1934-06-20

PRIVATE BILLS COMMITTEE

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

[Stage Direction]
Hon. HUGH GUTHRIE (Minister of Justice) moved for leave to introduce Bill No
114,	to amend the criminal code.
Motion agreed to and bill read the first time.

[Stage Direction]
Hon. HUGH GUTHRIE (Minister of Justice) moved for leave to introduce Bill No
115,	respecting the election of members of the House of Commons.
Some hon. MEMBERS:: Explain.


Some hon. MEMBERS:: How about
Ontario?


Mr. GUTHRIE:: Mr. Speaker, before
attempting to explain the bill I must thank my hon. friends opposite for the kindly greeting they have given me.


Mr. HANBURY:: For the last time.


Hugh Guthrie: Well, I have no fear on that score. This bill becomes necessary, Mr. Speaker, as a result of the franchise bill which is now before the house. This bill as introduced will repeal the Dominion Elections Act. It removes from it all the clauses which have now been transferred to the Franchise Act and reenacts those clauses in another form according to their numbers. The one is consequential upon the other.


Mr. LAPOINTE:: Are there any changes involved?


Hugh Guthrie: There are some changes. When the bill is introduced my hon. friend will have a chance to examine it. My idea is to have it printed for distribution at once.


Mr. CASGRAIN:: What are the changes?


Hugh Guthrie: There are some changes which are absolutely consequential upon the changes in the Franchise Act. The only other change that I need mention is the repeal of the section whereby returning officers were appointed by the chief electoral officer under the present law. The bill proposes to revert to the old system and the returning officers will be appointed by the governor in council.


Ernest Lapointe: Political appointments.


Mr. BENNETT:: They were last time.
Motion agreed to and bill read the first time, on division.



REPRESENTATION ACT, 1933

[Stage Direction]
Hon. HUGH GUTHRIE (Minister of Justice) moved for leave to introduce Bill No. 116, to amend the Representation Act, 1933.
Some hon. MEMBERS:: Explain.


Hugh Guthrie: As hon. members are
aware, the Representation Act passed last session does not come into force until the dissolution of parliament. The present bill enables work to be done in connection with the appointment of returning officers prior to the dissolution of parliament. The ridings have been rearranged and many will disappear and if time is to be saved it will be necessary that power be given to take certain steps in advance of dissolution.


Mr. MACKENZIE KING:: Do I understand the Minister of Justice (Mr. Guthrie)

Representation Act
to say that the bill which he is now introducing will not come into effect until after the dissolution of parliament?


Hugh Guthrie: No. The present Representation Act does not come into effect until dissolution. Constituencies have been changed throughout Canada and some of the old ones will disappear and new ones will come into being. There is only one clause in the bill which I am now introducing and I might as well read it. It reads:
Provided that for the purpose only of authorizing and enbling the appointment pursuant to the Dominion Elections Act, 1934, of returning officers, this act shall be deemed to be now in force.


William Lyon Mackenzie King: Inasmuch as
the Minister of Justice has mentioned dissolution, might I ask the Prime Minister (Mr. Bennett)-


Richard Bedford Bennett: This is not the time or
place for that question; it should be asked on the orders of the day.
Motion agreed to and bill read the first time.


Mr. DENIS (Translation):: Mr. Speaker, I wish to inquire of the hon. Minister of Justice (Mr. Guthrie) whether the French copies of these bills are ready for distribution. We have noted recently that the French revision of bills has been delayed, so that we are unable to follow these bills in our own mother tongue.


Mr. SPEAKER:: Question No. 1.


Joseph-Arthur Denis: I want a reply to my
question.


Mr. DUPRE (Translation) :: Would the hon. member be kind enough to explain so that we may reply immediately?


Mr. POULIOT (Translation):: Do you not
understand French?


Joseph-Arthur Denis: I understand
that the hon. Solicitor General wished to have the questions put in a legal form. Can we not express ourselves in French without having recourse to a legal form, so as to be understood by the hon. Solicitor General?


Mr. MERCIER (St. Henri) (Translation):: Mr. Speaker, the hon. member for St. Denis requested-


Pierre Édouard Blondin: The hon. member can
put his question when the orders of the day are called.


Mr. MERCIER (St. Henri):: The hon.
member wanted to know if this bill has been printed in French.


Hugh Guthrie: It will be printed in due time according to the rules; it is just being introduced.


Pierre Édouard Blondin: The bill is only introduced to-day.



QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. McKENZIE (Assiniboia):: 1.	On what date did the agent on the White Bear Indian reserve in Saskatchewan resign his position?
2.	Did the department give notice to the farm labourer on the reserve, H. R. Bush, that his services were no longer required after April 1, 1934; if so, why?
3.	Has either or both of these positions been filled; if so, why?
4.	Is it true that there is only a farm instructor resident on the reserve at the present time, and that an agent living some eighty miles distant is acting as agent on the reserve?
5.	Was a report reecived last winter by the Department that some twenty or more families were in dire want and that the acting agent found this condition to exist when he visited the reserve?
6.	Did the acting agent at that time authorize flour to be loaned to these families, which was later to be repaid out of the proceeds of the rental from the lake resort on the reserve?
7.	Were the Indians also asked to give orders on their treaty money for seed potatoes and food?
8.	How much money is to the credit of the Indians on this reserve from the surrender of two reserves in the Moose Mountain area some thirty-two years ago?
9.	How much is the yearly rental of the lake resort on the reserve?
10.	How is this money distributed?


Mr. MURPHY:: 1.	December 1, 1933.
2.	Yes. It was considered his services were no longer required.
3.	No.
4.	A farming instructor is resident on the Moose Mountain reserve: the Indian agent lives at Broadview, Sask., a distance of approximately 55 miles from the centre of the reserve.
5.	The inspector of Indian agencies reported January 9, 1934, that the Indians of the Moose Mountain reserve were in need of food and that he had purchased 30 sacks of flour for them.

Questions

6.	At that time the department instructed the inspector to purchase food supplies to the value of S800 if necessary; .payment was made as follows: $540 from band funds and $266.87 from parliamentary appropriation.
7.	So far as is known the Indians were not asked to give orders on their treaty money for seed potatoes and food.
8.	Capital $22,725.41; interest $1,089.09.
9.	$800.
10.	Credited to band funds.


MINGAN INDIAN AGENT
Mr. CASGRAIN:: 1.	Who is the present acting Indian agent at Mingan, on the north shore of the St. Lawrence river?
2.	Who appointed such acting agent?
3.	By whom was he recommended?


Mr. MURPHY:: 1.	Maxwell George, Hamilton.
2.	The Civil Service Commission.
3.	Answered by No. 2.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. POWER:: 1.	Was Mr. J. Bte. Painchaud in the employ of the marine department, signal service, Crane island, during the navigation seasons of
1931,	1932, and 1933?
2.	Were his services retained for the navigation season of 1934?
3.	If not, what were the reasons for his dismissal?
4.	Did the said gentleman pass the examinations required by the department?


Mr. CAHAN:: Return tabled herewith.


MR. DANCAUSE
Mr. POWER:: 1.	Was Mr. Dancause in the employ of the marine department, signal service, Crane island, during the navigation seasons of 1931,
1932,	and 1933?
2.	Was he employed during the navigation season of 1934?
3.	If this man was not employed during any of the aforesaid navigation seasons, why was he not employed?
4.	Did the said gentleman pass the examinations required by the department?


Charles Hazlitt Cahan: Return tabled herewith.


MR. CHARLES N. ROY
Mr. POWER:: 1.	Was Mr. Charles N. Roy in the employ of the marine department, signal service, Crane island, during the navigation seasons of 1931, 1932, and 1933?
2.	Was he employed during the navigation season of 1934?

3.	If he was not employed during any of the aforesaid navigation seasons, why was he not employed?
4.	Did the said gentleman pass the examinations required by the department?


Charles Hazlitt Cahan: Return tabled herewith.


SEIZURES OF LOBSTER GEAR
Mr. MacLEAN:: 1.	How many seizures of lobster gear were made by patrol boat No. 2 in Malpeque bay and vicinity, during the season of 1933?
2.	How many seizures of lobster gear were made at Tignish and Hardy's channel. Prince Edward Island, during the season of 1933?
3.	What quantity of traps, rope and gear was seized in each case and how was same disposed of?
4.	What amount of money was realized from the sales?



DISSOLUTION OF PARLIAMENT

[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: Mr. Speaker, in view of the results of the elections yesterday in Ontario and Saskatchewan and the participation in the campaign of so many hon. members of the government, including the Prime Minister (Mr. Bennett); also in view of the fact that this is the fifth session of this parliament and that the results in federal by-elections during the past few years have been what they were, might I ask the Prime Minister if he does not consider that the time has come when he should announce that at the conclusion of this session there will be an immediate dissolution of parliament?


Richard Bedford Bennett: Mr. Speaker, I have listened to the question of the right hon. leader of the opposition. If a reply were needed, the categorical answer would be no. The government will advise His Excellency as to dissolution when in the opinion of the government dissolution is desirable in the interests of this country.


William Lyon Mackenzie King: What about the opinion of the people?



PRICE OF COAL

[Stage Direction]
On the orders of the day:
Joseph-Arthur Denis: Mr. Speaker, the government is surely aware that coal companies have raised the price of coal from $2 to $2.50 per ton, within the last days. Such action on the part of coal companies must be looked upon as a challenge to public opinion and especially to the judgment delivered by the Superior Court of Quebec. I wish to inquire whether

Wheat Sales in the Orient
it is the intention of the government to take any steps to prevent these companies exploiting the public and scorning the authorities and laws of this country?


Hon. H. H. STEVENS (Minister of Trade and Commerce):: Mr. Speaker, I understand the hon. gentleman is referring to the increase in the price of coal in certain sections of the country. As far as my department has anything to do with that, we have made inquiries. There is some reason for the increase in the price of imported coal-that is what he refers to:	Welsh coal-because of
the difference in exchange this year as compared with last. There is a difference of 75 cents or $1 a ton. But there is no particular duty resting upon the department over which I preside or upon the government as a whole in regard to the matter, apart from the general interest that might be taken in the subject.



FIRST NARROWS BRIDGE

[Stage Direction]
On the orders of the day:
Hon. IAN MACKENZIE (Vancouver Centre) :: Has the Minister of Public Works any further announcement to make with respect to the progress of negotiations affecting the building of the First Narrows bridge at Vancouver?


Hon. H. A. STEWART (Minister of Public Works):: I have nothing to say in addition to what has already been stated by myself and the Prime Minister. 1 understand that further representations are to be made, and those opposed have asked an opportunity to make further representations.


Mr. McINTOSH:: So it is not in the public works program.



DREDGING AT TRACADIE

[Stage Direction]
On the orders of the day:
Hon. P. J. VENIOT (Gloucester):: Has the Department of Public Works issued an order for the removal of the dredge boat at Tra-cadie which has been there the last two years?


Hugh Alexander Stewart: I understand my hon. friend from Gloucester is asking whether instructions have been given for its removal. No.


Peter John Veniot: I have another question to ask. Are repairs being made to the dredge boat at Tracadie at the present time?


Hugh Alexander Stewart: I am not sure; I will make inquiries and advise my hon. friend.
7472R-261J



WHEAT SALES IN THE ORIENT

[Stage Direction]
On the orders of the day:
Hon. W. R. MOTHERWELL (Melville):: On a question of privilege, Mr. Speaker. I regret very much the necessity of once more calling attention to the fact that a certain return I asked for away back in February has not yet been tabled, unless it was done to-day. Possibly, if it has been tabled to-day, the Secretary of State will so inform me and I shall require to say no more.


Charles Hazlitt Cahan: What is the return?


William Richard Motherwell: I wish to direct the attention of the house to the fact that apart from some comparatively unimportant communications which were apparently obtained by the Department of External Affairs, the order that was passed by this house has not been complied with, nor has there been any valid or indeed any kind of excuse for noncompliance with this order. I wish to read the order and I shall endeavour not to depart from the strict letter of my duty in speaking to a question of privilege. The order reads:
Return to an order of the House of Commons, dated 12th February, 1934, showing:
A copy of all correspondence, cables and other documents, exchanged between the Hon. Herbert Marler, Canadian representative in Tokyo, Japan, or the representative of any other country, and any member of the federal government, with respect to the possibility and practicability of disposing of more Canadian farm products, especially wheat and wheat flour, either in Japan or China, during the past three and a half years.
I know, Mr. Speaker, that in this day of stirring events this is a comparatively unimportant return; but that depends, I may say, on what it may contain. I think there is prospect of something very important being in it if I can only get the Minister of Trade and1 Commerce (Mr. Stevens), in whose possession it is, to table it. I have waited long and patiently, as I think you will agree, for this return. I wonder, Mr. Speaker, whether we can get a little order; I cannot hear myself talking. I know that we will-have to forgive them under the circumstances and events of yesterday.


Richard Bedford Bennett: Hear, hear.


William Richard Motherwell: The days that it
should have taken to comply with the order have extended into weeks and the weeks into months-four months and nine or ten days;' yet the order has not made its appearance. Since the events of yesterday have passed, it occurred to me that this would be the
Wheal Sales in the Orient

psychological time, when the government is in particularly good humour, to come across with this return. I have done nearly everything an hon. member can do. I cannot go across the aisle and commit some act of violence, especially when I know the report is not there or it would have been tabled to-day; and it might not be a safe performance to indulge in anyway. Seriously, I feel that the Minister of Trade and Commerce, according to his own officers, has a report from the Hon. Mr. Marler on the question of selling more wheat to China or Japan, and he simply has not tabled it. He has flouted the command of the house; he has refused to obey, without giving any kind of excuse I have heard yet. I will now give the minister an opportunity of either saying that he will table it or giving a valid reason why he cannot or won't.


Henry Herbert Stevens: The hon. gentleman is not quite fair in his attitude to-day, and on reflection I think he will recognize that he is not. As a matter of fact, everything which it is proper to file has been filed. Certain documents may pass between one department and another or between the minister representing this government in Japan, as in this case, and the Department of External Affairs, which it is not proper or competent for the government to bring down. Such documents as we could bring down we have brought down I went further, in my desire to assist the hon. member, and asked1 my officers to go over matters with me so that we might try to bring before him anything which it was within our power to bring down. Furthermore, I asked the head of the commercial intelligence branch to look over the files to see whether he could find any interesting or helpful information or documents there, and these are now in process of being prepared, as I am informed by my officers, and will be forwarded to the hon. member. But he had not asked for such documents; that is done purely as an act of courtesy to him. So far as the technical obligations of the government are concerned, they have been fully complied with.


William Richard Motherwell: I do not think I
can speak a second time on a question of privilege, can I? All I say is that four months of courtesy is delightful, but four minutes of action would be better.



SASKATCHEWAN ELECTION

[Stage Direction]
On the orders of the day:
Ernest Lapointe: As we have the pleasure of seeing the Minister of Agriculture back in the house, perhaps he will satisfy my curiosity if I ask him whether the marketing act was an issue in the campaign in Saskatchewan.


Jean-François Pouliot: It was in Ontario.


Hon. ROBERT WEIR (Minister of Agriculture) :: Hon. members will agree that, in
view of the size of the question, it requires no answer-


Jean-François Pouliot: There is never an answer.


Robert Weir: -but I have no
hesitation in saying this, that had it been a major issue the results might not have been so satisfactory from his point of view.



PRIVATE BILLS COMMITTEE

Mr. T. H. STINSON (Victoria, Ont.) moved:: That the recommendations contained in the ninth report of the select standing committee on miscellaneous private bills respecting the refund of the private bill fee of $200 in connection with Bill No. 9 be concurred in.


Pierre Édouard Blondin: By consent of the house.


[Stage Direction]
Motion agreed to.

[Stage Direction]
The house resumed from Friday, June 15, consideration in committee of Bill No. 99, to amend the Income War Tax Act-Mr. Rhodes -Mr. Sullivan in the chair.
On section 14-Non-residents deemed to be carrying on business.
Mr. RALSTON:: While the bill is before committee I presume the Prime Minister is in charge of it. I want to point out that the other day clause 8 was passed along with a number of other clauses without any discussion. I wonder whether the Prime Minister could give the committee an explanation if he would permit me to refer to clause 8, subclause 6.


Richard Bedford Bennett: Let us first dispose of the clause before the committee. This clause stood at the instance of the hon. member for Van-couver-Burrard (Mr. Hanbury).


Some hon. MEMBERS:: Carried.


Richard Bedford Bennett: Had it not stood, the necessity of preparing a large amount of in-

Income War Tax Act
formation which I thought the hon. member wanted with respect to it would have been obviated. I am very glad to dispense with the reading of the information.


Wilfred Hanbury: I have in the meantime received some of the information and I am quite satisfied.


[Stage Direction]
Section agreed to.
James Layton Ralston: Would the Prime Minister kindly allow me to refer to clause 8, subclause 6, and to direct his attention to the particular point I have in mind? This subelause seems to be a provision against non-residents. It has been, I understand, a principle in income tax legislation that non-residents shall not be taxed in view of the fact that our residents do not expect to be taxed in a foreign country. After all, the matter works out pretty fairly. If you tax a non-resident he receives exemption from his tax in his own country, and if a foreign country taxes our residents they get an exemption here, so by and large, the matter works out evenly. But I submit to my right hon. friend that this particular clause invades an entirely new field of taxation, and with all due deference I think there is considerable objection to it. Perhaps the Prime Minister would indicate whether there is some particular case-and by that I mean not a particular individual case but class of cases-which has been dealt with, which justifies a departure from the general rule.


Richard Bedford Bennett: Perhaps the hon. gentleman is aware quite as well as I am, that there has been a tendency on the part of all countries during recent years to make more drastic provisions in their income tax laws. In Great Britain, the United States and other countries it has been the practice in recent years to secure so far as possible a tax from any corporation or individual making an income in the particular country. It will be remembered that in the United States for a time they required a certificate that all taxes had been paid before a person was allowed to board a ship at New York to go abroad, and similar provisions have been made with respect to receipts for money received by artists and even by prizefighters in cities of the United States. In this country we have been endeavouring slowly to develop our income tax law. For instance, clause 14 that stood goes back as a matter of fact to 1924, it being put upon the statute books then.


Wilfred Hanbury: Has that clause ever been operative?


Richard Bedford Bennett: Yes, perhaps $56,000 were secured under it last year.
With respect to clause 8, subclause 6, although it has been passed, I am making this: explanation which is given without my attention being directed to it with care. It will' be observed that subclause 6 reads:
The income for any taxation period of a non-resident beneficiary of any estate or trust shall be deemed to include all income accruing: to the credit of the non-resident beneficiary, whether received by him or not during such taxation period, and such non-resident beneficiary shall be liable to taxation in respect of such incomes as in the ease of an unmarried person resident in Canada: provided that he shall not be entitled to the exemptions provided by paragraphs (e) and (i) of subsection one of section five of this act. The tax payable hereunder shall be deducted by the trustee from any amount otherwise payable to such beneficiary and remitted to the receiver general of Canada.
The family corporation we have wiped out. The personal corporation still exists; that is, if John Smith desires to incorporate his estate and call it John Smith, Limited, he may do so. He may not disburse all the revenues coming from that estate in any particular year; what he may do is retain the income during the year and reinvest it, but under the law as it now stands he is liable for tax. There was some difficulty about this point but it has been cleared up and the practice now is to tax the income regardless as to whether it has been disbursed. The income tax branch advises the Department of Finance that in this country there are large numbers of trusts created by non-residents, and these trusts have been, shall I say, profitable inasmuch as they have substantial incomes which in some instances are not disbursed and are reinvested for those who own the fund, that is, those who created the trust. This proposes that the income thus derived from the operations of a trust in Canada shall pay tax in the same way as a personal corporation would do. I am not unaware of the fact that this matter has been discussed on previous occasions-and I am now speaking, as I say, without having carefully gone into it-and the suggestion has been made that the effect of taxing the income of such trusts would be to militate against money coming into this country for investment, But any tax thus paid by a beneficiary under the trust would in most cases be free from taxation at least in the country in which the creator, or the settler, if you will, resides. Either in Great Britain or the United States that would be a taxable deduction from his income for the current year; that is, assuming that the income of the trust in this country was sufficient to create a tax of $500, he would be entitled in Great Britain or the United
Income War Tax Act

States, on production of evidence that tha-t tax was paid here, to set that up as a deduction against his income tax. In Great Britain they tax such trust incomes in the manner I have just indicated. I know the income tax branch have given a great deal of attention to this matter and they have concluded there is no reason why a trust set up by non-residents and producing substantial income should be treated differently from a personal corporation established in this country by one of our own citizens in his lifetime. The enforcement of this provision with respect to trusts has been limited to those originated, shall I say, by persons who resided in countries where a deduction is allowed from the income tax payable by them of the amount paid on the income from the trust here. I think that is as clear a statement as I can make from my understanding of the provision.


James Layton Ralston: I did not catch the numbers the Prime Minister gave last night as to the bills that were coming up for discussion to-day, and although I made inquiries I did not know this one was coming up. I wonder whether the Prime Minister would allow the bill to stand in committee.


Richard Bedford Bennett: Well, I had intended to move the bill forward to-day. Frankly, I do not think the government is prepared to abandon the provision.


James Layton Ralston: I am not talking about abandoning it. I want to mention just one matter.


Richard Bedford Bennett: This clause has been passed.


James Layton Ralston: In committee.


Richard Bedford Bennett: The bill stood for one purpose only, that is in regard to clause 14, and the hon. gentleman who asked that that clause stand now says that he is satisfied about it because it was put into the statutes of 1924. But I always like to accommodate hon. gentlemen opposite. The bill has to go to the Senate, but if he desires it to stand I will not press it to-day.


James Layton Ralston: I telephoned this afternoon to the commissioner of taxation and I found he was at the house. The point I have in mind is, the Prime Minister's explanation indicated that the bill is directed towards the income of Canadian trusts.


Richard Bedford Bennett: Of trusts established in Canada.


James Layton Ralston: I point out that the bill does not seem to provide for that. I wanted to look at the bill and see if that amendment should not be made, if the government has decided upon the policy of taxing nonresidents, as to the advisability of which I have some doubts. I think the bill should, as the Prime Minister's explanation indicates, be confined to estates or trusts established in Canada. Perhaps the Prime Minister would allow it to stand for an hour or two-


Richard Bedford Bennett: But I desire to point out that our taxing arm does not reach to other than Canadian trusts.


James Layton Ralston: I think the Prime Minister forgets that we have lengthened our taxing arm by directing that taxes shall be deducted at the source. Therefore you may have a trust established in Great Britain or France or somewhere with regard to Canadian securities, and your taxing arm will reach there because you deduct the tax where the bond interest or the dividend is paid.


Richard Bedford Bennett: But not the source in the sense in which the hon. gentleman used the word a moment ago. Our taxing arm cannot compel any corporation in Great Britain or France to do anything. What we can tax is the income here from the Canadian investment. But our taxing arm does not touch the corporation in Great Britain or France, but only the income in this country.
I desire further to point out that subsection 6 does not tax non-residents. Let us get that out of our head. AVhat we are taxing is the income in this country that may belong to people not in this country. That is an altogether different thing. What we are taxing is income, not individuals.


James Layton Ralston: I do not see that distinction.


Richard Bedford Bennett: Well I think most people will agree that there is a very clear distinction between saying that you are taxing an income accruing outside of the country and taxing an income in this country that belongs to a person not residing in it. Surely if the money is earned in this country it is not unfair to do what they do in Great Britain and France, namely tax it here, although the person in receipt of it may be in China or India. In the United States very large sums are being collected on just such trusts set up there. I suppose it is known to the hon. gentleman from his reading that very large sums of money have been invested in the United States in that form by those who reside in many countries of Europe. In that

Canadian-British Insurance
country they have stretched out their arm not against the individual but against the money. It is not a non-resident tax, it is a tax against money made under the protection of the institutions of the country. The contribution that is made by those who have thus obtained the income comes out of the money so secured. I know the argument against it, that it discourages the coming in of funds from abroad; that the trusts will no longer continue. That has always been the argument. I find that in other countries where that argument has been disregarded there has been no such result. People continue to invest where they think it safe and where they can secure under reasonably sound conditions the largest income. Out of that income we take something because the protection of our laws and the institutions of our country have enabled the profit to be obtained.
However I move that the committee rise and ask leave to sit again this day in order to meet the hon. gentleman's view, although as a matter of fact I have not moved that we reconsider the section. But we can carry on the discussion without doing that.
Progress reported.



CANADIAN AND BRITISH INSURANCE COMPANIES

[Stage Direction]
Right Hon. R. B. BENNETT (Prime Minister) moved the second reading of Bill No. 72, to amend the Canadian and British Insurance Companies Act, 1932.
He said: It is proposed to amend this legislation in very important particulars. The bill has passed the Senate and comes to us from that chamber. As it stands it is intended to secure to life insurance companies carrying on business in Canada the right to obtain a licence from the insurance department of this country. Companies other than life insurance companies of course are also involved. I need hardly point out to this house what is very well known, that the last judgment of the privy council made it clear beyond peradventure that the business of insurance is within the exclusive jurisdiction *of the provinces. Nevertheless there are certain features of insurance business, life insurance business in particular, that require to be considered from the standpoint of insolvency, from the standpoint of interest and other standpoints that fall solely within the jurisdiction of this parliament. Eminent counsel have been engaged from time to time by those who are greatly concerned, because I need hardly point out to this house how anxious companies carrying on life insurance
business are to have a licence from the Dominion of Canada, especially when carrying on business in foreign jurisdictions; they have found it valuable to have the actuarial experience of this dominion under the direction of the superintendent of insurance-
If hon. gentlemen in the rear will be good enough to go into the lobbies to talk there rather than here, I suggest it would be better.
The effect of securing the licence, of course, is to indicate that the actuarial department under the direction of the superintendent of insurance have satisfied themselves of the solvency of the company securing the licence The benefits that have accrued to Canadian companies doing business abroad by having that licence have been very great. I think I indicated in this house on one occasion that a Canadian company has at risk in the United States of America over a billion dollars of insurance in all forms, and many millions are at risk in other countries, as well as in Canada. So this bill was prepared on the assumption that this comes within the legislative competence of parliament.
There are certain sections to which attention was specifically directed the other day, that is it is proposed to withdraw certain insurance companies or organizations or associations from the operation of the bill.
Ian Alistair Mackenzie: Lloyds?


Richard Bedford Bennett: Yes. So^ that the principle of the bill may be explained in a single sentence, as being that jurisdiction should be established for the parliament of Canada, if possible, in the manner indicated, for companies that desire to secure licences under our act to enable them to have the benefit of such expression of approval in the carrying on of their business in other countries.


Ian Alistair Mackenzie: I want
to congratulate the government on withdrawing from this bill the clause affecting Lloyds. I may say that I read with great interest the debate that occurred on this subject in another place and I was not impressed by the learned legal argument of the leader of the Senate in regard to the question of bankruptcy and insolvency as affecting Lloyds. His argument was that the privy council would be influenced on this question because the suggestion of bankruptcy or insolvency could not be thought of in connection with such a wonderful company as Lloyds. I think the opinion of any member of this house would be that Lloyds or any company doing business in this country should have the same and no better treatment than our own Canadian companies. I
Canadian-British Insurance

am sure that the Prime Minister is aware of the history concerning the legislative jurisdiction of the dominion parliament in regard to the question of insurance. First the appeal of 1910 by the province of Alberta, then the appeal of 1924 when the dominion endeavoured to solve these matters under the guise of criminal jurisdiction. Again theTe was the question of taxation in 1931. Now they are proceeding under the inherent jurisdiction of this parliament as to bankruptcy and insolvency, and so far as I am concerned I have no objection whatever to the general provisions of this measure. If the objectionable clause had not been withdrawn, however, I would have had very serious and sustained objection.


James Layton Ralston: All I want to say, Mr. Speaker, is
that I think the government have been wise in coming to this decision. Further I think they have shortened the session considerably, because I am sure we would have heard a number of lengthy, earnest speeches as to this clause, which was very objectionable to all parts of Canada.


Richard Bedford Bennett: I desire to correct just
one statement; I shall do so more fully when the bill is in committee, but I think it desirable to mention the matter now. Lloyds were not the applicants in the first instance in regard to this matter. I think in fairness to that great organization I should state that they were not seeking these benefits. However, they said that under their charter and the relevant legislation they could not put up a deposit; I understand that in one state of the American union some of their insured made the deposit for them. I mention this in order that there may be no animadversions cast against that organization under the circumstances to which I shall refer presently.


Mr. JACOBS:: May I ask if this was a
government measure?


Richard Bedford Bennett: It was explained by the
leader of the government in the Senate, who introduced it, that it was introduced for reasons that were obvious, and it was left to the free action of the Senate to determine what should be done.


Samuel William Jacobs: I see that the minds of the members of the government were not at one on this measure.


Richard Bedford Bennett: Yes, they were.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Sullivan in the chair.

On section 1.
Richard Bedford Bennett: This section deals with the preamble of another statute, and I think it might very well stand for the moment. I propose to substitute a preamble that will read as follows:
Whereas it is desirable to provide for the registration of such companies and of British insurance companies which may desire to carry on the business of insurance in Canada, and for the voluntary registration of provincial companies; and
That is a frank recognition, as will be observed, of the provincial jurisdiction.
Whereas it is contrary to the public interest that insurance companies which are unable to discharge their liabilities to policyholders in Canada as they become due, or are otherwise insolvent, should be permitted to carry on the business of insurance in Canada; and
That is in order to make it perfectly dear that there is no desire to trench upon the exclusive jurisdiction of the provinces but to remain within the jurisdiction of the dominion with respect to insolvency and bankruptcy. I may point out that recently, when a foreign company registered here went into a receivership in the United States and did not pay its policyholders promptly, but paid them in instalments, solely by reason of the deposit here we were able to have those claims in Canada adjusted without delay, in view of the judgment of the courts that the deposits in Canada might be available for Canadian losses. Then there is the further declaration:
Whereas it is desirable to provide by a system of returns and inspection against such companies engaging in, or continuing to carry on, business in Canada while unable to discharge their liabilities to such policyholders as they become due or while otherwise insolvent, and to declare the conditions upon which such companies shall be deemed to be insolvent and be subject to be wound up under the provisions of the Winding-up Act;
I think hon. members of the house who are also members of the legal profession will realize that once we found jurisdiction upon insolvency it follows that returns should be made to provide for continuing solvency in order that claims might be met as they come due. I will not ask the house to pass this preamble until we finish the bill; then we may come back to it. Or I will make the motion for the amendment of section 1 now if it is thought desirable. That seems to be the general consensus of opinion, so I would move that paragraph 2, 6 and 7 of the preamble to the Canadian and British Insurance Companies Act, 1932, chapter 46 of the statutes of Can-

Canadian-British Insurance
ada, 1932, be repealed and the following substituted therefor:
1. Paragraphs two, six and seven of the preamble to the Canadian and British Insurance Companies Act, 1932, chapter forty-six of the statutes of Canada, 1932, are repealed and the following substituted therefor:
Whereas it is desirable to provide for the registration of such companies and of British insurance companies which may desire to carry on the business of insurance in Canada, and for the voluntary registration of provincial companies; and
Whereas it is contrary to the public interest that insurance companies 'which are unable to discharge their liabilities to policyholders in Canada as they become due, or are otherwise insolvent, should be permitted to carry on the business of insurance in Canada; and
Whereas it is desirable to provide by a system of returns and inspection against such companies engaging in. or continuing to carry on, business in Canada while unable to discharge their liabilities to such policyholders as they become due or while otherwise insolvent, and to declare the conditions upon which such companies shall be deemed to be insolvent and be subject to be wound up under the provisions of the Winding-up Act;


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 2-"Association."
Richard Bedford Bennett: Now, in order to meet the difficulty, section 2 will have to be amended. It is proposed that section 2 as it now stands be struck out, and the following substituted therefor:
2. Section two of the said act is amended as follows:
(1)	By striking out paragraphs (b) and (c) thereof and substituting therefor the following:
(b) "British company" means any corporation incorporated under the laws of the United Kingdom of Great Britain and Northern Ireland or any British dominion or possession other than Canada or a province of Canada for the purpose of carrying on the business of insurance.	,	.
(2)	Bv relettenng paragraphs (d) to (pi thereof (c) to (o) respectively.
That makes it perfectly clear that provincial companies are not affected.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 3 to 35 inclusive agreed to.
On section 36-Documents required to be filed.
Richard Bedford Bennett: With respect to this section it will be observed that certain documents are required from companies other than Lloyds. I think I should avail myself of this
opportunity to indicate what I cannot too strongly urge, that there is no reflection in any sense upon the great association known as Lloyds by reason of this action being taken.


Ian Alistair Mackenzie: There was none intended from this side.


Richard Bedford Bennett: Those who are interested in the history of Lloyds and who desire to be fully informed may consult the articles in the Encyclopaedia Britannica, where they will find a very full history of its operations. The magnitude of its operations now is almost beyond our comprehension. In every part of the world they transact business. They have had risks in Canada for many, many years, and they have very large risks in this country at the present time, and in fact are authorized in the province of Quebec to carry on business. Provisions have been specifically made, and if the committee so desire I might indicate what they are, with respect to this company carrying on business in various parts of Canada. The organization of the company is such that they are not in a position to withdraw from their funds the deposit that is required by our law without amending their own legislation, and they have indicated that as they have grown up more or less under the aegis of the board of trade in England they do not desire to take that course. During the war their risks were enormous and in every part of the world.
I make this statement in order that there might be no misapprehension or doubt on the part of anyone in this parliament or in Canada as to the solvency of the company or as to its ability to discharge its obligations. Lloyds is an accepted and recognized authority in matters maritime in almost every part of the world. Lloyds register indeed is the last word to which those who seek information in respect to maritime matters refer. Their captains' room in London is resorted to by men from every part of the world, and their means of information with respect to the whereabouts of every ship on the registers of the various countries of the world is really most remarkable. If any hon. members of this house happen to look up the shipping columns of the morning papers in London and notice the whereabouts of different ships in all parts of the world, they will find that if there is a casualty even to a very small ship it is always recorded there. I mention that matter in passing in order that there might be no misapprehension.
Canadian-British Insurance

I move, Mr. Chairman, that section 36 be
amended as follows:
(1)	By striking out the words "other than a member of Lloyds" in the first and second lines of new section one hundred and eighteen.
(2)	By striking out sub-paragraph (i) of paragraph (a) of said new section one hundred and eighteen and substituting therefor the following:
(i) A copy of the charter, act of incorporation or articles of association of the British company, certified by the proper officer in charge of the original thereof.
(3)	By striking out new sections one hundred and nineteen and one hundred and twenty.
(4)	By renumbering new section one hundred and twenty-one one hundred and nineteen.


Ian Alistair Mackenzie: May I assure the Prime Minister that any remarks directed from this side of the house were not intended in any way as an attack on this unique and illustrious organization known as Lloyds; indeed, very much to the contrary. Our objections were based on the fact that we do not desire special privileges to be given to any organization, no matter what, in this country.


Ernest Lapointe: I desire to endorse what the Prime Minister has said with regard to Lloyds. If I am not mistaken, all their funds are already pledged for the security of those who have insurance in that organization to meet claims from all over the world, and that is one of the reasons why it cannot divert any of its funds for deposit in other countries. There is no doubt in the world that any insurance at Lloyds is a safer investment than any other thing.


Mr. EULER:: Mr. Chairman, nothing is to
be gained by prolonging the debate on this bill since the Prime Minister has announced that he is withdrawing from the bill the clause which was so objectionable to a good many Canadians, and to insurance companies in particular. I had a very strong objection to it for the reasons already given, that it constituted discrimination against Canadian companies, and secondly I thought that perhaps after all it was unfair to exempt Lloyds from having a deposit in Canada. If any action had to be brought for the collection of any sum the case might have had to go to the courts in England. Further, I think I am correct in saying that although the clause is being modified it does not preclude Lloyds from doing business in Canada.


Richard Bedford Bennett: They are doing business
here now.


William Daum Euler: And they can continue to
do business here. I am quite in accord with those who have commended the government for the action they have taken in striking out the clause.


Mr. GEARY:: A great many people
throughout Ontario, insurance companies and others, were interested in this matter and they urged the objection to the bill which has led to the clause in question being dropped. Very many of us on this side of the house are thoroughly in accord with the change that has been made and were desirous of seeing it made, and we made such representations as we were able to in order to bring this change about.
Amendment, agreed to.
Section as amended agreed to.
On section 37-Name of company.


Richard Bedford Bennett: I move, Mr. Chairman,
that section 37 be amended by substituting for the figures "122" in the third line thereof the figures "120."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 38.
Richard Bedford Bennett: I move, Mr. Chairman,
that section 38 be struck out and the following substituted therefor:
38.	Section one hundred and twenty-four of the said act is amended by striking out the proviso to subsection one thereof and by renumbering the said section one hundred and twenty-one.
On section 39,-Assets to be maintained in Canada by other companies.


Richard Bedford Bennett: This section has to be amended, Mr. Chairman. If hon. gentlemen will follow me it will expedite matters. I move that section 39 be struck out and the following substituted therefor:
39.	Section one hundred and twenty-five of the said act is renumbered one hundred and twenty-two; and section one hundred and twenty-six of the said' act is repealed and the following substituted therefor:-
123. Every British company registered under this act to transact any class of insurance business, other than life insurance, shall at all times maintain assets in Canada in respect of any such class of business of an amount at least equal to the liabilities of the company in Canada including the liabilities of the company in respect of its outstanding unmatured policies in Canada computed in accordance with the provisions of section one hundred and thirty-seven of this act;
Provided, however, that the assets in Canada of a British company which is a purely mutual

Canadian-British Insurance
fire insurance company shall continue to form part of the general assets of such company, available pari passu to all its policyholders in or out of Canada in the same manner as its other funds; but no such company shall, except with the consent of the treasury board, and upon such terms and conditions as the treasury board may determine, reduce the amount of its assets in Canada below the amount otherwise required by this act to be maintained in Canada.
(2) The proviso to subsection one of this section shall not apply to any such company which files with the minister in a form approved by him, a declaration that the assets in Canada of such company are held for the protection of the policyholders in Canada, exclusively, of such company.
That is a mere statement of the law in the first part; that is, that the assets in Canada are available for Canadian policyholders; but with respect to mutual companies, obviously the very nature of the class of business carried on involves the principle that all the assets are available for all the policy liabilities; and thirdly, there is no necessity to file a specific form of return if they file a declaration and show in their declaration that all the assets in Canada are available solely for Canadian business.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 40.
Richard Bedford Bennett: There is an amendment, Mr. Chairman, to this section, to strike out the figures "126" and substitute "124." That is in accordance with the renumbering that I have just indicated.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 41-Annual statements.
Mr. BENNETT; The figure "127" will be changed to "125."
Amendment agreed to.
Section as amended agreed to.
On section 42.
Richard Bedford Bennett: I have an amendment
to move to this section as follows:
That section 42 of Bill No. 72 be struck out and the following substituted therefor:-[DOT]
"42. Section one hundred and twenty-nine of the said act is amended by striking out the proviso to subsection 2 thereof and by renumbering the said section one hundred and twenty-six; and sections one hundred and thirty, one hundred and thirty-one and one hundred and thirty-two of the said act are renumbered one hundred and twenty-seven, one hundred and twenty-eight and one hundred and twenty-nine respectively."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 43-Examination at head office of British company.
Richard Bedford Bennett: There will be an amendment to change the figure "132" to "130."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 44.
Richard Bedford Bennett: I move an amendment
to substitute the words "one hundred and thirty-one" for the words "one hundred and thirty-three."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 45.
Richard Bedford Bennett: The amendment will be to change "one hundred and thirty-four" to "one hundred and thirty-two."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 46.
Richard Bedford Bennett: The amendment will be
to change the figure "135" to "133."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 47-Application of sections in part III to British companies.
Richard Bedford Bennett: The amendment here is to change the figure "136" to "134" and the words "one hundred and twenty-five" will be substituted for the words "one hundred and twenty-seven."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 48-Special application of sections of this part.
Richard Bedford Bennett: The amendment will be to substitute the figure "135" for the figure "137" and to substitute the words "one hundred and thirty-six" to "one hundred and thirty-eight" for the words "one hundred and thirty-eight to one hundred and forty."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 49.
Richard Bedford Bennett: There is a similar change in the numbering.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Canadian-British Insurance
[Stage Direction]
On section 50.
Richard Bedford Bennett: The amendment here is to change the words "one hundred and forty" to "one hundred and thirty-eight" and the words "one hundred and twenty-five" to "one hundred and twenty-three."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 51-Title insurance.
Richard Bedford Bennett: There are similar changes in the numbering.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 52-Application of sections in Part III to a British company other than a member of Lloyd's.
Richard Bedford Bennett: There is some little
change necessary here because Lloyd's appears. The amendment reads:
Section 52 of Bill 72 shall be struck out and the following substituted therefor:

Section one hundred and forty-three of the said act is repealed and the following substituted therefor:

140. The provisions of sections one hundred and five, one hundred and six, one hundred and seven and one hundred and ten of this act shall apply, mutatis mutandis, to every British company registered under this act to the same extent as such provisions are applicable to a company registered to transact the same class or classes of insurance business under Part III of this act.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 53-Withdrawal of certificate for non-compliance.
Richard Bedford Bennett: Under the amendment this section will read:
If any British company registered under this act fails to deposit in the department annual statements pursuant to the provisions of sections one hundred and twenty-five and one hundred and twenty-six of this act, or declines to permit the examination authorized by section one hundred and twenty-seven or by section one hundred and thirty of this act, or refuses to give any information desired for such purpose in its possession or control, its certificate of registree may be withdrawn by the minister.
These are the same terms that apply with respect to the other companies.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 54-Penalty for transacting insurance without registration.
Richard Bedford Bennett: The figure "144" will be changed to "142" and the words "one hundred and forty-four" will be sustituted for the words "one hundred and forty-six."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 55-Other penalty provisions applicable.
Richard Bedford Bennett: There is a slight change here to substitute the figure "143" for "145."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 56.
Richard Bedford Bennett: This section will have to be amended by changing the words "one hundred and forty-six" to "one hundred and forty-four."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 57.
Richard Bedford Bennett: This section will also have to be renumbered.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 58-Name of company.
Richard Bedford Bennett: The amendment here will provide for renumbering.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 59.
Richard Bedford Bennett: This section will have to be renumbered.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 60-Application of provisions of act.
Richard Bedford Bennett: The figure "152" will be changed to "150."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 61.
Richard Bedford Bennett: This section will also be renumbered.


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

Supply Bill
On section 62.
Richard Bedford Bennett: This will also have to be renumbered.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 63 agreed to.
Bill reported.
Richard Bedford Bennett: As it will be necessary for this bill to go back to the Senate to be reconsidered third reading might be given at this time with the consent of the house, and I so move.


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

[Stage Direction]
Right Hon. R. B. BENNETT (Prime Minister, for the Minister of Finance) moved the second reading of Bill No. 109, for granting to His Majesty certain sums of money for the public service for the financial year ending the 31st March, 1935.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Stirling in the chair.
Section 1 agreed to.
On section 2-$128,617,254.36 granted for 1934-35.
Ernest Lapointe: I was not here when the supplementary estimates were passed the other day. There was an item in connection with the disarmament conference, and I should like to know from the Prime Minister whether Canada has representation at the present time at the conference or on the committees which sit in connection with the disarmament conference; also who this representative is or these representatives are.


Richard Bedford Bennett: The hon. gentleman is
probably aware of the fact that since the formal adjournment of the committee on disarmament no action has been taken other than the endeavour by the great powers, if I might use that word in the broad sense, to secure some form of agreement with respect to disarmament. The hon. gentleman, who follows these matters with great care, will remember the proposals put forward by various countries and finally the effort made by the British government to secure some form of acquiescence on the part of all-or agreement, which is the word I should use-and that the Lord Privy Seal visited various capitals looking towards that end. The result has not been
very satisfactory. The speech made a few days ago by the foreign secretary of the United Kingdom indicated the great differences of opinion that prevail among the great powers with respect to this matter. The effort that is now being made to secure, through membership in the League of Nations of all the powers, the opportunity to enable one body to deal with the subject is still going forward. The hon. gentleman is perhaps more familiar with what has been done in that regard than I am. Our position is being constantly watched, and that position is communicated to us by dispatches which come in from the foreign office. We are kept advised of what is going on from that source, and our permanent representative at Geneva, Doctor Riddell, is constantly informed as to what is transpiring there; and when occasion necessitates we have representation from the Paris office of the dominion to proceed to Geneva for the purpose of discussion. But until matters reach what I might very properly describe as a somewhat nearer approach to unity on the great principles that have to be considered, I should think it is not at all probable that we shall endeavour to make representations other than in the manner I have indicated. We are willing to make, and are de-sirious of making, any contribution we can; but the contribution that we can make, in the very nature of things, is very limited until the moment comes when by agreement between the great powers we are able at least to throw the weight of our vote and influence towards the acceptance of a plan of disarmament that will bring about the result aimed at. And that, as I say, is not at the moment as promising as one would like. I do not think I can usefully say more than that.


Samuel William Jacobs: What has Canada got to disarm? We have nothing to disarm in this country. The fact that we talk about disarmament implies armament.


Ernest Lapointe: It should not be necessary for us to go to Europe for the purpose of bringing about disarmament, but we want to cooperate and try to get other nations to disarm.


Richard Bedford Bennett: I think the hon. member for Cartier (Mr. Jacobs) will agree that while a country may not find itself so situated as to have to disarm, because it is in the happy position of having nothing to disarm, its moral influence and the weight of its example, especially having regard to its geographical position, is a matter of great importance. While it is true that we are but

Supply Bill
ten and a half millions, and while it is true that we have no armament to destroy or to scrap, nevertheless we have, as a member of the league, a voice and a vote; and to the extent that they may be available for the purpose of promoting the cause of peace, I regard them as being of importance at this particular time. It is not necessary of course, as the former Minister of Justice (Mr. Lapointe) says, to send a delegation or to maintain them in Europe for that purpose; but at any moment when voice and vote become important we have the facilities through our Paris office of exercising such influence as can be brought to bear by both our vote and our voice.


Ernest Lapointe: Do I understand then
that the amount which is being voted in connection with the disarmament conference is to be used in case the government finds it necessary to send somebody in addition to Doctor Riddell to take part in the proceedings?


Richard Bedford Bennett: The hon. gentleman is
quite right in that assumption. If, for instance, a situation should develop in which those charged with larger responsibilities than we have think it desirable that there should be a general meeting, and we should have to send someone from this country, the vote is to be available for that purpose; and in addition to that it is only fair to say that we cannot charge against the Paris office the expense of going to Geneva out of their meagre surplus, and a proper charge against that $5,000 would be expenses incurred for that purpose.


Samuel William Jacobs: What does it cost this
country to be a member of the League of Nations? I do not know whether the Prime Minister has the figures before him, but it would be interesting to know.


Richard Bedford Bennett: The hon. gentleman
will remember that a return was filed in answer to a question, and on the records of Hansard there is a full statement of what this cost has been during the years we have been a member. I will not endeavour to charge my memory with any statement because it might not be quite accurate, but the hon. gentleman will find it in Hansard. This I will say, however. I should think that our annual expenditure for the League of Nations and everything connected with it might amount to perhaps what we spent in eight or ten hours during the war-something of that sort.


Samuel William Jacobs: It is not for the purpose
of comparison that I wish to know; but generally speaking I understand it is $300,000 or $400,000 a year. I am not criticizing the figure nor the action of our government in being a member of the League of Nations.


Richard Bedford Bennett: It is set out in detail
in Hansard, from the inception. Between four and five weeks ago I filed the statement.


Joseph Philippe Baby Casgrain: It is an insurance
premium against war.


[Stage Direction]
Section agreed to.
Sections 3 to 6 inclusive agreed to.
On schedule A.
Joseph-Arthur Denis: Mr. Chairman, may I request the government to specify in the contracts which will be awarded for the erection of public buildings, that all stone cutting, instead of being done by machines, which replace 25 men at a very heavy cost, should be done by stone cutters who are unemployed, at present. I think that the buildings themselves would be better finished because experience has taught us that the quality of stone cut by workers is much superior to that of machines. Machine work will not allow distinguishing the rock that has been damaged in the quarries by explosives and, after a number of years, because of humidity, rain and climatic changes, one may notice, that the stones are cracked at certain places, which naturally endangers the safety of the building itself. I would request the government in order to find work for those who are out of jobs to employ stone cutters and not machinery to shape or transform the stones.


Richard Bedford Bennett: I assume that what the hon. gentleman desires to deal with may more properly be considered when the public works bill is before the house for consideration. In the meantime the difficulties are quite manifest to anyone who gives the matter thought. When tenders are called for public works or undertakings and it is stipulated that they shall be done by hand, you have an added cost that sometimes increases it to such an extent as to make it impossible to do the work within the appropriation. In other cases the complaint is that not only has it added cost to the undertaking, but it renders it impossible to make any reasonable estimate hav-

Income War Tax Act
ing regard to the differences that are manifest in the work that may be done by individuals from time to time. I can only say this, that part of the work to which reference has been made was done under agreement between the city, the province and the dominion, under which agreement the dominion made certain contributions to the entire cost of the work which was carried on by the city at the Lachine canal, as the hon. gentleman knows, and which I believe was not stone but concrete. The contribution was made by the dominion, the amount being covered in an estimate which we passed the other evening. When the public works bill is under consideration the representations of the hon. gentleman can be renewed and borne in mind by the Minister of Public Works when he considers the matter.


Mr. COOTE:: I wonder whether under schedule A I might ask the Prime Minister with reference to the Canada Year Book which I am told is not to be published this year. As I was not in the chamber when the estimates of the bureau of statistics were being considered, I wonder whether the right hon. gentleman could say whether that is the case.


Richard Bedford Bennett: I am bound to say that I had not heard and I would be very loath to believe it is not to be published. I say frankly I had not even heard that suggested. I shall make inquiries and let the hon. gentleman know. The minister is sitting in a committee or I would ascertain at this moment.


George Gibson Coote: I did not know whether I would have another opportunity to ask the question.


Richard Bedford Bennett: Quite so.


Mr. BOUCHARD:: Am I in order in asking the Prime Minister this question:	When an
order is given to a manufacturer of cloth, would it be possible to induce him to use more Canadian wool in orders for cloth when contracts are awarded by the government?


Richard Bedford Bennett: The hon. member for Kamouraska may be amazed to know a few days ago I was discussing with representatives of the woollen industry the possibility of the utilization of our wool, and I was surprised to learn the extent to which it has been and is being used at the present time in local mills throughout the country. But it would be very difficult in contracts to do more than suggest that the wool be of Canadian manufacture. I do not know how we could very well go beyond that, because the cloth that
is standardized for some requirements of the public service is standardized on the basis of there being utilized with Canadian wool, wool that is imported sometimes from Australia, sometimes from Australia by way of England and sometimes from New Zealand, as the hon. gentleman knows.


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

Richard Bedford Bennett: Since the hon. member for Shelburne-Yarmouth (Mr. Ralston) mentioned the matter he did this afternoon with respect to clause 8 of Bill 99, a slip has been placed in my hands stating that a delegation is arriving here to-morrow morning and desires to make representations with reference to the Income War Tax Act. I will therefore let the matter stand until to-morrow, although the clause has been passed, if that meets with the convenience of the hon. gentleman.
A telegram to the same effect has just been received, so I take it that we can let the matter stand.


James Layton Ralston: I was just telephoning the commissioner and suggesting a possible amendment he might submit to the Prime Minister. I did not know anything about the delegation. I am only too glad if the bill is allowed to stand.



FINANCE ACT

[Stage Direction]
Right Hon. R. B. BENNETT (Prime Minister) moved the second reading of Bill No. Ill, to repeal the Finance Act.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Sullivan in the chair.
On section 1-Finance Act repealed.
George Gibson Coote: I would just like to suggest to the Prime Minister that although we have [DOT] not had very much time to consider this bill, perhaps it might be a good idea to leave the Finance Act on the statute book. We are going to set up a privately owned Bank of Canada, which is to have the sole right of note issue. If there should ever be a conflict of opinion between the government and that bank as to whether there were enough currency issued and available in Canada the
Finance Act

government of the day might be very glad to have the Finance Act on the statute book. I do not see what harm it would do. I make that suggestion.


Richard Bedford Bennett: I do not think the hon. gentleman is serious in making that suggestion. If that act were to remain and the Bank of Canada Act were to come into force it would mean absolute chaos. The hon. gentleman always refers to the Bank of Canada as a privately owned bank. That matter, I believe, is to be discussed in the committee later.


Joseph Philippe Baby Casgrain: That is why they want it.


Richard Bedford Bennett: Yes, I am just coming to that. The profits that are earned by the Bank of Canada are for the people of Canada, with the exception of four and a half per cent interest on the capital, which it would probably cost even if the money were borrowed. As to maintaining the Finance Act and the Bank of Canada Act in force at the same time, it would create financial chaos; it would be destructive of the whole system as we maintain it, and public confidence would disappear.


James Layton Ralston: Does the Prime Minister anticipate that there will be any hiatus between the coming into force of the Bank of Canada Act and the repeal of the Finance Act? I was going to ask whether the action on each could not be concurrent, one to come into force when the other is repealed.


Richard Bedford Bennett: The hon. gentleman has asked a question which I asked myself when this statute was being prepared. The banks have loans under the Finance Act. Matters will have to be cleaned up, so to speak, and under the act as it now stands it is contemplated that for certain obligations the central bank shall receive certain forms of securities from the dominion.


James Layton Ralston: There will perhaps be some overlapping?


Richard Bedford Bennett: This seems to be the safer method to pursue in view of the possibilities of overlapping in the operation of the act. As a matter of fact the course suggested was that which was originally being pursued, but on looking into the matter I thought this the safer method, to set up the institution so that it may function successfully, and repeal this act whenever the overlapping, if there be any, has been ended; or it may be that it can be arranged to have it done at the same time.


George Gibson Coote: Even if the Finance Act is not repealed, as long as the central bank is carrying on I anticipate no attempt would be made to use the Finance Act. I simply suggest it might be left so that it could be used at any time if the government so desired.


Richard Bedford Bennett: I do not want to be discourteous to the hon. gentleman, but I think if he will take a few moments to consider he will realize that an application might be made by a chartered bank to the government for advances under that act, and the government no longer having any money with which to make the advance because the engraving and issuing of dominion notes would have ceased, a situation would be created which in my humble judgment would be more or less ridiculous.


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

[Stage Direction]
Right Hon. R. B. BENNETT (Prime Minister) moved the second reading of Bill No. 112, to repeal chapter 4 of the statutes of 1915.
Motion agreed to and bill read the second time.
Mr. BENNETT moved that the house go into committee on the bill.
Motion agreed to and the house went into committee thereon, Mr. Sullivan in the chair.
Ian Alistair Mackenzie: What is the relation of this bill to the one introduced yesterday to amend the Dominion Notes Act?


Richard Bedford Bennett: That is the act under
which in 1915 Dominion of Canada notes or bills were issued on the security of (a) certain railway bonds-


Ian Alistair Mackenzie: Was it $26,000,000?


Richard Bedford Bennett: No, not $26,000,000, but
$16,000,000 and $10,000,000. The $16,000,000 was on railway securities and the $10,000,000 on the general credit of the country. Obviously this liability must be taken care of when the new bank begins to function under the provisions set forth in the bill incorporating the bank. The act itself provides how that liability shall be discharged. In order that there shall be no difficulty about the matter this bill repeals that act on proclamation when the other act comes into force.

Finance Act


Ian Alistair Mackenzie: Were
these 826,000.000 included in the total of
8171.000,000 given yesterday?


William Daum Euler: I recall that last session the Pr ne Minister in making a statement told the house that during the war an issue of something like sixty or sixty-five million dollars of currency was made for which no coverage was supplied. Under what act was that done? I should also like to ask whether the announcement made yesterday with regard to the changed standards will take care of that old inflation, if I might call it so.


Richard Bedford Bennett: Oh, no. Under the provisions of the War Measures Act certain issues were made. They were retired and disposed of except those covered by this statute, which are of a permanent character. The $16,000,000 is secured now by railway securities; the other $10,000,000 is on the general credit of the country. Both of them are to be taken care of under the provisions of the Bank of Canada Act that I referred to yesterday, and the changed coverage provisions that are set forth in the amendment to the statute that appears upon the order paper as Bill No. 110.


William Daum Euler: That is the $60,000,000 odd?


Richard Bedford Bennett: No, only $26,000,000.


William Daum Euler: But last year I can remember that $60,000,000 was spoken of. That has been reduced to the sum mentioned here, I take it?


Richard Bedford Bennett: I think that should be
made clear. I did not quite follow what the hon. gentleman was referring to; I thought he was referring to some expansions of the currency that took place during the war which were of a temporary character. What I was referring to was the sum total of three issues: (a) that secured by railway securities-I shall presently read the statute; (b) that issued on the general credit, and (c) the issues under the Finance Act, which of course had no coverage. As soon as parliament met after the declaration of war we made special provision, by amending the Dominion Notes Act, to meet that situation, as the hon. gentleman perhaps recalls. Under the War Measures Act orders in council were issued from time to time, and since the hon. gentleman has asked I think perhaps the only way I can answer him intelligently is to read the preamble to the statute:
Whereas for the purposes set forth in orders in council of date the fifth day of September. 1914	(P.C. 2325). the twenty-sixth day of
September. 1914 (P.C. 2450), the twenty-fourth 74726-262
day of October, 1914 (P.C. 2670), the twentieth day of November, 1914 (P.C. 2921), and the sixteenth day of December, 1914	(P.C.
3170). and pursuant to said orders, advances to the amount of ten million dollars ($10,000,000) in the form of an issue of dominion notes were made to the Canadian Northern Railway Company, against a pledge by the company of its guaranteed securities issued in pursuance of the provisions of The Canadian Northern Railway Guarantee Act, 1914. by placing the sums so advanced to the credit of the Minister of Finance for payment out under the provisions of the trust deed securing the issue of these securities;
And whereas for the purposes set forth in orders in council of date the fifth day of September, 1914 (P.C. 2326), the twenty-sixth day of September, 1914	(P.C.	2451), the
twenty-fourth day of October, 1914 (P.C. 2671), and the twentieth day of November, 1914 (P.C. 2922), and pursuant to said orders, advances to the amount of six million dollars ($6,000,000) in the form of an issue of dominion notes were made to the Grand Trunk Pacific Railway Company, against a pledge by the company of its guaranteed securities issued in pursuance of the provisions of The Grand Trunk Pacific Guarantee Act. 1914. by placing the sums so advanced to the credit of the Minister of Finance for payment out under the provisions of the deed of trust securing the issue of these securities;	_
And whereas pursuant to an order in council of date the second day of November, 1914 (P.C. 2750). dominion notes to the amount of ten million dollars ($10,000,000) were issued, in order that certain obligations of Canada might be met as they matured;
And whereas with respect to the greater part of these issues of dominion notes security _ in the form required by section 5 of The Dominion Notes Act, 1914, was not held;


William Daum Euler: That would mean gold was not held?


Richard Bedford Bennett: Yes, under the provision requiring dollar for dollar above the stipulated amount.
And whereas it is expedient that such issues, and the making of such advances and the taking of security therefor, and the agreements with regard to repayment of such advances be severally confirmed:
Therefore His Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
1.	The issues of dominion notes and the advances made in pursuance of the orders in council cited in the preamble, and all things done under the provisions of the said orders in council, are hereby confirmed and shall be deemed to have been duly authorized.
2.	The agreements referred to in the preamble are hereby declared to be and shall be deemed to have been valid agreements and binding on the respective railway companies parties thereto.
That is the authority for the issue of the
S26,000,000, $16,000,000 being covered by the
securities of the railways guaranteed by the dominion, and the 810.000,000 being uncovered.

Finance Act


William Daum Euler: My memory must be very badly at fault-


Richard Bedford Bennett: I had not finished. In addition to that there are advances under the Finance Act from time to time.


Ian Alistair Mackenzie: 
Richard Bedford Bennett: 
William Daum Euler: What was the total of that?


Richard Bedford Bennett: 
William Daum Euler: 
Richard Bedford Bennett: 
Ian Alistair Mackenzie: 
Richard Bedford Bennett: 
William Daum Euler: That is at the old valuation?


Richard Bedford Bennett: Yes. There has been no new valuation imposed on any of this gold in the computation of the twenty-five per cent metal coverage for issues; we have relied upon the old valuation, but by reason of what I said yesterday the increased value of

Franchise Act
gold enables us to carry forward money for other things such as the program I mentioned yesterday.


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


[Stage Direction]
Hon. HUGH GUTHRIE (Minister of Justice) moved the second reading of Bill No. 101, respecting the franchise of electors at elections of members of the House of Commons.
William Lyon Mackenzie King: Mr. Speaker,
I understood that this measure would not come up to-day. It was not mentioned last night.


Richard Bedford Bennett: I said that we would
take any second readings on the order paper.


Hugh Guthrie: The idea is in the one
hour remaining to take only the non-contentious clauses.


William Lyon Mackenzie King: There are one or two matters with respect to the bill itself on which some of us would like to say something, and the minister has only to-day introduced the bills which are interrelated with this one. I think we ought to have the opportunity of at least looking at those bills before going on with the second reading of this measure. Of course if the government insists-


Richard Bedford Bennett: No. If the right hon.
gentleman desires time to consider the bill further, I shall not press it, but I said last night that we would take any second readings on the order paper.


William Lyon Mackenzie King: I should like
to look at the bills that are related to this one before we pass the second reading.


Richard Bedford Bennett: All right.


William Lyon Mackenzie King: Then as a
matter of procedure I will move the adjournment of the debate.


Richard Bedford Bennett: The right hon. gentleman need not do that. We will simply not call this order to-day. We will take it tomorrow.
74726-262 J
Order for second reading stands.
On motion of Mr. Bennett the house adjourned at 5.05 p.m.
Thursday, June 21, 1934