, but I have not time to do so. I shall refer
Beauhamois Power Project

only -to the remarks of the present chief engineer of the Department of Railways and Canals, Mr. McLachl'an. This gentleman gave evidence before the committee of this house which last year investigated the Beauharnois project. He was interrogated concerning difficulties involved in the project, and his evidence went to show that there was a certain current running crosswise at the entrance to the canal at lake St. Francis which would render exceedingly dangerous the navigation of ships at that point. In answer to the inquiry, "Is it a serious question?" he was referring to the matter of navigation and interference with treaty obligations, he answered, "Well, it is serious enough for me to feel that some change ought to be -made to mitigate conditions, otherwise I am sure we will have trouble both in using the waterway we have built under those conditions and in satisfying the American engineers when they come to approve of what we propose to do in Canadian territory." Then the question was asked, "And this change was never approved?" to which he replied, "This change was never approved." To my knowledge, so far as my information goes, the plans for this international work have not yet been approved. I submit that before work can be commenced, before navigation can ensue, there must be approval granted by the International Joint Commission under the Boundary Waters Treaty of 1909.
There are other points to which I should like to draw the attention of hon. members. In summing up this phase of the matter, however, I suggest that the granting of authority, or the purporting to grant authority, to extend these works and undertakings as proposed in the -charter to which I have referred is not, I assert definitely-and I challenge legal correction, because after all I am only a layman, and am willing to listen to legal opinions in the matter-within the competence of the province of Quebec; the charter is ultra vires and illegal, and should be cancelled.
What about t-he interests involved? Serious -very serious. Not only should the charter be cancelled, but if the situation is left in its present position I hesitate to picture to the house what the possibilities may be. The federal government, however, can protect the public interest, and it is for that reason the amendment has been moved to-day. We have offered it humbly and respectfully, with no wish whatever to dictate, but simply to offer suggestions as to the manner in which the present federal administration should deal with the matter. In my opinion the federal government at this time can and should

reorganize the whole project. Both in respect to power output and canalization it should be declared a work in the national interest. There should be set up a federal hydro-electric commission to deal with the vast water power of this great international river.
On his oration in connection with this matter during the session of the year 1930 the Prime Minister, the leader of this government, asked the following question, "Do hon. members realize what this power development means? Do they realize that it means the future welfare and interests of not thousand or tens of thousands, but milions of people in the great yalley of the St. 'Lawrence?" I say the whole St. Lawrence project comes -within the scope of his statement. The whole St. Lawrence river scheme, involving as it does the development of 5,000,000 horse-power, 4,000,000 of which would belong to Canada, justifies and necessitates the creation of a federal hydro-electric commission to be operated in the public interest.
I opened my remarks to-day with a quotation from a speech by the leader of the government in which he said that governments regretted having given away for nothing, or next to nothing, valuable resources. Here is an opportunity for this government to save to the people of Canada one of the greatest and most powerful resources. They can declare this work to be in the national interest; they can create a federal hydro-electric commission. I submit if a part of the scheme can be developed in the national interest, the whole of it can be. The legality of the present situation should be decided. Let them take the matter to the privy council. I am satisfied as to what the decision will be.
The project cannot be left in its present state without grave dangers-yes, grave dangers-to the legitimate investments of Canadians and others. There is the further risk, worse than the one I have mentioned, that the great power interests may now seize upon the project, in its dying days, and grasp it to themselves, with the result that within a very short time this country would find itself under the absolute control of the Holt monopoly, the great Montreal Light, Heat and Power Company. There is no question in my mind as to the grave danger of that condition arising, if something is not done. In any case, Mr. Speaker, if this government does not act, if it merely leaves this company operating in the hands in which it now is operating, pouring into its coffers, as it has already been doing, millions of the taxpayers' money and on top of that proposing to make a loan to the tune of $15,000,000 or

Beauhamois Power Project
$16,000,000 more without deciding the question I have raised, why, the whole investment is liable to be lost. For it is certain that a valuable resource of this character is not going to be left in this questionable legal position. There will be, as I feel almost certain, case after case before the courts to determine the legality of it. There will be a definite fight-in fact I believe it commenced some time ago-it will continue, and other interests will combine and conspire to seize control of this project. If this government does not want to leave our investments in danger of being utterly lost it is time now for it to take over the whole project, and protect the rights of the people of Canada.


Pierre Édouard Blondin: The hon. member for Bow River has spoken forty minutes.


James Shaver Woodsworth: Mr. Speaker, after the very excellent presentation of this subject by those who have already taken part in the debate, it does not seem necessary to enter any more fully into its legal and constitutional aspects. For two years when this subject has been under discussion I have had the honour of supporting the contentions of the member for Acadia (Mr. Gardiner), the member for Bow River (Mr. Garland), and I should like once again to give whatever support I may to their point of view. Further than that, my colleague from East Hamilton (Mr. Mitchell) in his election campaign promised the electors that if possible he would press for a further inquiry into this whole matter. Up to the present we have not been able to bring the matter before the house, and unfortunately my colleague owing to another engagement is not able to be present this evening. So I should like on his behalf to say a few words with regard to the question.
Last year when I returned to my own city of Winnipeg I found myself the subject of a good deal of criticism, not because I had participated in debates on this question but rather because I had not gone far enough in urging immediate action. So far as the press represents public opinion, I may say the Manitoba Free Press urged that the matter should not have been left where the committee left it last session; and the Tribune-which generally supports the Conservative government-came out very strongly indeed with the view that some plan had been hatched in the committee to prevent the public getting at the real facts of the case. The two papers were inclined to denounce some of us Independents because we had not done more in attempting
to force action on the part of the government.
I should like to read the statement which I gave to the house last session on the 31st of July, just after the report of the committee was presented:
-to-day the public demand several outstanding things. First of all the punishment of (a) those who have defrauded the public; (b) those who have been guilty of bribery, and (c) those who have betrayed public trust.
I think undoubtedly the general public did believe there was going to be some sort of justice in regard to these matters in which corruption had been shown. I submit that although these months have gone by there has been no punishment of the guilty parties.


Edward Joseph Garland: Hear, hear.


James Shaver Woodsworth: Unfortunately last
year the reference was so narrow that the committee could not follow up its investigations as far as they should have been followed; further, I suppose owing to the party warfare it was not possible for the majority of the committee to be free to go very far; also, as members will recognize, there were several representatives from the provinces present, who as soon as anything that touched the provinces came before the committee objected strongly on the ground that these were provincial matters; and so the inquiry did not go very far. The same thing happened to some extent, I believe, in the provincial inquiry; it stopped before the fullest investigation had been made. I think the same criticism may be made with regard to the investigation in the Senate, which was largely confined to the conduct of certain senators. So that so far as meting out punishment is concerned, the only action taken has been to force one senator to resign his position.
Mr. LaVERGNE:	He committed suicide.


James Shaver Woodsworth: Last July I also
said:
Second, I think the public demand a further i nvestigation,-
I am still of that opinion. It seems to me that in attempting to move his amendment to-night, the member for Acadia was along right lines when he suggested a royal commission. I do not believe parliament is a suitable body to make an investigation of this character. We all recognize that party feeling runs high, that the past government had a good deal to do with this matter, that the present government may or may not have administered it in just the right way, and so party considerations undoubtedly enter into any parliamentary investigation, and certainly
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would enter into the report of any special committee. It would seem to me that there ought to be a judicial investigation.
I submit, Mr. Speaker, there is a very grave danger at the present time that the public will lose all confidence in parliamentary institutions and will come to the conclusion that parliament is intent on shielding rather than exposing corruption when it involves the great corporations. Since no subject has aroused greater public interest than this Beauharnois scandal, interest extending over the past two years, it seems to me that the government would be well-advised to accept this suggestion to appoint a royal commission to go into every aspect of this affair, and particularly, as the attempted amendment puts it:
Especially with regard to all moneys derived from the sale of the $13,000,000 of collateral trust bonds issued by the Beauharnois Corporation Limited.
I suggested thirdly:

a very large section of the people demand government control of the whole Beauharnois enterprise.
I know there are those in the province of Quebec who have been very strong in their advocacy of provincial rights in this matter, and who at the same time have been very strong-until recently at least-in urging private ownership.
Mr. LaVERGNE: They are not very numerous.


James Shaver Woodsworth: Possibly, as the
hon. member for Montmagny (Mr. LaVergne) suggests, they are not very numerous. But I do believe there is a growing number of the people across Canada who are convinced that the only way to settle this matter properly is by government control of the whole Beauharnois enterprise. Then I suggested:
Further, at least the more thoughtful part of the public demand legislation that will prevent similar occurrences in the future.
I believe that that too is an increasing demand on the part of the public. So far we have had no legislation. When on various occasions this session some of us have raised the question of watered stock we have been told that it was practically impossible for the government to do anything in the matter. The lid has been lifted a little bit in this Beauharnois question, and we have seen how the public has been defrauded and exploited. But those who know anything about the way a great many corporations have been carried on will recognize that Beauharnois is not by any means an isolated example of exploitation and corruption, and whether or not these other cases are investigated as fully as Beauharnois, at

least we should have such legislation as would prevent this kind of thing in the future. It is, however, very difficult for any private member to introduce legislation of that kind. Only to-night we had an example of how strictly the rules of procedure are interpreted, in that no matter may be brought up by a private member if it involves in any way the expenditure of public moneys, nor even any resolution which expresses the opinion of the house on a certain course that might involve the expenditure of public moneys. Under these circumstances it is next to impossible for any member to propose legislation; all we can do is to appeal to the government to take action along this line.
In concluding my speech on this question on May 26 last year, I ventured to summarize the points which I had been trying to make, and as I have not the time to-night to argue the case, I should like to read this summary', which I think is in line with the presentation just made by the hon. member for Bow River (Mr. Garland) :
The claims of this corporation are based essentially on the old claims of the Roberts. The Dominion government owns the Roberts' works, as is shown by the fact that the present corporation is paying a nominal rental charge to the Dominion government.
That fact was brought out very clearly in the factum to which reference has been made; indeed, it was the reading of the factum that largely converted me in the matter. I could not read that presentation as made by the Attorney General and others on behalf of the late administration without believing that there was a very strong case for the dominion ownership and operation of the water-powers of the St. Lawrence.
Under the British North America Act, public works on the St. Lawrence -were definitely put under Dominion jurisdiction.
It was a surprise to me when I read the British North America Act. It may be said- I know it has been said-that the clauses cited related to certain particular powers, but I am still of the opinion that, since the claims of the present corporation are based entirely on the rights of the Roberts, from the legal standpoint these powers are still within the jurisdiction of the Dominion government. I further urged:
Moreover, the province can incorporate only such companies as contemplate distinctively provincial objects.-and the objects of the Beauharnois corporation are decidedly not provincial but, in fact, interprovincial in character.
That is one of the points just discussed by the hon. member for Bow River, and the

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other point I have mentioned is alsb elaborated by him.
The St. Lawrence system is essentially a great dominion project, and if we are ever to carry it through successfully we cannot allow anything to stand in the way. Finally, this whole question involves our international obligations.
I still believe I was right in the position I took a year ago. I quite admit that there is ground for dispute as between the dominion and the province. As a matter of fact, it is rather curious that in this particular instance the jurisdictional dispute arises with respect to two distinct aspects of the same enterprise. The province claims the water powers, which claim a great many of us cannot concede and which the factum already quoted disputes. But the province claims-


Mr. CASGRAIN:: May I ask the hon. gentleman a question? I understand that my hon. friend refers to the factum that was presented on behalf of the Attorney General of Canada. Has he been made aware of what the decision of the supreme court was on that factum as presented? If my contention is correct, the point of view of the provinces was upheld.


Edward Joseph Garland: Oh no; as a matter of fact the weight of opinion was against the province.


James Shaver Woodsworth: As I understand it-


William Lyon Mackenzie King: Could you
understand it?


James Shaver Woodsworth: I was going to say that the decision, as I understand the matter, was left very indefinite. But the point I was emphasizing was that the case as presented by the representatives of the Dominion government still stands. There is nothing to offset that, and it still stands. While the province has claimed the water-powers, and while the Dominion government at that time put in a claim for them, there is no doubt that the canal comes exclusively' under the jurisdiction of the Dominion government. So that at best we have the dispute relative to merely one aspect of the project.
I am inclined to think that the province of *Quebec secured a great strategic advantage when, apparently without consultation with the dominion, and without waiting for any judicial decision whatever, it granted a charter to a company to go ahead and develop the water-powers the possession of which was under dispute.
Mr. LaVERGNE: It is assuming a lot to say that there was no consultation.


James Shaver Woodsworth: The hon. member may' know more about that than I do; at any rate, nothing has been brought out in public to show that there was such consultation. I was giving the late administration-
Mr. LaVERGNE: The benefit of the doubt.


James Shaver Woodsworth: Yes, the benefit of the doubt, especially after reading the strong presentation in the factum. However, I say that the province of Quebec undoubtedly secured a great strategic advantage in immediately granting the charter and permit-ing a company under provincial charter to develop these water-powers. But we have reached the stage where this corporation is not able to carry the enterprise through. It is in difficulties to-day, and here it seems to me is the Dominion government's chance. Up to the present time the Dominion government has not done a very great deal in the matter, but one thing that has been done is this: the 80,000 shares issued to the Sterling Corporation have been turned in for cancellation in accordance with the demands made by the government. I give the government credit for that. I do not know just how much these shares are worth, nor do I know under what pressure they were turned in, but I do think that is a good thing, more especially as it seems to me to establish a precedent for the confiscation of watered stocks. I should like to think that this will be done with other shares in this corporation, and with shares in other corporations as well. However, that much has been done, for which I give the government credit. Further, the government has declared that the ownership of the canal is with the Dominion government. That too is a good thing, although I do not know that in reality it amounts to a great deal, because the canal, although it was not owned before by the government, had to operate under the supervision of the Dominion government. I do not know that there is any financial change involved, and it seems to me that in this matter the government has not made anything more than a technical gain.
On the other hand the government have assumed enormous responsibilities; they have backed the banks, they have, as it were, underwritten the scheme. Since the bondholders do not appear to be in a position to carry through the enterprise for themselves, there is a great danger of the whole undertaking falling into the hands of some one person capable of putting it through. The name of that one person is on the lips of all-Sir Herbert Holt. It would be a very sorry triumph indeed if the net result of the ex-
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posures in this house is that the Dominion government will be obligated to carry the canal through to completion, whereas under the old arrangement it would have been completed without any government financial responsibility, and further that the enterprise is to be taken out of the hands of a financially small man like Mr. Sweezey and thrown into the hands of a big financial man like Sir Herbert Holt. If that is the net result of it all, it will be most unfortunate and disappointing.
It does seem to me that it is now quite possible for the government to take over this whole scheme as a dominion enterprise; in fact I do not see any other way in which it can be saved. Even if we conceded the claims of the province of Quebec to the water-powers, the government might still take over the enterprise, considering the financial obligations they have already incurred. They undoubtedly have the right to construct the canal. If it were found that Quebec had certain rights in the water-powers, those surplus powers not needed by the dominion for canal purposes could be turned over to that province for distribution. The same thing could be done in connection with the water-powers in the province of Ontario. If it is found that the dominion has not the rights which many of us think it has to the water-powers, let the dominion continue this undertaking as a great public work; let it carry on the development; let it use what power it needs for canal purposes, and then turn over the residual amount to the provinces.


Edward Joseph Garland: On proper terms.


James Shaver Woodsworth: Certainly, on proper terms. That could be done even if the provincial rights are conceded, but I do not see why those claims should be conceded without a reference to either the supreme court or the privy council. When the Prime Minister (Mr. Bennett) was making a statement a few weeks ago I asked if it were not possible to present another case to the courts. I do not know that I am sufficiently familiar with legal terms to state properly what I have in mind, but it seems to me that if the Dominion government went ahead and quietly assumed control, they could then go to the courts and have a better chance of a decision being arrived at. I think the chances would be better than if a 'hypothetical case were presented, as was done the last time the matter was referred to the supreme court. Let us go ahead and seize this undertaking; let the government go ahead with its canal project-

that will involve the development of the dams and other facilities necessary in the development of water-power-which it has an absolute right to do, and then, if the .provincial government challenges the government's action, there would1 be an actual case to be presented to the supreme court or the privy council.
In the few moments that remain to me I should like to run over very briefly one or two of the points contained in the amendment which the hon. member for Acadia (Mr. Gardiner) was not permitted to place before the house. There is no doubt a good deal of public money is involved and more that wall be needed before this project is completed. That in itself seems to me to warrant active interference on the part of the government. Only the other d'ay I was approached by several bondholders who were anxious to know what the government could possibly do in the matter. The affairs of this project are now in rather a critical state and the government by taking a strong line of action could settle the matter without any great difficulty.
I have already urged the nationalization of the whole project, and I do not know that it is necessary to say more in this connection. The hon. member for Bow River has quoted the words of the Prime Minister in connection with radio. If it is necessary to prevent radio from being exploited, it is surely neces-sar}' to prevent our water-powers from being exploited. If it is wise that radio should be maintained as a heritage for our children, it is surely wise that these great water-powers should also be retained as a heritage for our children. The suggestion is made that a federal hydro-electric commission be appointed, and I cannot see why that suggestion would not be feasible. With our transportation systems in such serious condition, it is highly desirable that there should be a correlation of all our various means of communication and transportation.
Another point is in connection with the question whether or not the act passed by the province of Quebec which granted the charter to this company is ultra vires.
Mr. LaVERGNE : There is no doubt it is.


James Shaver Woodsworth: The hon. member across the way says that there is no doubt it is ultra vires, and that expression of opinion is on the lips of a great many people to-day. That should afford a legal basis for the carrying out of other definite and constructive measures. If I may venture to speak not only for my own constituency but to express what I know is the feeling prevailing in the western

Beauhamois Power Project
provinces, I would say that the people of the prairies realized very keenly that Beauharnois is a matter which concerns not only the east but the west as well.
Mr. LaVERGNE: That is also the opinion of Quebec.


James Shaver Woodsworth: I am glad to hear that it is also the opinion of Quebec. If that is true, then theTe seems to be no reason why we could not get action along these lines. Further than that, I know that the west as a whole will stand stoutly behind public ownership and will back up any action on the part of the present government which will give us control over this great national heritage.


Charles Hazlitt Cahan: Mr. Speaker, I do not think it is necessary to follow the hon. gentlemen in all the extreme and exaggerated statements which they have made. The argument contained in the factum presented by the Attorney General of Canada to the Supreme Court of Canada seems to have convinced hon. gentlemen of the third party as to its sanity, soundness and logic but it failed utterly to have that same effect upon the supreme court. Fortunately it was the supreme court that had jurisdiction in the matter as well as the duty and obligation of rendering a decision in the premises. But I should1 be very reluctant that either this house or the country should take its final opinion on legal questions from either the hon. member for Acadia (Mr. Gardiner) or the hon. member for Bow River (Mr. Garland). The hon. member for Acadia this afternoon endeavoured to show, without any supporting argument, that it is illegal in Canada for our banks to make a loan on the bonds of an incorporated company-that was his suggestion-especially if that incorporated company held real estate or immovable property. No more absurd opinion, I suggest, could possibly have been rendered, and if the contention of the hon. member for Acadia were to be accepted, we would have very many financial problems added to those with which we are now faced. There can be no doubt that under the provisions of the Bank Act loans may be legally made by a bank on the security of bonds of an incorporated company.
But the hon. member for Winnipeg North Centre (Mr. Woodsworth) professed to be anxious to have the waters of the St. Lawrence within the province of Quebec declared to be a national interest and taken over and administered by the federal government of Canada. He suggested that all the provinces of the west were entirely in favour of such action. Such advocacy would have had more influence upon my opinion had it been publicly made some years before the water-powers of British Columbia within the railway belt, which water-powers were undoubtedly within the jurisdiction of the dominion, were, at the request of western members, transferred to that province, they contending day in and day out that British Columbia demanded that the water-powers within its borders should be administered by the provincial government. In recent years I have been in the house during two or three sessions when members from the provinces of the middle west, Manitoba, Saskatchewan and Alberta, have demanded most vociferously that the natural resources, including the water-powers, of those three provinces, which were undoubtedly vested in His Majesty in the right of the dominion, should be transferred to those provinces, not merely as a property right but so as to bring those water-powers within the legislative jurisdiction of those respective provinces. I did not hear the hon. member for Winnipeg North Centre raise his voice against that transfer to his own province of Manitoba, which he then represented, nor did I hear a voice raised from either of the other two provinces, Alberta and Saskatchewan, against such a transfer. It was made with the almost unanimous approbation of both sides of the house, and it remains to-day as a transfer which vests those natural resources, including water-powers, in His Majesty in the right of these several provinces.
The provinces are rather jealous of their rights. Ontario has persistently claimed that the right to develop one-half of the flow of the St. Lawrence river within the international section is vested in the crown in the right of that province, and public and legal opinion in that province has almost unanimously approved that contention. In our province of Quebec, we are rather sensitive with regard to our rights. That province has insisted not only that the water-powers on the great rivers within its borders are vested in the crown in the right of the province, but that the water-powers on the St. Lawrence where it flows through Quebec are vested in the crown in the right of the province. It is not for me to say that that contention is valid until it is finally passed upon by a judicial court of final appeal. But when the hon. member for Winnipeg North Centre suggests that we should take that property and that right, leaving the province to contest our taking of its property, that is simply making the appeal which the ordinary burglar makes when he enters a house and takes property which he knows does not belong to him, leaving it to the householder to put the burglar out and to protect his chattels. I feel some-
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times in sympathy with the hon member for Winnipeg North Centre when he suggests, in regard to the protection of labour in this country, certain social improvements, but that proper end cannot be attained by burglary and theft such as he has advocated in this house to-night.


James Shaver Woodsworth: I rise to a point of order. The hon. member has suggested that I have been advocating burglary in the house to-night. I have not advocated anything of the kind. I have suggested that the Dominion government has certain rights. The hon. member differs from me. He has a perfect right to differ, but he has no right to say that I have advocated burglary, and I ask him to withdraw that expression.


Charles Hazlitt Cahan: Perhaps I should withdraw my nomenclature for the subject matter which the hon. member advocated, but he and I differ as to what burglary and theft mean. What is clear to me is that by reiterating scandal when it serves no good purpose, what mv hon. friend has in mind is not tihe preservation of national rights. If that preservation were his sole object, I could approve it, but it seems to me, from time to time when his argument is brought home, the hon. gentleman deliberately, earnestly and persistently seeks to break down parliamentary institutions and responsible government in this country. In that end and purpose I certainly cannot agree with him.
First, I shall deal with the argument that simply because section 12 of the act incorporating the Beauharnois Light, Heat and Power Company provides that "the company may supply, sell and distribute light, heat and power in anyr direction within a radius of forty miles from the town of Beauharnois," and assuming that forty miles from the town of Beauharnois would extend across the United States border, therefore, it is asserted, this act is ultra vires of the province, because it provides that a provincial company may transmit its power across the border. I do not think that either the Supreme Court of Canada or the Judicial Committee of the Privy' Council will place that interpretation upon it, which was clearly' not the interpretation placed upon it by the government and the legislature at the time the act was passed. I would suggest that the Supreme Court of Canada or the Judicial Committee of the Privy Council might well interpret that section to mean that the company is authorized to supply, sell and distribute light, heat and power in any' direction within the legislative jurisdiction of the province of Quebec within a radius of forty .miles from the town of Beau-

harnois. But to suggest to this house that the whole act is ultra vires because of the extreme and exaggerated construction placed upon that single section seems to me to be absurd.
With regard to Beauharnois, I regard this debate as exceedingly inopportune. This house has decided by the statements made by the leaders of opinion on both sides that no active step should be taken to prevent the holders of the collateral trust bonds of the Beauharnois Company from realizing upon the security which they have for their bonds, or from placing themselves in a position where they' can approach the government of the province of Quebec and also approach this parliament, so far as it has legislative or its government administrative jurisdiction, to procure our sanction for measures whereby they may carry on to a conclusion and a completion the undertaking of that company. These bondholders have had to wait while another house of this parliament has been considering the Beauharnois scandal. They have had to wait until a commission appointed under the legislative authority of the province of Ontario had finished its investigation into certain features of the so-called Beauharnois scandal. But now I say to hon. gentlemen, give to these bondholders an opportunity without further obstruction or further reckless and immature criticism to meet together, as they seek to do, to form their proper committees, and take such measures as are within their jurisdiction as bondholders in order to place this undertaking on a sound and secure basis. The trustee for the bondholders at their request has called a meeting at Montreal for the tenth of June, 1932, and these bondholders are meeting there for the purpose of examining into the undertaking, business and affairs of the company and of taking such measures as will enable them to preserve their rights and interests. It would be, I think, not only inopportune but improper for the government of Canada, while we ask them and have asked them to take these measures to protect their own interests, to intervene and obstruct and preclude them from taking those measures which are necessary in order to preserve their property rights.
The hon. member for Acadia suggested that all the Beauharnois legislation we have passed is utterly illegal and invalid because the word "limited" is used after the name of the Beauharnois Light, Heat and Power Company'. Well, Mr. Speaker, that is so frivolous that one finds difficulty in dealing with it. Anyway I will say this, that in drafting the statute, chapter 20 and chapter 19 of last y'car,

Beauharnois Power Project
the Beauharnois Light, Heat and Power Company was described as a limited company. It is a limited company in effect although the word limited is not in its name, but that that statute did not definitely describe the company incorporated and organized under the legislation of the province of Quebec, which was therein referred to, I absolutely deny; and I doubt if my hon. friend could find a sane and sound lawyer throughout the length and breadth of this country who would say that that statute is invalid in consequence of the objection my hon. friend has raised.
The hon. member for Acadia suggests that because this canal has by section 1 of chapter 20 of the statutes of 1931 been declared to be a work for the general advantage of Canada, therefore the government of Canada is entitled to go in and take possession of the company's property and confiscate it and forfeit it to the crown in the right of the dominion. Otherwise his argument seemed to me to be absolutely without effect.


Robert Gardiner: I object to that statement, Mr. Speaker. I never suggested that this government go and confiscate the property. My hon. friend is drawing upon his imagination too much.


Charles Hazlitt Cahan: So far as my imagination extends, if I could reach anywhere near the limits of the mind of the hon. member for Acadia in his discussion of this afternoon, I should abandon my robe and profession as a lawyer for the writing of extravagant poetry or romance.


Robert Gardiner: It is a great pity the hon. gentleman has not that much imagination.


Charles Hazlitt Cahan: Let us stick to the facts. Section 1 of chapter 20 says:
1. The canal now being constructed by the Beauharnois Light, Heat and Power Company, Limited, a body corporate, incorporated under the laws of the province of Quebec, between lake St. Francis and lake St. Louis, on the south side of, or in or along the St. Lawrence river, and the works on land or lands covered with water, excavations, embankments, retaining structures, remedial works, dams, locks and other works appurtenant to said canal, now executed or hereafter to be executed, are hereby declared to be works for the general advantage of Canada.
That simply means that the canal and the approaches to the canal, the walls of the canal and the locks and other works appurtenant thereto, which may be useful for navigation now or in the future, are declared to be within the legislative jurisdiction of the parliament of Canada; but it so far leaves untouched the power house and power works and the 41761-212
hydro-electric installations in the power house and other works. Then to show the meaning clearly, section 2 of chapter 20 says:
The governor in council is hereby authorized from time to time to make any orders, rules or regulations which may be deemed necessary or convenient with respect to any diversion of waters of the St. Lawrence river by said company or appertaining or relating to the protection of the paramount rights and interests of navigation in and through said canal and connecting waters.
So that we have taken authority by order in council to protect our paramount rights in respect of water flowing through the canal or ditch which has been or is being constructed by the Beauharnois Light, Heat and Power Company. But then, in order that it might be made clear that we had no intention to encroach upon the exclusive jurisdiction of the province of Quebec this parliament enacted in section 4:
Nothing in this act contained shall be deemed to affect any right that may be vested in the province of Quebec over or in respect of the use of the waters of the river St. Lawrence for the development of hydro-electric power.
Since the arguments which were included in the factums from which the hon. member quoted so freely this afternoon failed to persuade the Supreme Court of Canada or the Judicial Committee of the Privy Council, this constitutional question which has been raised as to legislative jurisdiction is not yet finally and conclusively decided. It can be decided in only one of two ways, either by a final decision of a judicial body, through litigation arising with regard to the subject matter, or by agreement between the dominion and the province with confirmatory legislative and parliamentary enactments.
It so happens that the Prime Minister and my colleagues committed to me, in conjunction with the representatives of the province of Quebec and of the Beauharnois Light, Heat and Power Company, the drafting of the order in council PG. 504, of March 1, 1932, to which reference was made to-day by the hon. member for Acadia. If need be, although forty minutes is not sufficient time in which to enter into so lengthy a discussion, I am prepared to vindicate and support the terms of that order in council as being to my mind perfectly fair and equitable as between the parties, and within the legislative jurisdiction of the parliament of Canada under the terms of the acts to which I have just referred.
Chapter 19 of the acts of last year provided that the Beauharnois Light, Heat and Power Company has the right to utilize 53,072 cubic feet of water by the diversion now being

Beauharnois Power Project

made. That right, whether it was founded upon an invalid or a valid enactment of the province of Quebec, was ratified last year by the unanimous vote of the parliament of Canada. Section 2 of chapter 19 reads:
The Beauharnois Light, Heat and Power Company, Limited, its successors or assigns, in so far as it may be within the competence of parliament, is hereby granted the right to divert from lake St. Francis up to but not exceeding 53,072 cubic second feet of water of the flow of the river St. Lawrence, to be returned to lake St. Louis and to be used for the development of hydro-electric power between the two said points, in such manner, upon such terms and conditions and with such limitations and reservations as may be prescribed by order of the governor in council.
Then section 3 of chapter 19 provides:
The governor in council shall not consent to any further or additional diversion by said company of water of the river St. Lawrence except with the express approval of parliament.
That is what parliament demanded, and what parliament reserved. Therefore I do not think there can be any solid ground for the legal contention that the right to use 53,072 cubic feet of water is not vested in the Beauharnois Light, Heat and Power Company at the present time. The company has that right, in so far as such right could be conferred by the legislature of the province of Quebec. It has that right, in so far as it could be conferred by the parliament of Canada, exercising its proper and recognized legislative jurisdiction.
For the present it seems to me that the one aim and object of this parliament should be to enable these people, who for good or ill have invested some $27,000,000 in the securities issued by the Beauharnois Light, Heat and Power Company, to meet together and take appropriate action so as to place the company in a position whereby its financial stability will be assured, and where it will be enabled to approach the parliament of Canada and, if need be, the legislature of Quebec, for such additional diversions as parliament in its wisdom may be prepared to grant. When those additional diversions are authorized, parliament may, within the limits of that legislation, place any terms and conditions upon the grant that it may see. fit. First, however, we must have a company able to function in a proper and efficient manner. All this government has done is to give the company time, so that it may function, and to that end my personal opinion would be that further judicial investigations are not now opportune.
If the hon. member for Acadia really desires to know the financial structures which

at present exist, he will have no difficulty in obtaining that information. Where the money went is well known. He cannot read the report of the committee upon which he sat without gaining that information, and if he wishes further information I am sure I could give it to him, as a result of my own investigations, so that there will be no necessity for a royal commission in order to elicit the facts.


Robert Gardiner: Can the minister give
information to the house as to where the $4,000,000 went about which the Prime Minister spoke?


Charles Hazlitt Cahan: Yes, I can, but I did not
wish to be led into discussing that phase of the subject, because there were some of the other tergiversations of the hon. gentleman with which I wished to deal. The amount payable and paid to the Beauharnois Power Syndicate by the Beauharnois Power Corporation Limited, under the agreement dated December 17, 1929, to which the Prime Minister referred, for the purchase of the assets and undertakings of that syndicate, amounted to $4,750,000. By payment of that sum of money the company acquired the property and assets of the syndicate. That property and those assets were acquired by the syndicate's expenditures. for which the Beauharnois Power Corporation Limited received dollar for dollar in value to the amount of $2,500,000. Of the balance. $2,250,000 was used by the syndicate for its own purposes. One of those purposes was to take $1,000,000 in cash and pay for the capital stock of the Beauharnois Power Corporation Limited for which they had subscribed to the extent of 1,000,000 shares of a nominal value of one dollar each. Those, I think, are the facts beyond a doubt. But in the length of time available for a discussion such as this, right on the eve of the prorogation of parliament, one cannot go into all these details, and for the present I ask this house to believe that the Prime Minister and his colleagues have been giving a great deal of anxious thought to devising the ways and means by which this great undertaking, of so much importance, not only to the province of Quebec but to the adjoining province of Ontario, may be brought to fruition on a proper basis, so that it may function for the future to the advantage of Canada as a whole.
Now, in view of these considerations I ask whether this parliament is not prepared to give the government its confidence in working out this veiy grave problem, which is not of our making, which was thrust upon us, but to which we conscientiously and sincerely are

Agricultural Conditions
giving our time and attention in the hope that this great project may not be destroyed, and that the money invested in it by so many of our people throughout the length and breadth of Canada may not be entirely lost.


Robert Gardiner: Before the hon. Secretary of State sits down may I point out to him that the 84,000,000 I referred to was the sum which the Prime Minister mentioned in his statement to this house on April 18, and is not the 84,750,000 which my good friend the Secretary of State dealt with.
Mr. ARMAND R. LaVERGNE (Mont-magny): It is very seldom, Mr. Speaker, that the hon. member for Winnipeg North Centre (Mr. Woodsworth) and myself agree, we are generally at the antipodes-


James Shaver Woodsworth: It is very serious for us to be burglars.
Mr. LaVERGNE: -but I wish to put myself on record as endorsing what has been said by him and by the member for Acadia (Mr. Gardiner). I like doing a little housebreaking for the purpose of preventing the house being burned down by the people who have gone into it. I desire to put the question on a higher plane. I am not so much concerned with those who have lost millions of dollars in this project. It is all very unfortunate, but it is a story we hear very often in these days. I shall not attempt any legal quibbling as to whether the Beauharnois canal or the water-power belongs to the province or to the dominion. I have my own legal opinion; I have not a shadow of doubt that it belongs to the dominion. But that is not the question; it is higher and more important. I think if the common people of Quebec have one opinion on the matter it is that that the St. Lawrence is a national asset which belongs to the confederation of Canada, not to the Beauharnois corporation or the Beau-hamois Light, Heat and Power Company, or some other corporation. This is the last natural resource which is left to the people of Quebec; the others have been sold, given to, or robbed by, the great corporations. I repeat, this is the only natural resource left to the people of the province of Quebec, and in that way to the people of the dominion. Our only hope, our only salvation, is that the federal government will treat this great public work as a public ownership undertaking, so that the people of Quebec and of the dominion shall come into their share. And it is about time they should.
41761-212J



AGRICULTURAL CONDITIONS

[Stage Direction]
Miss AGNES C. MACPHAIL (Southeast Grey): Mr. Speaker, even though the session is in its last hours, we feel we must once again draw the attention of the house and the government to the distressed condition of the agricultural industry. I think it is true that there are still great numbers of people in Canada who do not know how terrible are the conditions under which the farmers of Canada are struggling. It is very easy for those who are living comfortably not to realize the distress of the agriculturist. So I ask the house to bear with me for just a few minutes while once more I outline those conditions.
The farmer is bearing much more than his share of the depression. We know that the price he gets for his products has fallen much more than the price of those things which he must buy. The price of what he sells has fallen sixty-four per cent, while the price of what he buys has fallen not quite fourteen per cent. Farmer's debts and interest charges, insurance premiums, and so on, are fixed in terms of dollars. These dollars cannot be secured by him in any way but through the selling of his commodities. In other words he must sell his commodities in order to secure the dollars with which to pay his fixed charges. Therefore when his debts are measured in commodity prices, we find they have doubled and trebled in the last three years. I think every member must conclude that this condition cannot go on, that either the price of the farmer's commodities must be raised to something like the level on which the debts were contracted, or the debt level must be lowered to something like the commodity price level-or a little of both. As it is at the moment, the farmer in every province is on a buyer's strike. True, it is an unorganized strike, but it is none the less effective. He is on a buyer's strike because almost his whole output is needed to meet his fixed charges, and he has no money left with which to buy many things not only that he would like to buy but that he actually needs. The last census showed that forty-seven per cent of our population are on the land. We cannot cripple the buying power of such a large percentage of our people without paralyzing the commercial life of Canada, and adding great numbers to our unemployed. I think the house will agree with me that there will be no return to prosperity in this country until the purchasing power of the farmer has been restored. The agriculturist in Canada faces
Agricultural Conditions
[Stage Direction]
peculiarly difficult conditions. He sells at wholesale prices and buys at retail; he sells in a free market and buys in a protected market, and the continued effort of governments to shut out imports certainly tends to .destroy the farmer's markets. He sells as an unorganized individual in a highly organized world, and buys as an individual from organized trade. Then the farmers pay higher interest rates and they have a higher per capita overhead than any other class with an equal net income.
For many years, ever since I came to this house until this last year, the farmer's whole problem has ibeen made more complex by our immigration policy. We spent very large sums of money, which finally the farmer had to pay, for the purpose of bringing into this country immigrants who became competitors with our established farmers. Then, added to all these conditions which have prevailed for many years, -the farmers of Canada to-day are finding life almost impossible because of the exchange problem between Great Britain and Canada. Great Britain provides, if not the only market, almost the only one in which the Canadian farmer can sell his surplus products; but when the farmer places his products on the British market and is paid in British currency he loses on exchange. In converting that British currency into Canadian currency, eighteen per cent of the price of his product is lost. The farmer has many other difficulties to face, and they are taking the heart out of him. The result is that the Canadian farmer feels he cannot go on, and those who have not been close to agriculture in the last three or four months can scarcely know how discouraged the farmer in this province is, and I dare say that applies to farmers in every other province. But it is not only in the exchange as between British and Canadian currency that the farmers are faced with difficulty; the fact is that the nations that are our greatest competitors in agricultural products are in a more advantageous position with respect to exchange, and this makes it all the more trying for our farmers. For instance, the Danish farmer, with his money at par with the pound sterling, has, when the British pound is converted into his own currency as much in Danish money as his .products .brought in British currency, whereas we are at a disadvantage to the extent of eighteen per cent. And the Argentine, Australia and New Zealand enjoy an even greater advantage. So that the Canadian farmer simply has not a chance as things are, and we who represent agricultural constituencies, whether we sit in this

corner of the house or in either of the two great parties, should not allow this session to close without urging upon the government that steps be taken to ameliorate the condition of the Canadian farmer.
From time to time during this and previous sessions almost every phase of agriculture and the difficulties of the people who are engaged in that industry in its various branches have been dealt with by one member or another, and therefore I am not going to take up the time of the house to-night enlarging upon those difficulties. It has often been said in this house that although we in this corner discuss the difficulties of the farmers we do not suggest any remedies. I propose, therefore, to move, seconded by the hon. member for Macleod (Mr. Coote), an amendment which does outline remedies, and in a most respectful and helpful way we offer this government these proposals for what they may be worth. I move:
That all the words after the word "that" in the first line be struck out and the following substituted therefor:
"this bouse regrets that the government has not made any pronouncement of a policy calculated to meet the depressed conditions of the agricultural industry.
Further, this house is of opinion that the government should take into consideration the following suggestions as means calculated to improve the agricultural industry:
(a)	the national control and regulation of currency and credit;
(b)	a measure of controlled inflation having for its object increase in commodity prices, and as a first step towards this end bringing our currency to par with the pound sterling;
(c)	a substantial reduction of farm indebtedness and interest rates;
(d)	financial assistance in creating processing plants under farmer control;
(e)	international agreements on tariff matters;
(f)	the creation of an export marketing board;
(g)	that farmer cooperative selling organizations be permitted to import goods received in other countries in exchange for Canadian agricultural products without the imposition of customs or dumping duty;
(h)	relieving the farmer of some of the indirect taxation and substituting heavier direct taxation based on the ability to pay.
Mr. A. W. NEILL (Comox-Alberni):: The
matter to which I wish to refer is a little different from the subject matter of the amendment, but it has something in common with it. It is altogether different and rather an anticlimax to the long drawn-out debate on Beauharnois which dealt with great issues involving millions of dollars. The matter with which I intend to deal affects only the poor, ordinary toiling people and the effort they

Agricultural Conditions
have to make to obtain a livelihood for themselves, their wives and children. It has been said by a cynic that the Beauharnois matter is a titanic battle between two groups of financial pirates for the control of a huge money-making power development, but this matter is one which comes home to the poorest people in our land. I would not have spoken to-night had I not received a few hours ago a couple of petitions revealing such serious conditions that I feel compelled to put them before the house. Before doing so perhaps I had better make the situation clear by reading from a brief which I prepared a few weeks ago in connection with this matter. I think this brief will explain the situation and less explanation of the petitions will be required. It is dated Ottawa, May 3, and reads:
Ottawa, Ont.,
May 3, 1932.
E. C. Matthews, Esq., M.P.,
House of Commons,
Ottawa, Ont.
Hear Mr. Matthews:
In accordance with our arrangement yesterday I beg to present to your committee a statement on behalf of the Pacific coast fishermen in connection with the prices of gasoline.
You have had a lot of evidence in connection with the price of gas as used in cars, etc., but I would point out where a car will go twenty-five miles on a gallon of gas, a boat will only go six or seven. Also the use of a car, except in the case of a jitney, is often only a convenience to a man in business, but in the case of the fisherman a boat using gas all the time is absolutely essential in his business.
The fishing of which I am speaking is mostly trolling for what are called spring salmon, and later for cohoes, and some gill netting as well, practically all individual fishermen. The larger boats, owned by canning companies and packers, etc., generally have diesel engines and use a cheaper grade of fuel having a lower duty.
The market for springs caught at this time of the year is practically entirely in the States, and at the present time the market is very limited and the price very low. On fish caught by our fishermen going into Seattle there is a duty of two cents per pound, which did not seem very much when fish was selling at sixteen cents a pound, but it is a very substantial handicap now when fish is bringing five cents and even three cents a pound.
The United States fishermen, fishing in the same grounds as our men, mostly outside the three mile limit, can get their gas in Seattle for less than half what it costs our men. It has been estimated that the cost of gas and oil constitutes from 35 to 70 per cent of the cost of operating. Not only do our boats have tc go out a long distance to the banks, sometimes twenty miles off shore, but the engine has to be operated all the time they are fishing, as the boat has to be kept moving slowly. The United States fisherman sells his fish in Seattle and gets two cents a pound more than our men do for it. and he buys his gas at the reduced price I have mentioned.
I might give a specific instance of what occurred last spring, that is, a year ago. Gas was being sold in Seattle at six cents a gallon, wine measure. Our customs department considered that the proper price was eleven cents, wine measure, and the difference, five cents a gallon, was held to be dumping duty. Therefore, we had a
Cost price of	 6 cents
Dumping duty of	 5 cents
Making a total cost of	11 cents
which, translated into imperial gallons is 13-2 cents. To this was added the regular duty of 24 cents per gallon, imperial, making 15'7 cents as against 7-2 cents, the latter being the equivalent in imperial gallons of six cents per gallon, wine measure. At the same time the price on our side of the line was around 22 cents. At the present time the spread seems to be even greater.
I would like to quote briefly some telegrams and letters I have received. One telegram
'eadS'	14-15 March, 1932.
"To A. W. Neill, M.P.
Salmon prices Seattle ten cents to-day this means five cents here. Vancouver unable move fish. Unless gas prices dropped considerably the whole west coast fleet must tie up and rely on government for support halibut fleet already quit. Gas selling Seattle waterfront seven cents Canadian fishermen at great disadvantage. Can anything be done situation becoming critical?
A letter reads:
March 15, 1932.
"To A. W. Neill, M.P.,
Ottawa, Ont.
Dear Mr. Neill:
You of course appreciate that in so far as we are concerned we are not very much interested in the price of gas, but being familiar with the situation on the west coast I can readily see that if the government is handling other matters that we are vitally interested in the same as they are handling this gasoline question, then it is just too bad for Canadian industries to ever hope to overcome these obstacles.
I was talking recently to a man very vitally interested in the business and he stated to me that in his opinion it is very likely, within the next thirty days, owing to market conditions, that the entire trolling fleet on the west coast of Vancouver island will have to tie up. I can readily understand this, knowing that alongside of our Canadian boats the American trollers are trolling in the same waters, and whereas the American boats are only paying 6 cents per gallon for their gasoline, the Canadian trollers are paying 24 cents an imperial gallon which is 19 cents an American gallon- or in other words, it is costing them three times as much for their fuel oil cost, which item represents at least 70 per cent of their total cost of operating their boats.
On top of this the Canadian trollers. as you know, are burdened with an additional tax of 2 cents per pound for the fish that is sold in the States, and owing to the limited market in Canada 90 per cent of the spring salmon they catch are sold in the United States. Only a few days ago. I understand, one of Nelson's packers delivered 20,000 pounds of spring salmon in Seattle, on which they only received a net
Agricultural Conditions

return, after paying the tax, of 5 cents and 3 cents per pound, and one of the largest fresh fish houses in Seattle intimated to me a few days ago that it was only a matter of a week or two before there would be an additional cut in prices.
So you can see that the situation for the trailers on the west coast is really serious, unless something is done."
An extract from another letter reads:
March 29, 1932.
"Re the price of gasoline to commercial fishermen in British Columbia to-day.
Our organization of trailers embodying 200 members of white fishermen will in the near future be striving to keep off the bread line; fishing at low prices for their fish and still paying the same price for their gasoline as they did when they were getting 400 per cent more for their fish. This is not logic, it cannot be done; you cannot carry on this way. Our boys are willing to fish for lower prices knowing that world conditions are such that the public cannot be expected to pay a premium on their article alongside the farmer who is getting a low price for his beef, at the same time the government cannot expect this industry to carry on with a burden imposed on them through tariffs or protection to the oil industry of Canada.
If the price of gasoline holds at the present level, our fishermen will be forced to quit and seek unemployment relief. It would be far better for the governnient to pay the fishermen's gasoline bill rather than force them out of business as then they would earn at least part of their keep. The country would be far ahead doing this providing they cannot get the duty down on gasoline so that the fishermen in British Columbia could import their gasoline at a price at half of what the oil companies are charging them in British Columbia to-day. This is not a case of party politics and should be thoroughly gone into by both parties of the house, the outcome of which should be pressed at Ottawa.
Salmon prices for the future are going to be below the present cost of production and the only hope of keeping going is for cheaper operating costs which cannot be done unless you get some quick action. Better this than unemployment."


Pierre Édouard Blondin: Do I understand the hon. member to say that he is reading from a speech prepared by himself?


Alan Webster Neill: No.


Pierre Édouard Blondin: From what document is
the hon. member reading?


Alan Webster Neill: From a brief on behalf of
the fishermen submitted to the committee investigating the gasoline situation.


Pierre Édouard Blondin: A brief prepared by the
hon. member?


Alan Webster Neill: I am about to read a petition presented to the Prime Minister. It reads as follows:

To the Right Hon. R. B. Bennett,
Prime Minister of Canada,
Ottawa, Canada.
Dear Sir:-
We, the undersigned fishermen, citizens of British Columbia, do herewith petition the government of Canada to remove the dumping duty imposed on gasoline entering Canada from the United States of America, which is used in the fisheries.
1.	That in marketing our trolled caught salmon, we have to export 80 per cent of our catches to the United States of America. Canada is only able to buy 20 per cent. By marketing our fish in United States of America, we have to compete with the United States trailers. This above mentioned dumping duty makes it unfair competition.
2.	That the United States trailer has other advantages. We have to. pay 2 cents per pound on our salmon going into U.S.A. We also pay a duty of 2J cents per gallon on gasoline entering Canada from U.S.A. ordinary duty.
3.	That the price charged by the oil companies for gasoline on our west coast, and the low price received for our fish makes it impossible for us to operate at a profit. If this dumping duty is not taken off, we will be forced to stop operating, and ask the government for relief.
4.	That if the dumping duty on gasoline is removed and we could take advantage of the cheaper fuel, it would help relieve the serious condition existing amongst the fishing fleet on our west coast of Vancouver island.
The point I wish to make on behalf of the fishermen is this, that they are not in the least concerned as to what the oil companies show in connection with profits or losses. The ramifications of the business are so great, it would be quite easy for them, as one government official stated in evidence, to buy from a parent or subsidiary company in the United States, an interlocking concern as we would say, at a price that would show a loss in the Canadian importations. That would be a mere matter of bookkeeping. One of the witnesses who gave evidence before the committee said that prices had been depressed as a result of excessive crude production; or in other words, there had been more gas produced than the consumption demanded. That may be correct, but what has that to do with the starving fishermen on the west coast of Vancouver island? It is simply the same as saying that the production exceeds the demand, a statement which applies equally to the lumbermen, the coal miner, the wheat growers, the fisherman and every other producer of a basic product. None of those industries has come to the government and demanded that we shall make its price such that it can earn even a moderate profit. All have had to take the reduced prices. The producer of one basic commodity, handicapped as he is by his

Agricultural Conditions
miserable price, his low wages, his infrequent employment, has this advantage, small as it may be, that he can buy the other man's stuff also at the low cost. When, however, we come to the oil people, the government says: Thus far shalt thou go and no farther. We say to the fisherman, the coal miner and the wheat grower: You must sell your Stuff in competition with the world, that is below the cost of production; you can buy your wheat, coal and fish at that price; but when you buy oil, we insist that it shall be at such a price as will produce a good profit to the oil company.
The fisherman's contention is that the oil companies have taken advantage of the legislation that was passed in September, 1930, which imposed not only a bigger duty but a dumping duty on gasoline. Any relief that could be obtained in this regard would be of great benefit to the fishermen. It would keep them out of the bread line, from demanding relief from the government, because I suppose a destitute man can demand relief, a miserable dole, a few dollars a month for working at something for which he is unfitted. It would pay even the oil companies if a reduction were made in the price of gasoline, because they would sell more, they would cut down their overhead and so on. They tell us: Our overhead expenses are heavy. I can point out where a considerable saving could be made, and that is if they ended the senseless competition with other companies. You can go into any village and see three or four rival concerns-I am not talking of service stations-with four or five big stationary tanks and the usual tank delivery equipment, where there is room for only one, and of course the consumer has to pay the cost. I want to read just two short petitions that I received a few hours ago. This letter, which is addressed to me is the result of a meeting held at Kyoquot, British Columbia, on the trolling grounds, in Walters cove on May 7, 1932: Dear Sir:
Kindly present this petition to the proper authorities, viz:
Whereas the prices on salmon have now dropped to unheard of low levels, in fact to three cents per pound for No. 1 and one cent for number twos on the fishing grounds, and whereas it is not possible to operate and make our daily bread, selling our production for those prices, and whereas the Dominion government is helping out unemployment by appropriation of funds, therefore we the undersigned fishermen petition the Dominion government to take off the dumping duty and all other duties off gasoline from the United States for use in commercial fishing, as a special measure to give us a chance to make a livelihood and not become a burden to the taxpayer of the country. Gasoline from the United States can be obtained for half price that we are paying here if the duties were removed.
That is signed by some hundreds of men. This is a short one from the Kyoquot Trollers Cooperative Association, which is a veiy fine body, well managed, sensibly organized by the fishermen themselves, with no expensive overhead. Up to date it has been successful, but now it is in trouble. This is a resolution passed at a meeting of the board of directors at Kyoquot, British Columbia, on May 15:
Whereas the depressed condition throughout Canada and the United States have brought food products to the present low level, the market for salmon fresh or cured has suffered more than other products, and
Whereas according to the books of our association the gross earnings per fisherman per week for the last four weeks have dropped to $9.59, and
Whereas there is no other buyer on the west coast of Vancouver island able to pay any better
prices, and
Whereas our association are unable to give financial assistance, the fishermen now find it impossible to continue operating, as the average daily expense per fisherman is $2.50 per day when operating,
Therefore be it resolved that in order to give the fisherman a chance to continue to make a livelihood and be a producer and not become idle and a burden on the government, we respectfully ask the power that may be to use their influence in an endeavour to get all duties and taxes on gasoline used for commercial fishing purposes lifted.
This is a brief note that I have received and I am going to read only one sentence, as follows:
Mr. Neill:
I wish to tell you that all the Canadian trollers on the coast are tied up-
That is a fulfilment of the prophecy I read dated a month or two ago.
-owing to so low a price that they cannot operate without a loss; even some fishermen of Ucluelet going on to relief and these are good fishermen.
Some lion. MEMBERS:	Carried.


Alan Webster Neill: No, it is not carried. We
have done little all day but listen to academic discussions. This is something real and practical, coming home to the flesh and blood of human beings.
While nothing was said in the committee's report about the fishermen's end of the matter, yet I am informed, on authority I know to be sincere and, I trust, well informed, that the big oil company out there, because there is practically only one, has inaugurated an arrangement whereby the fishermen on the Pacific coast can secure a considerable reduction in the price. They propose to put in what I take to be some kind of what is called stepped-up distillate, that is, improved distillate, which they will be able to sell at five cents a gallon less than the present price

Agricultural Conditions
of gasoline and which they guarantee will be absolutely suitable to the fishermen's engines. Further, they propose to give the fishermen a two-cent cut in the price of ordinary gasoline below current prices. If that is so, and if it is continued, it will be satisfactory. It will help the fishermen to help themselves; also it will help the oil companies? of course, by enabling them to sell more; but until I have definite knowledge that this is really in existence and at least some expectation that the arrangement is permanent, I must continue to press for the request of these men, so desperately near destitution, that the duty and dumping duty on gasoline should be removed.
To these men, hoping against hope that something will be done, what a hollow mockery it must be to be told that the committee has decided that the price of gasoline is reasonable 1 I am willing for the moment to grant it is reasonable so far as the Imperial Oil Company is concerned, but I contend that neither we as parliament nor the government are under any obligation to see that the Imperial Oil Company makes either a good or a reasonable or any .profit in these times. In better times that is a matter we should consider, because we want industry stimulated, but in these days we are in a world-slashing competition, where everything is being sold below cost, and each can buy the other's product below cost. That is not desirable, and we would not grudge paying more for the other fellow's commodities so long as he was paying more for ours. But when we have to accept a lower price on our product, we should not have to pay a high price or even a reasonable price to the oil companies. That is where the error comes in. The premises are wrong when we are told that this must be applied only to oil. If for oil, why not for wheat? Let us carry the thing further. Let us be consistent. Either let all buy at low prices or let us have fictitious prices created by law for the benefit of us all. If I had had anything to do with the investigation of gasoline prices I would not have worried about costs at all. I would have said to the oil companies: What are your prices? If you like to give us your costs, well and good. That is a matter of interest, but it does not greatly affect this issue. We want your prices. Then I would have easily checked them up, yes, and checked them up without spending ten thousand dollars. Then I would have taken steps to ascertain what genuine competing companies were prepared to put gasoline down at, not companies ostensibly competing in Canada but actually engaged only in distribution, because it was admitted in the evidence that

one company dominated the prices of them all. Then I would have, gone to some foreign country, if there was no competition in Canada, to Peru, the United States, the West Indies, Roumania, even to Russia if that were necessary, and I would have asked for their prices and I would have got them. Then I would have come back to the big company in Canada and I would have told them that the law of trade is the law of the survival of the fittest. I would have said: These are the competing prices you must meet. We would like to see you get the business at these prices. Meet those prices inside of two weeks, or we shall recommend the government to take the dumping duty off. If that had been done, we would not have the situation we have in Canada to-day.
That, Mr. Speaker, is practically the case for the fishermen. I have put it poorly; I have not had time to do it justice. Their situation is desperate. Are we going to help these men to help themselves, or are we just going to give them this miserable dole, letting their boats deteriorate-and they deteriorate very quickly when tied up-letting their nets deteriorate as they do even more rapidly when not in use; letting their gear go down and letting the morale of the men go down, because a fisherman working with a pick and shovel on the road is like a fish out of water. Better give him a little help and encourage him to go on and let someone else go in the bread line if he has to.
I very much regret to have had to take up time at this late hour, because I know the desire of hon. members to get home, but I felt it was my duty to bring this matter to the attention of this house and of the government. The situation of the fishermen is desperate, and I fear for the future because desperate men will do desperate things. There is the situation, and I put the responsibility up to the government. If the oil companies would help along the lines of the suggestions made to me .it might help, but it is only a supposition. If we cannot get some definite assurance, let us take some steps to reduce the duty and take off the dumping duty and thereby fulfil the promise made to us by the Prime Minister in September, 1930, when he said-I could quote Hansard, I have it here-there will be no increase in prices because of an increase in the tariff. When my hon. friend from Shcl-burne-Yarmouth (Mr. Ralston) and myself pleaded with the government to exempt the fishermen the Prime Minister said that it was unnecessary to talk of such a thing because there was not going to be any increase in prices. Possibly there has not been, but the

Agricultural Conditions
other side of it is that there has been no reduction in prices when there should have been. That possibility was put up to the Prime Minister and he said: If there are substantial reductions in prices elsewhere and none in Canada when there should be, we would consider that a breach of the agreement. I maintain, Mr. Speaker, that it has been abundantly proved that the agreement has been broken, that faith has not been kept, and I say that it is up to the government to live up to the promise made by the Prime Minister on that occasion.


George Gibson Coote: I think
possibly I might make use of some words of the speaker who preceded me (Mr. Neill) when I endeavour to bring this discussion back to the amendment moved by the hon. member for Southeast Grey (Miss Macphail), draw the attention of the house to the condition of agriculture in Canada, and say that some measures must be taken to improve the situation now existing.
Agriculture is Canada's most important industry. Through agriculture forty-seven per cent of our people secure their living. Agriculture gives employment to more Canadians than any other industry, and the condition of agriculture is vitally important to every other industry in Canada and I think to every financial interest and financial institution in Canada.
It might be enlightening to members of the house and possibly to members of the government to give the total value of the agricultural production in Canada last year. In 1931 our agricultural production was valued at nearly one billion dollars less than in 1928. In other words, the value of our agricultural production last year was approximately only forty per cent of its value in 1928. Agriculture in Canada took a drop last year of sixty per cent as compared with 1928. May I quote the figures very briefly?
1926..
1927..
1928..
1931..
Total value of agricultural production in Canada .	$1,714,000,000
.	1.825,000,000
.	1.806,000,000
.	880,000,000
I doubt if any other industry could carry on for another year if the value of its production had dropped sixty per cent, and the only reason that agriculture is carrying on to-day is that the farmers are working without wages and in many cases are living on sums earned and saved in previous years. I think, Mr. Speaker, it is evident that something must be done to take care of agriculture. May I quote just one or two paragraphs from Farm and Dairy of April, 1932?
Many people who are making money out of farmers appear not to realize how serious is the situation. When farmers, as thousands of them are doing, find it necessary to give up the use of their automobiles, to disconnect their telephones and to make many other similar economies, it is because they are reaching the limit of their resources. They know that they must save every cent if they are to pull through this time of crisis.
I would like to emphasize the first words of that quotation, "Many people who are making money out of farmers appear not to realize how serious is the situation." I repeat that many other industries in Canada are dependent on the success of agriculture for their success and continuance.
Before I leave this question of the condition of agriculture I would like to quote the actual price of a few of our basic commodities. Ontario farmers at the present time are receiving for their milk which they are sending to the cheese factory, so I was told last week, less than fifty cents per one hundred pounds, which works out at five cents a gallon or 1J cents a quart of milk. That does not pay for the labour involved in taking the milk from the cow. Eggs in Alberta at country points, I am told, bring three cents a dozen. In other words, it takes one dozen eggs to pay for a postage stamp to mail a letter. How can the farmers of Canada continue under those conditions?
I regret very much to have to take up the time of the house at this late stage of the session, but we have been here between three and four months, and nothing that I can think of has been done for agriculture except to reduce the estimates of the Department of Agriculture by about one-third. If anything had been done for agriculture I would not be speaking on this amendment to-night. We have waited to the very last week of the session hoping that the government would do something for agriculture. If agriculture was not in need, I would not be stressing the urgency of the situation at the present time. There is no industry in Canada that has borne the burden and heat of the day to the same degree and so patiently as agriculture. For three years prices of agricultural products have been steadily declining. I notice in the Canadian Countryman, which gives prices of butter in Toronto, that in January, 1930, butter was worth 39 cents per pound and that in February, 1932, it had fallen to 17 cents, in spite of the efforts of the government to assist agriculture. I will admit it is perhaps a little
Agricultural Conditions

difficult for the government to find the necessary measures to assist agriculture. In the amendment there are a number of suggestions. If we may judge from the record of previous governments in Canada with reference to their assistance to agriculture, I have no doubt the program outlined in the amendment will stand for some years before it is completely adopted. I do suggest to the government, however, that they take action on one or two of these matters before the house again assembles.
The vital question to the farmer to-day is that of prices, and the exchange value of his commodities. Before dealing with exchange values, may I say that on an average about thirty-five per cent of the farmer's income must be paid out for debts, interest, taxes, insurance premiums and other payments fixed in terms of dollars. The farmer can pay these liabilities only through the sale of his commodities. When the price he receives from such sales drops to the extent of sixty per cent we will readily understand that he must sell two and one-half times the amount of commodities to pay his debts, interest, taxes, insurance premiums, and so on. I agree with the suggestion made by the Prime Minister some time ago that the people of Canada should hang on to their insurance policies as long as possible, and keep the premiums paid up. But to-day the majority of farmers find it impossible to pay the premiums. There is one thing the government could do for the farmer, and that is to increase farm commodity price levels in Canada. There is a possibility of increasing those price levels.
May I point out that practically all our basic commodities are to-day on an export basis? I refer particularly to wheat, cattle, hogs and dairy products. The export market which fixes prices is in England. The net price at which we sell practically all our wheat-and I am using wheat only as an example-is fixed by the price of that wheat in Liverpool, in English currency, less the carrying charges for taking it over there. That price applies to every bushel of wheat we sell. Therefore the price to the Canadian farmer depends upon the amount of Canadian money we receive for the British pound. Last September we were receiving $4.87.


Richard Bedford Bennett: Is it not the other way about? It is the amount of money they have to pay to meet the Canadian dollar-just the reverse of the hon. member's suggestion.


George Gibson Coote: I think I can prove to the Prime Minister -that my contention is correct. The price of wheat is fixed in Liverpool, when we sell, we sell at Liverpool prices.


Richard Bedford Bennett: No, we sell at our prices.


George Gibson Coote: The price is quoted in Liverpool at so many shillings per quarter, and we sell at that price. Then we bring the British currency over here.


Edward James Young: No, we do not.


George Gibson Coote: The exporter is paid with a bill of exchange on Liverpool or London. Today he receives for the British pound only $4.17, or thereabouts; the rate varies from day to day. Were our currency at a par with English currency he would be receiving $4.87. The same applies to the sale of cattle and hogs. I am sorry I have not the article before me, but may I inform hon. members that in the monthly letter for October of the Packers' Association of Canada they state definitely that the cause of the low price of hogs in Canada is due to the fact that we have a surplus, and are now definitely on an export basis. Not only that, but we are suffering from ithe disadvantage that whereas last September we were receiving $4.87 for the pound, at the time this letter was issued we were receiving only $4.17. In other words there was a loss of 70 cents on every pound sterling. That situation is brought out clearly in letters of the Packers' Association.


Richard Bedford Bennett: The hon. member must be wrong. He knows that when the Englishman buys our wheat he buys at the seller's price, namely 63 or 64 cents. He may have to pay more shillings than he had expected, ibut the fact remains he has to pay it in our money.


George Gibson Coote: Ever since I can remember, we have been told that the price of wheat was set in Liverpool, that we could not set the -price of Canadian wheat. I understood that we sold or kept it, just as we wished, but that when we sold it was at the Liverpool price.


Richard Bedford Bennett: We sell at our own price.


George Gibson Coote: And our prices are determined by Liverpool prices.


Richard Bedford Bennett: That is another matter altogether.


George Gibson Coote: One reason our price is higher than it was a year ago is that to-day we are twelve per cent or thirteen per cent off -gold prices. The same applies to cattle. Some of the Prime Minister's friends in Calgary are probably still in possession of cheques they received for the sale of steers shipped to the old country last October or November. By the time the shipments had reached the old country and the drafts had been sent

Agricultural Conditioris
back here in payment for the cattle the shippers could get only $4.40 per pound sterling. They held the drafts, believing that our dollar would come back to par. Some of them may still hold the drafts, and we know that to-day they are worth only about $4.17 per pound sterling. That has brought down the' price of cattle in Canada. The price of hogs is down in this country. Only a few days ago I quoted a despatch from Montreal by a representative of the Canadian press pointing out that when Canadian butter was shipped to England we took a discount on the British price,-that is, when it was translated into Canadian currency. On the other hand the Danish farmer, dealing in a currency at par with the pound sterling, took no discount, and the New Zealand and Australian farmers were receiving very handsome premiums in the funds of their own countries owing to the fact that the British pound is at a premium in those countries. I am speaking only from memory, but I believe that in Australia the British pound is at a premium of about 25 per cent.
While I am on this subject I should like to refer to a copy of the New Zealand Dairy Produce Exporter, dated Saturday, February 27, 1932. This journal is issued at Wellington, New Zealand, and it carries a report of a committee of experts who had been dealing with conditions in New Zealand, who gave particular attention to the farming industry. I should like to read their findings to the house. Before doing that, however, may I quote one or two paragraphs from their report in which they deal with the dangers of inaction:
It is true that, if no action is taken, farm costs will eventually be brought into line with selling prices, but the present economic and financial system would be in danger of collapse in the process.
I think that is absolutely true in Canada. Our financial institutions are too dependent upon agriculture to ignore the situation prevailing in that industry. The article continues :
Those who prefer to adopt a policy of inaction, or who talk easily of "getting costs down" are completely out of touch with the realties of the situation. If internal prices In New Zealand are to be brought into conformity with our overseas prices by means of a direct attack on costs, it will be necessary to reduce interest, wages, rents, salaries and all payments for services by about 37 per cent, unless export prices rise.
The findings of this committee are very significant and should foe of particular interest to this house and government. The first proposal of the committee is:
As a first step the exchange rate should be raised to twenty-five per cent, and held at not below that level until conditions stabilize overseas. The currency should then be revalued in terms of sterling at a level to be determined by an expert committee.
As I said a few minutes ago, I believe at the present time exchange is at a rate of about ten per cent. This committee would have it raised to twenty-five per cent. That would increase the price of agricultural commodities in New Zealand by fifteen per cent. This committee also suggests:
A reduction in all interests and other fixed charges should be imposed, subject to exemption in the case of hardship.
The government and the banks should agree to a lowering of deposit and "over the counter" rates.
May I once again draw the attention of the house and the government to the findings of this expert committee, the first of which is:
That the exchange rate should be raised to twenty-five per cent and held at not below that level until conditions stabilize overseas.
They mean until price levels overseas rise to the point where the export price of these commodities in terms of British sterling will be sufficiently high to return their cost of production to the New Zealand farmer. This committee consisted of II. Belshaw, M.A., Ph. D., Professor of Economics and Dean of the Faculty of Commerce, Auckland university college, and four other economists from New Zealand universities. I am sorry all members could not read this illuminating article. It deals very fully with the situation facing New Zealand. That situation is a good deal similar to the situation facing the Canadian farmer, but it is better there by at least twenty-five per cent, due to the difference in the value of the pound in the two countries; in New Zealand the British pound is worth somewhere about $5.25, as against $4.18 in Canada. I do not see how we are going to compete with New Zealand in the butter market of the old country with exchange at its present level.
May I point out to the committee that this morning's Citizen carries a despatch from London reporting an address by Sir Josiah Stamp before the Canada Club in London. I believe when the Prime Minister introduced Sir Josiah Stamp to us a couple of months ago he referred to him as one of the world's greatest economists; therefore I quote him with great pleasure, but of course, only briefly. Dealing with Canada's currency dilemma, Sir Josiah is reported in these terms:
Canada's economic dependence upon world prices was greater than ever, Sir Josiah con-
Agricultural Conditions

tinued. It was sometimes thought her decision to adhere to some fixed relation for her currency to the New York dollar as distinct from the opposite course of adopting sterling or some intermediate level rested upon the importance to the dominion of avoiding payment of substantial premiums on her heavy New York obligations. It had been said Canada could not possibly afford this premium or its general effect upon her credit.
This dilemma was more apparent than real in the opinion of Sir Josiah. Even if Canada left her present dollar standard and her internal price level rose, she would still have to pay her New York obligations, and with gold prices raised abroad for her wheat, the relation between the Canadian dollar and the New York dollar would become immaterial for the purposes of payment.
Although it was important Canada should raise her internal price level for successful prosecution of her industries and the ^ balancing of her provincial budgets, he believed the dominion might be no more successful than England if the advantage gained by exchange depreciation continued to be offset by falling gold prices abroad.


Richard Bedford Bennett: Hear, hear.


George Gibson Coote: The report continues:
It might well be better, Sir Josiah said, for the dominion's internal price level to remain practically the same as at present than for it to fall continuously in relation to the price level of the United States.
I agree with that, but I think it would be much better for the price level of Canada to rise. Of course, I am talking of the commodity price level. The report concludes:
The United States, he stated, was far better balanced internally than Canada and consequently better able to stand price depreciation.
Canada cannot stand that price depreciation, because it is affecting directly forty-seven per cent of her people engaged in agriculture; it is not affecting the remainder of the population to the same degree, and consequently you have this unfair relation of prices. This question of price stability is one on which I think Sir Josiah Stamp is an authority. He has written a book lately entitled Gold and the Price Level. I quote this one paragraph from it:
The problem of the price level is the most important single problem of the age. ... With business men there is still a sneaking feeling that references to the price level are academic and highbrow, not practical and immediate, . . . and yet it is the most bitterly practical of all questions.
The farmer cannot continue with the present price level. In fact there is no level about it. The price of what he sells has dropped sixty per cent, while the price of what he buys has dropped only fourteen per cent. Surely that cannot continue in Canada.
I Mr. Coote.J


Richard Bedford Bennett: To say that the price of what he sells has decreased sixty per cent, while the price of what he buys has decreased only fourteen per cent, is hardly correct, for you are taking into consideration insurance, taxes and other items of that character which are a constant factor to all parties in the state.


George Gibson Coote: The actual figures I quoted
are I think approximately correct. I based them on figures supplied by the Labour department and the bureau of statistics. Certainly they indicate the change in the different price levels. Mr. J. M. Keynes, one of the most prominent economists of the world, says:
Modern capitalism is faced, in my opinion, with the choice between finding some way to increase money values towards their former figure, or seeing widespread insolvencies and defaults, and the collapse of a large part of the financial structure.
It is that collapse which I am anxious to avoid. I urge the government very respectfully but very earnestly, to take action to raise price levels for the farmers of Canada.


Richard Bedford Bennett: How?


George Gibson Coote: By allowing our dollar to
depreciate.


Richard Bedford Bennett: How?


George Gibson Coote: I think the Prime Minister
knows very well how to do it. On one occasion he stated in this house-


Pierre Édouard Blondin: It being eleven o'clock
this house stands adjourned until eleven o'clock to-morrow morning.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Wednesday, May 25, 1932