1935-02-22

OFFICIAL REPORT


[Stage Direction]
House
of Commons! ©etjates
[Stage Direction]
Friday, February 22, 1935

[Stage Direction]
Mr. G. D. STANLEY (East Calgary, for Mr. Ganong) presented the first report of the special committee to consider and report upon the inauguration of a national policy of house building, as follows:
Your committee recommends that it he granted leave to report from time to time.
Your committee also recommends that five hundred copies in English and two hundred copies in French of the proceedings and evidence to be taken before the committee, and all papers and' records to be incorporated with such evidence, be printed from day to day; and that standing order 64 be suspended in relation thereto.
Mr. STANLEY moved that the report be concurred in.
Motion agreed to.

[Stage Direction]
Right Hon. R. B. BENNETT (Prime Minister) moved for leave to introduce Bill No. 21, to provide for limiting the hours of work in industrial undertakings to eight in the day and forty-eight in the week, in accordance with the convention concerning the application of the principle of the eight hour day or of the forty-eight hour week adopted by the general conference of the international labour organization in accordance with the treaties of Versailles and St. Germain.
Motion agreed to and bill read the first time.

[Stage Direction]
Right Hon. R. B. BENNETT (Prime Minister) moved for leave to introduce Bill No. 22, to provide for a weekly day of rest in accordance with the convention concerning the application of the weekly rest in industrial undertakings adopted by the general conference of the international labour organization in accordance with the treaties of Versailles and St. Germain.
Motion agreed to and bill read the first time.

[Stage Direction]
On the orders of the day:
Mr. JEAN FRANCOIS POULIOT (Temis-couata):: Was the importation into Canada of coal, wood pulp, pulpwood, lumber and timber of all kinds, asbestos and furs from the USSR, prohibited by order in council P.C. 463, dated February 27, 1931, for the following reasons: (a) because such country was not a contracting party to the treaty of Versailles, and (b) on account of the documentary and other evidence which had been received by the various departments of the public service in Canada? If so, (a) was the latter objection dropped before Canada signed the telegram dated Geneva, September 15, 1934, inviting the USSR, to enter the League of Nations? (b) Does the former objection still stand since the USSR, have entered the League of Nations?


Right Hon. R. B. BENNETT (Prime Minister):: Stands as notice of motion.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
Hon. R. J. MANION (Minister of Railways and Canals) moved the second reading of Bill No. 20, respecting the appointment of auditors for the Canadian National Railways.
Mr. EULER:: Explain.


Mr. MANION:: If hon. gentlemen opposite are satisfied probably it would be better to go into committee on the bill at once. Otherwise I would have to explain it on the second reading, and that is a little more difficult because questions may be asked that I should like to answer. After all the principle of the bill, I think, is acceptable; we must appoint auditors for the Canadian National Railways. There may be some discussion, but perhaps I might be permitted to ascertain whether or not I should proceed now or whether the house will permit this bill to be considered at once in committee of the whole.

C.N.R.-Auditors

Hon, W. D. EULER (North Waterloo): Mr. Speaker, if I may I would make this suggestion. When the auditors were appointed on previous occasions the names of the auditors were not inserted until we went into committee. If we are not committed to the principle of the bill by permitting second reading without discussion I do not suppose there is any particular objection to the bill going to committee. I hope I have not exhausted my right to speak, because I should like to see what the minister has to say in this regard.


Robert James Manion: I am quite agreeable to that. The only principle accepted by allowing second reading would be the appointment of auditors. The question as to who should be the auditors is for this house, because they are appointed by parliament. If that is satisfactory we might go into committee.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Smith (Cumberland) in the chair.
On the short title.
William Daum Euler: I would like to ask the minister why the change is being made in the personnel of the auditors.


Robert James Manion: Ordinarily I should not have expected much discussion on this question but I think, quite unjustly and unfairly, a few of the daily journals of Canada-


Mr. McINTOSH:: Would you specify them?


Robert James Manion: I could do that, but there is no need for it at the moment. Before I am through perhaps I will do so. A few newspapers have taken the attitude that this is a sort of revenge upon George A. Touche and Company for their temerity in suggesting that there should be a recapitalization of the financial set-up of the Canadian National Railways. I only mention that because the whole suggestion seems to me almost too ridiculous to be printed. My hon. friend wants me to name these journals. I will name one at any rate. In the issue of the Toronto Daily Star that came in this morning appears a rather severe article criticizing the government. I should like to read one paragraph of that article, for it justifies me in mentioning the matter. The heading is "Unfairness to Canadian National Railways," and the last paragraph reads:
Far from welcoming the proposal of the auditors that the grossly inflated debt of the Canadian National Railways be pared down the Bennett government is demanding that the auditors be dismissed.

In that regard I might just say that they are not being dismissed; the auditors are 'being changed.


Some hon. MEMBERS:: Oh, oh.


Robert James Manion: There is a difference, and a little later I will deal more fully with that. I am surprised that my hon. friends should laugh, because to change auditors is quite within the right of any business institution, while to dismiss the auditors would mean severely reprimanding them for something they had done or left undone. However, I will finish the paragraph I was reading:
The explanation that will be given for the proposed dismissal of the auditors no doubt will be that the firm has its headquarters in England-
I	did not know that until this morning; I made inquiries, and I think that is correct.
-but so it had a year ago when Mr. Bennett and Doctor Manion were loud in praise of its work.
I am not going into any great detail, but that is why I wish to deal with this question to some extent. In the first place I want to make it clear to the committee and to the people in general that the thing furthest from the mind of the government, or of the Prime Minister, myself or any member of the government, was that George A. Touche and Company were being punished in any way because they suggested a recapitalization of the financial set-up of the 'Canadian National Railways. The idea behind such a change is exactly the idea that applies to the banks of this country and which is contained in the Bank Act, which I hold in my hand. A bank cannot retain the same auditors for more than two years. If that is a good rule for the banks, after George A. Touche and Company have been auditors of the Canadian National Railways for eleven or twelve years surely if the government thinks new auditors may bring a new slant or new outlook upon the operations and condition of the Canadian National Railways the government has a perfect right to suggest to this house^-because they are parliament's auditors -that we should have a change. I should like to read that provision in the Bank Act, which is found in subsection 5 of section 55:
The shareholders-
After all it must be remembered that the auditors being appointed to-day are the shareholders' auditors for the Canadian National Railways. This has nothing whatever to do with the trustees. One article which I read in another newspaper, criticizing the government rather severely, suggested that we had

C.NJt.-Auditors
over-ruled the recommendation of the trustees in this regard. As a matter of fact the trustees have nothing to do wuth the appointment of these auditors; the auditors are appointed by this parliament as the shareholders of the Canadian 'National Railways, so the trustees do not enter into the picture at all.
-shall, at each annual general meeting, appoint two persons, not members of the same firm, whose names are included in the last published list, to audit the affairs of the bank, but if the same two persons, or members respectively of the same two firms have been appointed for two years in succession to audit the affairs of any one bank, one such person or any member of one such firm shall not be again appointed to audit the affairs of such bank during the period of two years next following the term for which he was last appointed.
In brief that simply means what I think it very clearly states, that the banks of this country cannot have the same auditors for more than two years. Every two years the shareholders of the banks must change their auditors, and it is on exactly that principle this proposal is made.
It will be remembered that I said these were parliament's auditors. For the benefit of those who have not studied the question I should like to read the two sections dealing with this matter from the 'Canadian National-Canadian Pacific Act of 1933, under which these auditors are appointed. Section ,13 reads:	[DOT]
(1) A continuous audit of the accounts of national railways shall be made by independent auditors appointed annually by a resolution of parliament and annually reporting to parliament in respect of their audit. Their annual report shall call attention to jmy matters which in their opinion require consideration or remedial action. They shall be paid by the national company such amounts as the governor in council shall from time to time approve.
Then section 14 reads:
The trustees shall make a report annually to parliament setting forth in a summary manner the results of their operations, any cooperative measures, plans or arrangements, effective pursuant to this act, any economies or more remunerative operation thereby produced, the amounts expended on capital account in respect of national railways and such other information as appears to them to be of public interest or necessary for the information of parliament with relation to any situation existing at the time of such report, or as may be required from time to time by the governor in council.
I had that marked, although it has not really any bearing on the question. But as a rule the trustees themselves do incorporate the auditors' certificate in their report.
92582-70i


Mr. HANBURY:: Does the second to last clause refer to the trustees' report?


Robert James Manion: Yes. I just wish to make it clear that the auditors we are appointing to-day are the auditors appointed by parliament under that act. There is no connection whatever between a change in auditors and their recommendation.
In regard to these recommendations may I say that they did not originate with George A. Touche and Company. I have made it my business to look into the history surrounding this whole matter in connection with the recommendation for recapitalization. The first person who made any real proposal in connection with a proposed recapitalization of the Canadian National Railways was Sir Joseph Flavelle. In a letter written to Right Hon. Arthur Meighen in 1921 he made that suggestion. We might as well suggest that Sir Joseph Flavelle was dropped from the Grand Trunk board because he had the temerity to suggest a refinancing or a change in the financial set-up of the Canadian National Railways.


Mr. HEAPS:: He knows something about
set-ups, doesn't he?


Robert James Manion: My hon. friend says so,
and I do not quarrel with him.


Jean-François Pouliot: Does the minister take
his inspiration from Sir Joseph Flavelle?


Robert James Manion: No. In 1923, 1924, and
again in 1925, the late Sir Henry Thornton in the annual report of the Canadian National Railways made to the government of the day suggested-well, so that there may be no misunderstanding I shall read one or two sentences from the annual report of 1923. Sir Henry said:
Consideration is being given to the policy to be followed with respect to the capitalization of the system, and the extent to which, if at all, the advances made and capital held by the government should be written down to a figure which may be regarded as consistent with the earning prospects of the railway. In the consideration of such a problem, the interests of the government, which is to say the people of Canada, must be given due weight. On the other hand it would seem unreasonable to burden the Canadian National railways with a load which is beyond its conceivable earning capacity.
Again in 1924, a similar suggestion was made, which I shall not quote. Then, in 1925, the following clause appears, bearing on the question in hand to-day:
The work is being performed effectively and it is expected-
C.N.R.-Auditors

it could only come from the auditors. However I do not wish to prejudge them. As far as the Touche company is concerned as auditors of the Canadian National Railways in the past they have I think given satisfactory service in every way, but the government is of the opinion at the present time that nothing but benefit can result to the Canadian National Railways and1 the people of this country and indeed to members of this house by taking on another outstandingly able auditing company of Canada to deal with this question.
Mr.EULER: Mr. Chairman, in what I have to say I desire to assure the committee that I have no brief for the Touche company. I have had no communication with them since the proposal has been made to replace them by another firm, nor have I any prejudice against the firm which it is proposed to appoint, although I must say that they have been in receipt of large fees from this government and previous governments and have done a great deal of government work. I was glad to hear the minister say that the Touche company are not being dismissed, if I might use the word, because of the fact that they made certain recommendations with regard to the writing down of the capitalization of the Canadian National Railways. I should not like to believe that the government would do that.
I must also say, with all respect to the minister, that the reasons which have been given by him do not appear to me to be quite adequate. His chief reason for changing the auditors is that the government is acting as they would act in the case of auditors of banks who are required to be changed every two years. In the first place, if that is the government's conviction it seems rather strange that they waited for four years until they made such a change. There is also some distinction between banks and the Canadian National Railways. The Canadian banks are the custodians of the moneys of the people of Canada, in charge of trust funds, and it is especially desirable that they be safeguarded in every way, perhaps by the appointment of new auditors from time to time. But the same conditions do not entirely obtain in regard to the Canadian National Railways.
It was only last year that the Minister of Railways stated in connection with a possible change of auditors-he will correct me if I am wrong-that it was rather an undesirable thing to do because it took some considerable time, I think he said some months, for new auditors to familiarize themselves with the

method of keeping the accounts of the Canadian National Railways, and I thought that was a very good argument.


Robert James Manion: I will answer that at the moment or afterwards, as my hon. friend desires.


William Daum Euler: If a firm of auditors is capable, and I think the Prime Minister has admitted that this firm is capable, and the minister said it again to-day, there should be some very special reason before you subject them to the indignity, shall I say, or disgrace or loss of prestige which must of necessity come to them by reason of the fact that they are relieved of duties which they have carried on satisfactorily for a period of eighteen years.


Richard Bedford Bennett: My hon. friend is mistaken. Their term of office expired on December 31, 1934.


William Daum Euler: The right hon. gentleman means to say that the appointment is made from year to year. I know that just as well as he does, but there is no getting away from this fact, that when a firm has been kept in the employ of the government or any other employer for a long, long period of years, and then suddenly a change is made, that in effect means dismissal; at least, it appears to the public and certainly to the firm themselves as a matter of dismissal.


Richard Bedford Bennett: They were only kept by the government one year. The company itself appointed them previously.


William Daum Euler: I let that go because it is not the chief argument I desire to make.
Since the affairs of the Canadian National Railways are each year referred to the committee on railways and shipping, it might not have been out of place to submit a matter of this kind for discussion to that committee, but that was not done.
The chief reason why I would say the time is inopportune for a change of auditors lies in the very report which is being discussed by the Minister of Railways this afternoon. The committee last year had no opportunity, or practically none, to discuss that report. The minister said a few moments ago that that report was discussed, but I will leave it to every member of that committee, whether he sits on that side of the house or on this side, whether we did in effect have any real opportunity to discuss either of these reports, the financial report of the board of trustees, which is a voluminous document, or the report

C.N.R.-Auditors
submitted by the auditors themselves, which also is a document of very considerable proportions. We had 1 think only three meetings of that committee. I do not know why that committee was not called together before it was. I am not casting any reflections, but I do not know why we did not have that opportunity. The fact remains that that committee had the opportunity for only three meetings. I say it is utterly impossible to examine and discuss the two reports that were submitted to that committee for consideration. In the auditors' report there was one recommendation which I regard as important, and in that respect I must disagree with the minister. The part of the report I regard as important is the one that refers to the writing down of the capitalization of the railways.
For a good many years in this house and outside of it it has been urged that something should be done to place the capitalization of the national railways on a fair basis, a basis such as would make it impossible for the enemies of the publicly owned Canadian National railway system to misrepresent the position of the railways. I have myself urged it from time to time, perhaps half a dozen times in the last ten years. But it was never done. The minister says that Sir Henry Thornton made a certain suggestion to the late government. That may be so, but my impression is decidedly this, that no really definite or concrete suggestion was ever made for the writing down of the capitalization of the national railways.


Robert James Manion: My hon. friend is entirely wrong about that and I correct him in order to keep tire issue straight. I have it in my office.


William Daum Euler: If I am wrong I am ready
to admit it, but my impression is, and I had a fairly close association with him as far as the national railways were concerned, that they were never quite ready to do it; and one of the reasons was that it was extremely difficult to accomplish such a writing down because of the fact that the Canadian National Railways consisted of an aggregation of something like one hundred joint stock companies, with all their various bond issues and matters of that kind. It should have been done long ago, but we had always thought that it was a very difficult thing to do; and therefore it came as a matter of surprise and satisfaction to me in the committee last year when the auditors, Messrs. Touche & Company, made a very simple suggestion which would have dealt with the question in what I regard as a very
reasonable way. And that is why ^ I bring it up to-day I bring it up now for this reason.
I think that the auditors should be retained for at least another year because they are thoroughly familiar with their own recommendations and since we could not discuss it last year in the committee and bring the recommendations before parliament, we should have an opportunity during this session to discuss the whole matter in an intelligent way; and we should be materially assisted in that regard if the auditors who made the suggestion were permitted to be present at that gathering rather than an entirely strange body of auditors who perhaps might not be in sympathy with the suggestion. ^
I wish to discuss the recommendations made, and I should like to discuss the matter of removing from the public mind some misapprehensions. That is what the auditors desire to do. The debt of the railways to the government is given in the auditors' report-I ^ am using round figures-at $1,771,000,000. That is to say, that sum is carried on the books of the railway as the debt to the federal government. And here is the strange situation disclosed in last year's meeting of the committee, that while the railways carry this liability to the federal government on their books the federal government does not carry it as an asset on the federal books. I had on the order paper a few weeks ago a question as to how much of the debt owing by the railways to the government was already included in the federal national debt, and the reply came, as given by the Minister of Railways, that praeticilly the whole of the debt of the railways to the government itself was already absorbed into the national debt. That national debt, in round figures, is $2,770,000,000 and the debt of the railways to the government is 51,770,000,000. Now if the whole of that liability by the railways to the government is absorbed into the national debt, then certainly those are wrong who take the whole debt of the railways to the government amounting to $1,770,000,000 and $1,250,000,000 to the public by way of bonds and add it to the $2,770,000,000 of Canadian government debt. In that way they add the two together, making the debt of the Canadian people, through the government itself and through the railways, approximately $5,500,000,000. In other words, they are adding to the amount that has already been absorbed into the national debt, given by the minister as $1,-
500,000,000, putting it in twice and exaggerating the debt of the Canadian people in the two ways, through the government itself and through the railways, by about $1,500,000,000.

C.N.R.-Auditors
The reason for that is this. There has always been some misunderstanding with regard to the debt of the Canadian National Railways. Now I say that we have not had a fair picture of the situation of the Canadian National Railways. It is bad enough, and during the present year we shall stall fail short of paying interest on the bonded indebtedness to the public by about $50,000,000. But when you figure that according to the Canadian National books there is still owing by the railways an additional $1,700,000,000, then the people are almost justified in figuring interest on that $1,700,000,000, and it is very easy then to put the deficit of the Canadian National Railways at upwards of $100,000,000.
It is not fair to carry on the books of the Canadian National Railways that sum of $1,770,000,000 owing to the Canadian government, and the reasons are given in the auditors' report. That is why I propose to fake a few minutes discussing that aspect of the subject. That sum of $1,770,000,000 owing by the railways to the government is made up as follows, in round figures:
Old Grand Trunk stock	$165,000,000
Canadian Northern Railway Stock. 100,000,000 Old Grand Trunk debentures.. ..	15,000,000
Government advances for deficits.. 324,000,000 Government loans for capital purposes	 337,000,000
Interest accrued by railways on government advances and loans. . 424,000,000 Government expenditure on Canadian government railways-what is known as the Intercolonial.. 404,000,000
That makes a total, again in round figures, of $1,770,000,000.


Mr. DUFF:: When was that made up to?


William Daum Euler: This is in the auditors' report of last year. I will read briefly from that report to show how they propose to deal with the matter; they indicate that the amounts I have just given are not a truly accurate reflection of the position of the Canadian National Railways, and why they propose to adjust them so that they will give a fair picture of the situation. They say:
Misconceptions of net debt and annual budget position of Canada.
We consider that we should call attention to the effect upon the public mind in Canada and elsewhere when the national system and dominion public accounts are considered on a consolidated basis. In the last two years or so we have observed a tendency on the part of many to think erroneously of the national system capital liabilities and annual deficits as being additions to the net debt and the annual budget deficits of the dominion.

Then they discuss the misconceptions. I have not time to quote the report in full, but they go on to say:
Recommendations with a view to correcting misconceptions of Canada's financial position.
With a view to establishing in the public mind a fundamentally correct interpretation of the effect of the national railways finances upon the dominion public accounts we would suggest that consideration be given to the following recommendations:-
I am going to boil those down just as much as possible and discuss the items which I have placed upon Hansard, not at any great length but discarding as far as possible what I think is unnecessary for my argument.
First, with regard to the old Grand Trunk stock of $165,000,000, the auditors would write that out completely. Why?
. Because the Grand Trunk board of arbitration in 1921 declared the stock worthless and found the intrinsic property investment values to fee substantially overstated on the books.
The stock is worthless, yet that amount of $165,000,000 has been carried on the books of the Canadian National, inherited from private ownership-and let those who favour private ownership not forget that point-as a liability when it was worth absolutely nothing at the time it was turned over to the Canadian National.
Second, they would write down the second item of $100,000,000 of Canadian Northern stock to $18,000,000-
-taking the Canadian Northern board of arbitration findings in 1918 as a basis for the capital stock valuation and the relative effect upon property investment account at that time.
The direct cost to the government was $10,009,000.
So there we were carrying another $100,000,000 of liabilities of the Canadian National as owing to the government for something which actually cost the government $10,000,000.
Third, they would write out completely the government advances for deficits-there may be some disagreement with regard to that, but I will give the report of the auditors- aggregating $324,000,000, "because it represents nothing but a contribution by shareholders to replace their impaired capital," just as in a private concern if money had to be placed in a private company to repair losses it would not be regarded as a debt; it would be simply replacing the capital. The report says:
This principle is already recognized in the absorption by the government-
That is the present government and I think they did right in this regard.
-of the 1932 and 1933 system deficits to the extent of $120,266,721.26.

C.N.R.-Auditors
They are simply advising that we do with past deficits what the present government has done with the deficits of 1932 and 1933.
Fourth:
Writing out completely the governmental grants in aid of construction represented by the old Grand Trunk debentures to the amount of $15,142,633.33 ... because this portion of the grants was placed junior to the old Grand Trunk stocks which were declared worthless in the 1921 arbitration.
That leaves two items; the amounts that were advanced specifically for capital purposes, one of something like $355,000,000. That actually went into the construction of the road, being actual capital invested. The suggestion of the auditors is that, instead of this amount plus the amount of $404,000,000 that was expended on the Intercolonial railway, being carried as an ordinary liability by the Canadian National Railways, they should issue to the government of Canada $760,000,000 in common stock, upon which necessarily no interest would be paid. That is, that amount which has actually been expended in capital would in an ordinary company be raised no doubt by subscriptions for stock and it then would not be an ordinary debt upon which interest would be paid, but it would be capital stock upon which dividends would be paid if any were earned and if they were not earned, it would not be kept on the books as a liability upon which interest would be compounded and pyramided from year to year. If these recommendations were carried out, there would be this situation according to the auditors; items now totaling $1,011,000,000 would disappear entirely from the railway company's account with the Dominion of Canada and the remaining $760,000,000 would appear not as a debt owed by the railways as a debtor to the government as a creditor, but as an investment by the government as I have explained before, and it would be subject as is said, to the ordinary risks of business. If there were a profit, the government would get a dividend. If there were a loss, it would not be carried on the books as a liability of the company for all time to come.
I have given this information for the purpose of showing that this matter is of very considerable importance to the .people of Canada. It is only fair to the Canadian National Railways that the books should be rectified so as to show the exact condition of the railways with regard to their relation to the dominion government. The minister has said: Even if you write this down, it will not relieve the people of Canada by one cent from the necessity of paying interest. That is quite
true and I for one would like to correct any opinion that has gone abroad, if it has, that if we write down the capital, we shall save interest. We shall not save anything at all. The amount of the Canadian National Railway debt that has already gone, that has already been absorbed into the debt of the country, is taken care of by payment of interest from time to time as the interest on the federal bonds matures. As regards indebtedness owing to the public, it goes as a matter of course that the interest on that has to be paid. But this would put the Canadian National Railways at a fair valuation in the eyes of the people of Canada; they would not be constantly told that this railway has cost us $2,700,000,000 or $2,800,000,000 and that our deficit from year to year is about $100,000,000. It is worth while doing this because if one thing has occurred within the last two or three years-and I regret it very much and I think some other hon. members also regret it-it has been this, that by misrepresentation of the condition of the Canadian National Railways eitheT in regard to expenditures or capitalization the confidence of the people of this country has been shaken in the principle of public ownership of railways in a way that is not at all justified by the facts. As I said a while ago, the situation is bad enough, and speaking for myself I have advocated one way of avoiding the extreme waste by way of duplication and so on as between the two railways. I did not however rise to say that to-day because it is entirely a personal opinion.


Mr. MACKENZIE (Vancouver):: Hear,
hear.


William Daum Euler: The hon. member will have an opportunity of expressing his own views.
In conclusion, I would say that these changes if they are made would be in keeping with the facts and with common sense, and I think the government should give its immediate attention to the recommendations that were made in good faith by the auditors who are now being replaced. I would like to repeat: My chief reason for suggesting that the change in auditors be not made now is in order that the present auditors may appear before the parliamentary committee on railways which will be appointed, I hope soon, and which will.be given an opportunity of meeting a little sooner than it did last year, and they may be of assistance to the committee by explaining the terms of their recommendations so that after the committee rises we may make an intelligent report to the house.
C.N.R.-Auditors


Robert James Manion: In regard to the last suggestion of my hon. friend, I am glad to tell him that the present auditors will appear before the committee this year. Nobody else could, they are the only people who know anything about it. Those we are appointing now naturally will not know anything about the matter yet, so when the special committee does meet it will be Touche and Company who will come to explain everything; my hon. friend need have no worry in that regard.


Mr. GRAY:: I do not propose to follow at any great length the very able statement made by my colleague the hon. member for North Waterloo with respect to the report of Touche and Company of last year, in which they advocated that the debt structure of the Canadian National Railways be written down, as the hon. member has covered it very fully. It is quite true, as pointed out by the Minister of Railways, that there have been previous recommendations with respect to this matter. I think it was investigated by the board of audit in 1925 and subsequently. But I say that the report of Touche and Company made to the committee very late last session was the most comprehensive of all reports that have been made. Further, the minister states that there has been no requisition or suggestion by the board of trustees that any action be taken. It is true that the Duff commission in their report stated-I think this is the way it was put-that they frankly recognized that a very substantial part of the money invested in the railways comprised in the Canadian National system must be regarded as lost, and the capital liability heavily written down; and, as stated by the minister, asked that it be reported upon by the board of trustees. Hon. Mr. Fullerton, the chairman of the board, told the committee last year that he had been studying the matter ever since he was appointed. Mr. Fullerton said on May 25 last year, as reported in the first minutes of proceedings, pages 3 and 4, that he has been giving the matter of this writing down of the capital structure serious consideration, has studied the report fully; and on page 4 he says:
It appears to me that it could be argued with much force that the writing down should even go further than has been recommended. However the matter in the final analysis is one for the parliament of Canada to determine.
I suggest to the minister that in Mr. Fullerton's recommendations as presented to the committee, he there and then said, I approve of what has been recommended by Touche and Company, and I pass this on to parliament, represented by the Minister of Railways and the government, to take action.

I recall quite well that we there and then urged that the minister, even at that session, or certainly at this, should bring in a bill to give effect to the recommendations of Touche and Company and the trustees. The minister cannot argue that we are still waiting for some further recommendations from the board of trustees. On this point I am in full accord with what the hon. member for North Waterloo has said, that we have not finished with this, in view of the fact that this report was not acted upon by the government, and regardless of the statement by the minister: Oh well, these auditors will still appear before the committee. Of course they will, because in fact they have been acting since January 1, 1935. The Prime Minister said a few minutes ago that their term of office expired December 31, 1934. But who has been acting since that date? It is a continuous audit. At the end of the first quarter we are asked to strike out the name of Touche and Company and substitute that of Clarkson, Gordon, Dilworth and Company. I urge upon the minister that Touche and Company be permitted to finish, and to give again their recommendations and conclusions since the last report, in view of the fact that the government have not acted upon it. I think that is only right. I cannot appreciate the very fine distinction drawn by the minister to-day between dismissal and a change. I say to him, and I think upon consideration he will agree, that when he cast the reflections that he did upon this company-


Robert James Manion: I cast no reflections.


Ross Wilfred Gray: Well, the minister can use
his own judgment what term is suitable for his statement that he had heard that they had been a party to the propaganda that he said was being sent out about the government. The Minister of Railways said either too much or too little.


Some hon. MEMBERS:: Hear, hear.


Ross Wilfred Gray: It is certainly up to him to
substantiate these remarks on the floor of the house, because this is a reputable firm. Then for the purpose of his argument the minister goes to the Bank Act and states that bank auditors are changed every two years. The Prime Minister interrupted my hon. friend from North Waterloo when he said that this company had been auditors for some ten or twelve years, the Prime Minister said, No, only one year under the government. Well then, if under the government they have only been there one year, if it is only one year that this government have recognized

C.N.R.-Auditors
Touche and Company, surely they should be given at least the time that auditors are given under the Bank Act.
The minister has stated, and I think quite honestly, that these auditors are satisfactory. Let us see what the minister thought about changing auditors when this matter was first discussed, back in 1933, at the time of the Canadian National-Canadian Pacific bill. The minister's remarks will be found at page 4083 of Hansard for that year. The hon. member for Muskoka-Ontario (Mr. MoGib-bon) urged that year and again the next year that the auditors should be changed from time to time, and the Minister of Railways had this to say:
Mr. Manion: While I agree that if there is any reason for changing auditors, it should be done, at the same time my hon. friend should remember that the auditing of the Canadian National Railways' accounts is a huge job which requires special training and the following of a complicated set of rules. The auditing requires very elaborate work on the part of the particular firm that is doing the auditing, and unless there is good reason for a change, I do not think it would be wise for any government to change the auditors every year. The new auditors would have to learn the very complicated and elaborate system of accounting which is used, and I do not think a yearly change would be practicable.


Robert James Manion: Hear, hear, I still think
that.


Ross Wilfred Gray: Mr. Arthurs interrupted, saying:
You might trade with the Canadian Pacific every other year.
Mr. Manion: My hon. friend mentions the Canadian Pacific. I do not think the Canadian Pacific or any other big company changes its auditors yearly. I agree that if there were any reason for the change it could be made, and that is why it is proposed that the auditors shall be appointed annually, to give an opportunity for making the change if necessary.
Yet this government, if we are to accept the Prime Minister's theory, have changed them after one year, as far as the government appointment is concerned.
I agree that if there were any reason for the change it could be made, and that it is why it is proposed that the auditors shall be appointed annually, to give an opportunity for making the change if necessary.
And I ask the minister to note these words of his:
I think however it would be better to retain the same auditors so long as they were satisfactory.
"So long as they were satisfactory." Will the minister state to-day that Touche and Company are not satisfactory?


Robert James Manion: No, but I hope the new appointees may be more satisfactory.


Ross Wilfred Gray: Then let us see what the minister had to say when this matter came up for consideration in 1934, as reported at page 845 of Hansard:
It has been decided, after a good deal of consideration, that the auditors who have been doing the work for a good many years-I do not know exactly how long, but eight or ten years at any rate-are so well trained in the work and are so capable that it would be wise to appoint them at least for this year. I am informed by the railway people themselves that it would take quite a long time for any group of auditors to learn the method of auditing such an immense system of books and accounts as are contained in this vast business. For example,
I am told that there are no other chartered accountants in Canada who are familiar with the interstate commerce commission's type of accounting and the accounting of the Canadian National Railways is carried on under the same rules as those of the interstate commerce commission for the railways of the United States.


Robert James Manion: Was not that the same discussion as the other?


Ross Wilfred Gray: No, this was last year.


Robert James Manion: Then we must have
appointed them two years in succession.


Wilfred Hanbury: You were consistent for one year.


Robert James Manion: That is more than you are.


Ross Wilfred Gray: Let me go back. In 1932-33 we were merely discussing the Canadian National-Canadian Pacific bill. February, 1934, was the first time the bill was brought in by the minister under the act.
The Clarkson firm is one of the oldest in Toronto; its reputation is well known, but after inquiry the minister found that Touche and Company were the only auditors capable of performing the audit under the interstate commerce commission method of auditing. The minister so stated on the floor of the house, andi we must ask the minister now what has brought about this change during the months that have passed since he made that statement in 1934. Is it part of the changing policy of the government? The minister said:
If it be true, as I am informed, that there are no other companies of chartered accountants in Canada who are familiar with that type of auditing, it would probably take many months for a new company to assume charge of the auditing and become familiar with it. Therefore, after a good deal of consideration, we felt that it would be wise, at any rate for this year, to appoint George A. Touche and Company, and I intend to move that the name
C.N.R.-Auditors

"George A. Touche and Company, chartered accountants of the city of Toronto" be inserted in* section one of this bill.
I ask the minister if he has been quite fair in his statements to-day, and if there is not something that he has not told us with regard to this change. We can go back to the day when the Prime Minister, in connection with that same bill, told us that the railways no longer belonged to the people of Canada but belonged to those holding bonds. We can go back to his radio broadcast of January 2, 1935, when he told us that the return to prosperity depended upon the solution of the railway problem, but he left it at that for the next four or five broadcasts without explaining what he meant. We can follow him on to Toronto, to a board of trade meeting at which he stated that the solution of the railway problem is not a responsibility of the government but a responsibility of the people, and by that statement I say that he meant that it was a responsibility of the people to return him to power so that he could bring about the amalgamation of these two roads.
The minister says that adjustment of the capital structure is a dead issue. It is not a dead issue to the enemies of the Canadian National Railways. I agree that it does not make any difference with regard to the interest that may be paid, but it does make a great deal of difference to those who are piling up and pyramiding the interest on that debt structure. So while the minister deprecates it, laughs at it and says there is no justification whatever for it, I do submit that he has not satisfied very many on this side of the house with the* explanation he has given for the substitution of the Clarkson firm for George A. Touche and Company.


Robert James Manion: Mr. Chairman, I rather
think it would be somewhat difficult for those on this side of the house to satisfy hon. gentlemen on the other side, so I am not particularly worried about not satisfying them. Even if they were perfectly satisfied, as they indicated they were by their vote on the unemployment insurance measure, they would continue to criticise us, so it is a little difficult to satisfy my hon. friends, and particularly I have no hope of satisfying the hon. gentleman who has just sat down, and who has made every endeavour to turn this into a political question. He even dragged in by the hair of the head the old question of amalgamation, for which, by the way, no one on this side of the house has ever spoken so far as I know; not a man on this side of the house has ever come out for amalgamation, but at least two hon, members on the other side

of the house have done so. So it is rather far fetched to try to drag in the question of amalgamation and use it against us. Within the last two months as Minister of Railways I have made two speeches, one in Smiths Falls and the other in Brockville, both of them against amalgamation, and I think probably I can speak more for the government than my hon. friend can, with all due respect to him.
For a few moments, Mr. Chairman, I wish to deal with the remarks of my hon. friend from North Waterloo, which were a good deal more moderate than those of the hon. gentleman who has just taken his seat. The hon. member for North Waterloo discussed the question of the recapitalization of the Canadian National. I quite admit his right to do so; I quite admit that it enters into the discussion here to-day, and I have no criticism to offer in that regard. But I do say that it is a very debatable question, and I am sure my hon. friend will agree. I admit as well that there are some items in the Canadian National balance sheet, charged against the Canadian National and debited to them as owing to the government, that might well be wiped out. I do not quarrel with that, but the question is the same as it was when his government was in power; the difficulty is to arrive at something in the way of a fair decision in regard to that balance sheet. I quite agree that the day will come when the balance sheet will have to be straightened out.
The hon. gentleman dealt with some of the items, and with some of his statements I have no quarrel at all. I agree that some of the items might well be dealt with but, as was realized by the late management and the late government, and as is realized I think by the present management and the present government, it is a question that requires a great deal of investigation in order to decide rightly as to what should be done. For example, supposing we did as the hon. gentleman suggests and wiped out, not the $270,000,000 of stocks which are charged up against them, which item I think should be reduced to about $18,000,000, but a great part of the other liabilities charged up to the Canadian National in the railway balance sheet. It must not be forgotten that the greater part of those debts represent actual money paid either for capital expenditure or for interest upon some of that money. My hon. friend agrees that this is correct. Well, there are those who rightly say, "Why should we hide the picture?" That is the argument of the other side, and if we carry out the

C.N.R.-Auditors
suggestion of the hon. gentleman and wipe out some of the capital liabilities of the Canadian National to the government, then the charge will be made that this government or whatever government takes that step is merely trying to hide some of the cost of the Canadian National to this country. If my hon. friend has any idea that by hiding these costs instead of keeping them in the open, on the books of the Canadian National, we will stop those who want to talk about them, he is much more optimistic with regard to the enemies of the Canadian National than I am.


William Daum Euler: Why, then, are they absorbed in the national debt and not carried on the books as an asset?


Robert James Manion: The answer, obviously, is
that they do not consider them worth anything.


William Daum Euler: Then why carry them as a
liability on the books of the Canadian National?


Robert James Manion: We do not carry them as Canadian National debts.


William Daum Euler: Who controls the Canadian National?


Robert James Manion: It is controlled to a large
extent by the trustees, but of course they could not make a change of that kind without the statutory sanction of this parliament. But I do submit that if we wiped out some of these debts we would be simply hiding them, and the very same people who are going around the country to-day talking about the debt of the Canadian National Railways would make the statement that the government was being unfair to the people of Canada in trying to hide part of that debt. They would use the same figures, because those figures are easily obtainable. Any member of this house can ask for a return showing just how much money has been paid to the Canadian National, the Canadian Pacific or any other railway company, and they have done so. Surely my hon. friend does not suggest that if part of those debts were wiped off, the enemies of the Canadian National would stop speaking about them. If he does make that suggestion I do not agree with him.


William Daum Euler: I do not like to interrupt
my hon. friend because he is arguing reasonably to-day.


Robert James Manion: Why "to-day;" I am always reasonable.


William Daum Euler: I should like to ask the
minister this question: We know that comparisons are always being made between the Canadian Pacific Railway and the Canadian National Railways. Supposing, for example, that in any one year the Canadian Pacific Railway lost, we will say, the sum of $25,000,000 or $50,000,000, would that be charged up as a liability to stand against them forever? No, they would simply absorb the loss and forget it. Why should the Canadian National Railways carry those losses as a debt against themselves and the Canadian government?


Robert James Manion: I do not quarrel with the hon. member for having used that argument. That is what a private corporation would do, undoubtedly-but this does not happen to be a private corporation. It happens to be a public corporation owned and more or less controlled by the government of Canada. I admit quite freely that the hon. member has some right in his argument, but I contend that on the other hand the other side has rights. I submit they could not be prevented from speaking about the hidden debts simply by hiding them.
I wish to point out just how difficult it is to understand the situation. The hon. member for North Waterloo, who is one of the intelligent members in the chamber-and I say that quite frankly-


Some hon. MEMBERS:: Hear, hear.


Robert James Manion: The hon. member has been studying the question for many years. He has spoken about public ownership, and yet he stood in this chamber this afternoon and made a wrong statement in regard to interest charges accrued on the books of the Canadian National Railways. I use this illustration simply to point out how difficult it is to understand the matter. The hon. gentleman said that while we are telling throughout the country that the Canadian National Railways deficit was nearly $100,000,000 there was $1,700,000,000 charged up by the government against the Canadian National Railways, and that the interest on that amount was being charged against the railways.


William Daum Euler: No, I never said that.


Robert James Manion: The hon. member gave that impression, probably he would correct it.


William Daum Euler: This is the statement: When those who are the enemies of public ownership figure out the deficit on the Canadian National Railways they will take, first, the interest on the funded debt to the public, which this year is about $50,000,000, and which has to be raised
C.N.R.-Auditors

out of taxation. Then there is the other debt owing to the government of $1,700,000,000 which they say the government has advanced in one way or another to the Canadian National Railways; but that is not true. It is true to some extent-deficits, loans, advances and so on; those are accurate. But some of the other items the minister knows should not be included. For instance, there is the value of stock taken over from the Canadian Northern and from the Grand Trunk. Then the enemies of public ownership take that $1,700,000,000 and say that since the Canadian government advanced that money there is interest to be paid on it. Then they figure the interest on that amount, add it to the interest on the funded debt and make up a loss or deficit of $100,000,000 or more.


Robert James Manion: That was the hon. member's statement, and that is exactly what I said.


William Daum Euler: It is not untrue.


Robert James Manion: I will show where it is untrue. They do not compute the interest on $1,700,000,000 at all.


William Daum Euler: Who does not?


Robert James Manion: They compute the interest on $600,000,000. My hon. friend is a good mathematician, and he could very easily figure out that if you take five per cent of $1,700,000,000 you have $85,000,000 of government interest, alone.


William Daum Euler: So you would.


Robert James Manion: Yes, but they do not take that. What they take is this: The money that was put out by the Canadian government in the past decade for the Canadian National Railways was, first, the money paid for the construction of the Intercolonial railway, and the Transcontinental and other government lines amounting to $400,000,000. But no interest has ever been charged on that- none whatever. That is the first.


William Daum Euler: But-


Robert James Manion: Let me finish. The hon. member may correct me if I am wrong-but I am not wrong. Then, secondly, there was a little over $600,000,000 loaned by the Canadian government to the old Grand Trunk, to the Canadian Northern and so on. It is only upon that sum that interest is ever charged. It is not charged upon the $1,700,000,000.


William Daum Euler: By whom?


Robert James Manion: By the railway books. But let me finish.


William Daum Euler: All right.


Robert James Manion: As my hon. friend has said the deficit last year was over $50,000,000. In that year, 1933, the railways were $3,500,000 short of paying the interest charges on the debt due the public. Since the interest last year was a little less than $57,000,000, roughly speaking, and they were $3,500,000 short on income account the deficit was roughly $60,000,000 that year. Then they get the figure of $100,000,000-sometimes $90,000,000 and sometimes $100,000,000-by adding the interest charged in the books of the railways on that $600,000,000. If my hon. friend will look up the report he will see that that is correct. I know I am right, because I have the figures right here. The interest figures on government loans given at the bottom of page 11 of the Canadian National Railways report for 1933 is shown as $36,000,000. That is accrued annually against the Canadian National railways on the books of the company as owing to the government. That is interest. It is shown, plainly in the balance sheet. The balance sheet shows the government railway construction account as $404,000,000, and no interest has ever been charged upon it at any time. Then the balance sheet statement shows $661,000,000 as loans from the Dominion of Canada. Part of that was used for deficits, and as the hon. member pointed out quite properly, part of it was used for the capital expenditures of the Canadian National railways.
It is only upon that $661,000,000 of government loans that interest is charged-not on the total liability figure of $1,700,000,000 at all. That is what I have been pointing out to the hon. member. I am not finding fault with him, but I wish to say to hon. members of the committee that the hon. member makes a mistake when he stands in this chamber and in discussing this matter states that we have charged the railways with interest on $1,700,000,000.


Wilfred Hanbury: The minister did not understand what the hon. member said.


Robert James Manion: He repeated it a moment ago; however we will leave it to Hansard. I am not trying to find fault with the hon. member. I am merely showing the difficulty which any ordinary citizen must meet who does not understand the situation; the facts are very difficult to understand. Hon. members find difficulty in understanding them, because they are dealing with a most complicated matter. I should like to ask the hon. member or any other member in the chamber how many citizens in Canada could state the national debt, if they were asked. I

C.N.R.-Auditors
would say that probably not one in a hundred thousand could tell what our national debt amounts to. So if the hon. member thinks we will help out the situation confronting the Canadian National Railways by hiding some of the moneys actually paid by the government of Canada and putting it behind a curtain, so to speak, he is much more optimistic about it than I am.


Mr. BEAUBIEN:: If it is so difficult for the minister and members of the committee to understand the position of the Canadian National Railways does he not think that fact would be a good argument for keeping the present auditors.


Robert James Manion: Well, if the present auditors have been on duty for twelve years, as has been pointed out, and we have not succeeded in learning much about the situation, I do not think it is necessary to keep them for another twelve years. However, that is by the way.
I think the hon. member said that we had waited four years to make the change. He intimated that we had been in power four years and that the same auditors had done the work. But if we took the attitude that because other auditors coming in will have to learn the methods of the inter-state commerce commission, as was pointed out by the hon. member, and if it is going to take them some months to learn all the details, then, following that argument we could never change the auditors of the Canadian 'National Railways. We would never be in a position to do that. My hon. friends opposite would come back and try-no doubt they probably would-to change from Touche and Company to some other firm. They might very well do that, without any reflection upon Touche and Company, and they would be tied up with the same argument. In other words, if that were the case we could never make a change.


Charles-Philippe Beaubien: The reason I asked the question was that the minister made the statement that Touche and Company were very competent.


Robert James Manion: I do not question that. I consider Touche and Company are competent, but I also submit the firm of Clarkson, Gordon, Dilworth, Guilfoyle and Nash are competent.


William Daum Euler: Do you think the railways can carry all that?


Robert James Manion: They have carried a good deal.


Ian Alistair Mackenzie: Another liability.


Robert James Manion: This is one of the outstanding firms in Canada; of course there are others. For instance the Canadian Pacific Railway do not employ Touche and Company but they seem to have their books audited all right.


Abraham Albert Heaps: Has the Canadian Pacific Railway changed auditors?


Robert James Manion: I do not think they have in recent years.


Ross Wilfred Gray: The Canadian Pacific Railway are not under the inter-state commerce commission.


Robert James Manion: Quite true.


Ross Wilfred Gray: In the second place the minister said they should not be changed as long as they were satisfactory, not merely that their services were satisfactory.


Robert James Manion: Well, perhaps I did although I do not remember saying quite that, but I will accept the hon. gentleman's word. But I submit that I am of young enough mould that I can change my mind. I take that for granted, and let it go at that. I am not going to argue about that at all. Lincoln once said that anyone who does not know more this year than he did last had not much brains to know anything at all.


Wilfred Hanbury: What do you know more this year than you did last to account for this change?


Robert James Manion: It is simply that I and
the government are of the opinion that it would be a good thing to bring in new blood, a powerful organization to come in aind make suggestions, just as it would be in regard to other matters.
I do not agree with some of the remarks of some hon. gentlemen opposite. I think it was my hon. friend from North Waterloo who said this was an indignity.


William Daum Euler: I think I said that.


Robert James Manion: He said that it was an
indignity upon Touche and Company that they should be changed. There is no indignity cast upon them at all. They have not a perpetual stranglehold on this job. It pays $50,000 a year, plus some expenses, not very great. Is it to be taken that for all time, from now until eternity, if we still own the railways when eternity has arrived, we must
C.N.R.-Auditors

keep Touche and Company? Have not. other people some rights? Cannot the auditors be changed without casting any reflection upon Touche and Company at all?
1 want to deal now with one or two other points. My hon. friend mentioned that he would like to see the special railway committee meet early. Well, that committee meets when there is business for it to deal with. AVe cannot meet at the present time because we have nothing for that special railway committee to deal with. The committee meets as a rule as soon as the report of the Canadian National Railways is submitted.


William Daum Euler: It did not last year.


Robert James Manion: 
Charles-Philippe Beaubien: Did not the minister try to injure it when he recommended the construction of the Mafeking cut-off?


William Daum Euler: Probably the discussion is more or less purposeless, especially the personal interchanges. I was referring to the statement of the minister when he credited me with a certain amount of intelligence and said that nevertheless I had made a mistake. Yet he himself was so absolutely sure. I say to him, and it may not be for any lack of intelligence because he is intelligent, that he is quite wrong. He says that I stated a certain thing. As a matter of fact we are talking about two different things, and I will be generous enough to say that we are probably both correct. He stated to the committee, and he will probably correct me again, with regard to that $1,700,000,000 owed by the railways to the government, that I had said the railway figured interest on that amount. I never said anything of the sort. I said that the enemies of public ownership, and he can look for them in a great many places-


An hon. MEMBER:: Around him.


William Daum Euler: I do not know that they are around him, but I say that the enemies of public ownership, journalistic or otherwise, do figure the interest on every red cent that ever was put into the Canadian National Railways or is charged against the Canadian National Railways on the books of the company.

CJfJt.-Auditors
They charge it on every amount they possibly can. I have seen them in some newspapers swell the deficit to over 1100,000,000. That is what I said. I did not say that the interest on the whole sum is credited to the government on the books of the company.
I am in entire agreement with the minister in his last remarks. Although I do not agree with it usually I do not believe this government is deliberately setting out to wreck the Canadian National Railways. I would not like to make that charge against anybody, no matter how bitter an opponent he might be. The only purpose I had to serve was this, to conserve the Canadian National Railways and to preserve the morale of the Canadian people so that they are not misled. Let them get a true picture of the liabilities of the Canadian National Railways, nothing more and nothing less.


Abraham Albert Heaps: I would like to say a word
on this question. The debate this afternoon has resolved itself more or less into a discussion of the capital structure of the Canadian National Railways. During the whole course of this discussion I have waited for some reason to be given for this change in auditors, but so far I have not heard one word given as to why such a change is necessary in the auditors for the Canadian National Railways, except this, and I do not think this could be given as a valid reason or even as an excuse, and that is that the banks change their auditors every two years. I think, Mr. Chairman, that governments in the past have been too apt to follow the lead of the banks and I think if they would follow the lead of some other interest it might be more beneficial to the people of Canada.
I do not know the firm of Touche and Company at all, and I know very little of the other firm that it is proposed to appoint in their place. But if the services of Touche and Company have been satisfactory I can see no good reason why they should be changed, except for the reason the minister gave in his last sentence or two when he said that bringing in a new and a powerful organization might lead to the government receiving certain suggestions in regard to the railway; in other words, bringing in a new doctor to look over the patient.


Robert James Manion: Or new members of parliament, as is often done.


Abraham Albert Heaps: Or new undertakers. May
I give this illustration to the minister? Probably in the next few months the government
will appeal to the people and no doubt they will tell the people what a splendid record they have behind them in the past four years.


Robert James Manion: Hear, hear.


Abraham Albert Heaps: The minister agrees with
that statement. On the strength of that record for the past four years the government will appeal to the people for a new mandate. They do not expect a change, do they?


Robert James Manion: But they may get it.


Wilfred Hanbury: They certainly will.


Robert James Manion: One never knows in politics; the government in Ontario did, you know.


Mr. SPOTTON:: Now that the election is over, who is the new Minister of Railways?


Abraham Albert Heaps: My hon. friends feel that
because of the good service they have rendered they ought to be retained in office. Should not the same principle apply to those in the government service? If a firm of auditors have given good service, I do not think there is any valid reason why they should be changed.


An hon. MEMBER:: But you object to
monopolies.


Abraham Albert Heaps: This is not a monopoly.
When an employee of the government has given good service-and in this instance it is generally recognized by the government, by the opposition and by all parties that these people have-I do not see any good reason for the change. I think the principle is bad, unless it has come to be recognized as the practice to change auditors every few years. But that has not been the practice. I asked the Minister of Railways whether the auditors in the Canadian Pacific Railway had been changed and his answer was in the negative. Well, if that principle is good enough for the Canadian Pacific Railway surely it is good enough for the Canadian National. I was anxious to hear something said as to why there had been a change in the personnel of the auditors but we have been given no reason at all, and unless there is something more valid than the reason given so far by the Minister of Railways for changing auditors, unless it can be shown that their services have not been satisfactory or that better results can be obtained by dispensing with them, then I submit that no change should be made.



C.N.R.-Auditors


Mr. NEILL:: One of the effects of this bill is to remove the firm of George A. Touche & Company from a no doubt profitable contract with the dominion government. If that is the object then I am tickled pink to vote for it. It is a long lane that has no turning. My mind goes back to the spring of 1932 when a special committee was appointed to investigate the price of gasoline, and that committee appointed George A. Touche & Company to make an investigation into prices charged. I was not a member of the committee, but one member in discussing the matter in the house spoke as follows, as reported at page 1645 of Hansard of November 25, 1932. He said:
If two experts had been sent out by the oil companies to justify a higher price for gasoline they could not have found two men who could have done the work better. These men reported that the oil companies were not charging too much. ... At that time the committee said, "We do not want that sort of information; we want the facts and figures in order to draw our own conclusions." As a matter of fact the auditors brought in their conclusions without the actual figures. After arguing with them for a whole day we did manage to obtain a few figures, and they told us that if we wanted the other information they could figure it out but they did not have it prepared. So far as the committee was concerned the work done by those men was very unsatisfactory, though no doubt it was satisfactory to the oil companies in general.
Because of that job we had to pay SI 1,233, and I brought the matter up in the house. The Prime Minister used this language:
I may say that like the hon. gentleman I thought the amount was very large. . . . We did not ask that the account be taxed, because you cannot tax it, but we asked that it be moderated.
Further on I protested again, and the right hon. gentleman said:
No bargain was made antecedent to the employment being given to this firm. They have rendered an account which was referred to me personally and I could find no way by which it could be reduced.
That shows the spirit in which the Prime Minister regarded it, and I thereupon replied:
If that is the case, there is no use in my wasting the time of the committeie. At the same time, it is a good thing to uncover these things as they can be remembered the next time we need the services of accountants.
It was also complained that they had brought back a whitewashing report which they had not been asked for. It is said in Scripture that he who is faithful in a few things will be faithful in many, and the con-

verse is true. These men gouged us three years ago and I am pleased to vote for their removal.


Sir EUGENE FISET:: To come back to the discussion of the bill itself, has the government taken steps to consult the trustees or to obtain from them a recommendation with regard to the change of office? It seems to me, in view of the numerous statements that have been made by the minister himself that the government has had nothing to do with the administration of the railways, and as we have taken the trouble to place in the hands of the trustees the complete and absolute administration of the system I think it would have been at least a matter of courtesy for the government to ask for a recommendation from the trustees themselves.


Robert James Manion: The hon. gentleman has asked a proper question, but I do not consider that this or any other government should consult the trustees in this regard because this is an audit for the parliament of Canada. They have their own auditors, and they have nothing whatever to say in regard to these auditors. I will read once more a section of the act passed in 1933 bearing on this subject:
A continuous audit of the accounts of national railways shall be made by independent auditors appointed annually by a resolution of parliament and annually reporting to parliament in respect of their audit.
That is section 13, subsection 1, of the act of 1933. These are our auditors, not the trustees', and I do not consider that the trustees should be consulted. Indeed, if we did consult them I think we should be doing wrong, because they have their own auditors.


Eugène Fiset: The answer to my question is no.


Wilfred Hanbury: Who have been acting as auditors since December 31, 1934?


Robert James Manion: The same firm, and they will continue to act, unless they are recreant to their trust, until the others take over; and they will be paid in the ordinary way. I do not think there is any reason for assuming that they will not report.


William Daum Euler: When will the others take over?


Robert James Manion: Not until we pass the bill, I have not thought of the date, but it will be perhaps the middle of next month.


Wilfred Hanbury: The statement has been made here this afternon that we have as yet been given no reason why a change is being

C.N.R.-Auditors
made. I think the minister has given a very good reason why it is being made. He said it was the opinion of the government that the new auditors would be more efficient.


Ian Alistair Mackenzie: More
satisfactory, he said.


Wilfred Hanbury: I am going to give him credit for meaning efficient. If that is the opinion of the government I am prepared to subscribe to it. I do not see any reason why auditors should be continued in office year after year regardless of their efficiency, and there is only one suggestion I have to make to the minister, a suggestion which I think in all fairness he should adopt. The minister left the impression with me, and I think with a good many other hon. members, that he had some reason to believe-he used very guarded language-that the present officers of Messrs. Touche & Company had been lending their assistance to propaganda that had been spread across Canada in the newspapers, in order that the government might be embarrassed in making the change. That is the impression left on me and I believe on many others, and I submit that in fairness to the members of the committee as well as to Messrs. Touche & Company he should either go further in his statement and try to show to what extent it is true or else make an absolute retraction so that the members of the committee will feel that perhaps the matter is not as bad as we have been led to believe. The minister has said also that all the members on the government side of the house were supporting the Canadian National Railways and that there was no suggestion by any member of the Conservative party that there should be any amalgamation or unification. I am quite prepared to accept that; I cannot give any evidence to the contrary. But I do say this, and I say it in fairness to the government and in all seriousness, that there are many people in Canada to-day who question the policy of the government with reference to amalgamation and would welcome a reiteration by the Prime Minister of his 1930 slogan-amalgamation never, competition ever. I am suggesting to the Minister of Railways that in view of the situation and of the agitation that has been carried on for the last few months and, indeed, for the last few years, it is only fair to the people of Canada that the Prime Minister should again make a statement in that connection.
There is one suggestion I will make to the minister and of course he knows whether he will accept it. He says that Touche and Company have been acting as auditors so far this
year, and, further, that they will be appearing before the special committee on railways and shipping, so that their work will continue for some time. I suggest therefore that the date in this bill might very well be changed so as to appoint the new auditors for the year 1936. In other words, let us continue the present auditors during the year 1935. That would in the first place answer any possible suggestion that Touche and Company were being discharged on the basis of inefficiency, and in my opinion the government would be quite justified in making the change in view of the fact that they have the responsibility of saying who the auditors are to be. But as the present auditors must of necessity carry on for some time and as the change should be made at the end: of the calendar year, if the minister would make the suggested change in the bill to have it read: "1936," that would meet the situation and satisfy everybody; in so far as I am concerned it would satisfy me.


Robert James Manion: In regard to the first statement made by the hon. gentleman as to what I have said about Touche and Company, I shall endeavour to repeat my words so far as I can remember them-and I did not say them without ample thought-because I do not think he will claim I have anything to withdraw when I repeat them so far as I can remember. My statement was that I had been told that Touche and Company encouraged the propaganda, or something to that effect. I said that I hoped this was not true and I could not believe it was true because if it were, they would have proved themselves recreant to their duty and should have been removed. That is what I intended to say and I think that is what I said.


Wilfred Hanbury: May I interrupt the minister? If he did not believe it was true, why did he even make the suggestion? Was it fair to do so.


Robert James Manion: Well, that is questionable. I did further state that some of the information that was being used almost looked as if it came from the auditors, and I repeat that. I have not anything to withdraw. I have said this afternoon three or four times that I am not nor is the government reflecting on Touche and Company. So far as I am concerned that is sufficient for them ; at least it is all they are going to get. So that probably is clear enough.
In regard to my hon. friend's suggestion as to the carrying on of the present auditors, I think there is very good ground for what he suggests, and as a matter of fact the thought
C.N.R.-Auditors

came into my head that we would have to do something of the sort, because the auditors of last year, that is Touche and Company, really were automatically discharged on December 31. In the original act under which we appoint these auditors, the one from which I quoted, the Canadian National-Cana-dian Pacific Act of 1933, section 13, subsection 2 reads:
Notwithstanding anything in this act contained the now existing auditors of the Canadian National Railways shall continue in office and perform their duties as such until _ their successors have been appointed under this act and have commenced to perform their duties.
I think wording such as that would cover the ground. I would not like to do this right off the bat, so if my hon. friend will accept my word, on the third reading of the bill I shall endeavour to cover the ground suggested by him when the time comes.


Abraham Albert Heaps: When do the services of Touche and Company terminate?


Robert James Manion: I pointed out to some other hon. member that they will automatically carry on until their successors take over. We are legalizing this.


Abraham Albert Heaps: When will that be?


Robert James Manion: I am afraid my hon. friend was not listening. A few minutes ago somebody else asked the same question and I said that it could not 'be until after the act received its third reading; it will be some time after that. It will be the earliest time possible after the act has received its third reading, had the approval of the other house and is assented to by His Excellency.


Mr. SANDERSON:: I take it from the minister's statement of a few minutes ago that the remuneration to Clarkson, Gordon and Company will be $50,000 plus expenses. About how much would the expenses be?


Robert James Manion: I had occasion to look that up. Last year they were between $4,000 and $5,000. I am speaking subject to correction, although I think I am right. No expenses are paid for services in Montreal, but expenses are paid where any of their auditors are sent out on the line. Any auditing firm auditing such a huge business organization as the Canadian National Railways must have auditors on the work continuously and some of them have to travel throughout the country. When they do so, they are paid expenses. Last year they amounted to something like $4,000 or $5,000.


Frederick George Sanderson: What is the amount that has been paid to Touche and Company?


Robert James Manion: It is $50,000 a year.


Frederick George Sanderson: There is no change
in that amount?


Robert James Manion: No.


Mr. STEWART (Edmonton):: I am not particularly interested in the discussion as to the change in auditors although I think the minister might have had a better reason for suggesting the change than the one he has offered, for after all, from the statement of the minister, those auditors appear to have been giving perfect satisfaction. But I want to say something in connection with all this railway discussion and particularly with regard to the propaganda that is going on from some sources in Canada and that persists in going on despite the repeated statements of the minister himself, speaking on behalf of the government, that there is no intention on the part of the government to consider amalgamation of any sort. That should settle the matter so far as the government is concerned, but despite those statements there is a persistent propaganda being carried on throughout Canada that the Canadian National Railways is the big problem or one of the big problems to be met and settled by the government either now or at some future date.
I would like to suggest to the minister that he consider the writing down of the capitalized debt of the Canadian National Railways because I agree with the hon. member for North Waterloo that the government persist in capitalizing this road to the fullest extent possible, charging interest upon this capital and thereby presenting such a picture to the Canadian people that if amalgamation or perhaps absorption, which would be worse in my opinion, of another corporation were considered, that would perhaps meet with some approval by the public. I am one of those who dread that sort of thing because I have lived in western Canada under conditions where we had one corporation. I do not say that they did not render service, but they rendered service when it pleased them and not when it was satisfactory to the shippers. I think anyone who has lived through that period will agree with me.
I was a member of a government that did perhaps foolish things in order to try to correct that situation; I admit that now. Those are all incidents of the past, but we have this problem on our doorstep and it is one that, I agree with the most ardent propagandists with regard to the matter, is

C.NJt.-Auditors
mi
giving us the greatest concern. In the first place I would like to see the capital structure reduced to proper proportions; I do not think it should be carried in the condition it is in to-day. This is not the first time I have voiced this opinion. I believe also during these troublous periods, this period of depression, both railways have not been paying proper attention to maintenance and a heavy bill for maintenance charges is being piled up that some day or another will have to be met. That is, maintenance will have to be undertaken much more extensively than is now being done by either railway company. I do not think one can criticize one any more than the other. They are absolutely necessary for the people of this country. But I ask the Minister of Railways and the Prime Minister to place before the Canadian people something that is never emphasized as it should be, namely that we enjoy a lower passenger and freight rate structure in this country than do our neighbours to the south, where the railways are under private ownership. That is something that is largely lost sight of. When there is so much talk about the capital and debt structure of the Canadian National Railways, and the interest charge that the Canadian people are paying, it seems to me that the other side of the matter should be brought to the attention of the Canadian people. I am not in possession of actual figures, but perhaps the contribution which we are making by way of interest charges from public revenues is largely offset by our lower traffic rates. That may or may not be a good thing, but if we ever get into the situation of having no national railway it would not be long before the Canadian people would be asked to make good that so-called loss in interest by way of increased traffic charges. That is one reason why I am very much in favour of preserving the national railways as a national undertaking, controlled by the government of this country. I think it is highly important. I know that is foreign to the present discussion, but I want again to emphasize that point, as I have on former occasions, because I believe it is one that is being ignored by those who oppose the situation as it exists to-day, and it is not constantly placed before the public as it should be as a reason why we have to carry that added burden during this troubled period. I suggest to the minister that he give earnest consideration to the writing down of the debt structure.
I know nothing about Touche and Company or the abilities of the gentlemen whom it is proposed to place in charge. The government will have to take the responsibility
for that; they have taken the responsibility for making other changes in management and will have to bear any criticism that may result from the exchange. But the other matter I think is highly important in view of the propaganda that is being constantly launched against this undertaking from one end of the country to the other.


Richard Bedford Bennett: The railway rate structure in this country is, as the hon. gentleman says, very low. But I wonder if he has noticed the advertisements appearing in the eastern press lately quoting a Vancouver newspaper editorial in which the demand is made that there be an immediate reduction in freight rates?


Charles A. Stewart: Yes, I have.


Richard Bedford Bennett: On every occasion that
I have had the opportunity, and I think the same statement is true about most public men in Canada, we have pointed out that, for instance, grain rates ini western Canada for some hauls have been as much as twenty per cent lower than in the United States And frequently we find Americans pointing to our rates as being lower than theirs. But the other side of it is indicated in the advertisement to which I have just directed attention.
With respect to the capital structure of the Canadian National Railways, I could not be in the chamber during the whole of this discussion, but there is one reason why at present it cannot be touched. Doubtless every hon. member knows that the Grand Trunk people are still proceeding with their litigation against this country in connection with the taking over of that system. Mr. Lovi-bond's case in Ontario was disposed of by the Canadian courts adversely to his contention, but there is now before the privy council a petition from that gentleman in which he asks that certain things be done. To disturb that capital structure until this litigation is ended is something that I think almost any man would agree should not be done. I do not know how many hon. members have studied the situation, I assume many have; it is a most complex and difficult one. Scarcely any Canadians go to London without someone beginning to talk to him about the Grand Trunk situation, and undoubtedly many receive letters about it. Litigation was commenced in the United States and in the courts of Ontario. The case of Lovibond versus the Grand Trunk-or the Canadian National, I think it was; I forget the exact name of the defendant-was disposed of by our courts, as I have said, adversely to his
C.N.R.-Auditors

contention. Now the matter stands with this petition asking the privy council to reopen and hear again the whole matter.
I do not suppose many hon. members have really followed the point at issue. It will be remembered that this country offered to settle with the 'Grand Trunk for a certain figure. That offer was declined.


Wilfred Hanbury: With the shareholders.


Richard Bedford Bennett: Well, it was a representative of the company. There are so many classes of shareholders. Certain difficulties arose to which I shall presently refer. Then the matter was arbitrated, and it will be recalled that the case went ultimately to the privy council, and the privy council sustained the arbitration award. But that has not stopped the agitation on the part of certain classes of shareholders, who contend that their position was not properly represented, either at the arbitration, in which Chief Justice Taft of the United States represented the shareholders of the Grand Trunk, or to the Canadian government. They have proceeded with litigation. I do not know whether or not the house recalls the fact that the legislation which enabled action to be taken was placed upon the statute books 'by the government of which Mr. Meighen was the head, but the arbitration was not disposed of in the privy council until after he had been succeeded by the present leader of the opposition (Mr. Mackenzie King). When the Grand Trunk arbitration decision was given by the privy council, in virtue of legislation which had been passed an order in council was put through here that wiped out the Dashwood house register of shareholders of the Grand Trunk, and substituted the name of the Minister of Finance as the shareholder of the road. You can readily see what opportunities for differences of opinion might arise from the enactment of that statute and the passing of the order in council under it. This litigation which is still pending is of such a character that I do not think that this country should lightly disturb the status quo with respect to capitalization until it is disposed of. That was in the mind of the former president of the Canadian National, I know, because he was not aware of the position which was taken by these shareholders until after he went to England and a number of them waited upon him, as they did also upon the former prime minister. One set of them demanded a fiat on a petition of right. They did not endeavour to secure the fiat for a long time, and then successive governments have not taken any

action in that regard, so they launched a simple action in the courts, which has been disposed of by the court of appeal in Ontario and is now in the position I have indicated. I think most members of the committee will realize how unwise it would be to touch this matter until such time at least as this litigation has been disposed of.
As far as concerns the writing down of the capitalization of any company, it is well known that the methods to be pursued and the reasons for the action to be taken have been settled by long lines of decisions. It is well for this jmung country that an investment which it has made in railroads and which has become valueless should be constantly before it as a deterrent from practising the same thing in the future.


William Daum Euler: It was valueless before they took it over.


Richard Bedford Bennett: It could not have been
done without the action of this parliament, representing the people of the country, and it is well that the people should have before them a constant reminder of the mistakes they have made in the past, in order that they may be avoided in the future. It is like punishment in criminal cases, which is for two purposes; one the mere punishment, the other for deterrent purposes. I think the deterrent effect of being constantly reminded of something is very useful. It cannot affect rates, as the hon. member for West Edmonton realizes; it cannot affect anything at all in connection with the company, except to remind us that we made tremendous mistakes and that it will be a very long time before we can eliminate the results of those mistakes. It does not, as my hon. friend the Minister of Finance says, help us any in regard to having to continue to pay in hard cash the deficits that accumulate from year to year. If cutting down this capital structure would lessen the deficit that had to foe paid one could understand something about it, but when it does not touch that obligation in any shape or form, direct or indirect, the idea of entirely eliminating it would mean that we would hide from ourselves the position that we ourselves created, and assume that we were in a position which we were not in, for we still have to pay the deficits which arise out of the operation of the property.
My only reason for rising at all was merely to indicate what I trust the committee realizes, how unwise and unsound it would be to endeavour to take any action with respect to the matter when litigation so serious in its possible consequences is still pending.

C.N.R.-Auditors


Charles A. Stewart: The answer given by the Prime Minister is the one I received from colleagues of my own when I pressed the same question, but I have always felt that it afforded opponents of the national system the opportunity to make unfair comparisons between the national system and the privately owned system, owing to this very debt structure.
Mr. BENNETT': Oh, no.


Charles A. Stewart: I will just
take a moment to explain why I say that. The right hon. gentleman knows better than anyone else the amount of land contributed for the construction of ibhe Canadian Pacific railway. In no way does that appear as a charge in the capital debt of that railway.


Richard Bedford Bennett: It is an asset.


Charles A. Stewart: Yes, but it is not set out in the capital debt of the railways, and it is just as much a contribution by the Canadian people as the cash that is turned over to the national system every year. On that count alone I have always urged that the two lines should be treated alike. Surely this land was worth money; undoubtedly it was. I will agree at once that until the construction of the Canadian Pacific railway its value was very doubtful, but on the construction of that railway it became worth a veiy considerable amount of money. When we come to compare the capital debt structures of the two lines of railway, however, it appears very much as though the national system was carrying a very much larger capital debt than that of the privately owned system, and whether we like it or not people will always make comparisons between the two systems. For these reasons I desire once more not to plead the case of the Canadian National Railways but to put it in such a light that it can be judged on its merits in regard both to construction costs and the cost of operation. Personally I do not think there was very much difference between the construction costs of the two lines. Despite all that has been said about the cost of constructing the Canadian National and all the railways that have been taken over by it, I never could believe that the cost was very much more than that of the Canadian Pacific railway, but that is being constantly held up as an argument against public ownership. That was why I wished to make these few remarks.


Mr. CANTLEY:: Mr. Chairman, I should like to refer to the remark of my genial friend the hon. member for West Edmonton with regard to the upkeep of the road, and his
suggestion that a large expenditure would have to be made in the near future. In that connection I would remind the hon. gentleman of the fact that conditions have changed. Twenty years ago we had fifty-six pound rails. Then they were sixty pound rails, then sixty-seven, then eighty, then ninety pounds and up to one hundred and one hundred and ten pounds. That one factor plays a great part in the question of repairs and renewals. In addition, in recent years we have been using a hardened steel rail which has given three times the service that was given by the rails rolled twenty years ago. Instead of ordinary ties of cedar, hemlock or pine, according to the part of the country through which the road passes, in the main we are now using creosoted ties, which have a life of twenty years or more; just how long they last and can be used has not been determined as yet. These ties are now protected by tie plates, which we did not have in any quantity twenty years ago, which is another important factor. To-day we also have rock and slag ballast, which tends to cut down the cost of maintenance.
These are the main factors to which I should like to refer. The railway picture is bad enough without adding to it the suggestion of my hon. friend that the railway is going behind enormously because of neglected repairs. In my view that is not a fact. So far as rolling stock is concerned, that is quite a different matter. To-day the railway has probably fifteen or sixteen thousand derelict cars on sidings all the way from Sydney to Vancouver. Those will have to be replaced and additional modern motive power provided just as soon as we can find the money with which to do it, but as regards the roadbed I submit we need have no great concern for some little time.


Wilfred Hanbury: To-day in Canada we have a nationally owned and a privately owned railway. We have no basis of comparison in regard to the various services they perform, because the Canadian National and the Canadian Pacific have not the same system of accounting. I think it would be very much in the interests of the Canadian people and of the railway companies themselves if they were on a comparable basis, and I suggest that the minister give some consideration to the question of bringing a bill before this house placing the responsibility on the railway commission, probably, to see that a uniform system of accounting is adopted by the two railways so that the Canadian people may have some basis for comparing the results that are being
C.N.R.-Refunding

obtained by the privately owned company on the one hand and by the publicly owned company on the other.


[Stage Direction]
Section agreed to.
Preamble agreed to.
Bill reported.


[Stage Direction]
Hon. E. N. RHODES (Minister of Finance) moved the second reading of Bill No. 19, respecting the Canadian National Railways and to provide for the refunding of maturing and callable financial obligations.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. MacDonald (Cape Breton) in the chair.
Sections 1 and 2 agreed to.
On section 3-Issue of substituted securities.
William Daum Euler: I am not sure whether it is in order on this section, but I should like to bring to the attention of the minister a question I asked him the other day, namely as to whether or not these bonds would be issued direct by the government or issued by the railway company and guaranteed by the government. I note that one of the clauses of the bill provides for an issue by the railway and a guarantee to be given by the government. Would the minister state the reason why that is being done? It was understood by the railway committee that we could finance more cheaply by having a direct government issue rather than an issue by the railways guaranteed by the government.


Mr. RHODES:: This bill contemplates the refunding of guaranteed securities.


Mr. CASGRAIN:: By whom?


Edgar Nelson Rhodes: Hon. gentlemen will note that section 8 of the bill authorizes loans to the Canadian National out of the consolidated revenue fund, which would constitute a direct obligation. The question as to the extent to which it would be advisable to substitute direct obligations for guaranteed securities is a large question of major policy.


William Daum Euler: I should like to be clear on the point. Does the bill give the government authority to change the proposed action? That is, they could take either course?


Edgar Nelson Rhodes: Yes.


William Daum Euler: Would the minister state the present intention?-because I suppose action will be taken immediately.


Edgar Nelson Rhodes: It will depend entirely upon the circumstances.


William Daum Euler: There is no decision yet as to which the government will adopt?


Edgar Nelson Rhodes: No, nor could there very well be. The decision will depend entirely on market conditions, and the type of bond.


William Daum Euler: There is no decision now?


Edgar Nelson Rhodes: As I said the other day the difference between the guaranteed security and the direct obligation of the dominion is, in our own market, very slight.


William Daum Euler: Is the minister making them callable?


Edgar Nelson Rhodes: Yes, every one of them.


Eugène Fiset: I was under the impression when two or three years ago the policy was inaugurated whereby we introduced the estimates of the Canadian National railways by resolution rather than by items in the estimates, part II of the bill provided that any loans of the Canadian National Railways should in the future be floated directly by the government. In the same year we had a discussion in the railway committee and ascertained from the auditors and also from the officials of the Canadian National Railways that either in the floating or in the refunding of a loan the government by direct issue could save at least one-third of one per cent. That is why we are anxious to ascertain the policy the government intends to follow.


Edgar Nelson Rhodes: The matter to which the hon. member for Rimouski refers had no reference to refunding. This bill has to do entirely with the refunding of existing issues.


William Daum Euler: What difference is there? Is there any difference in the principle?


Eugène Fiset: I think the minister is making a mistake. I do not think it provided only for refunding for the same year in which the discussion took place. I believe however that the matter of refunding at least one loan was mentioned in the bill.


Edgar Nelson Rhodes: I must agree to disagree
with the hon. member because I am advised that there never has been any commitment of that kind, either by the committee or by the house.


Eugène Fiset: In committee, I
discussed the matter of refunding and the floating of new loans. I took the trouble to ascertain from officials of the Canadian National Railways and also from the auditors

C.N.R.-R efunding
what the saving would have been if the funding had been done differently, and we were given a figure of one-third of one per cent. That is why I say the matter was discussed in committee.


Edgar Nelson Rhodes: It should be understood
that that statement referred to new capital; it did not deal with the refunding of existing obligations. The amount involved would run into many hundreds of millions of dollars.


Eugène Fiset: I understand that.


Edgar Nelson Rhodes: From the national point
of view the credit position of the country might be far better if we did not attempt to take over the whole load at once.


Eugène Fiset: I am simply calling the attention of the minister to the fact that this matter was discussed in committee, that we had the advice of the auditors, and that we were given a positive statement, both on refunding and on the floating of new loans, that one-third of one per cent might be saved if they were floated directly by the government instead of by the railway.


Edgar Nelson Rhodes: As a matter of fact the
auditor may make any recommendation he wishes. The question of a major national policy or a decision as to what is in the best interests of the country is quite another matter. It is a very large question. May I point out to the hon. member that there is no question of a difference of one-third; the difference in Canada to-day is somewhere about one-tenth of one per cent.


Wilfred Hanbury: That was two or three
years ago.


Eugène Fiset: Yes, that is what
I said.


Mr. HANSON (Skeena):: Does this bill
provide for payment in Canadian currency?


Edgar Nelson Rhodes: That would depend entirely upon the condition of the market, and, to use a homely phrase, the man who pays the piper calls the tune. We have to deal with existing maturities and they have to be paid in the terms of the obligation. But so far as possible all issues will be made in Canadian funds. The hon. member will recall that some of these maturities fall due in England and some in the United States.


Olof Hanson: I realize that,
but I thought they were made payable in Canadian currency no matter where they fell due.


Edgar Nelson Rhodes: Of course if a bond falls
due payable in pounds sterling we cannot pay it in Canadian currency unless the person who owns the bond is prepared to accept Canadian currency. So far as possible we will make them payable in Canadian currency.


Wilfred Hanbury: The minister has said
that if it falls due in United States funds or pounds sterling he cannot refund it in Canadian funds?


Edgar Nelson Rhodes: Not unless the holder of
the bond agrees.


Wilfred Hanbury: Perhaps the minister
would let me place my interpretation upon it. He may not be able to replace it on the same basis, but it is just a question of the price he will put on his issue, and what he will pay for it.


Edgar Nelson Rhodes: The hon. member might
add to that that if you are refunding-and that is what we are dealing with-


Wilfred Hanbury: Yes.


Edgar Nelson Rhodes: If the bondholder insists
upon having either his cash or a substituted bond payable in pounds sterling, then we have no option.


Wilfred Hanbury: I still submit that the
minister could probably induce some of the old country and United States investors to take bonds payable in Canada, if it were necessary to give them a slight premium over what they would otherwise receive.


Edgar Nelson Rhodes: We will do that, wherever possible.


[Stage Direction]
Section agreed to.
Sections 4 to 7 inclusive agreed to.
On section 8-Loans authorized to National Company not exceeding aggregate amount of $200,000,000.
William Daum Euler: Perhaps the minister is not in a position or would not care to say what the rate and terms of the bonds will be.


Edgar Nelson Rhodes: Of the securities to be refunded?


William Daum Euler: Yes.


Edgar Nelson Rhodes: If my hon. friend will look at Hansard of February 14, page 808, he will find a detailed list of all the maturing securities.


William Daum Euler: I meant the rate at which the new bonds are going to be issued.
1116	COMMONS
Supply-Pensions and National Health


Edgar Nelson Rhodes: Oh, that will depend entirely on the market. The last one was at three per cent.


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

[Stage Direction]
The house in committee of supply, Mr. Morand in the chair.
Care of patients and medical examination respecting pensions; hospital allowances (compensation), $3,200,000.
Mr. MACKENZIE (Vancouver); There is no difference at all in the amount of the vote this year?	*
Hon. D. M. SUTHERLAND (Minister of Pensions and National Health):: No, it is the same as last year.


[Stage Direction]
Item agreed to.
Salaries-
Departmental staff, $2,375,000.
Ian Alistair Mackenzie: Does this include the departmental salaries at the various institutions throughout Canada?


Donald Matheson Sutherland: Yes, it includes all the administrative salaries, but not the doctors on schedule of fees.


[Stage Direction]
Item agreed to.
Unemployment relief, $2,100,000.
Ian Alistair Mackenzie: Is the scale of unemployment relief uniform in all the provinces?


Donald Matheson Sutherland: No. The general
plan that is adopted is to bring the amount up to the scale of relief in the municipality for the smaller pensioners who are eligible under this vote.


Ian Alistair Mackenzie: So that because of the lack of uniformity in the scale of relief in the different municipalities there is a lack of uniformity in the relief granted to pensioners under this vote?


Donald Matheson Sutherland: That is it.


Mr. SPENCER:: Are the unemployed exsoldiers always treated separately from the general unemployed?


Donald Matheson Sutherland: The pensioners are.


Mr. COOTE:: Would the minister give us some idea of the variations which exist in the amount of unemployment relief paid to exsoldiers in various cities or in different parts

of Canada? This is a subject on which there is a great deal of complaint, and I think a statement from the minister would be useful.


Donald Matheson Sutherland: It depends upon the scale the municipality is paying. If, for instance, a married pensioner is drawing a pension of $15 and the municipal scale of relief for a married man who is not a pensioner is $25, his relief would be brought up to S25. Another pensioner in another city might be drawing a pension of $22 and the city scale of relief be $27. Here again the pension would be brought up to t'he amount the city was paying.


Ian Alistair Mackenzie: What are the qualifications for entitlement to relief under this vote?


Donald Matheson Sutherland: A man has to be a pensioner or else have received a final payment as distinct from a gratuity, instead of one of the smaller pensions.


Olof Hanson: Is there any difference as regards municipalities within the province in the scale of relief?


Donald Matheson Sutherland: There are variations. There might be a different scale of relief in Prince Rupert, for instance, from the scale in Victoria or Vancouver.


Ian Alistair Mackenzie: Is it necessary to have any specific percentage of pension to qualify under this vote?


Donald Matheson Sutherland: No.


Ian Alistair Mackenzie: It is regardless of any specific percentage?


Donald Matheson Sutherland: Yes.


Mr. POWER:: Did the vote of $2,100,000 last year cover all expenditures?


Donald Matheson Sutherland: Yes, it is estimated that it will cover the expenditures for the remainder of the year.


Charles Gavan Power: Is medical treatment given to pensioners under this vote?


Donald Matheson Sutherland: Yes, treatment is given to the pensioner, but not to his family.


Charles Gavan Power: No medical treatment for his family?


Donald Matheson Sutherland: That is the general rule, but if there is an emergency case that our men see, of course it would be handled.


Charles Gavan Power: Is clothing given to members of the pensioner's family?


Donald Matheson Sutherland: Clothing is given in some cases where there is a very urgent need.

Supply-Pe nsions-Relief


Charles Gavan Power: And fuel?


Donald Matheson Sutherland: Fuel is always given.


Charles Gavan Power: Is not one of the causes of complaint that all the municipalities make arrangements for the medical care of ordinary civilians who are on relief but that the same arrangements are not made for the families of pensioners on relief? Is not that one of the causes of complaint?


Donald Matheson Sutherland: Undoubtedly there have 4>een representations made.


Charles Gavan Power: And what is the reply of the department to that complaint?


Donald Matheson Sutherland: The reply has always been that in no case has the dominion accepted responsibility for medical care for anyone who was not a pensioner. In the arrangements made by the Department of Labour with the various provinces medical care has never been recognized as a dominion responsibility, and so far as the families of the pensioners are concerned it has been felt that they have not lost the right to be considered eligible for receiving medical care from the municipalities in which they reside.


Charles Gavan Power: The same argument applies to clothing, I have no doubt?


Donald Matheson Sutherland: Yes, but we have given clothing.


Charles Gavan Power: You have given clothing, but as a matter of compassion rather than as a matter of right.


Donald Matheson Sutherland: That is right.


Charles Gavan Power: The complaint is this.
Ex-soldiers are constantly writing in-I get many letters from them-to the effect that they are discriminated against, and it would appear from what the minister says that there is some foundation in fact for these complaints, though I am not blaming the department for that. But the fact would appear to be that in a great many municipalities, in almost all the municipalities, some degree of medical care is given unemployed persons on relief and their families, and to some extent also they receive a clothing allowance or clothing, whereas the families of returned soldiers do not receive this medical care nor do they receive clothing from anybody. The municipalities take this ground: You are an ex-soldier and consequently a responsibility of the federal government; therefore we will not have anything to do with you. If you want anything, go to the federal government, to the Department of Pensions and National Health, and they will
look after you. That appears to be the great difficulty; it is the great cause of complaint. I am not suggesting that there is any negligence on the part of the government or of the department, but the facts are there. Throughout the country returned soldiers are complaining very bitterly that they are being discriminated against. Whether the department should contribute clothing and medical attention to the families of returned soldiers on relief is a matter of policy regarding which it is not for me to make suggestions; but I think that after four years of this kind of thing with these complaints being made the department should at least have come to some conclusion as to what the future policy will be. I think the minister ought to give an explanation.


Donald Matheson Sutherland: There have been
complaints from some municipalities but really, considered as a whole, from very few, because in the vast majority of instances the municipalities have realized their responsibility for medical care. With the exception of a few municipalities, though a good deal has been said about the question, the situation has not become an acute one.


Charles Gavan Power: The moment a man is
known to be a returned soldier you will find in most municipalities that he is told to go to the federal government. Hon. members generally, I believe, have had the same experience. We have all had letters from returned soldiers all over Canada complaining that the municipality absolutely washes its hands of them if they are in the category of a pensioner, high or low, or of one who is entitled to relief. In some instances they go a step further. If a man is a returned soldier, even if he is not entitled to relief from the department, a great many municipalities say, "Go to the returned soldiers' organization or to the department." Unfortunately, or fortunately, perhaps, some returned soldiers' organizations have in the past had certain sums of money which they could dispose of to look after their own people. The army and navy veterans in Quebec expended large amounts derived, as we are told, from the illegal and immoral practice of running lotteries, but those amounts were expended to very good purpose in looking after the returned soldiers and their dependents not only in Quebec but throughout the country. But as a result of the activities of the soldiers themselves and of the department, a great many municipalities would not look after the soldiers any longer, whether they were entitled to relief under the
Supply-Pensions-R e lief

department or not. I do believe it is a matter that should be looked into and handled perhaps more efficiently by the department than it is at the present time.


Ian Alistair Mackenzie: What
amounts have been expended in the various provinces under the vote?


Donald Matheson Sutherland: In the Quebec district, $212,149; that takes in the province of Quebec; in Nova Scotia and Prince Edward Island, $43,344; in eastern Ontario, taking in Kingston and Ottawa districts, $135,054; in oentral Ontario, taking in Toronto and Hamilton, $638,241; in western Ontario, $157,487; in Manitoba, $278,183; in Saskatchewan, $64,178; in Alberta, $118,133; in British Columbia, $247,524; in New Brunswick, $18,272.


Mr. GEARY:: Take, in the working out of this plan, an instance such as the minister gives where the municipality pays $25 a month and the soldier gets $15. The department makes that up to $25 and in that ease the municipality is relieved entirely of what otherwise would be a charge upon it of $25 for the man. Under these circumstances I think the municipality should see that any incidental relief, like clothing, fuel and medical attention, should be given that person without any difficulty. But has the minister realized that in some municipalities the total allowance for an unemployed single man is $15? The soldier is drawing $15 and he is then in exactly the same position as the unemployed single man, but he is in this difficult position, that the very fact of his being a pensioner indicates that he is not as well able to take on casual jobs as the ordinr-ary unemployed single man. The pension of $15 may cover some difficulty of a leg or an arm; I know of one man who is practically stone deaf and; cannot get casual labour. It occurs to me that perhaps the minister might consider whether that factor should not enter into the calculation to some extent. In the city of Toronto a $15 pensioner is really at a disadvantage with the single unemployed man who draws $15 from the municipality.


Charles Gavan Power: What is the total amount of pension the unmarried pensioner can draw?


Donald Matheson Sutherland: Fifteen dollars.


Charles Gavan Power: Is that the total all over Canada?


Donald Matheson Sutherland: The basic scale of the department for a single .pensioner $15; for the married pensioner without children $25; for the pensioner with a wife and one

child $30, with $2.50 for each additional child. The municipality has a figure corresponding to each of these amounts.


Charles Gavan Power: What is the highest for a single man?


Donald Matheson Sutherland: The maximum with rates previously in effect was for the single man $30; man and wife, $45; man and wife and one child, $57, and for the man with two or more children, $67.


Charles Gavan Power: Sixty-seven dollars is the maximum paid anywhere in 'Canada. What about the man with a wife and five children? While the minister's officials are looking up the matter, will he explain how this thing works? As I understand it, from the total of $67 there is deducted first the amount of pension which the man receives.


Donald Matheson Sutherland: Yes.


Charles Gavan Power: Suppose he is getting a $10 pension; that is deducted from the $67. Is there any deduction for any gainful employment which he may have?


Donald Matheson Sutherland: He would be allowed $10 a month for casual employment.


Charles Gavan Power: Without deduction?


Donald Matheson Sutherland: Yes.


Charles Gavan Power: Suppose he earns $20, is there any deduction of any kind or is he taken off relief altogether?


Donald Matheson Sutherland: There would be a deduction of the second $10 off the increased amount.


Charles Gavan Power: What is the total amount he must earn so that he will not get any relief at all?


Donald Matheson Sutherland: If the total amount was $67 and he was working and earned the difference between the pension and that, he would automatically go off relief.


Charles Gavan Power: There are two sides to this story. Is there any incentive for that man to work? In other words, would it pay a pensioner of the category mentioned by the minister simply to stay on relief or would it be better for him to get a job and do something?


Donald Matheson Sutherland: Unfortunately on the part not only of returned soldiers but of others, there is an inclination rather to stay on relief. That is human nature, and returned soldiers are no different from other people. Some of course would rather get out and fight against this inclination, but undoubtedly if a man saw a job drawing $15 a.

Supply-Pensions-Relief
month, he would figure he would get about as much by sitting still with the pension coming in, and there might be a tendency to sit back; I cannot deny that.


Ian Alistair Mackenzie: Are the costs the same in the winter as in the summer?


Donald Matheson Sutherland: They are a little more in the winter on account of the fuel. According to the weather, when the necessity comes on for fuel, the costs would be more.


Charles Gavan Power: Is the change made on April
1?


Donald Matheson Sutherland: No, depending altogether on the weather.


Charles Gavan Power: When was the change made last year?


Donald Matheson Sutherland: It would vary according to the climate. In Victoria they would not require fuel as soon as in Quebec, or in Ottawa.


Frederick George Sanderson: What is the difference
between summer and winter costs?


Donald Matheson Sutherland: Principally the cost of the fuel.


Frederick George Sanderson: I know that, but in dollars and cents?


Donald Matheson Sutherland: In the year 1933-34 it was as follows:
Month

	Amount
April	 $106,518
May	 177,550
June	 148,528
July	 135,216
August	 126,954
September	 124,144
October	 134,451
November	 156,187
December	 180,316
January	 200,522
This shows that the cost increases in the cold months.


Frederick George Sanderson: I would like to get the figures for the individual. If a returned man was getting $15 a month in the summer, what would he get in the winter?


Donald Matheson Sutherland: There would be the difference of the price of the fuel, probably S6 to $8 a month in the case of married men.


Frederick George Sanderson: That would be $15 in the summer and $21 or $23 in the winter?


Donald Matheson Sutherland: In some instances
that would be the case; that is the main item.


Eugène Fiset: The minister said
that these amounts are paid not only to pensioners but to all returned soldiers who make application for them.


Donald Matheson Sutherland: No, the hon. gentleman misunderstood me. It is only to pensioners.


Eugène Fiset: It is all very fine and easy for those gentlemen who are living in big cities where relief of some form is obtainable, but in the small centres, the rural districts in the constituency that I have the honour to represent, there is no such thing as state aid or municipal contributions toward unemployment relief. I would like to ascertain from the minister the mode of procedure to enable any of our pensioners to obtain relief. Have they to apply directly to the department at Ottawa? To whom should they make application and what are the means to be taken in order to secure some part of that relief?


Donald Matheson Sutherland: If someone with a small pension living in the constituency of the hon. member were in difficulties, he might write to Ottawa or to the hon. member himself, but his proper procedure would be to get in touch with our relief official in Quebec city, who would look into the matter possibly by communication with the reeve or mayor of the municipality and find out the man's condition. Such a pensioner would not get as much as one would in a city, because undoubtedly in the smaller places living would be cheaper, but he would be looked after and given every assistance that could properly be given to him.


Eugène Fiset: May I bring to
the minister's attention a concrete case that will perhaps illustrate the point. This was a pensioner receiving prior to last year a pension of $100. By decision of the department this was reduced to $20 a month. This man has a wife and family and he is a cripple and in bed. He has tried and I have tried myself for the last six months to induce the department to review the case. He has made four different applications to the official in charge in Quebec so far as the department is concerned without receiving any answer. This year I wrote to the department, placing the facts before them, and I got an answer from Doctor Henderson stating that if this man would make direct application to Ottawa he might have a chance to get his case reviewed by a quorum of the new commission that has been created. I was always under the impression that in
Railway Act-Traffic by Water

accordance with the decision given by the Prime Minister last year or two years ago this man would be entitled to draw the full amount of his pension, $100 a month, until his case would have been reviewed, but the decision of the department has been absolutely to the contrary. The only recourse he has now is to have his case reviewed by a quorum of the new commission that has been created. 1 want to ascertain from the minister whether, if this man makes application directly to the department at Ottawa, supporting his application first of all by medical evidence, second by a certificate of the mayor of the municipality in which he lives, and third, by letter from the parish priest, he will have a chance to come under the provisions of this appropriation?


Donald Matheson Sutherland: What the hon.
gentleman is speaking of is a reconsideration of the man's pension; there are so many cases that are individual and the hon. gentleman knows I have no control whatever over the pension commission or the pension appeal court.


Eugène Fiset: I am talking about relief.


Donald Matheson Sutherland: Yes, certainly.
At six o'clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clock.



RAILWAY ACT AMENDMENT


[Stage Direction]
On the order being called:
Resuming debate on the motion of Mr. Neill for the second reading of Bill No. 12, an act to amend the Railway Act (traffic by water).
Alan Webster Neill: Stand.


Robert James Manion: No, Mr. Speaker; I regret I cannot agree to the hon. gentleman's request to have the bill stand.. I had the floor the other evening, and on the matter being called I have either to take the floor or to pass up the bill.
The house resumed from Tuesday, February 12, consideration of the motion of Mr. Neill for the second reading of Dill No. 12, to amend the Railway Act (traffic by water).


Robert James Manion: 
Alan Webster Neill: Do I understand the minister to say that the board of railway commissioners passed an order that the act was not to be enforced?


Mr. MAN ION:: First, on February 15, 1911, they passed an order that it was to be put into effect, but six weeks later, on March 28, 1911, they said they had reconsidered the matter and put out a circular with the words I have just read, exempting the port to port shipping of the railway companies.


Alan Webster Neill: Can the board of railway commissioners by issuing a circular do away with the law of the land?
Mr. MANIiQN: I do not know; I cannot go into the details of that. I assume-I am only guessing now-that this act was to be put into effect by the board of railway commissioners, and they attempted to do it and found it was not feasible. I am giving the facts as given to me by my officers as part of the history of the attempt to put under the board of railway commissioners the port to port shipping of the railways. I do not believe that it is any more feasible to-day than it was at that time.
But in addition there is this to remember -at least this is how I understand it: that if this bill should become law Canadian shipping would be under the control of the board of railway commissioners, but tramps and foreign ships, would not, or at least they oould so arrange shipping and rates that they might not be, so that it would result in unfair -competition to our Canadian shipping.
Then another point is that the Department of Trade and Commerce handles the subsidies paid ships for carrying mails, for example, or passengers over certain routes. Shipping to which the Department of Trade and 'Commerce pays these subsidies is to-day under the control of that department in regard to rates and tolls just as it is proposed by this bill to give control to the board of railway commissioners. The subsidized steamships are to-day controlled by the Department of Trade and Commerce in that respect.
I am merely mentioning these things briefly; I am not attempting any elaborate discussion of the matter, but I have looked into it sufficiently to become convinced that it is not feasible. While far from questioning the hon. member's good faith-I concede that at once-at the same time I think the matter requires further consideration by the hon. gentleman himself and certainly by the government, before we could consent to have this bill put upon the statute book. There has been no public demand for it that I know of. The hon. gentleman has made his own case, but I have heard of no others who have asked to have this bill enacted. On the contrary, since the hon. gentleman introduced his bill three or four weeks ago I have received very many protests, and I am sure other members of the house have received them also. The hon. member for Vaneouver-Burrard (Mr. Hanbury) nods his head; he has received protests. My hon. friend the Minister of National Defence (Mr. Stirling), the British Columbia minister, has received many protests as well. For example, I have received protests from the Vancouver Merchants' Exchange, the Vancouver board of trade, the Halifax board of trade, the Canadian Pacific and Canadian National steamships and from a number of private companies as well, of which I will name four. They include the Anglo-British Columbia Packing Company, Associated Timber Exporters, British Columbia Packers Limited and the Canadian Fishing Company Limited. Those are some I have under my hand.
In view of all these protests, therefore, with all due deference I suggest to my hon. friend that he might well withdraw this bill at this time, and if he and we come back here next year, after having given it further consideration he may desire to introduce it again then. It may be, though it takes a rather long stretch of the imagination, that he will be on the government side of the house at that time; one never can tell what may happen after an election, but I do suggest in all sincerity that the hon. gentleman might withdraw the bill now. I think that would be better than to have us vote it down. I do not think there is any need for that, but if he will not withdraw the bill the government will have to take the position of opposing it.


Mr. D. B. PLUNKETT (Victoria, B.C.):: Mr. Speaker,, representing as I do a section of the country where there is a large coastal trade this matter has been brought to my attention very forcibly by the business men of that district. I cannot see any advantage to be gained by putting the shipping business under the control of the board of railway commissioners. Are we to educate those commissioners so that they will understand

Railway Act-Traffic by Water
shipping? We would have to do that if we wanted to be fair to the shipping interests, because it could be hardly expected that a mind trained in railroad matters would be equally trained in shipping matters.
The protests I have received come from various large commercial and industrial houses of the west. One is from the British Columbia Cement Company. I do not propose to read the telegrams; they are too numerous for that, so I will just name the companies concerned. I have a telegram from the Moore Whittington Lumber Company; another from the Cameron Lumber Company; another from J. H. Todd and Sons Limited, and one from one of the very largest wholesale hardware houses in the west, Messrs. McLennan, McFeely and Prior. In addition I also received a protest from the Vancouver Merchants Exchange, which the minister mentioned.
In these times of business depression, when business men are straining to the utmost to carry on their activities, will it be of any value to us as a nation to bring in legislation which may make it even more difficult for them to carry on? Take the case of a hardware firm, such as the company that sent me a telegram. They receive large consignments from the east. Should they be put at the mercy of the railways if they can bring in larger and more varied supplies by sea? Would it be fair to them to take away the competition of water traffic? When I mention competition I must say that there would be the danger of the railway commissioners being influenced to a certain extent by their association with the railways. Both the railway companies have shipping interests as well, and they might so arrange matters as to have vessels at the ports just at the right time to take the freight, and the independent shippers would be placed in a precarious position if they were unable to compete for freight being handled by the railway companies. We had a merchant marine service owned and controlled by the government, and surely those ships were in a position to give good service at as reasonable a rate as possible, but what happened? The government had to dispose of many of those vessels because they could not be made to pay. Even the United States have found it difficult to build up a paying merchant marine, and many of their ocean liners are subsidized to a certain extent. So I say, Mr. Speaker, that the day we try to have this business handled from the railway commission point of view will be disastrous to us. It will mean more regulations, more examinations and more supervision; it will mean another commission

set up, because surely both railways and shipping could not be put under one commission. With the trade of the country just beginning to pick up I think it would be unwise to make this change, particularly when we have substantial proof of the disapproval of the business men who use this service. I cannot see any reason why we should support this measure, and I intend to oppose it.


Hon. P. J. VENIOT (Gloucester):: Mr. Speaker, generally I like to agree with the hon. member for Comox-Alberni (Mr. Neill), who at various times has made useful and practical suggestions to this house, but so far as this bill is concerned I feel constrained to oppose it. If this measure passes and becomes law there will be a conflict of authority between the railway commission and the government of the province of New Brunswick. In that province we have what is known as a ferry service, with boats carrying both passengers and freight from the islands to the mainland. This service serves three islands in the bay of Fundy and two or three islands in the bay of Chaleur. In the county I have the honour to represent there are two islands served by this ferry service. In the past the federal government granted a subsidy to the ferry system of Gloucester county. For the last year or two that subsidy has been withdrawn, but the provincial government has continued to subsidize the ferry system of the province, and under that arrangement it has authority to fix passenger and freight rates. If this bill goes through that authority will be taken from the provincial government and vested in the railway commission. I claim that unless it goes to a very great deal of trouble the railway commission will not be in a position to regulate freight and passenger rates in connection with our ferry system as efficiently as the government of that province can at the present time, and for that reason I regret that I must oppose the passage of this measure.


Alan Webster Neill: Mr. Speaker, I was more than astonished when, about a minute and a half before the notice was called, I was informed that it was the intention of the Minister of Railways (Mr. Manion) to go on with this bill to-night. I had allowed the bill to stand previously at his request, and I thought perhaps there might be suoh a thing as reciprocity in these matters. With regard to the criticism that has been advanced by the hon. member for Gloucester (Mr. Veniot), that is entirely a local matter which could have been adjusted in the railway commission if the bill had been allowed to go

Railway Act-Traffic by Water
there. With regard to the remarks of the hon. member for Victoria (Mr. Plunkett), I will not waste the time of the house in replying to them because his ignorance of this subject is too profound. He should have nonsuited his predecessor, Doctor Tolmie, on the subject before discussing it here.
With regard to the Minister of Railways, he goes back to the introduction of what he says was a similar bill by a gentleman named Armstrong, the then member for Lambton. The minister says this gentleman brought up this matter year after year. So far as the records show he brought it up twice, and he received a much more favourable reception from the Minister of Railways of that day than I have received.


Robert James Manion: It was brought up four
times.


Alan Webster Neill: So far as I can see it was discussed only twice. The first year it was introduced late in the session and died on the order paper; in the second year, through the courtesy of the Minister of Railways, it went to the railway committee. It was discussed in that committee at considerable length, but they did not report favourably upon it. As a precedent for rejecting the bill the minister draws a parallel between it and the one introduced by Mr. Armstrong. Surely the minister knows that the two bills are totally different; Mr. Armstrong's bill had nothing to do with the matters now under discussion. His bill dealt entirely with the great lakes.


Robert James Manion: I said that.


Alan Webster Neill: Where is the resemblance?


Robert James Manion: Simply because it was shipping, that is all. It was lake shipping, instead of coastal shipping.


Alan Webster Neill: One dealt with shipping on the great lakes and the other with shipping on the coast; there was no parallel between the two. The minister has said that the bill standing in my name is not feasible. His only reason for making the statement seemed to be that he had certain telegrams. I believe if he would study them he would find that with one possible exception they objected to the measure being made to apply to traffic passing from the Atlantic to the Pacific and vice versa. Again, that is a matter which could easily have been adjusted in committee. As a matter of fact I had drawn an amendment to omit the objectionable part, as the minister might have seen in the press. Such an amendment would have avoided ninety per cent of the objections in the telegrams to which he referred.
The extraordinary part of the minister's presentation was his admission that the section he read-I have not the act before me because I have been taken unawares-which states clearly and distinctly that the control by the board of railway commissioners extending to all vessels owned, operated, chartered or controlled by the railway companies has been cancelled by a circular. That has been the law for twenty-nine years, but the minister waves his hand and states'that the provision was done away with, and that therefore it has no force or effect. How was it done away with? Why, they issued a circular! I never heard of a circular before.


Robert James Manion: That does not prove it is not true,-simply because the hon. member did not hear of it. There are many things of which he did not hear.


Alan Webster Neill: 
Robert James Manion: My information is that it is not in force.


Alan Webster Neill: The minister states it is not m force by virtue of the grace of God and a circular.


Robert James Manion: I did not mention God.


Alan Webster Neill: The grace of God should be left out; the minister is right there. I should have said it is not in force by the grace of the railway board and a circular! I am sorry that a person occupying the proud position of minister of railways should have to shelter himself behind a circular which has put out of existence a statute which has been in force for twenty-nine years. He said the provision has been done away with by a circular which was issued by the board of railway commissioners in 1911. That is an extraordinary situation. Are we to pass laws in this parliament and then twenty or twenty-five years later find that they have become ineffective because of a circular-not even an order in council?


Robert James Manion: As a matter of fact I
stated that the law was never put into effect. I stated the order had gone out by circular that the law should go into effect on February 15, and that on March 28 by another



Railway Act-Traffic by Water
circular the railways were instructed not to bother filing their records. It was never put into effect.


Alan Webster Neill: The act was revised in 1919; was there any circular after that year?


Robert James Manion: It was never in effect
since 1911.


Alan Webster Neill: This is the position. We
pass an act in 1904-


Robert James Manion: 1906.


Alan Webster Neill: 1906-and the minister states it did not come into effect until a circular was issued. But no such condition is mentioned in the act. We know what the routine must be. On certain occasions we say that a measure shall come into effect, or that certain sections shall become effective-as in the shipping bill-after proclamation by order of the governor in council; but they do not come into effect because of a circular. However, we are told by the minister that the board of railway commissioners issued a circular, and that later on they got cold feet and issued another circular ending the matter. This feature seems to me preposterous. The circular of beloved memory was issued in March, 1911. The act was revised in 1918 or 1919-I shall not pledge myself as to the exact year, but I know it was about that time. Was the revised statute again killed by this dead and gone circular which had been issued seven years before? If so it would seem a most extraordinary position. I should think the matter ought to be referred to the railway committee so that that phase of the matter could be investigated. In fact, the appointment of a special committee would be justified to find out whether or not circulars are running this country. We have heard a great deal about government by order in council, but here is an act passed twenty-nine years ago and revised from time to time which is alleged to be nonoperative because of a circular issued by the board of railway commissioners.
The minister makes the suggestion that shipping not owned by the railways might be brought under control. Certainly; that is the object of the bill. I do not believe my record will indicate that I have been an advocate of vested interests in railway companies, but if it is right and proper that a steamship owned by a railway company should be under the control of this act, is there any reason why a shipping company which does not happen to be owned by a railway company should not be governed by

it? If it is right and proper that the ships owned by a railway company should have control exercised over their rates, their itinerary, and so on, is it unfair to think that the shipping owned by shipping companies which do not happen to be connected with railways should be subject to the same regulations?
The minister undermined his own argument, because after proving that it would be utterly impossible to enforce such a law in any way, shape or form he went on to say that a great deal of shipping on the Pacific coast is under such control now because any boat subsidized by the government in any way is subject to the rules and regulations of the Department of Trade and Commerce. Well, is it all right to have rates, itinerary, ports of call and so on under the supervision of the Department of Trade and Commerce and all wrong to be under the control exercised by the board of railway commissioners?


Robert James Manion: The Department of Trade and Commerce subsidized them and has some right to call the tune.


Alan Webster Neill: Yes, and because they are
subsidized I propose they should be placed under the same board which controls the boats owned by the railway companies, a board accustomed to doing that type of work. I would say the Department of Trade and Commerce could hardly be considered to be expert in the control of traffic. Most of the companies on the Pacific coast are subsidized by the government.


Robert James Manion: A great many of them
are not.


Alan Webster Neill: I differ from the minister
on that point, so far as the Pacific coast is concerned. I do not know about the Atlantic coast. In a naive and almost pathetic manner he held out the hope that perhaps conditions would be more favourable next year for the passage of this bill.


Robert James Manion: No, for the consideration
of it.


Alan Webster Neill: I certainly hope they will be.
Motion (Mr. Neill) negatived on division.



DOMINION ELECTIONS ACT


[Stage Direction]
The house resumed from Tuesday, February 19, consideration of the motion of Mr. Mac-Innis for the second reading of Bill No. 16, to amend the Dominion Elections Act, 1934.

Dominion Elections Act
Mr. MacINNIS:: Mr. Speaker, there is not
much more that I wish to say in connection with this bill. I would like to point out, however, that the Minister of Justice (Mr. Guthrie) was evidently under a misapprehension as to the purpose of the amendment when he spoke in the house on Tuesday evening. In refusing to accept this amendment he said, at page 982 of Hansard:
I think it is going beyond the bounds of common sense. It is not a reasonable request that men from Nova Scotia or New Brunswick or the prairie provinces settling in Ontario, say, should be entitled to vote in a constituency in which their camp happens to be situated.
The amendment did not ask for any such thing. As a matter of fact, all that the amendment asks for is that the same provision shall apply to the men in the unemployment relief camps as now applies to other categories of electors who may vote by absentee ballot provided they are twenty-five miles or more distant from their electoral district or polling division on election day, First of all, the men in the camps must be registered in some constituency in the province in which they desire to vote. If they have not been long enough in the province to acquire domicile there, then of course they are not eligible for registration and are therefore not qualified to vote. In any case the reason for the amendment is that generally speaking these men are not allowed to vote in the constituency where the camp is situated. The Minister of Justice went on to say:
There is nothing in the election act to prevent these men from voting in their own localities.
Then he gave the reason himsejf why they cannot vote in their own localities. He said:
The question of transportation is a serious one, but I am not in favour of the proposal.
It is altogether a question of transportation, Mr. Speaker-question of the impossibility of these men going into the constituency where they are registered in order to vote on election day. The hon. member for Kingston City (Mr. Ross) was under the same misapprehend sion, and I understand that he was also opposed to the amendment because the vote could not be controlled. I am not interested in controlling the votes. All I am interested in is that these: men should be given the opportunity to exercise their franchise as ordinary citizens do, and that they should not just because of their circumstances, over which they have no control, be prevented from exercising their franchise on election day.
Shortly before I came east along with other federal members from greater Vancouver 1
92582-72i
met some of these men, and I think the other Vancouver members who were with me will remember this circumstance. One of the men that we met was an upstanding young fellow who, asked if he had served overseas, 6aid that he had served overseas for four years. He is a British subject and had lived in Canada some fifteen or sixteen years. When he was overseas he was entitled to vote during the elections of 1917, even in France, but now he is in an unemployment camp and just because he cannot afford the transportation from the camp to the constituency where he may be registered, that is if he is registered, he is prevented from vofing. I would ask the members to take this into serious consideration before they refuse to accept the amendment. There is equity, there is justice in this proposal, and to accept it would be doing something for men who are unable under the circumstances to do anything very much for themselves. I would therefore ask the members of the house to support the amendment.


Mr. IRVINE:: I was paired with the hon. member for East Edmonton (Mr. Bury). Had I voted, I would have voted for the motion.
Dominion Elections Act


Eugène Fiset: I was paired with the Minister of Labour (Mr. Gordon). Had I voted, I would have voted for the motion.


Frederick George Sanderson: I was paired with the hon. member for Haldimand (Mr. Senn). Had I voted, I would have voted for the motion.


Mr. MULOCK:: I was paired with the hon. member for Toronto-High Park (Mr. Anderson). Had I voted, I would have voted for the motion.


Mr. BUTCHER:: I was paired with the hon. member for Portage la Prairie (Mr. Burns). Had I voted, I would have voted for the motion.


Mr. MacLEAN:: I was paired with the hon. member for Royal (Mr. Jones). Had I voted, I would have voted for the motion.


Mr. VALLANCE:: I was paired with the hon. member for Wentworth (Mr. Wilson). Had I voted, I would have voted for the motion.


Mr. JOHNSTONE:: I was paired with the hon. member for Willow Bunch (Mr. Donnelly). Had I voted, I would have voted against the motion.


Charles Gavan Power: I was paired with the hon. member for Muskoka-Ontario (Mr. Mc-Gibbon). Had I voted, I would have voted for the motion.


George Reginald Geary: I was paired with the hon. member for Laurier-Outremont (Mr. Mercier). Had I voted, I would have voted against the motion.


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


Mr. SMOKE:: I was paired with the hon. member for Temiscouata (Mr. Pouliot). Had I voted, I would have voted against the motion,


Mr. GARLAND (Carleton):: I was paired with the hon. member for Russell (Mr. Goulet). Had I voted, I would have voted against the motion.


Olof Hanson: I was paired with the Minister of National Defence (Mr. Stirling). Had I voted, I would have voted for the motion.


Mr. ROBERGE (Translation):: I was paired with the hon. member for Kingston (Mr. Ross). Had I voted, I would have voted against the second reading of this hill.
[Hr. Irvine.]


Mr. BRASSET (Translation):: I was paired with the hon. member for St. Ann (Mr. Sullivan). Had I voted, I would have voted for the second reading of this bill.


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


Mr. FAFARD (Translation):: I was paired with the hon. member for Levis (Mr. Fortin). Had I voted, I would have voted against the second reading of this bill.



PENSIONS AND NATIONAL HEALTH

[Stage Direction]
The house in committee of supply, Mr. Smith (Cumberland) in the chair.
Unemployment relief, $2,100,000.
Ian Alistair Mackenzie: I understood the minister to say that any pensioner could qualify for this relief. Can pensioners of the higher scale qualify?


Donald Matheson Sutherland: Not if the pension is over the maximum.


Mr. FRASER (Cariboo):: I took it from what the minister said that a pensioner with a small disability which had been cleared up by a lump sum payment would be eligible under this vote. Is that so?


Donald Matheson Sutherland: If he has commuted a pension, between five and twenty per cent, and taken a lump sum, then he is not out unless the disability on re-examination has been founds to have disappeared or to be less than five per cent.


John Anderson Fraser: If his pension was under five per cent and was paid to him in a lump sum without any option does he qualify?


Donald Matheson Sutherland: No.


Charles Gavan Power: Will the minister explain that again? I understood him to say that if a pensioner commuted his pension he was no longer eligible for relief. He knows that under the legislation of 1930 pensioners who commuted are allowed to go back on pension at the rate fixed by legislation.


Donald Matheson Sutherland: These are the ones that are eligible according to the statement I have before me: former members of the Canadian Expeditionary Force who are in receipt of pension payable by the pension commission; former members of the imperial forces or the forces of His Majesty's allies

Supply-Pensions-R elief
who were resident in Canada on or before December 1, 1924, who are in receipt of pension payable by their respective governments, or who have received a final payment under the provisions of any act or regulation for permanent disability assessed between five and twenty per cent.


Ian Alistair Mackenzie: This afternoon the minister gave the amounts by provinces; can he give the numbers of those who are drawing this relief?


Donald Matheson Sutherland: The figures are as
follows:
District-	Number
Quebec	 989
Nova Scotia and Prince Edward Is. 363
Eastern Ontario	 640
Central Ontario	 3,026
Western Ontario	 784
Manitoba	 1,161
Saskatchewan	 402
Alberta	 452
British Columbia	 1,487
New Brunswick	 148


Mr. RALSTON:: Are the numbers increasing?


Donald Matheson Sutherland: During December,
counting pensioners, their wives and children, there were 31,454. On January 31 there were 33,464.


Ian Alistair Mackenzie: How do the numbers compare with a year ago? Are they increasing from year to year?


Donald Matheson Sutherland: For January, 1934, the number of pensioners was 9,728; for January of this year it was 9,410, or just a few less.


John Anderson Fraser: The case I had in mind when I asked the question of the minister was of a veteran who had been pensioned and allowed three per cent disability. Of course he had no alternative but to take a lump sum for his pension in full settlement of his claim. He is now unable to work. Under the statement the minister has just made this man is excluded from relief. He made application for the war veteran's allowance and he was also denied the privilege of receiving that. The treatment of this case is rather hard and it should receive consideration from the government. He is excluded from all classes of pension and he gets no relief at all. If he is not eligible for the war veteran's allowance and if his pension is paid up and he is also excluded from other relief, why should he not come under departmental relief?


Donald Matheson Sutherland: I think in that case he should come under municipal relief.


William Pate Mulock: Where municipalities are not paying relief, what can be done for men in a similar position with pensionable disability of the rate mentioned?


Donald Matheson Sutherland: In cases like that, if the municipalities were not issuing relief- and this would probably be in the smaller municipalities-the rate for a single pensioner is $15; for the married pensioner without children, $25; for the pensioner with a wife and one child, $30, with $2.50 for each additional child.


William Pate Mulock: Where would the man apply? For instance, in North York constituency, would he apply to Christie Street hospital?


Donald Matheson Sutherland: Yes.


Mr. REID:: Might I draw to the attention of the minister cases in muncipalities in Fraser Valley, and I think the cases I shall cite should prove to him that to bring the allowance up to what the municipalities are giving is not a fair method of dealing with the matter so far as the returned men are concerned. In the Fraser valley there are municipalities that are unable to pay even the government scale. The government have set a scale of relief so that if a transient comes in, he would be entitled as a single man to $12.50 or $15, or for a man, wife and child, to $30. But most of the muncipalities out there are unable to pay that, with the result that the relief has been cut down in some instances to one-quarter. Some of the municipalities cannot even pay $7 to a single man, a transient, with the result that some men are drawing only $3.75; others are getting $5 per month, and the rate is made up to the $7 allowed by the municipality. Surely the minister must realize that that is very unfair.
Again, the complaint is made by great numbers of returned men that they are told by the municipalities: Go to the pension board; this is not a case for us at all. I am stating actual facts; the municipalities are compelled to do this because they find themselves faced with so large a number of unemployed and so many appeals to aid returned men, that they are saying to these men: We can do nothing for you. The minister should this new year review the whole matter of the relief basis and not only in such cases as I have cited where municipalities are paying only $7 to single and $11.50 to married men. He should take note of that and also of the fact that many returned men are being denied relief and so find themselves up against it.
Supply-Pensions-R eliej


Donald Matheson Sutherland: The hon. member is partly in error when he states that if a municipality were giving $7 to single men, and a returned man was drawing a pension of $5, we would make it up to $7. We would make it up to $15 regardless of what the municipality was paying. We have a basic rate which is a minimum rate. It is only when the municipalities pay more than our basic rate that we put the latter up. In case such as he has cited we would bring the amount up.


Thomas Reid: I am glad to hear that. I can assure the minister that those complaints were made to me in all seriousness before I left for Ottawa. Has the minister any statement to make regarding the returned man not on pension? I know every consideration should be given to those who have been wounded, but there are others who find themselves in pretty bad circumstances not only physically but financially and who are being turned down by municipalities that say: It is too bad, but you should apply to the pension board for assistance.


Donald Matheson Sutherland: That is a very rare thing for municipalities to do, because if a man has not a pension we can take it as a general rule that his value on the labour market is not impaired or diminished by any war disability.


Thomas Reid: It is not a case of the labour market. We perhaps have peculiar conditions out there. We have hundreds of men on small holdings who are being kept by the municipalities, many of them being returned men. It is a case of destitution, not of the labour market.


Charles Gavan Power: It seems to be thought that there is a discrimination in favour of imperial soldiers and men who served in allied armies, in the matter of distribution of relief. As the minister read out the categories entitled to relief I understood him to say that first, Canadian pensioners who are obtaining a pension of from five to twenty per cent, and secondly, enumerating the classes who served in the imperial army or allied armies, he stated that in those cases a man who had received a gratuity in lieu of pensions was entitled to relief, whereas a Canadian soldier was not entitled to relief at all if he had received a final gratuity. Am I right?


Donald Matheson Sutherland: No, these are all
pensioners, former members of the imperial forces or the forces of His Majesty's allies who were resident in Canada on or before

December 1, 1924, who are in receipt of pension payable by their respective government-


Charles Gavan Power: Read on.


Donald Matheson Sutherland: Or who have received a final payment under the provisions of any act or regulation for permanent disabilities assessed between five and twenty per cent. That last clause of course applies mainly t'o Imperials. Canadians who received a final payment other than a gratuity, are entitled to relief if the pensionable disability lias persisted.


Charles Gavan Power: I understood from the
minister a moment ago that Canadians who had received a final payment were not entitled.


Eugène Fiset: Yes, that is the
answer that was given.


Charles Gavan Power: Did I understand the
minister aright?


Donald Matheson Sutherland: I referred to those
who have received a final payment under the provisions of any act or regulation for permanent disability assessed between five and twenty per cent.


Charles Gavan Power: They are not entitled to
relief?


Donald Matheson Sutherland: Yes, they are subject to the condition I have named.


Charles Gavan Power: Then I take it that Canadian soldiers not entitled to relief are those who received a final settlement of less than five per cent, that is the $75 or $100 gratuity which was granted on discharge?


Donald Matheson Sutherland: That is right.


William Pate Mulock: That does not change
what was said before. Pensioners who are in receipt of pensions between five and twenty per cent are entitled to the benefit of this legislation?


Donald Matheson Sutherland: Correct.


Charles-Philippe Beaubien: Suppose that in my own district, where it is all rural municipalities, not very anxious to give relief, a small pensioner is out of work and the municipality refuses to recognize him; is there any place he can go to get redress?


Donald Matheson Sutherland: Yes, he should make application at Deer Lodge hospital.


James Layton Ralston: Is there any connection
between the staff, or is it the same staff that

Supply-Pensions-R e lief
investigates the needs of the applicant under war veterans' allowance 'legislation and applicants for relief? Are they the same people?


Donald Matheson Sutherland: Yes, to a large
extent they would be.


James Layton Ralston: For instance, not to mention any names, in Montreal or Halifax is it the administrator of the unit who has charge of the investigation as to the need of the applicant?


Donald Matheson Sutherland: Yes.


James Layton Ralston: In Montreal say, has he a board of two or three?


Donald Matheson Sutherland: No, there is no
board. The district administrator would be governed by the general regulations and he would have to make the decision.


James Layton Ralston: Would he make a personal investigation?


Donald Matheson Sutherland: Yes.


Peter John Veniot: I wish to ask a question concerning the methods adopted in New Brunswick to ascertain who are entitled to allowance. Suppose an application in my home town is made by a pensioner under this act I understand an inspector is sent or asked to make a report upon the applicant. I forget the inspector's name-he resides in the county of Northumberland. Has that inspector authority to decide upon the amount of relief that pensioners should get?


Donald Matheson Sutherland: No, he would first have to make a report to Lancaster hospital in St. John.


Mr. YENIOT:: Well, it is not being done. The inspector goes to the house, questions the family and tells them right then and there, "you can get so much and no more." I know one case where the pensioner was getting about $13 a month. He was a major in the army overseas. He was out of work and applied for relief. He finally got word from this inspector in the next county, who sent an order for groceries to the amount of $4.28 per month, I think. That was all he could get. That inspector never inquired what was being granted by the county of Gloucester or the municipality; all he allowed that family to get-husband, wife and I think two children certainly one-was $4.28 a month for groceries. I do not think that is right.


Donald Matheson Sutherland: If the hon. member will drop me a line giving the name I will look into it. I think he is entitled to more relief than that.


Peter John Veniot: Well, the man has work now; he does not require relief. But he certainly did at that time, and he refused to accept that order; he felt it was an injustice. He said he was not looking for charity, and he refused it. He brought the order and showed it to me. He said: "If I cannot be treated better than that I will not accept it at all." This is going on in Northumberland and Gloucester.


Mr. HOWDEN:: I have a matter to bring to the attention of the minister. It may not properly come under this vote, but I consider it important. Perhaps the quickest way to present it would be to read a communication from the office of the ladies' auxiliary, Canadian War Disability Pensioners' Association:
On behalf of the Ladies' Auxiliary to Canadian War Disability Pensioners' Association, I am instructed to call to your earnest attention the fact that we are suffering grievously by _ not being able either to get free medical relief or to pay for it. Our incomes, as you know, are very small, and it is utterly impossible to pay medical fees, consequently we have to suffer.
A short time ago the child of one of our Winnipeg pensioners died for lack of medical attention. This has been verified by a letter to the press, by Dr. McPhail of Winnipeg, the doctor who was called in after the disease had gained too much headway. This is only one case-there are many, many others.
People on relief in this city, even the former enemy people, are able to get free medical assistance in time of sickness, but we whose husbands gave their best to the country have to go without and suffer in silence. Many of our members (including myself) and our children are in need of medical and dental assistance right now, but cannot get this help. We would also like to be allowed to engage our own family doctors, as is now being done by families on relief in this city.
Sick benefits are given to needy pensioners- why not extend it to their dependents-their needs are equally great.
This is a decided injustice, and' we believe that if this is brought to the attention of those in control, that the situation can very easily be remedied, therefore, we hope this matter will have your careful and immediate attention.
That is signed on behalf of the above association by a number of ladies, whose names it is not necessary to read. I may tell the minister that this is not the first I have heard of this state of affairs; it has 'been put up to me, as it were, a number of times by the wives and widows of overseas men that it was impossible for them to obtain medical relief for either themselves or their families. It seems a pity to think that they should be penalized merely because their husbands were overseas and rendered service to the country, because all others in our part of the
Supply-Pensions-Belief

country, just now at all events, certainly can get medical relief when it is needed. I am not very familiar with the regulations in connection with war pensioners, but I have read this letter to the minister and I would like to hear what he has to say in regard to the matter.


Donald Matheson Sutherland: That brings up the matter we were discussing before recess. The dominion government has never recognized that it was responsible for medical relief. During the last few years, since the question has been brought up, we have gone on the assumption that it was the duty of the municipalities to look after medical relief, with the exception of the pensioners themselves. We have taken the ground that because a man went overseas, bis wife and family have not lost their rights of citizenship or their right to secure certain care such as medical relief from the municipalities in which they reside. We maintain that the municipalities taking that stand-there are not many-are hardly playing fair with those people.


Mr.   BOWDEN@: Possibly it would not be a practicable procedure, but I suggest to the minister that some action might be taken by his department in regard to these people and the municipalities in which they live. It seems too bad that municipalities should shrug their shoulders and refuse to have anything to do with them. There must be some responsibility somewhere, and if it does not rest with the Department of Pensions and National Health someone ought to point out to these municipalities that these people are very seriously in need. It might not be the business of the minister's department to take up the matter, but it seems to me that in a large way it is the business of the federal authority at all events to see that these people get the succour they deserve. I am just leaving it with the minister in that way, in the hope that something may be done.
Mr. MaeINNIS: I was just going to bring up the point that has been raised by the hon. member for St. Boniface. Mine is not a particular case, but rather a general complaint from the pensioners on relief in the constituency which I represent. They make the same complaint, that while city relief recipients receive medical attention and medicine to some extent at least through the civic authorities, the pensioners on relief aTe not allowed, the same advantages. There is also a complaint in regard to the fact that relief is not paid in cash. I would like to ask the minister how the relief is paid.
fMr. Veniot.]


Donald Matheson Sutherland: We never pay in cash; we pay in orders for goods such as groceries and fuel, and for rent.
Mr. MaeINNIS: Is there any good reason why payment should not be made in cash? I believe the municipalities are adopting that method now. When relief was started I think the practice was to handle it by means of relief vouchers, but now I think most of the municipalities are paying in cash; at least the tendency is very much in that direction. Has the minister considered that matter, and is there any possibility of payments being made in cash?


Donald Matheson Sutherland: Of course there is this difference, that the pensioners are receiving their pensions in cash; that is not affected at all. It is simply the supplementary relief that is issuable by these orders.
Mr. MaeINNIS:	I am aware of that, but
I have before me a typical case of a five per cent pensioner who also receives an allowance. The pension amounts to about $7.75, and that is paid in cash. The relief allowance-this is for a family of five- amounts to something like $34.65, which would be paid in vouchers for certain kinds of goods. Are the particular commodities and quantities stated in the vouchers?


Donald Matheson Sutherland: I am informed that they do not specify a pound of rice or a pound of meat or anything like that; they are for so much food.
Mr. MaeINNIS:	Is there any allowance
in the vouchers for medical attention or medicine?


Donald Matheson Sutherland: Medical treatment
is only for the pensioner himself.
Mr. MaeINNIS:	Of course that makes
it rather difficult, because where there are families usually it is the families that need the medical attention. I think the allowance is altogether too small. In the case I have before me the pensioner on relief receives a pension of $7.75 and a relief allowance of $34.65, or a total of $42.40. Out of that comes fuel, an average of $5 a month, which I think is a very low average even for the lower mainland of British Columbia. There is an allowance of $1 a month for electric light, which I think also is very low. Then there is 60 cents for an evening paper, $1.25 for car fare and $12 for rent. It will be noticed that the rent accounts for a large portion of the allowance. That amounts in all to about $19.85, leaving a balance of $22.55 for food for the family for a month. That works out

Supply-Pensions-Relief
to about $4.50 per person per month, or about 5 cents per meal. With food prices going up I think that is altogether too little. I was wondering if the government had considered restoring the cut that was made some two or three years ago.


Donald Matheson Sutherland: The grant depends
entirely on the municipality. They know the cost of living in their own district, and when they set a level we conform to it. We rely on the judgment of the people who are acquainted with local conditions.


Angus MacInnis: Then will the minister
take under consideration the payment of the allowance in cash?


Donald Matheson Sutherland: In my judgment it
works out better according to the present plan. I have not heard any particular complaints about it; I think everyone is fairly well satisfied.


Angus MacInnis: Evidently these people
are not satisfied.


William Pate Mulock: Has the minister the
amounts paid for unemployment relief in the last four years, and are they less than they were four years ago?


Donald Matheson Sutherland: follows:
1929-	30	
1930-	31	
1931-	32	
1932-	33	
1933-	34	
The figures are as


William Pate Mulock: Has the minister the
number of people benefiting in each of those years?


Donald Matheson Sutherland: Yes.
are:
1925-	26	
1926-	27	
1927-	28	
1928-	20	
1929-	30	
1930-	31	
1931-	32	
1932-	33	
1933-	34	
The figures
3,121
4,079
4.182
4.647
5,548
8.811
12,303
14.368
12,735


William Pate Mulock: Was there a change in
rate a few years ago?


Donald Matheson Sutherland: The rate has been
changed gradually. As the municipalities changed their rates, for various reasons, then our rates would change.


William Pate Mulock: Has the rate been increased or lowered?


Donald Matheson Sutherland: As a rule it has been increased.


Alfred Edgar MacLean: There is another class of returned man who receives no benefit under this form of relief. I refer to the man who suffers from severe disabilities, whose case has been heard and turned down by the pensions authorities but who is not given any relief. In Prince Edward Island t'he matter of relief is handled by the provincial government, and the amount allowed is very small. The greatest amount paid is $5 per person, and at the present, time we have many cases of extreme need among our returned men. I know the minister will reply that because those men are not receiving a pension they cannot come under the scheme, and cannot obtain an order for groceries or supplies as could a pensioner. Has special consideration been given to that class of men? They suffer from disability, they are not able to earn their living, and employment is very scarce. Yet they cannot get relief under any of the schemes, and they are suffering a hardship which the department of pensions would do well to consider. I know the minister will reply that- before he could do anything the act would have to be changed. In many cases those men are suffering actual disability but unfortunately they cannot link up their disability with overseas service, and for that reason are turned down. They receive no assistance from the government despite the fact that they gave of their best in the world war.


Donald Matheson Sutherland: We have given a
good deal of consideration to those men, and I have every sympathy with the class the hon. member has mentioned. No matter what our law may be there will always be certain cases on the border line. It is impossible under this type of relief to have any other basis of entitlement. The municipality should assist where the men are not getting pensions.


Frederick George Sanderson: A few moments ago
the minister said that the department did not pay out any cash in connection with the relief fund, but that they issued vouchers. Who issues the vouchers?


Donald Matheson Sutherland: In a Stratford or Woodstock ease it would be a relief officer from London.


Frederick George Sanderson: An officer in London
would issue the vouchers for St. Marys and surrounding country?


Donald Matheson Sutherland: Yes.


Frederick George Sanderson: On whose authority
would he issue them?
Supply-Pensions-Relie }


Donald Matheson Sutherland: I know that not long ago a relief officer was in Woodstock and the people who thought they were entitled to relief got in touch with him and made their arrangements. I have no doubt the same applies to St. Marys and Stratford.


Frederick George Sanderson: Can a returned man who receives a voucher go to any store he chooses? Are they honoured in all stores?


Donald Matheson Sutherland: No, but the man may select his own store.


Frederick George Sanderson: As a matter of information, and without any desire to criticize, may I ask by what means those requests are placed before the minister or his department? If he decides relief should be granted, what happens? Do the requests come from the individuals who are interceding on behalf of the returned man?


Donald Matheson Sutherland: They may come in one of several ways. A man may communicate directly with London. He may communicate with my hon. friend, and we would get in touch with London. Then, the head of the legion might write.


Frederick George Sanderson: There must be some overlapping if those who are entitled to relief are to get it. Undoubtedly there are many persons who do not know about the relief. As the minister has said, they might come to me, as a member of this house, or they might go to the mayor of the town, or to the legion; but apparently there is no plan under which urgent cases may be dealt with without going through a procedure which would use up a considerable amount of time. I am not suggesting the department should advertise that it is giving relief, but is there no policy under which a returned man may know that there is an unemployment relief fund and that he may obtain relief without delay or red tape?


Donald Matheson Sutherland: I do not think there would be anyone who would not know he was entitled to relief. They are pensioners receiving their cheques each month, and they may write to the district administrator and receive immediate attention. In all cases our officers are instructed to act with the greatest possible dispatch.


Frederick George Sanderson: I suppose the representative in London, for instance, has several men working under him?


Donald Matheson Sutherland: Yes.


Frederick George Sanderson: Do the officials acquaint themselves with the case of every individual who applies? ,


Donald Matheson Sutherland: Oh yes. They check up on the statements and as to the need, whether they are working and so on.


Frederick George Sanderson: Do they travel around or do they do it by communicating with someone in the town from which the clain comes?


Donald Matheson Sutherland: In both ways. They would probably get in touch with the man personally, and they might follow that up by letter. They do keep in very close touch.


Mr. SPEARMAN:: I should like to emphasize again a point that has been raised by a number of hon. members, and that is in respect of the medical attention necessary for the families of pensioners who are on relief. The minister knows that in practically every municipality where a system of civic relief is being carried on, accompanying the relief is a modicum at least of medical attention supplied to the familes on relief which they are unable to pay for themselves. I have no such cases in my territory because it is a rural territory, but I have had the matter brought to my attention rather forcibly by citizens of Calgary and Edmonton who have sent to me a number of requests individually and from organizations and have cited cases in both these cities. In both Calgary and Edmonton not only is nursing and medical attention given to the families of those on municipal relief, but in many cases where the condition of a member of a family requires it special allowances are made for special diets and so forth in the case of certain illnesses and weaknesses. None of that, however, as I understand it, is provided for the families of pensioners who are receiving this form of relief. It has been suggested, of course, that the municipalities, being relieved of any other burdens with respect to the families of pensioners, should be glad to look after their nursing and medical attention, and possibly they should, but the fact remains they do not. They assume no responsibility whatever in respect either of the pensioner or of any member of his family. Although the intention of the act and the policy of the department is to bring these small pensioners up to a parity so far as relief is concerned with the civilians on relief in that particular municipality, the fact remains that the returned men are not on a parity because it is a certain drain on their resources to provide the medical attention that their families require. I am not certain as to the extent to which the act would make it possible, although I am reasonably familiar with the act, of course, having been working in that connection for a great many years. I

Supply-Pensions-R eliej
am not certain that the act itself would allow sufficient latitude, although I am inclined to think it would. If it does not, having regard to the fact that the present situation is not in consonance with the desire of the house, the policy of the department, or the statute itself, the desire being to put the pensioners on a parity with those on civilian relief, I would suggest that, if it is necessary, a slight amendment be made to the act to enable that to be done. If the necessary power is already contained in the act I suggest that the regulations be extended to make this possible, because I can assure the minister from a number of cases with which I am reasonably familiar that because of this possible lack of specific provision in the statute there is a distinct hardship in a certain number of cases. Moreover it does create what we are anxious to avoid, that feeling amongst the returned men that they are not being dealt with on a parity with the civilian population; that instead of discrimination, if any, being in their favour as most of them think it should be, and as I believe it should be in that respect, it is against them. Of course I am perfectly aware that this has been carried on under this and other governments, that it has been the practice for many years, but at the same time it is not a practice of which I approve. The cost would be insignificant in relation to the good, both actual and physiological, that would be done by taking that wider and more generous view of the statute, and it would be worth *while both as a matter of physical aid and in respect of the contentment of mind that would follow on the part of those so treated.


Donald Matheson Sutherland: That undoubtedly is the view of a great many, but the point is this:	If these people are discriminated
against it is not the dominion that is doing it; it is the municipality. These people did not lose all rights as citizens of the municipality because they went to the war. There is also this about it. In the two municipalities which my hon. friend mentioned, Calgary and Edmonton, I am informed that we are getting very few complaints. There were some in Calgary at one time, but now I understand the matter is being looked after there. There never has been any complaint from Edmonton so far as I have heard.


Alfred Speakman: I am very glad there
is not, because it is not so very long since that a complaint was registered with me. They were not complaining as to the administration of the act. The officials were perfectly sympathetic. It was the policy that was complained of.
May I just suggest this to the minister? He is perfectly right in saying that these pensioners by reason of their being returned men have not lost their civilian rights. They still have all the rights of civilian citizens of the municipality, and the municipality might very well provide such medical care as is required. But the dominion government has taken over the responsibility not only so far as the men themselves are concerned, but in respect of rentals and fuel and food for their families. They have taken over the entire responsibility for the men and their families. I think they have taken the ground, and it is sound ground, that were it not for the condition of the men it is possible that they would be able to look after themselves and their families. That permeates our entire federal legislation with respect to the returned men-our pension law, our veterans' allowance legislation and most of our acts in relation to the returned men. The responsibility for the dependents of the returned men is included in the responsibility for the returned men themselves. That is in our pension act, where the state assumes the responsibility of paying not only a pension but an additional allowance for the wife and each of the children of the pensioner. Responsibility for the family is assumed as part of the state's responsibility for the man himself, and I suggest that it is not out of the way to carry that assumption of responsibility one step further in dealing with what is one of the most difficult features of the whole situation. As the minister very well knows, the difficulty arises partly from the fact that the pensionable disability bears but little relation to the entire disability. The pensionable disability frequently means the whole difference between employability and unemployability. That a man has a low rate of pension does not mean that he is suffering from that same degree of disability in the employment market. Having regard to all the precedents we have set in our federal laws in dealing with returned men and the interpretation which has been placed upon that responsibility, the minister would do well to consider this matter further.


Mr. MULOOK:: A few moments ago I
understood the minister to say that these vouchers were given out by relief officers. I assume he means relief officers representing his department and not the municipality.


Donald Matheson Sutherland: -Yes.


[Stage Direction]
Item agreed to.
Supply-Pensions-Veterans
[Stage Direction]
Pension appeal court, $19,800.
William Pate Mulock: I understand from a statement made the other day that there have been four more appointments to facilitate the hearings of these appeals. Is that correct?


Donald Matheson Sutherland: This is the pension appeal court item; that is under the pension commission.


Angus MacInnis: Where the pension board appealed from the findings in the first instance and the appeals were lost, from their point of view I should like to have some information regarding five cases that have been under consideration. One of them was settled last year and of the other four, one of the pensioners, a Mr. Smith of Vancouver, has written to me. These four are still waiting on the acceptance of the findings of the commission in their cases. Can the minister give me some information regarding these cases?


Donald Matheson Sutherland: These cases were decided as to entitlement and the matter is now receiving final consideration by the chairman of the pension commission. It came up the other day. Someone wrote to me and that was the information.


Angus MacInnis: The persons concerned may expect final settlement shortly?


Donald Matheson Sutherland: They will receive final consideration shortly, yes.


[Stage Direction]
Item agreed to.
War veterans' allowances, $2,250,000.
Frederick George Sanderson: How many are now receiving assistance from the war veterans' allowances?


Donald Matheson Sutherland: The total number in force on December 31 last was 6,755, and there were dependent allowances of 97.


Frederick George Sanderson: How does that compare with the year before?


Donald Matheson Sutherland: On March 31, 1934, there were 5,837. It is gradually increasing.


Thomas Reid: What would be the cost if the age limit were lowered from sixty to fifty-five?


Donald Matheson Sutherland: If the age of entitlement were changed from sixty to fifty-five it would cost some two million dollars a year more.


Alfred Speakman: Has the minister before him the numbers in the two classes-that is, the class that are in receipt of allowance because they have arrived at the age of sixty, and the class that are in receipt of allowance because, although not yet sixty, they are so

disabled mentally or physically as to be unemployable. The answer the minister gives will have a bearing on this question, because a large proportion come under the class who, though below sixty, are receiving allowance on account of disability that makes them unemployable, and that class would not increase by the lowering of the age of entitlement.


Donald Matheson Sutherland: Under sixty there are 2,065, and over sixty there are' 4,690.


Thomas Reid: In view of the fact that over two million dollars is provided for relief for unemployed pensioners, I wonder how many of those would come between fifty-five and sixty. It is true it would take two million dollars more if the age limit were reduced, but has the minister considered exactly what the actual cost would be provided those on relief were taken up and the limit lowered?


Donald Matheson Sutherland: This takes into
account everyone who would be eligible between the ages of fifty-five and sixty whether on relief or not. If they were on relief they would be eligible for this if the age were made fifty-five.


Charles Gavan Power: Only yesterday I made inquiries of the officers of the department as to what the extra cost would be if the age at which the war veterans' allowance began were lowered from sixty to fifty, and I was told that next year instead of $2,500,000 it would run to $7,500,000, and within ten years the total xpenditure on the upward curve would run into $106,000,000 instead of $42,000,000. These figures seem to be in the hands of the officers of the department and it would be well to have them known to the public before further agitation is carried on to lower the age from sixty to fifty. If the cost is only $2,000,000 we may have an agitation, but if it is clearly shown that we shall move by leaps and bounds and that the very principle on which the War Veterans' Allowance Act was founded will be destroyed, then that ought to be made quite clear right at the beginning of any propaganda for lowering the age limit; because the principle on which this whole legislation was founded was the presumption that a man of sixty was likely to be incapable of earning a living. But I have never heard anywhere that a man of fifty was to be put aside as incapable -let us hope not, as I believe the Minister of Railways suggests. I think the country ought to know just what expense would be involved.


Donald Matheson Sutherland: The estimated expenditure during the coming fiscal year, as the act is at present, will be approximately $2,-
500,000.	If the age were changed to fifty-five it would cost $4,500,000. For the period of

Supply-Pensions-Veterans
the next ten years the cost, if the act were left as at present, would be 812,000,000. If the age were changed to fifty-five the cost would increase to $68,000,000.


Charles Gavan Power: Increased to or by $68,000,000? It increases from $2,000,000 to $4,000,000 in one year, and I can imagine that if at one period it is $42,000,000 it would increase to at least $80,000,000.


Donald Matheson Sutherland: Of course, a certain number drop off all the time; a number of them are dying.


Charles Gavan Power: But there is an upward curve that runs up to 1950 when it will be well over $12,000,000.


Donald Matheson Sutherland: I do not think these figures are wrong; they are dated just last week. If the age were changed from sixty to fifty the cost for the next fiscal year would rise from $2,500,000 to $7,500,000, and for the period of the next ten years the cost would be $103,700,000 instead of $42,000,000, which it will cost if the act is left as at present.


Mr. GERSHAW:: I understand that a returned soldier may qualify for this allowance at any age if he is totally and permanently unemployable. There is a great deal of difficulty about proving that condition and I should like the minister to tell us what evidence he requires before admitting that a man is totally and permanently unemployable


Donald Matheson Sutherland: They have to take the opinion of doctors; they are dependent upon a medical examination to be made by departmental doctors. In that connection it is rather interesting to note the different ages at which people are drawing this veteran's allowance. There is one man eighty-nine years old who is drawing it; one, eighty-eight; two, eighty-four; six, eighty-two; four, eighty-one, and then to go to the other extreme, there is one, thirty-two years; eight, thirty-three; twenty-one, thirty-four. That shows the tremendous spread in ages of those brought in under this act.


Charles Gavan Power: How was that man who is now eighty-nine years old ever allowed to enlist? He must have been sixty-nine when he enlisted.


Donald Matheson Sutherland: That is the extraordinary feature; sometimes they got in.


Frederick George Sanderson: Could the minister
give by provinces the number who are receiving aid under this act?


Donald Matheson Sutherland: The figures are as
follows:
District-	Number
Quebec	 624
Nova Scotia and Prince Edward Is. 402
Eastern Ontario	 321
Central Ontario	 1,564
Western Ontario	 405
Manitoba	 684
Saskatchewan	 330
Alberta	 529
British Columbia	 1,698
Newr Brunswick	 198


William Pate Mulock: When they are deciding
whether a man is unemployable under this act, do they take into consideration his former occupation only?-because he is simply handicapped in the labour market to-day, and that is the difficulty in regard to some of these cases. If his condition as it was before the war in connection with the kind of work he was doing is to be the basis, I think it would be well if this were made known in certain districts, because there is a little misunderstanding on that point. As an hon. member stated a moment ago, that is the difficulty in deciding whether a man is employable or not. That is where the difficulty has arisen in quite a few cases under the act.


Donald Matheson Sutherland: To come under
this act if he were under sixty years of age, he would have to be considered permanently unemployable.


George Gibson Coote: Is that absolutely so? I
must confess I have not looked at the act for two or three years. I was on the committee that drafted it and naturally I used to be familiar with it. But my recollection is that a certain amount of casual earnings was permitted without the man being deemed to be ineligible for the allowance.


Donald Matheson Sutherland: Certain casual
earnings are allowable.


George Gibson Coote: My recollection is that there is a certain latitude in the case of small, casual earnings, but apparently that does not apply to a man under sixty.


Donald Matheson Sutherland: It is really the old age pension scale. We are allowing $365. A single man would get $240, but he would still get the $240 if he had $125 from some other source.


George Gibson Coote: That is if he is sixty years old or over?


Donald Matheson Sutherland: It applies in both
cases.


George Gibson Coote: But in order to be considered as sixty before he reaches that age, he must be wholly unemployable?
Supply-National Health


Donald Matheson Sutherland: Yes.


John Power Howden: Who would be the referee in the matter of these disabled individuals? Naturally he would be a medical man, but I assume he would be in the employ of the department.


Donald Matheson Sutherland: The final decision rests with the War Veterans Allowance Committee which has a medical adviser.


Peter John Veniot: I wish to direct attention to a case that recently came under my notice. Under the act a soldier's widow who remarries, if her second husband dies within five years, can (become pensionable again.


Donald Matheson Sutherland: That is correct.


Peter John Veniot: I know of one or two cases where the widow remarried after drawing a pension for, say seven or eight years or five or six years and now she is a widow again. Her second husband has died, but she is over the five year period, having been married more than five years the second time. These women are in desperate circumstances, and I was wondering whether the government has taken into consideration amending the act in that regard. Of course the second marriage saved a lot of money to the government in pension, but I do not think they would lose anything if they extended the period beyond five years, making it ten years, so that the woman would again be entitled to pension.


Donald Matheson Sutherland: As the hon, member knows, that would have to be given considerable thought.


[Stage Direction]
Item agreed to.
National Health-
The administration of the acts respecting food and drugs, opium and narcotic drugs and proprietary or patent medicines, including the laboratory of hygiene, $130,000.
Public health engineering, $15,880.
Marine hospitals, including burial expenses of destitute deceased mariners, and grants to institutions assisting sailors, $163,500.
The administration of the acts respecting quarantine and leprosy, $150,000.
Immigration medical services, $126,920.
John Power Howden: It was pointed out last night in the course of the discussion on the unemployment insurance bill that the Department of Pensions and National Health had quite wide powers in regard to the health of the Canadian people. In that connection I should like to ask the minister whether any survey or inquiry has been made by the department at any time of which he has knowledge into the cost and efficiency of medical service to Canadian people.


Donald Matheson Sutherland: Nothing has been done in such detail as that, (because it has been realized, or at least I have realized- and I took a great interest in this work even before I took charge of the department- that the assistance and cooperation of the medical profession are of great importance in such a survey. As the hon. gentleman well knows, that aspect of the question has received a great deal of care from the medical associations, both dominion and provincial. All that work is in process of completion and I do not see any use in trying to duplicate that investigation. As soon as it is finished, it undoubtedly will form a splendid basis for possible further investigation in detail.


John Power Howden: Surveys of this kind have been made in both Canada and the United States. I believe it has been estimated that the cost of medical service to the Canadian people, largely a direct charge, is about $311,000,000 a year. On the other hand it has been estimated that the cost of medical service to the people of the United States is something over $3,500,000,000 a year, which figures out in both instances at around $30 a head. During the regime of President Hoover an inquiry was undertaken as to the cost of medical service to the people of the United States. Of course the United States is not Canada, but the two peoples live side by side; they have a common language and to a large extent their civilizations are similar. Before this inquiry was entered upon it was realized that there was a great deficiency in medical service to the American people, and on the other hand it is well known that medical men are driving taxis and doing manual labour and institutional work for which they receive little or no remuneration. An inquiry was therefore set on foot; a survey was made of some 1.800 families in all economic grades, and some very interesting faots were ascertained. I do not propose to burden the committee with much detail, but I will state a few of the facts that were ascertained. The matter is covered in a synopsis appearing in a current journal. It was found that 52 per cent of the American people receive no services from a physician. I think these figures would largely correspond with conditions in this country. It was found that 79 per cent get no attention from a dentist, that 89 per cent receive no health examination or similar preventive service, and 62 per cent receive no medical, dental or eye care of any sort. These statistics are for the prosperous years of 1928-29. Conditions are indubitably much worse now.

Supply-National Health
On the other hand it was ascertained that although many doctors have good incomes, one-third of all the physicians in the United States had incomes of less than $2,500, even in 1929. More doctors were found in the $1,000 to $2,000 class than in any other. It was also found that 16 per cent of American families spent less than $10 a year for medical service; forty-six per cent spent less than $40 a year; four per cent spent more than $500, and one per cent spent more than $1,000. It will be readily apparent that those who spent only $10 a year were not a matter of great importance, or even the $40 class, but for the four per cent whose expense for medical service was over $500, and that one family out of a hundred which was called upon to bear an expense of over $1,000, it was a very serious matter. While one family in every hundred was under an expense of $1,000 a year it must be evident that in a great many instances other families needing similar service could not possibly bear that expense. In such event there would be only two alternatives, one to go without medical attention, and the other to seek free service at the expense of the medical man or the community. Some people pay their way, but the expense of those who are unable to pay their way must either be undertaken by the municipality or the doctor must render free service. It is customary I admit for medical men to make those who do pay bear to some extent the cost of those who do not pay, and perhaps the cost to those who pay is increased by the idle time of the physician waiting for potential patients who fail to seek his assistance. The consequence is that those who do pay are called upon to pay heavier fees, and as fewer are seeking medical assistance all the time, the fees to those who do seek it and who pay their way must rise. It must be evident that very few people could bear an expense of $1,000 a year for medical service. But there is a means by which the matter could easily be taken care of. It was found that the expense averaged $30 per head to the American people for a very inefficient. service, whereas for very little more, that is for about $36 a year, a complete and efficient service could be supplied to the people of the United States, and I assume to the people of Canada as well, by bringing together the sick on the one hand and the idle doctors on the other. This would have to be done either by a form of sickness insurance or by state intervention of some nature, and I suppose if we are going to have state intervention it would have to be some form of sickness insurance or else of state medicine. I do not propose, however,
to take the time of the committee to-night in a discussion of that point. At present most of the provinces of Canada have state medicine; the municipalities are paying for medical service for their residents in the form of fees according to a regular scale. But when by a little effort, by the establishment of a system of sickness insurance or state medicine, we could cover this entire field and give everyone a satisfactory medical service, it seems so desirable to do so. It is clear that it is a matter for the Department of Pensions and National Health, and the national health of the people far outweighs the pensions side. It is a matter which this department should take into serious consideration.


Donald Matheson Sutherland: I am sure everyone has been much interested in the remarks of the hon. member for St. Boniface. In my judgment the country is gradually tending towards some form of state medicine, for the reason that he has mentioned, that at the present time the full advantage of medical knowledge and treatment are not available to all the population. But while realizing the desirability of some form of state medicine, I suggest that the matter has to be approached very gradually, because the medical profession have to go along with it; and there is this point to be considered as well, that, as every doctor knows, the personal element is very important in the relationship between the doctor and patient.


John Power Howden: The personal element need not be lost.


Donald Matheson Sutherland: It must not be; I think the whole scheme would fail if it were. But if all the doctors in the country were put on a panel system or a salary system I am afraid that unless great precautions were taken the personal element would be lost. With fifty per cent of the people who go to a doctor it is not medicine that is needed, but sound advice, and if the doctor does not take time to consider the personality of his patient that important element is lost. Everyone knows that there may be one doctor who is very brilliant, perhaps having taken a gold medal at school. He goes out to practice; he is capable of giving the very best attention and he does a great deal for his patients, yet he does not get along and does not secure the number of patients that may seek the services of a man who is not so highly qualified. That is where the personal element comes in. The possibility of doing away with that, as might happen if we went too hurriedly into any scheme of state medicine, is something which must be kept in mind.
Supply-National Health

I must say that in Canada the health of the people is being looked after pretty well. In the earliest days the municipalities provided the small amount of care needed for indigents, and the system has progressed from that time on. Preventive medicine has been carried on by the municipalities and the provinces, and that is being looked after exceedingly well. One hon. gentleman who spoke the other night rather questioned our policy in Canada in regard to health, but statistics prove that in this regard Canada compares very favourably with any country in the world. It has been shown that any controllable disease, such as diphtheria, typhoid fever and tuberculosis, is definitely on the down grade in this country, because the people have been taught how to look after themselves, and for that reason our record is good. Some people seem to delight in saying that the health of our people is not being looked after and is becoming poorer, but as a matter of fact it is being looked after exceedingly well. The other night the hon. member for St. Boniface made a point which is absolutely true, when he said that the people are receiving care, though the doctors may not be getting their pay. Everyone who has taken any interest in the question knows that. In my own county no one has to go without the treatment he needs, either operative or medical, and I think that applies to a great extent all over Canada. I may tell the hon. member for St. Boniface that the government are seized of the necessity of giving this matter the most thorough study, of trying to correlate the various efforts being made along these lines, and of associating themselves with the various agencies working towards this end. I think, as the hon. member thinks, the time will come before long when steps in this direction wall have to be taken, but it must be a gradual process.


John Power Howden: I very much appreciate
the remarks of the minister; I am glad to hear him speak as he has, and I agree with almost everything he has said. I do believe, however, that for a number of years the subject has not received the serious attention and thought it has deserved, though now the public is making a general demand for medical service, and when the public makes a general demand for anything it usually gets what it wants in a comparatively short time. What I think is neither here nor there, but, as the minister said a moment or two ago, in many parts of the country, certainly in that part from which I come, people are getting a very fair medical service. They are getting the services of medical men and

the drugs they require whenever and wherever they require or demand them; but as I have said before, the whole cost is falling on the municipalities which are struggling to keep their heads above water. As a consequence the medical men are not being paid for this service. I am not holding a brief for the medical men. I simply say that if the medical men are rendering good service -and I believe they are giving the people throughout the west and very largely throughout Canada a very satisfactory service-I think they ought to be paid a reasonable fee for it. If the fees now being paid by the municipalities could in some manner be augmented, then the people could have the doctors of their choice, and could have hospitalization whenever they required it. The difficulty with regard to the personal element, to which the minister referred, would be eliminated; people would have their own doctors and those doctors would receive reasonable remuneration for their services. The municipalities cannot do this alone; the little, struggling municipalities in western Canada can no more perform this service unaided than they can fly. I am appealing to the minister to-night because even with the assistance of the provinces the municipalities can barely perform the necessary services. I believe we require the joint action and interest of the three authorities, federal, provincial and municipal. If we can get that joint action we will have a satisfactory, non-compulsory system of state medicine which will be very much to the benefit and advantage of the Canadian people.


Henry Elvins Spencer: The minister made a
statement a few moments ago that I cannot let pass without at least questioning it. He will correct me if I am wrong, but I understood him to say that the health of the people is being looked after exceedingly well. I have no doubt the medical profession do their best, but may I suggest that among the people requiring medical attention there are three main types. The first class consists of those who can well afford to pay for medical aid. The second class is composed of those who have not the means to pay and who therefore usually are looked after by charity, in most cases with the help of the municipality, either urban or rural. But there is another very large class between those two, composed of people who also suffer but who do not want to go on charity. At the same time they cannot afford to pay to have themselves looked after, and as a result they go to the doctor only at the last moment. The doctors must know this very

Supply-National Health
well. I do not know the situation in this part of Canada but I do know it in western Canada. The problem of caring for their health is one of the biggest problems confronting the Canadian people, and it is a nightmare to those with families. Great loss has been sustained by the country simply through illness that might have been prevented if it had been looked after in time. I have been told on good authority, and I have never heard it contradicted, that the yearly loss to Canada through sickness and untimely death is about $300,900,000. Surely if that is true it is not correct to say that the health of the people is being looked after exceedingly well.


Donald Matheson Sutherland: May I ask my hon.
friend to repeat that figure?
Mr. SlPENOER:	$300,000,000.


Donald Matheson Sutherland: That represents
what?


Henry Elvins Spencer: That is the annual loss
through inability to work because of illness, and untimely death.
I am going to credit the minister with enthusiasm in the discharge of his duties, and with having attempted to do something the department has never attempted before, namely, to conduct an energetic drive towards cooperating with the provinces in a health policy. I am quite sure, however, that we will not have that drive if when we look at the situation to-day we say that the health of the people is being well looked after. I feel the medical profession are doing what they can, but on account of lack of policy and lack of coordination there are many people who because of the high cost of sickness, fear sickness more than anything else. For that very reason they will not seek medical aid, until the very last moment, and by doing that they are not fair to themselves or to the doctors.


Donald Matheson Sutherland: The hon. member
must realize that we will always have a great deal of sickness and loss of time. The best that preventive medicine can do is to prolong life by five or ten years. Unfor-tuately we cannot prolong it indefinitely. We will never reach the point where we can stop sickness or death.


Henry Elvins Spencer: I hope the minister
appreciates that through preventive measures the amount of sickness could be greatly reduced.


Mr. BLAIR:: I approve of the movement
now on foot, but I believe we must move
92582-7a
with considerable caution. I met with some organizations in Ontario who were asked whether they approved of the principle of the dominion parliament interfering in matters of health. I am inclined to agree with the minister when he states that the public are being fairly well looked after. To-day we protect them from diphtheria and use other methods of preventive medicine which we did not have a few years ago. Speaking for the province of Ontario-I would not care to speak for the rest of the dominion-I should say the people are fairly well cared for. There is one point, however, to which I should like to direct attention. While guardians are punished if children under their care are not sent to school, on many occasions the health of those children is neglected, but the guardians are not punished. I believe some provision should be made to correct that condition.
If we- are to introduce any measure for state medicine I believe the doctors as a profession must keep their prices at rates the public can pay. The figure of $360,000,000 per year for 10,000,000 people, or $36 per person, is far too high, and the public would be justified in resenting it. I believe the service could be given for a great deal less. The difficulty to-day is that the doctors are not being paid. I believe the municipalities and the provinces should shoulder the burden of caring for the people. So far as the federal government is concerned, I do not know where the money would come from, because after all this federal parliament is made up of members from the provinces. Further, the matter should not be considered too quickly. I was warned by medical men in Ontario that we must approach the subject very slowly because if rapid advances were made, public sentiment might condemn it. I believe the minister is acting properly in gathering information and permitting the public to feel its way. Eventually we may reach a point where there could be no reverses, and at a time when the public may demand further action we could go ahead and do our best. Although I am in favour of making inquiries, yet I feel caution should be exercised. Undoubtedly a reduction in fees such as has been suggested is required.
Mr. VEiNIOT: I notice under this item we have quarantines and leprosy. Gould the minister give me information about certain work .contemplated for the Tracadie lazaretto, and could he tell me what that work consists of? I believe a bowling green, a rink and the purchase of a certain number of radios has been considered.

Supply-National Health


Donald Matheson Sutherland: There was a plan whereby a large building would be erected for skating.


Clarence Joseph Veniot: Skating for whom?


Donald Matheson Sutherland: I presume for the attendants, and I understand two or three of the lepers skate. That is my information received from the deputy.
Mr. VEiNIOT: What about the bowling green?


Donald Matheson Sutherland: The bon. member does not seem enthusiastic about it.


Peter John Veniot: I certainly am not.


Donald Matheson Sutherland: I may relieve his mind by stating that we are not proceeding with the work at the present time. It has been stopped, pending further investigation.


Peter John Veniot: I hope the minister will never go on with it. There are nine or ten lepers in the lazaretto, and of 'that number no more than two or three could avail themselves of a rink which would cost $5,000 or $10,000. So far as the bowling green is concerned I do not believe three of the total number of lepers could use a ball. Most of them are advanced cases. The intention was to place six or seven radios in the lazaretto.


Donald Matheson Sutherland: I never heard about that.


Peter John Veniot: There was an idea to that effect. The former minister advertised it.


Donald Matheson Sutherland: I suppose he was going to donate them.
Mr. VEiNIOT: No, he was not; he is not as generous as all that.


John Power Howden: With regard to the narcotic drug act, are the offences as frequent as they formerly were? Is the matter now more under control than it was?
Mr. SUTHERLAiND:	The number of
addicts within our knowledge is becoming smaller, and the prosecutions are fewer. The convictions in the last few years would indicate that. In 1929 there were, 567; in 1930, 458; in 1931, 338; in 1932, 340; in 1933, 240.


John Power Howden: Looking over this item there was something that has always occurred to me, and I mentioned it on the last occasion this item was up. The minister is familiar with what we call the infectious papilomata. There are three of them-leprosy, syphilis and tuberculosis. The scope of leprosy is fortunately very limited at the present time, but that is not so with these other two diseases,

which are very similar in their pathology, in their general infection, and their widespread dissemination. If the government (feel it incumbent upon them to assume control in the case of leprosy, I do not see why it is not equally incumbent upon them, if not more so, to do so in the case of these other two diseases. Their widespread occurrence is of intensely serious import, and it is hard to choose between them as to the damage they do to the human race. The suffering and tragedy they cause lead me to believe that the federal authority could very well take under its own charge the control of syphilis and tuberculosis and take the necessary steps and precautions to control their spread and fulmination. I think this is well worthy of the government's consideration.


James Layton Ralston: I want to ask the minister to have a case looked into that has been brought to my attention. It is that of E. T. McKeen, inspector at Sydney, who was retired about two years ago and died a week ago. I have been asked to make an inquiry whether or not it was possible in view of his good service to make some allowance to his widow for pension. I do not know very much about the circumstances or how he was employed, whether he was a permanent officer or not, but I would ask the minister to look into it if he will.


Donald Matheson Sutherland: Yes.	.


John Power Howden: What does the minister think about the propriety of the department taking control over the two diseases I mentioned a moment ago? It is a very serious national matter.


Donald Matheson Sutherland: My information is that tuberculosis is being exceedingly well looked after at the present time. We owe a great deal to the Canadian Tuberculosis Association, which for many years has been spreading among the people the doctrine of prevention and care and treatment. I do not think any one disease we are subject to has received as much attention and care as tuberculosis, and in an effective way too, because tuberculosis is declining in Canada and we can hope that it will gradually be eliminated. It is not, of course, a disease like leprosy, where the possibility of cure is remote, although the chances even there are better now with a certain treatment that has been discovered. But leprosy is a loathsome disease and the sufferer from it must be segregated, whereas the tubercular patient after a certain period of sanatorium treatment can go home and, having learned to care for himself at the sanatorium, can carry

Supply-Pensions-European War
on his treatment at home and have a certain amount of family life. I do not think it is necessary for the state to take charge of that disease as my hon. friend suggests. With regard to syphilis, that is on a different basis. If a case develops and is diagnosed it will get treatment and there is no doubt that there is treatment for it in the first or second stages. It will receive treatment under the prevailing methods and means that we have. I do not think it is necessary to go to the extreme of the dominion taking over the responsibility for institutional treatment of either of these two diseases which my hon. friend has mentioned.


John Knox Blair: I wish the minister could give us some reassurance about the tubercular patients. I know of many homes where the tubercular patient is allowed to associate with the other children in the home, and I know of homes where one of the parents is tubercular. There are many families who cannot afford to send the tubercular patient to the hospital, and if some form of hospitalization for tubercular patients could be provided it would be of great assistance and mean a great deal to the families of these sufferers.


Donald Matheson Sutherland: Of course the hon. gentleman well knows that if a case of tuberculosis occurs in his municipality, the patient can be sent from his district I suppose to the Queen Alexandria sanatorium at London, and the municipality has to send the money to pay for the patient. There is a provision in the Ontario law that these cases must be looked after. Also in western Ontario, where we both come from, there are as the hon. gentleman knows travelling tuberculosis clinics which no doubt visit my hon. friend's part of the country, and any case that a doctor is a little suspicious about can be brought into the clinic for diagnosis. If the diagnosis is positive or it is a border line or suspicious case, or even one that would perhaps be better for sanatorium treatment for a little while, these cases are taken care of.


John Knox Blair: I realize that they can send the patient to the hospital, but the charge comes back on the farmer, who is not able to afford it. In many cases the expense keeps them from sending the patient to hospital because they have no resources with which to pay for the treatment, and the patient consequently stays at home with the rest of the family.


Donald Matheson Sutherland: It does not take a very long course of institutional treatment to 92582-731
teach a tubercular patient to look after himself so that he can go back and live with his family without being a menace. Undoubtedly there are some cases that are very difficult to deal with, even after they have been taught how to look after themselves; they go back and do not carry on the proper treatment. But where the father or mother is interested and will watch the patient, it requires only a very short period of institutional treatment for the patient to learn the routine and the regimen that is necessary to look after the disease.


[Stage Direction]
Item agreed to.
European war-naval, militia and air forces after the war, $42,000,000.
James Layton Ralston: What is the situation with regard to the marriage cases which gave us so much trouble last year? According to the Minister of Justice there were between 550 and 600 of these cases .which had been referred to the Department of Justice. How many of them have been disposed of, and how, and how many are still in suspense?


Donald Matheson Sutherland: I have not that information. I realize that this item can hardly be finished to-night, and the next time it is called I shall have the information. I know that the acting chairman of the commission has been giving his personal attention to these cases individually. They are not completed, but there will be a definite and detailed report on the present situation.


James Layton Ralston: I would refer the minister to the statement of the Minister of Justice to be found at page 1784 of Hansard of 1934, where he gave a classification of the cases. Perhaps that would help the minister to collect the information under these heads.


Charles Gavan Power: Has the minister any information with respect to the cases that were in the same category as the Skitch, Ouellette and other disputed cases? The Ouellette case is still before the court.


Donald Matheson Sutherland: I have not that information here. If the leader of the house would suggest adjourning at this time, I will have the information the next time this item is called.


Charles Gavan Power: Will the minister let No. 66
stand?


Donald Matheson Sutherland: Yes.
Progress reported.
On motion of Sir George Perley the house adjourned at 10.50 p.m.
CJ'f.R.-Auditors

Monday, February 25, 1935