1936-06-03

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

Mr. BROOKS:: 1.	Was Raymond W. McCluskey recently appointed to a position under the Department of Fisheries ^ for the district of Yictoria-Madawaska, New Brunswick?
2.	If so, by whom was he recommended?
3.	Has he been dismissed, and for what cause?
4.	If dismissed, who has been appointed in his place, and on whose recommendation?


Mr. MICHAUD:: 1.	Yes, as a temporary fishery guardian.
2.	He was appointed by the minister under the authority of the Fisheries Act.
3.	Yes. Not satisfactory for the work.
4.	Herbert Corbin. Appointed by the minister as in No. 2.


CANADIAN PACIFIC RAILWAY-$60,000,000 LOAN
Mr. POULIOT:: From what department or departments, and when, did the Department of the Secretary of State receive the correspondence contained in sessional paper No. 150-E, tabled on March 19, 1934. in accordance with an order of the House of Commons, dated February 12, 1934, for a copy of all correspondence interchanged between the government of Canada, or one or any of its members, and one or any of the Canadian banks, in connection with the guarantee given by the government for the loan of $60,000,000 to the Canadian Pacific Railway?


Mr. RINFRET:: The documents contained in the return tabled in the House of Commons on the 19th March, 1934, were not received in the Department of the Secretary of State. The return was tabled by the Right Hon. R. B. Bennett, then Prime Minister.


* MURDER OF CONSTABLE JOHN LEWIS AT SARNIA
Mr. CHURCH:: 1.	Will anything be done by the government (a) to grant a pension to the family of the late constable John Lewis, murdered on Saturday, May 23rd, at Sarnia, Ontario, while in the discharge of his duty in the interests of peace, order and good government in Canada; and (b) to lay down a definite policy for Canada towards police constables generally who die while in similar action in protecting life and property, and lose their lives for the protection of society?
2.	Will the government confer with the attorneys-general of the provinces in the matter with a view of a suitable and adequate federal pension being granted all families who suffer such great loss, or by granting a pension in conjunction with provincial and municipal authority ?


Mr. LAPOINTE (Quebec East):: Numerous representations are coming to the government from various sources along the line suggested in this question, more particularly from the hon. member for Lambton West (Mr. Gray), in whose constituency this event occurred. I may say first that the administration of justice, both civil and criminal, is under provincial jurisdiction, and the provincial authorities are responsible. But it is represented that in this case there is some degree of responsibility on the federal authority by reason of the fact that the person who was responsible for what happened was a prisoner who had been released under the Ticket of Leave Act and had been favoured with the exercise of the prerogative of clemency on the part of the crown. Of course it never was contem-
Questions

plated under the Ticket of Leave Act that the crown should be responsible for any actions of those who benefited by the exercise of clemency on the part of the crown. To accede to the requests that are being made would involve the whole policy underlying the Ticket of Leave Act and the exercise of the prerogative of mercy and clemency by the crown. Everybody will agree that under such circumstances the matter will require the most serious consideration.


Mr. CHURCH:: May I just say-


Some hon. MEMBERS:: Order.


Mr. SPEAKER:: Order.


Thomas Langton Church: Don't you think a policeman who protects free federal property all over Canada deserves a pension? It is just passing the buck.


RAILWAY EMPLOYEES-EMPLOYMENT AND WAGES
Mr. STEVENS:: 1.	How many engineers, conductors, firemen and trainmen in Canada have been paid for working more than the recognized equivalent of 26 days of 8 hours each a month, during the first quarter of 1936 (a) on the Canadian National Railways, and (b) on the Canadian Pacific Railway?
2.	How many days of eight hours each would the excess time put in by these men be equivalent to (a) in the case of the Canadian National Railways, and (b) in the case of the Canadian Pacific Railway?
3.	How many former employees with experience in the classes of work indicated in No. 1 were unemployed during the first quarter of 1936 (a) by the Canadian National Railways, and (b) by the Canadian Pacific Railway?
4.	How many employees with experience in the classes of work indicated in No. 1 were employed only part time during the first quarter of 1936 (a) by the Canadian National Railways, and (b) by the Canadian Pacific Railway?
5.	Has a referendum vote of employees in these classes of service been taken to ascertain if the majority of them would be satisfied with the recognized equivalent of not more than 26 days, of 8 hours each, a month?


Mr. HOWE:: The subject matter of this question relates to the internal management of the Canadian National and Canadian Pacific railways. The government has no information on the subject, and cannot properly ask either railway for the information.


CANADIAN NATIONAL RAILWAYS-ZONE ACCOUNTING SYSTEM
Mr. STEVENS:: 1.	To what extent has the "zone accounting system" been adopted by the Canadian National Railways?
2.	What saving, if any, has been made in payroll expenses thereby?

3.	What is the cost per year of the rental of accounting machines used in this system, and what amount has been expended in the purchase of machines in connection therewith?
4.	What is the cost of the stationery required
for "zone accounting" over and above the cost of stationery used in this connection prior to the adoption of the system?	,
5.	How many employees have been dismissed from the service as a result of the adoption of the system?


Clarence Decatur Howe: The same answer applies to this as to the previous question.


CANADIAN NATIONAL RAILWAYS- FREDERICTON, N.B., BRIDGE
Mr. BROOKS:: 1.	Will the government reconstruct the railway bridge, at Fredericton, which was destroyed by the spring freshets of 1936?
2.	If so, will an appropriation be made for this purpose during the present session of parliament?


Clarence Decatur Howe: This question relates to a railway bridge which is the property of the Canadian National Railways. I understand the question of reconstruction is under consideration by the Canadian National Railways, but it is not a matter for the government directly.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. HYNDMAN:: 1.	How many employees of the maintenance branch of the public buildings at Ottawa have been dismissed since November 1, 1935?
2.	What were their names?
3.	How long had each man so dismissed been employed by the Department of Public Works?
4.	Who were appointed in their places?
5.	How many of those so appointed are war veterans?


BRITISH COLUMBIA EXPERIMENTAL FARMS
Mr. TAYLOR (Nanaimo):: 1.	What was the cost of the up-keep of the Agassiz experimental farm, British Columbia, for each of the years 1931, 1932, 1933, 1934, and 1935?
2.	What was the cost of the up-lieep of the Summerland experimental farm, British Columbia, for each of the years 1931, 1932, 1933, 1934, and 1935?
3.	What was the cost of the up-keep of the Sidney experimental farm, British Columbia, for each of the years 1931, 1932, 1933, 1934, and 1935?
4.	As to the Sidney experimental farm, British Columbia, what proportion of the cost of up-keep for each of the years 1931, 1932, 1933, 1934, and 1935, is related to (a) park grounds and floral care and up-keep; (b) laboratory; (c) entomology; (d) pathology; (e) test plots?


NATIONAL PARKS
Mr. PURDY:: 1.	What are the names and locations of the national parks in Canada?
2.	What amount has been expended on each of them to March 31, 1936?
CANADIAN PACIFIC RAILWAY-$60,000,000 LOAN Mr. POULIOT:
1.	From May 31, 1933, inclusive, until February 13, 1934, was a copy of the letter of guarantee, dated May 31, 1933, signed by the Right Honourable R. B. Bennett, then Prime Minister, and addressed to Sir Charles Gordon, president of the Bank of Montreal, about the $60,000,000 loan to the Canadian Pacific Railway Company, forwarded, (a) to the Department of Finance; (b) to the Department of Railways and Canals, and (c) to any other department of the government?
2.	If so, by whom, to whom and on what date or dates?


Jean-François Pouliot: In the office of the Prime Minister or in any other department, is there a copy of the memorandum presented by Sir E. W. Beatty, president of the Canadian Pacific Railway Company, to the Right Honourable R. B. Bennett, then Prime Minister, about the dominion guarantee of the $60,000,000 loan to the Canadian Pacific Railway, and referred to by the latter in his evidence before the select standing committee of banking and commerce during the year 1934, at page 194 of the report?
MOTIONS FOR PAPERS farmers' creditors arrangement act Mr. PERLEY (Qu'Appelle):
For a copy of all papers or documents, including correspondence, letters, telegrams, resolutions and recommendations between individuals and creditor companies, or their representatives and between individuals or creditor companies and the government of the Dominion of Canada, relating to the dismissal, removal or appointments of officials appointed under the Farmers' Creditors Arrangement Act in the province of Saskatchewan; also copy of any telegrams or other correspondence between the chairman of the review board and the dominion government with respect to his retirement or resignation, prior to the first of June, 1936.
CANADIAN PACIFIC RAILWAY-$60,000,000 LOAN Mr. POULIOT:
For a copy of all correspondence between the Minister of Finance, from May 31, 1933, to October 23, 1935, and one or any of the Canadian banks or any railway company, in connection with the guarantee given by the government for the $60,000,009 loan to the Canadian Pacific Railway.


Jean-François Pouliot: For a copy of all correspondence between the Minister of Railways and Canals, from May 31, 1933, to October 23, 1935, and one or any of the Canadian banks or any railway company, in connection with the guarantee given by the government for the $60,000,000 loan to the Canadian Pacific Railway.
Motions for Papers


Jean-François Pouliot: For a copy of memorandum presented by Sir E. W. Beatty, president of the Canadian Pacific Railway Company, to the Right Honourable R. B. Bennett, then Prime Minister, about the dominion guarantee of the $60,000,000 loan to the Canadian Pacific Railway, and referred to by the latter in his evidence before the select standing committee on banking and commerce during the year 1934, at page 194 of the report.


Jean-François Pouliot: For a photostat copy of the original copy of the letter of guarantee, dated May 31, 1933, signed by the Right Honourable R. B. Bennett, then Prime Minister, and addressed to Sir Charles Gordon, president of the Bank of Montreal, about the $60,000,000 loan to the Canadian Pacific Railway Company, a typewritten copy of which has been tabled in sessional paper No. 150-E on March 19, 1934.


Mr. BENNETT:: I am not in a position to raise a question about the motion, but I must say this establishes a precedent of such far-reaching consequence that I direct the attention of the government to it. It involves a photostatic copy of communications which in their very essence are privileged so far as the files of the privy council are concerned. A copy of the letter was produced before the committee, and if a photostatic copy of every document is to be produced it raises another issue in this chamber which I never have heard raised before.


Jean-François Pouliot: If the right hon. gentleman quotes a rule to the house by virtue of which we cannot have a photostatic copy of the letter, I will abide by any ruling to that effect; but there is no rule to that effect.


Mr. MACKENZIE KING:: I must say that the request of the hon. member (Mr. Pouliot) for a photostatic copy of a typewritten communication which has already been placed before the house does seem to reflect upon the government which brought down the document. I do not think the hon. member could have had any such intention. I am sure he feels that any typewritten copy which has been tabled is a true copy of the original document, and there could not be any intention to imply that it was not such. However the hon. member may have reasons for assuming that the typewritten copy tabled is not an accurate copy of the original communication, and if there are such reasons and he will state them I should be prepared to have the house decide whether or not the order should be granted. Unless he has some special reason for his request, I suggest the motion should be dropped.


Jean-François Pouliot: I thank the right hon. gentleman for what he has just said; he must know my intentions are always pure. But the reason I ask for a photostatic copy of
Special War Revenue Act

the letter is that on the copy on record there are no initials of any minister besides the signature of the right hon. gentleman, and in order to do justice to the leader of the opposition, as I have heard that some of his ministers initialed the letter I wonder if the same initials were put on the copy. That is why I ask for a photostatic copy of the letter; it is only to render justice to the leader of the opposition. Once more I am defending him against himself.


William Lyon Mackenzie King: If there is a question of the copy not being a true one I see no reason why the order should not pass.


[Stage Direction]
Motion agreed to.

[Stage Direction]
The house resumed, from Tuesday, June 2, consideration in committee of Bill No. 76, to amend the Special War Revenue Act-Mr. Dunning-Mr. Sanderson in the chair.
The CHAIRMAN:: Members of the committee will understand that all sections of the bill, with the exception of the preamble and title, were passed last night.


Hon. J. L. ILSLEY (Minister of National Revenue):: Mr. Chairman, while that is true, I believe it is a fact that when we adjourned we were considering subsection 3 of section 62. I have given careful consideration to the objections raised by certain members, and to some extent I believe they are well founded. For these reasons I move:
That section 2 of Bill 76, an act to Amend the Special War Revenue Act, be amended by striking out of subsection 3 of section 62 of the said act, as set out in the said section, all the words following the word "forthwith" in the sixth line of the said subsection, and by adding to the aforesaid section 62 the following subsection:	_
"(4) Every person who having been notified by the minister in writing to keep records and books of account as provided in this part, neglects or refuses to keep such records or books of account shall be liable on summary conviction to a penalty not exceeding $500 and not less than $50. and in default of payment of such penalty to imprisonment for a term not exceeding six months and not less than one month."


Mr. LAWSON:: I congratulate the minister upon his reconsideration of the provision. It seems to me perfectly proper to impose a gaol sentence where an offence is wilfully committed and as I interpret the minister's proposed amending section it would apply only in cases of wilfulness. To that I have no objection.


[Stage Direction]
Amendment agreed to.
Section 2 as amended agreed to.

On section 20-Coming into force of section 4.
Mr. STEWART:: I understood that section 20 was not finally passed.


Mr. DUNNING:: It was.


Hugh Alexander Stewart: I should like to know
why the provision is made that section 4 shall be deemed to come into effect on June 1, and not on the earlier date at which the other sections become effective.


James Lorimer Ilsley: I made a brief explanation last night. The change in the definition of "producer or manufacturer" extends the definition to "any packer of olives and any commercial artist," and it is not deemed just to make the extension retroactive. From June 1 last it will apply to these two classes of persons.
On the preamble.


James Earl Lawson: I was wondering if the
minister would have any objection to a motion to revert to section 13 of this bill. The minister will remember that last night we went through the bill more or less hurriedly on the assurance that it contained merely the provisions of the budget, plus some administrative changes. I suggest to the minister that section 13 creates an entirely new situation so far as the enforcement officers of the department are concerned, and there are one or two phases of that amending section to which I should like to call the minister's attention.


James Lorimer Ilsley: I do not think I can refuse to accede to the hon. gentleman's request if he has anything he would like to say.


James Earl Lawson: Then, in order to regularize the matter, I would move, Mr. Chairman, that the committee revert to section 13 of the bill which is before the committee.


[Stage Direction]
Motion agreed to.
On section 13-Action against officers in the exercise of their duties.
James Earl Lawson: What I wish to call to the attention of the minister is the following. This section is designed apparently to confer protection upon enforcement officers of the department who commit certain acts in the course of their duty, or ostensibly in the course of their duty. The amendment comprises an addition to the Special War Revenue Act of sections 120A, 120B, 120C and 120D.
With respect to section 120A I raise no question except that the minister will observe that subsection 1 of section 120A provides for the requisite notice to be served, and sub-

Special War Revenue Act
section 2 starts off by requiring that there be in the notice something which is not specified in the subsection dealing with the notice. For the purpose of clarity I suggest to the minister that section 120A, subsection 1, be amended so as to make it clear that what is required in the notice is not merely a statement of the cause of action and the name and place of abode of the person who intends to bring such action, and the name of his attorney, solicitor or agent, but also such evidence as that person proposes to adduce in support of his cause of action, because that is apparently w'hat is intended by the first part of subsection 2.


James Lorimer Ilsley: The evidence does not have to be stated.


James Earl Lawson: Then what is intended
by the words in subsection 2, "No evidence of any cause of action shall be produced except of such as shall be stated in such notice?" Except of such what?


James Lorimer Ilsley: Of such cause of action.


James Earl Lawson: Oh, yes. If that is clear,
I would say that I have no suggestion with reference to section 120A, but it was not very clear to me. Section 120B, subsection 3, however, goes much further, I think, than any law upon our statute books, in giving protection to judicial, magisterial and police officers. Subsection 3 provides:
If the plaintiff is non-suited, or discontinues the action, or if, upon demurrer or otherwise, judgment is given against the plaintiff, the defendant shall recover costs, and have such remedy for the same as any defendant has in other cases where costs are given.
I call to the attention of the minister that costs are always a matter in the discretion of the court, and the proposed subsection is going very far in providing protection for enforcement officers in this connection. In view of the fact that failure to give notice, the giving of which is now being made a statutory requisite, will defeat the cause of action, even though it might be a perfectly good cause of action, the costs should be a matter in the discretion of the court as ;n. all other cases, and not arbitrarily fixed by statute.


James Lorimer Ilsley: This provision simply
follows the provision in the Customs Act, section 158, subsection 3, which reads as follows:
In such case, or if the plaintiff becomes non-suited, or discontinues .his action, or judgment is given for the defendant upon demurrer or otherwise, such defendant shall be entitled to full costs of defence.


James Earl Lawson: But is notice a prerequisite of action under the Customs Act?


James Lorimer Ilsley: Yes; by section 157 notice
is a prerequisite of action. In fact, these sections follow very closely the sections in the Customs Act. They introduce no new principle.


Mr. CAHAN:: But in this it is stated that the "defendant shall recover costs," while in the other, if I heard the quotation correctly, it is provided that the "defendant shall be entitled to costs."


James Lorimer Ilsley: Is there any difference?


Charles Hazlitt Cahan: I think there is a very great difference.


James Lorimer Ilsley: The words are these:
The defendant shall recover costs, and have such remedy for the same as any defendant-
And so forth.


Charles Hazlitt Cahan: I think in the first place
the word "shall" should be "may." As my hon. friend from York South (Mr. Lawson) has stated, he should recover costs only if he is entitled, to costs.


James Lorimer Ilsley: That would make a change
in the whole policy in these acts. The Excise Act, section S3, contains this provision:
And in such case or in case the plaintiff is non-suited or discontinues his action, or judgment is given for the defendant upon demurrer or otherwise, such defendant shall be entitled to the like costs as he would have been entitled to in case he had pleaded the general issue only.


Charles Hazlitt Cahan: Why not use the same language?


James Lorimer Ilsley: The language is slightly different in each of these acts.


Richard Bedford Bennett: The action has to be brought within three calendar months, and nothing can be done until one calendar month after notice. That means that the cause of action has to be considered and action taken in practically two months.
Another point is this, that instead of the giving of notice being set up as a plea, there is put upon the plaintiff the onus of proving that notice has been given, which is not usual.
Lastly, there has been a great change in procedure since the Customs Act was passed, and demurrers as such do not at present prevail in many of the provinces in Canada. The action is dismissed merely because no cause of action has been established. Setting down actions on demurrer is something that, under the Judicature Act of England, which is in force in most of the provinces, no longer prevails. What you do is to set down a point of

Special War Revenue Act

law, which is the old principle of the demurrer, to be considered by the court before the action is tried, and if the action is dismissed, as contemplated in this case, because no cause of action has been established or for other reasons, the defendant may recover his costs, but I should not think it desirable to say that he "shall" recover them.
The reason I mention this point is that I remember distinctly an action that was brought against the Department of Agriculture many, many years ago. It will be recalled that in the case against one of the members of the government of British Columbia the privy council decided that an action could properly be brought against him for failure to do his statutory duty and damages recovered, and after that it was not unusual for actions to be brought against officers of departments. The action I have in mind was brought against officials in the Department of Agriculture. No notice of the action had been given, and it was held that under the provisions of the law it was a good defence to say that he was a public officer and that no notice had been given. In some of the provinces we have provisions that all public officers and those holding public positions can be sued only if an action is brought against them. There is a direct conflict here between property and civil rights and the exercise of our exclusive powers under section 91. Property and civil rights has been held to be a matter solely within provincial jurisdiction. I am not at all clear that this is a matter which, because of its nature, enables us to legislate in connection with the statute of limitations with reference to bringing actions against individuals. In any event, I submit that three months is too short a time. In many of these cases a man will find that more than three months have gone before he has an opportunity of ascertaining the facts. He has to give notice after thirty days and it is quite clear that three months is not long enough. I think in some municipalities in western Canada the period is one year, while in others it is six months. To say that an action of this kind against an individual shall not be brought unless within three months, is an invitation in some instances to exercise powers which are beyond the jurisdiction of those exercising them.


James Lorimer Ilsley: With regard to the objection raised by the leader of the opposition (Mr. Bennett), I would be reluctant to make the period any more than three months. Three months is the period specified in the Customs Act and the Excise Act, and it seems to have been there for a long time.


Richard Bedford Bennett: Those are widely different powers.


James Lorimer Ilsley: Not very much. They are all based upon the same principle that considerable protection must be given to officers who are performing an invidious task, that of entering upon premises, looking at books and so on. I do not know what justification there could be for making an exception in the case of the Special War Revenue Act. The Excise Act is a very old act and as this section appears to have been taken from the revised statutes, I have no doubt it goes back a considerable length of time. The three month period is also to be found in the Customs Act. I do not know just what reason I could give for agreeing to the lengthening of that period in the Special War Revenue Act. With regard to the point raised by the hon. member for York South (Mr. Lawson), I have not any strong feeling as to the necessity of having the word "shall" in the section. I would be willing to substitute the word "may," if it is thought that that would be more just. The court could then decide who would pay the costs, and perhaps that would be preferable.


Charles Hazlitt Cahan: Why not use the same words as are in section 83 of the Excise Act?


James Lorimer Ilsley: I submit that those words could not be used because they refer to a system of pleading which, it seems to me, is not in use in many of the provinces. The wording is:
Such defendant shall be entitled to the like costs as he would have been entitled to in case he had pleaded the general issue only.
The hon. gentleman knows better than I that I would not know just what that means. Does it mean a denial of all the facts stated in the statement of claim?


Richard Bedford Bennett: Yes, not guilty by statute.


Charles Hazlitt Cahan: You use here the same terms, "The defendant may plead the general issue."


Richard Bedford Bennett: The second subsection of section 120B reads:
The defendant may plead the general issue, and give the special matter in evidence.
I think the whole section is obsolete.
. Mr. ILSLEY: I think if the word "may" is substituted it will cover the situation. I would move that in line 15 on page 8 of the bill the word "shall" be struck out and the word "may" be inserted in its place.


Thomas Langton Church: Mr. Chairman, I should like to ask the minister a question with reference to these actions against the officers

Special War Revenue Act
in his department. I may say that I think these officers are doing their duty faithfully and they should be given protection against these damage suits which are being brought in the courts. An officer of this department is a great asset in collecting revenue, but sometimes he may feel that he cannot do his whole duty because he does not receive the same protection as is given other officers under the justice of the peace acts in the different provinces. Just recently huge frauds were disclosed at Washington in connection with the collections of customs and income taxes. Some of our officers may be a little timid because if they are sued in court they may have to pay costs equal, in some cases, to three or four months' pay.
The records in these cases should be public property as that is the only way in which the public can know who is defrauding the government in connection with customs and income taxes. In my opinion the minister should take up this matter during the recess. In the recent investigation at Washington it was found that Mr. Pierpont Morgan had never paid a cent of income tax. It was found also that smuggling of articles from all over the world was going on. I think the minister should consider during the recess whether in the public interest there should not be a registration system in each revenue district in Canada, which register would be open to the public, on payment of adequate fees of inspection as is done at the registry office. Case after case has been heard in the police court at Toronto and a record should be kept. The public never hears of the frauds which are being worked on the Canadian government, unless through these actions or suits. We know what the frauds are but unfortunately we cannot get the proper evidence. The minister and his department are doing good work against offenders; the officers of the department are faithful in their duty and they should have legal protection against the heavy costs which may be involved. If we are to have an active and militant force to collect the revenues under this act, then the government of the day should see that these officers are protected. They should have the same protection as is given many provincial officers under the departments of the attorneys general.
The recent mass buying and price spreads inquiry showed the huge frauds which are being worked. Look at what happened to some of the smugglers. They had to go down to Washington to settle their cases. Enormous whisky shipments were made across the lakes and these people had to go to a foreign government and pay $3,000,000 for the smuggling of whisky into the United States.
12739-214J
We should conduct in Canada an investigation similar to that before the United States senate. If that were done we might be able to reduce the income tax, the sales tax and many other taxes which have become a burden on the people.
I contend that there should be a public register. Now we have to have a statement of claim, a statement of defence, an examination for discovery and a prosecution in the high court or the police court before the public can get any evidence of the frauds on the government. Then all they see is a paragraph in the daily press. We all know how much attention the daily press pays to this parliament. The papers do not bother with what is happening here or report the proceedings as formerly; they leave it all to the Canadian press. They give only about one-tenth of what is said here and sometimes that is not, in some cases, entirely correct. However, they are doing good, faithful work and they deserve a great deal of credit for the way in which they assist parliament.
I contend that if we have registers in the municipalities and provinces for real estate transactions, chattel mortgages, bills of sale, bills of lading, lien notes and all that kind of thing, it is time we made public the frauds being committed against the government by establishing a public register open to inspection for federal affairs I have named. You can go to the city clerk's office in any city or town in Canada, look up the roll and ascertain what a man is paying on income and business; but when it comes to federal affairs we have made no progress since confederation towards establishing a registry system whereby we can find out what the chisellers who are beating the government in customs duties and income tax as shown in the customs inquiry, are doing. It is not the small salaried man; it is not the consumer; he has to pay five or ten times over because of frauds against the government. We have seen the revelations at Washington and in the senate there, and we know what happened before the mass buying and price spreads commission in Canada. Anybody can go to Osgoode Hall and look up the statement of claim and the defence in the suits against our officers under this bill. The case comes up before the county court or the supreme court or the police court and you can get the evidence on payment of a small fee and a stamp tax in the court offices. Look at the way in which they are dealing with frauds in the old country, even where members of the House of Commons are concerned. There they enforce the law. I venture to say that if there were a federal register along the lines I propose it
Special War Revenue Act

jvould work satisfactorily, because anyone could go to a district office and by paying a small tax get the necessary information without inconvenience. Anybody who wanted information would have to pay for it; there would be a stamp tax of twenty-five or fifty cents, and no one would abuse the right. Moreover, that stamp tax would pay for the labour involved, giving a few extra men jobs. I am simply astonished at what has been going on. without any questions being asked in the House of Commons. People have been beating the regulations on both sides of the border in connection with customs and income tax. We find for years armed Canadian vessels on the great lakes, vessels loaded with smuggled whisky supplies bound for the United States, in violation, on the lakes, of the Rush-Bagot treaty, and they get away with it. And yet we are supposed to have an embassy at Washington, the result of our magnificent dream of separatism. Over the heads of the Canadian government these smugglers a month ago went to Washington and settled there with the United States government, a friendly power, for all this and for beating the regulations, and how they get away with it I do not know. We are away behind the times in the matter of law reform as regards income tax and customs law enforcement.
How will these officers be treated under section 13? Some man may have been beating the regulations, and if an officer takes any steps to cope with him he is threatened with a lawsuit. The consequence is that these officers may be intimidated by threats of suit; they are men receiving small salaries and under such circumstances they cannot be expected to do their duty properly. There are many people in Canada who are not paying income tax on millions of dollars of income from tax free bonds. No wonder they have been able to do so with impunity, and no wonder there is dissension in the country among the working classes, who have to pay heavy taxes-for everything is passed along to the consumer. The working people are getting sick of this sort of thing. They have come to the conclusion that there is one law for the rich and another for the poor in these revenue matters; that the small man must pay while the rich man can get away with it in the way I have indicated.
I do not blame the present minister; I do not blame the present government, far from it. I submit, however, that the government should look into this matter very carefully and appoint a committee of the house on investigation. Certainly this state of the law

regarding litigation is not fair to the poor officers of the department. As I say, they receive small salaries and there is no reason why they should be faced with litigation and the necessity of engaging counsel to defend them for doing their duty to the government. Sometimes the costs are against the plaintiff, but in any event the officer will be put to a good deal of expense. The time has come when the whole policy should be changed. There should be some sort of system whereby those who want information may be able to obtain it, and a stop should be put to the frauds that are being committed by big business as has been shown in our mass buying committee and at Washington.


Richard Bedford Bennett: Notwithstanding what the minister has said, the distinction between this measure and action taken under either the Customs Act or the Excise Act is very clear. This statute came into force only after the war, and it deals with conditions that are not contemplated in either the Customs Act or the Excise Act. The powers given the officers are far greater and they are more difficult to ascertain. For reasons which the hon. gentleman knows, in connection with the collection of income tax and matters of that sort, it was necessary to clothe the officers with wide authority in dealing with such questions. I am dealing only with the question with respect to the Special War Revenue Act. If the minister would be good enough to observe, first of all the general issue may be pleaded, which means that the defendant may give special matter in evidence, pleading not guilty by statute, and setting out in the margin the number of the statute. The second provision is to enable action to be brought even within three months; then notice has to be given within one of these three months, and he has thirty days after notice has been given to make amends. If notice is given so that the thirty day period expires towards the end of the three months, then obviously the exercise of the thirty day right with respect to making amends could not be within the three month period, because the action itself has to be brought within three months. Further, it is provided that the defendant shall be entitled to "the like costs"-in section 120C, the same as in the preceding one-which probably in that case will not do very much harm. In view of the amendment made by substituting the word "may" for the word "shall" that difficulty may be overcome. But when you come to section 120D, you have an entirely new principle. I do not

Special War Revenue Act
know whether it is in the old Customs Act, but if it is, it is not satisfactory. This provision reads:
If, in any such action, the court or judge before whom the action is tried certifies that the defendant or defendants in such action acted upon probable cause, the plaintiff in such action shall not be entitled to more than twenty cents damages, nor to any costs of suit.
The rule is, reasonable and probable cause; and the House of Lords having decided that action would lie against a corporation in connection with actions of malicious prosecution, great importance attaches to the use of the words "reasonable and probable cause." The minister will find that the .words "upon probable cause" are not the words that have received judicial interpretation in the courts of the country; those words are "reasonable and probable cause." I do not know what the old Customs Act says; it may say "probable cause." But certainly that statute is a very old one; we have made a great many changes and much progress since then. It might be well, therefore, to keep that in mind, if we are to apply the general principles and not deprive a man of the fruits of his victory. That is to say, a man goes into court, brings action and succeeds in proving damages. The court enters judgment for him for, we will say for the sake of argument, $500. But if the judge certifies that he had probable cause for bringing his action, then the result is that he gets twenty cents damages and no costs. The rule, I submit, is reasonable and probable cause, because probable cause is one thing and reasonable cause is another. There must be a combination of both reasonable cause and probable cause, in the cases that have received consideration by the courts of the country, to enable certain actions to be properly maintained. Are we not going too far when we say that probable cause entitles a successful plaintiff to twenty cents only, and no costs, without adding reasonable cause? For, as I say, a man may have a reasonable cause though it is not a probable cause. He may have probable cause which is not reasonable. I think the combination of words on which the decisions have been given make it necessary that similar words should be added to a statute such as this to enable the situation to be dealt with in the light of the decisions of the courts.


James Lorimer Ilsley: The words "probable cause" are used in both the Excise Act and the Customs Act.


Richard Bedford Bennett: Conditions have changed a great deal since those acts were drafted.


James Lorimer Ilsley: The phrase "reasonable and probable cause" is a very old one; it is one of the questions which arise in every action for malicious prosecution. That is the type of action in which it arises. There may be a difference between reasonable cause and probable cause, but probably that point has been considered by the courts; I am not sure whether or not it has. I do not think in committee of the whole we should depart from the old language of these acts unless we know exactly what we are doing. It may be that the words "probable cause" as used in the Customs Act and the Excise Act have received judicial interpretation on many occasions, and if in a hasty way we were to adopt the language that is applicable to actions for malicious prosecution and put it into this one act, out of the three, we might be doing something that would prove to be very embarrassing. I would prefer to adhere to the language which has been used in similar acts in the past and which, as far as I know, always has been in these acts.


Richard Bedford Bennett: Far be it from me to
press the matter further than to direct attention to it, but I have never seen a more obsolete statute than the one we are now passing. The old statute is obsolete; it is perfectly useless. When you talk about pleading the general issue and demurrers. I fancy that when my hon. friend was a law student the law had made such progress that he was not even compelled to learn what the general issue meant in pleading to an action, and actions on the case and trespass were long since forgotten. Statements of claim became merely concise statements of the circumstances upon which the right to recover were based. Here we are still adhering to the time-worn, obsolete provisions which were first put upon our statute books in 1838 or 1870, I think, and which have come down through the years. Now we are enacting something, but instead of making it modern we say; All right; the Customs Act had it for fifty years; the Excise Act had it for fifty years; so let us copy it. I am sure that cannot be sound.


James Lorimer Ilsley: The statute of frauds has had substantially the same wording since the time of Charles II.


Richard Bedford Bennett: Quite so. It has been
reenacted in practically every country in the world, and the reasons given for that have been excellent. One judge said that every word in that statute cost a subsidy, as I am sure the hon. gentleman will recall.
Special War Revenue Act


James Lorimer Ilsley: That is what I am afraid
of iQ this instance.


Richard Bedford Bennett: The most reactionary
Tory could hardly desire any stronger statement of reactionary principles than to say: Well, these things are old; they are all right, so let us stick to them. That is not the way in which progress is made. I say to the minister that this provision is unworkable and obsolete in this act as well as in the Customs Act and the Excise Act. I can tell the minister more. I am not busily engaged in practising my profession, but certainly if I had someone consult me in respect to this I would not pay much attention to it. I do not think we have considered it at all in the light of the decisions as to the power of this parliament to deal with matters of this kind, where property and civil rights are affected-. We enacted that statute a very long time ago, and I say that if we are going to reenact a principle and insert it in a statute we should do so according to our conceptions of modern conditions rather than blindly follow something that is fifty years old and that we know is no good. The minister himself says that he would not be concerned about the general issue.


James Lorimer Ilsley: I was set right on that, and I think pretty effectively, by the hon. member for St. Lawrence-St. George. I was told what the general issue meant by both the right hon. leader of the opposition and the hon. member for St. Lawrence-St. George.


Richard Bedford Bennett: Quite so, but that does not get away from the fact that we have this difficulty, and in a modem statute we are perpetuating the provisions of a statute passed half a century ago. However, I am quite content now that I have directed attention to the point.


James Earl Lawson: Even though this may be a repetition of some wording that appears in other acts I am not going to give my approval to something with which I entirely disagree, and I promise my hon. friend the minister that if I get a chance to say something against this provision as it appears in the Customs Act or any other act, I shall do so.
Under section 120D I think you are taking away something from the very people you want to help. Let me illustrate that. The minister referred to an action for malicious prosecution. I quite agree that that is the sort of action in which this language would be brought before the courts. My hon. friend will remember that when you go before a court in an action for malicious prosecution, if you are for the plaintiff you have to do two

things. First, you have to satisfy the judge that there was no reasonable and probable cause or you do not get to the jury at all, assuming that you have a jury trial. Then, the judge having found a lack of reasonable and probable cause, you are allowed to go to the jury, where you have to establish the further factor called malice. All right. Let us take a customs officer going into court as defendant in an action for malicious prosecution. Before a verdict can be obtained by the plaintiff the judge has to find that there was lack of reasonable and probable cause. Under this section, however, the judge has to make a much stronger finding in favour of the customs officer. He must find affirmatively that there was probable cause. It seems to me that in this section, though you may be repeating the words that appear in the Customs Act, you are not conferring any more protection or any greater right on your customs officer but you are introducing into present day legislation terms which, as far as I know, have not been, defined or interpreted by the courts, when at the same time you have terms available that have been interpreted almost as extensively as the old 13 Elizabeth section of the statute of frauds.
I suggest to the minister that he reconsider the wording of this section. I should like to point out something else to the committee, in connection with section 120C, to show the effect this provision may have, as I see it. Under section 120C a plaintiff brings an action. We will assume, first, that he thinks he has a cause of action. He does not go to a lawyer for two or three weeks; these people do not always rush off to some lawyer the next morning. In this case the lawyer looks up the provisions of the law and tells this man, "We will have to serve a notice." After he serves the notice he cannot do anything for a month, so there is a month and three weeks gone by. He also remembers that he has only three months within which to issue his writ so, being a prudent and1 discreet lawyer, within at least a week after the notice has expired he issues the writ. In other words he has issued his writ two months after the cause of action. Then the customs officer comes along with a notice in which he tenders some amends. Now the writ has been issued.


Mr. ELLIOTT (Middlesex):: That is within the calendar month after the notice.


James Earl Lawson: Yes, within a month after the officer receives the notice he tenders some amends. Under the ordinary law these amends would be in mitigation of damages. Under this section it is in complete bar of damages. If that were all it would not be

Judges Act Amendment
so bad, but the plaintiff, having issued his writ before he got the amends, even if he acoepts the amends and discontinues his action, is still liable to pay costs, in an action under which he could not do other than issue the writ, because section 120C says:
-and in such case, or in case the plaintiff ... discontinues his action, ... such defendant shall be entitled to the like costs as he would have been entitled to in case he had pleaded the general issue only:
I suggest that my hon. friend consider both those phases of the matter.


James Lorimer Ilsley: My hon. friend is wrong about the sequence of events. The tender of amends is not within a month after the action is brought; it is within a month after the notice is given.


James Earl Lawson: Quite right, but a condition might arise where, for the plaintiff to maintain his right of action, he would have to issue his writ before the officer is required to make the amends. Take a concrete case. Say alleged offence is committed to-day. Say the plaintiff's solicitor does not serve the notice until two months less one day after the commission of the offence. He would have to be within that time, or his action is barred. He has to issue his writ on the last day of the third month, in that event. Well, if the customs officer can tender the amends within one month after the notice is served, obviously he is not going to tender the amends the very day he gets the notice. Consequently the customs officer might tender the amends any time within one month less one day after the writ was issued, in which event the plaintiff must, under section 120C, pay the costs of issuing the writ. I am anxious to protect officers, but we should not put unreasonable things on our statutes.
Section as amended agreed to.
Bill reported, read the third time and
passed.



JUDGES ACT AMENDMENT

[Stage Direction]
The house resumed from Tuesday, June 2, consideration in committee of the following proposed resolution-Mr. Lapointe (Quebec East)-Mr. Sanderson in the chair.
That it is expedient to amend the Judges Act to provide salaries for the Ontario appeal and high court judges as presently constituted; and further provide that when a vacancy occurs in the office of chief justice in appeal the office shall be abolished and the court shall thereafter consist of a chief justice and seven other judges.
Ernest Lapointe: The object of this resolution and of the bill which will follow its adoption is to give effect to
amendments which have been made to the Ontario judicature act by the legislature of Ontario, first in 1931, and in 1936 at the last session. In 1931 the legislature of Ontario provided for a reduction in the court of appeal from ten members to eight, by providing that when vacancies occur they be not filled. But at the same time the legislature increased the high court trial division by two members, providing that when vacancies occurred in the appeal court the appointments would be made to the trial division instead of to the appeal court.


Richard Bedford Bennett: It did not increase the
total number?


Ernest Lapointe: It did
not increase the total number. This legislation is to give effect to this change in the constitution of the court, plus an addition of two judges. The purpose of the bill is in reality to add two judges to the trial division of the high court of Ontario. The reason for it, as has been represented by the provincial authorities, is the increase of legal business in the province, and more particularly the fact that two of the judges of the trial division have to devote their activities to other work. One has to devote all his time to bankruptcy matters, and another at the present time is engaged in the work coming to him under the Farmers' Creditors Arrangement Act. The result is that on many occasions it has been impossible to have a judge of the high court at the county seat at the usual terms. The representations made were found sufficient by the legislature of Ontario, and when they were made to this government we thought we should give effect to the intention of the legislature. Under the constitution the province creates the courts and the federal parliament provides for appointment and salaries of the judges.


Richard Bedford Bennett: As I read the resolution
it seems to me to be couched in unusual language to accomplish the end in view. The resolution reads:
That it is expedient to amend the Judges Act to provide salaries for the Ontario appeal and high court judges as presently constituted ...
Does it contemplate any change in salaries?


Ernest Lapointe: No. The apparent ambiguity struck me too, but the law officer who drafted it represented to me, and I accepted his explanation, that the term "as presently constituted" means as constituted by the Judicature Act of the province of Ontario. It is constituted, though effect has not been given here.
Judges Act Amendment


Richard Bedford Bennett: Yes; that is, it is constituted by statute of 1936.


Ernest Lapointe: Yes.


Richard Bedford Bennett: A statute of the Ontario legislature was passed last session, and the effect of it is to increase by two the number of high court judges.


Ernest Lapointe: Yes.


Richard Bedford Bennett: And with the aid of the statute of 1931 to bring about a reduction in the court of appeal from twelve to ten judges-


Ernest Lapointe: I forgot to say that one of the chief justices will disappear.


Richard Bedford Bennett: I understand that.


Ernest Lapointe: And when he vacates his office he will be replaced by an ordinary judge.


Richard Bedford Bennett: There will be seven other judges.


Ernest Lapointe: Yes.


James Earl Lawson: There were ten originally.


Richard Bedford Bennett: But as a result of the action of the legislature the court of appeal consists of the chief justice and seven other judges.


Ernest Lapointe: Yes.


Richard Bedford Bennett: This would seem to be the proper time to make some general observations in this connection, in view of the fact that the minister and I were the subject matter of some discussion at the last meeting of the Canadian Bar Association. I do not think either the minister or myself has anything to withdraw. I can speak only for myself as to what has been said on previous occasions with respect to the judiciary.
Recently in England a commission was appointed to investigate the whole matter of the age of retirement of judges, and although I have not the information before me, and am trusting to my memory-I had not prepared to speak to the matter to-day-I believe the limit was placed at seventy-three. Does the minister remember the official recommendation? Can he say whether it was seventy-three or seventy-five?


Ernest Lapointe: I thought it was seventy-five, but my right hon. friend may be right.


Richard Bedford Bennett: At present there is a conflict in my memory between seventy-three and seventy-five, and I do not wish to express a certain opinion as to which it was.


Mr. FACTOR:: Seventy-five.
fMr. E. Lapointe.]


Richard Bedford Bennett: In respect of our federal courts-tire Supreme Court of Canada and the Exchequer Court of Canada-and the county courts, we have provided a retiring age of seventy-five years. There is not much doubt that starting at one end of Canada and travelling to the other one may find large numbers of men endeavouring to discharge judicial functions who are physically unable to bear the strain of work and continuous effort necessary in the discharge of those duties. One makes that statement with great hesitancy, but it is a fact. It was so much so that at one time when the minister was in office he found it essential to enact legislation to enable him to deal with the difficulty. That legislation was severely challenged at the last meeting of the Canadian Bar Association. We introduced legislation to go a step farther and provide for retirement at seventy-five years. That, too, was challenged as being very unsatisfactory and as something which would impair the position of the judges.
For a moment let us examine the situation. I think the minister will agree it is time we were doing so. If all judges in Ontario were physically fit to discharge their judicial duties there would be no necessity of increasing the number by two. I believe that is so obvious that it needs only to be mentioned. There are other provinces in the confederation in which exactly the same difficulty prevails. Whether or not it is wise to discuss them in detail I have not yet made up my mind, but when the bill is introduced and has reached the committee stage I shall determine what course of action to pursue.
This is the principle which I submit should govern parliament in dealing with matters of this kind. First, if a man holds himself out as being qualified by training to occupy any position requiring the services of an expert- whether it be judge, doctor, dentist or engineer; it matters not-unless he has the proper qualifications he should not be appointed to the position, whatever it may be. Second, when he ceases to possess those qualifications he should no longer continue in office. Is there any possibility of getting away from the second proposition? We endeavour to have some regard, in a small way, for the first one But the second, which is a corollary of the first, has been the very foundation of the impartial administration of justice, namely that when men hold themselves out as being sufficiently trained in the law to enable them to undertake judicial duties, and when by reason of impairment of physical or mental capacity they are no longer able to give concentrated attention for periods extending over seven, eight or nine hours a day, obviously they are no longer

,	Judges Act Amendment



qualified for the positions they hold.-' It is an implied condition of the contract they make with the state that they will be able to discharge those duties and give the services indicated, and when they have reached the stage where they can no longer do so, it seems to me they should be content to retire. That is the position I have taken in the matter. It is not a new one to-day, nor was it new during the last parliament; it dates back farther than that. My personal conviction is that that is the only way we can get satisfactory service. Whether or not we should assert our views in the manner in which we endeavoured to do, and failed to succeed in doing, is still open for discussion and comment.


Samuel Factor: Does not the British North America Act provide life appointment for judges of the Supreme Court of Ontario?


Richard Bedford Bennett: Certainly, but there is
an implied condition that a man who undertakes to hold a position for life is qualified to do it; otherwise what have we?


Samuel Factor: I agree.


Richard Bedford Bennett: What is the result? If we were to rely altogether upon the provisions of the British North America Act whereby the judge may hold office during life and good behaviour, all we could do would be to appoint, and that would settle the matter; although the appointee might be an invalid, until an address were passed by both houses of parliament he could continue to occupy his position. It was that position that the present Minister of Justice had to meet on a previous occasion. The statute, it is true, was not originated by him, but when it was finally settled by the government of the day it provided for judicial inquiry as to physical or mental fitness, and if it was found as a result of inquiry that the occupant of a judicial position by impairment of either physical or mental health was unfit to discharge his duties, he could be retired, and the terms of retirement were provided in the act.


Ernest Lapointe: But it is a difficult thing to do.


Richard Bedford Bennett: Very. Judicial duties are always difficult to discharge; we know that. They involve the exercise of the highest qualities of which the human mind is capable, because justice is an attribute of the godhead, and frail humanity can only approximate an administration of justice as it should be administered. Failure to realize that is responsible for many of our difficulties.
The point I make is this: In any appointment where special knowledge is required, whether it be engineering or of some other professional kind, is it not an implied condition that with the payment of the salary there must be a maintenance of the special qualities upon which such payment is predicated? If there is a departure from that condition by reason of physical or mental incapacity, then obviously the right of the state to pay should also be terminated. For instance, if a judge is so deaf that he cannot hear the evidence, I suggest the matter is tremendously serious. What about the rights of those who stand in the dock before a judge who cannot hear and clearly appreciate the evidence of witnesses? Yet it is a condition that obtains at this time in more than one province. In the court of appeal it is not so difficult, yet it is a very unsound condition if the judge cannot hear what is said by counsel. Again, if a man has reached an age where concentration of effort has become practically impossible, is it quite right to say that litigants should have to defer to such a judge or that the state under such conditions should continue to pay, pay, pay?
These are problems to which I think we shall have to direct our attention, and they are not easy problems to deal with. By the time the bill is introduced I hope to have concluded whether it will serve a useful public purpose -to deal with these problems one after the other and point out what the actual situation is, and the ages the judges have reached. It is not so much a question of age. For instance, I know of a case in which the appointee was not old but developed a condition which made it impossible for him satisfactorily to discharge judicial functions; he could not give concentrated attention to problems over a period of five or six hours a day, and that situation when it is known is one that should be dealt with. In England, where they have so magnificent a judicial system, they found it necessary to appoint a commission a few months ago to deal with the problem and make a report, which I shall endeavour to secure before we reach the bill, and if that is so in a country like England, where the appointments have no political flavour as they very often have in this country, it becomes tremendously important, it seems to me, that we should have a clear understanding of what the implied conditions are when one is appointed to the bench.
Undoubtedly, ever since the Act of Settlement, judges have held office during life and
Judges Act Amendment


Mr. MacLENNAN:: Who is to decide as to their physical and mental fitness?


Richard Bedford Bennett: The hon. member for Inverness-Richmond (Mr. MacLennan) has raised the question, who is to determine their fitness? The statute which was passed under the aegis of the present Minister of Justice makes provision for that. It provides that his fellow judges, not necessarily in the province in which he lives, but members of the judiciary, are to decide that question, and it is a pretty difficult thing to place that burden upon them. In connection with county court judges, of course, we do appoint commissions of inquiry, and we have the power of removal, and on two occasions that power has been exercised in the last fifteen years. It was exercised by my friend the Minister of Justice during his former administration, and it was

Judges Act Amendment
exercised by a government in the early nineteen hundreds. In all these cases judicial inquiries were held; the fitness of the judge was reported to the executive, and the executive took the appropriate action. To have a commission of judges appointed to inquire into the mental equipment and physical condition of judges is very difficult and is the reason why this parliament fixed an age limit with respect to the federal and county courts.
The difficulty in connection with the county courts is that if one of seventy years of age were appointed to the county court tomorrow he would retire at seventy-five years on full pay. That is the reason why we have the unwritten rule that a man over sixty years of age should not be appointed to the bench. This has been sometimes disregarded, but in the main it is observed. I can recall the efforts I made when I was first a member of this house to secure the appointment to the bench of a gentleman who was perhaps better qualified than any other man in Alberta, but as his age was something like sixty-five years the late Judge Doherty said he could not appoint him. That general rule has prevailed. If fifteen is added to sixty it makes seventy-five, and that is the age at which a county court judge retires. That has been the general rule, but there have been exceptions with respect to the higher courts.
I bring this matter to the attention of the minister because I have frequently discussed it with him and I know how concerned he is about it. I still have the perhaps antiquated and old fashioned view that of the three branches of our polity, the legislative, the executive and the judicial, the judicial is the one in which we must place the greatest reliance. Although the judicial branch has not the same powers as it has in the great republic to the south, nevertheless its powers are tremendous. Being what they are, it devolves upon us to take every step possible to obviate dissatisfaction on the part of the public, on the one hand, with the service they receive, and those who give themselves to judicial office, on the other hand, from having any possible thought that they have been unfairly treated by parliament, which is just another way of saying that the people have treated them unfairly. There should be a measure of obligation on the part of the one fully as great as there is on the part of the other. There should be an obligation on the part of the people to pay the sums fixed by parliament and, in my judgment, there should be an
obligation on the part of those who receive payment to take it only so long as they are fit physically and mentally to discharge the implied obligations of their office, namely, to give that continuous attention to judicial work which was an essential condition of their being appointed.
So far as Ontario is concerned, it is quite obvious to anyone who knows the facts- whether or not they will be stated at length I shall have to leave to my own judgment later on-that these two appointments would not be necessary were it not for the age conditions that prevail. That is known to everyone familiar with the situation. The judges are doing bankruptcy work in all the provinces, but the work under the Farmers' Creditors Arrangement Act will slacken instead of increase. Probably it will have run itself out and be disposed of before long. That could not be made the reason for the appointment of two additional judges if the judges of the high court and the court of appeal were of an age where they could concentrate their physical energies and mental abilities upon the discharge of their judicial functions. Two or three hours a day is all that some of them are able to give in concentrated form to the problems of their courts. When one has reached a certain age it is not to be expected that he can go out to county towns to hold assizes with any degree of satisfaction to himself, or, shall I say, to those who have litigation in the courts over which he presides.
I do not envy the minister the difficulties of his position, but difficulties must be faced in dealing with matters of this kind. I think it is very unfair to impose upon the Canadian people the salaries of two additional high court judges in the province of Ontario when the necessity for so doing is attributable to conditions which have nothing to do with increased litigation or increased population, but arises out of the unfortunate circumstances to which I have alluded, and which I say again are not confined to the one province in this confederation.


Charles Hazlitt Cahan: Mr. Chairman, on previous occasions I have differed from the Minister of Justice (Mr. Lapointe) and the leader of the opposition (Mr. Bennett) with regard to the age of retirement for judges. I think a great injustice is sometimes done and the public interest sometimes suffers by prescribing a certain age for the retirement of either judicial officers or of officers of the civil service. Each case should be decided upon its own merits. On a previous occasion I called attention to the age of eminent judges serving in
Judges Act Amendment

Great Britain and the United States who had reached an age far beyond the limit of seventy-five years fixed by the statute introduced by the Minister of Justice as the age of retirement of judges of the federal and county courts. Without wanting in respect, I do say that a difficulty has arisen in Canada because of the lack of moral courage on the part of successive ministers of justice in the various adminstrations. I think section 28 of the Judges act was passed in 1922 and since then no minister of justice has had the courage to take the necessary measures prescribed by statute for the retirement of judges who have lost their capacity and efficiency. The statute to which I refer is chapter 105 of the revised statutes of Canada. Section 28 reads as follows:
28. (1) Any judge of the Supreme Court of Canada or of the Exchequer Court of Canada, or of any superior court in Canada, or any local judge in admiralty of the Exchequer Court of Canada or any judge of a county court, who is found by the governor in council, upon report of the Minister of Justice, to have become, by reason of age or infirmity, incapacitated or disabled from the due execution of his office, shall, notwithstanding anything in this act contained, cease to be paid or to receive or to be entitled to receive any further salary, if the facts respecting the incapacity or disability are first made the subject of inquiry and report in the manner hereinafter provided, and the judge is given reasonable notice of the time and place appointed for the inquiry and is afforded an opportunity by himself or his counsel of being heard thereat and of cross-examination of witnesses and of adducing evidence on his own behalf.
The next subsection reads:
(2) The governor in council may, for the purpose of making inquiry into the facts respecting the incapacity or disability of any such judge, issue a commission of inquiry to one or more judges of the Supreme Court of Canada, or of the Exchequer Court of Canada, or to one or more judges of any superior court in Canada, empowering him or them to make such inquiry and report,-
There is a reasonable provision for inquiry into the capacity of any judge holding an appointment to either of the courts mentioned, but the fact is that except in respect of county court judges this statutory power has not been exercised. I think it is due to a lack of moral courage on the part of the successive members of government holding the office of Minister of Justice. That office requires certain qualities and capacities greater than are vested in the ordinary member of parliament or in the ordinary member of government. In England the Lord High Chancellor does not fail, when called upon to exercise very great powers, by reason of his personal relations to those who have been appointed to and are sitting on the bench. When the Minister of Justice sees

that a judge is apparently lacking in capacity or is disabled by reason of age or infirmity, or otherwise incapacitated or disabled from the due execution of his office, it is his moral and statutory duty, I submit, to provide for an inquiry and, if the report upon inquiry sustains retirement, to report to council accordingly and have the judge retired. The Minister of Justice should act in accordance with the responsibilities of his office-and I am not making any special reflections on the present minister. But if he would do that, as I think he is bound to do in the exercise of the duties and responsibilities of his high office, we would avoid these scandals which we see every day when the courts are in session, in almost every province in Canada.


Thomas Langton Church: The province of Ontario
is empowered by the British North America Act to look after the constitution of the law courts in the province. I can see very little reason for this increase. This parliament, which provides the judges' salaries, should have some say before acts are passed by the Ontario legislature, when we are required to pay the salaries. There is no doubt that a good many of the supreme court judges are overworked, particularly those who go out on circuit. But take the votes in connection with the judges in Ontario. There is the Chief Justice of Ontario, whose salary is $10,000; Chief Justice in Appeal. $10,000; Chief Justice of the High Court of Justice, $10,000; salaries of six justices of appeal, at $9,000; salaries of ten judges of the high court, $90,000; and salaries of sixty-five county court judges at $5,000, together with travelling expenses, amounting in all to $400,000 a year. As was pointed out in the committee that sat in the session of 1929-30, in this province we have nearly as many judges as there are in England, with a population of 47 millions. I am not here to say anything against the splendid work done by the fine gentlemen who comprise the Supreme Court of Ontario, and as I say a great many of them are overworked. There is no doubt that this parliament, by delegating to them appeals in criminal cases and divorce legislation have added considerably to the work of certain judges. But on the other hand there is a good deal of work which, formerly performed by the supreme court, now goes to the county court. I would refer to Judge M arson, of the county oouirt, who has retired on pension. In the first and tenth division courts of Toronto he did the work which is now being done by three judges. When you consider that there are sixty-five county and junior judges in the counties of Ontario, the vote is a large one for that province. I was asking a prominent member of the bar the other day

Judges Act Amendment
his opinion of this particular bill so far as Ontario is concerned, and he said he was very much opposed to it. I saw in the newspapers the pictures of two gentlemen who are said to have been selected.
I think there should be a survey of this w'hole situation, and I suggest that the bill stand over until next year. I approve of an addition to the number of circuit judges, because when one of these judges is taken ill it is difficult to get someone to take his place. I understand that a recommendation was made this or last year that, in addition to the present list of supreme court circuit judges, there should be a special judge who would be available if relief were necessary along the lines I suggest, at Osgoode Hall. I know a great many of the judges and I know that they work very hard and are worn out by the time the long vacation comes. But in Ontario, not satisfied with having passed the act to which the Minister of Justice has referred in this resolution, they have upset the whole jurisdiction of the magistrates' courts throughout the province. Magistrates from York county have been transferred to Oakville, Milton, and other places all over the province, though they were appointed, in the first instance, for the county of York.
In my opinion a committee of the house should be appointed to study this question with regard to the judges, and the whole question of law reform, and in particular I would suggest a rearrangement of the work of the judges in view of the acts that have been already passed by the province, removing from the high court certain jurisdiction and placing it in the county court. This bill should be laid over for a year. We are getting law reform by means of two or three haphazard bills introduced during the course of the session, whereas in my opinion the whole problem of law reform should be carefully studied as it was in England with a view to reducing the cost of the administration of justice, and increasing the efficiency of justice in this country. There is need for such law reform. I have the highest respect for the able, hard working and most admirable body of men who have served the country on the bench of Ontario, not only in the court of appeal but in the supreme court and county courts and in the magistrates' courts as well. The administration of justice in this country has reflected the greatest credit on those in charge of it.
I believe there is a great deal in what the leader of the opposition has said. Day after day on the streets of the city I come from I meet some of the judges, some of whom I know are very much overworked, while others
may not be doing as much work. In 1929-30 it was found that three high court judges had left the bench to engage in a federal political inquiry-the late Mr. Robb used to call it the whisky inquiry, into customs and smuggling. Two or three judges, including one from Regina, left the bench for a year to carry on extra work, for which they got extra pay amounting to a large sum of money in addition to federal pay as judges, which others did their work. Judges should not be used for political investigations and inquiries; they have enough hard work as it is without being loaded up with all these extra duties. Much extra work has been placed on the supreme court judges, as well as other judges, by the Ontario legislature as well as federal authority. The lists of divorce cases at the non-jury sittings throughout this province have become appalling, just as was expected when we divested ourselves of this power and turned it over to the courts. The number of divorces is multiplying by two or three, and they are being made easier to obtain by the mistakes of this parliament. There are appeals, now also in criminal cases and every session adds to the work of our judges, and the pay is inadequate.
I believe it would be better if the minister would consider appointing a committee of the House of Commons or of both houses of parliament on law reform to go into the whole question of our judges and of law reform as they did in England. Let us have something concrete; let us bring the law up to date. As far as this measure goes, I believe we do need one additional judge for circuit work or so in Ontario, but the problem should be taken up in a larger way in order to consolidate the work, improve the efficiency of the law courts and prevent delays. I know one chief justice whom I saw on the street-car just the other day, who had been out on circuit hearing a very important case on constitutional questions. He has been overworked so much that he is ill. I was not speaking to him about this matter, but he certainly has been working very hard, hearing heavy cases that the newer younger judges are not given as yet. I must say that in my opinion recent appointments to the bench of younger men have been exceedingly well made, and these new judges in the supreme court are doing excellent work out on circuit that is a credit to the bench and the administration of justice which stands so high in Canada and is most creditable to the country..


Mr. DOUGLAS:: I should like to say just a word with regard to the suggestion of the right hon. leader of the opposition that some means be provided for retiring judges who
C.N.R.-Refunding

have ceased to be physically or mentally fit to discharge their duties. I lived for some years in a city where the judge suffered, unfortunately, from periodic attacks of amnesia. The result was that over quite a period of time some very unfortunate decisions were handed down. There were two results. One was that the attitude towards the law in that particular community was one of ridicule; the second was that practically every decision had to be appealed. Many of the decisions were reversed and practically all were modified to some extent. I appreciate that this would be a delicate matter to deal with, but surely it ought to be possible to enact legislation which would permit of the retirement of men no longer able to discharge their duties efficiently. The authority of the law can be maintained, it would seem to me, only if the men sitting on the bench inspire confidence rather than ridicule.


Ernest Lapointe: I shall reserve my remarks until the bill is under consideration.
Resolution reported, read the second time and concurred in. Mr. Lapointe (Quebec East) thereupon moved for leave to introduce Bill No. 83, to amend the Judges Act.
Motion agreed to and bill read the first time.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
The house resumed from Thursday, April 23, consideration in committee of the following proposed resolution-Mr. Dunning-Mr. Sanderson in the chair:
That it is expedient to bring in a measure respecting the Canadian National Railways, to authorize the provision of moneys to meet expenditures made and indebtedness incurred during the calendar year 1936, and to provide for the refunding of certain maturing financial obligations.
Charles Avery Dunning: Mr. Chairman, when this resolution was before the committee previously it was indicated that the standing committee on railways and shipping had not at that time finished its consideration of the estimates of the Canadian National Railways, and therefore the committee of the whole rose without completing its work. Since then the standing committee of the house dealing with these matters has completed its work and reported on this particular phase of the matter, as will be seen by reference to the votes and proceedings of April 30. I think, therefore, that any objection to the introduction 
of the bill has been met by what has happened since. I propose now, if the committee agrees to the resolution, just to introduce the bill; I do not expect it to be read the second time to-day, of course.


Richard Bedford Bennett: There is only one observation that I desire to make. It is this: In view of the evidence given before the special committee it does appear to me that there is not sufficient money provided for the deficit that inevitably must result.


Charles Avery Dunning: This does not deal with the deficit.


Richard Bedford Bennett: But it deals with the amount that has to be provided for this calendar year.


Charles Avery Dunning: This is for capital requirements only.


Richard Bedford Bennett: Only capital requirements?


Charles Avery Dunning: Yes, capital requirements and refunding.


Richard Bedford Bennett: I was going to say with respect to the other matter that it was quite apparent that operations for the first three months, owing to extraordinary conditions, had been somewhat unsatisfactory.


Charles Avery Dunning: The second three months are showing up better.


Richard Bedford Bennett: But not sufficiently to meet the contemplated shortage of revenue. However, since this deals only with capital expenditures and refunding I have nothing further to say.
Resolution reported, read the second time and concurred in. Mr. Dunning thereupon moved for leave to introduce Bill No. 84, respecting the Canadian National Railways and to authorize the provision of moneys to meet certain expenditures made and indebtedness incurred during the calendar year 1936.
Motion agreed to and bill read the first time.




[Stage Direction]
Hon. C. D. HOWE (Minister of Railways and Canals) moved that the house go into committee on Bill No. 21, to amend the Canadian National-Canadian Pacific Act, 1933.
Motion agreed to and the house went into committee, Mr. Sanderson in the chair.
Section 1 agreed to.

C.N.R.-Board of Directors
On section 2-Definition of trustees.
Charles Hazlitt Cahan: Have we had any clear statement by the minister as to the purpose of this substitution? Why would it not be quite sufficient for all practical purposes if the number of trustees were enlarged, and they were left vested with the duties that now appertain to the trustees? Why are directors presumed to be more efficient than trustees? What is the real purpose behind it? To me-and I say it with all due respect to the minister-the chief purpose of this bill is to place the entire management of the Canadian National Railways under political control, and if it is so placed I fear it is opening the way to political patronage and graft to an extent utterly unknown in Canada in the management of railways in which the government has a vested interest. We thought we were getting free from that. Whatever may be said about the existing trustees, I congratulate them upon this one thing: I think that since the board of trustees under Mr. Fullerton took control there has been less corruption and graft in the management of the Canadian National Railways than had existed in a number of previous years. That is one fact that Mr. Fullerton and those associated with him may be congratulated upon-the honesty and integrity which they have displayed since the board of trustees was created.


Clarence Decatur Howe: Mr. Chairman, it does not seem to me that the change in name from trustees to directors can have all the detrimental effect suggested by my hon. friend. We believe the set-up of a board of trustees is unsuitable to the operation of the property, and more particularly that section which vests the power of veto in the chairman. Simply enlarging the number of trustees and leaving that veto power with the chairman would, we believe, be quite inconsistent with the purposes we are attempting to achieve. So that while this board could be called a board of seven trustees, my thought is that the term "trustees" suggests trustees in bankruptcy, trustees operating a bankrupt concern, whereas we think it is better policy at this time to appoint seven directors and operate the railway as a business concern. It is a matter of policy.
As to the suggestion that this change is going to introduce graft and corruption, I really cannot see the basis for it. I thought that in drafting this act we had blocked all the old avenues by which people used to approach the Canadian National Railways. I do not know that I should suggest what those ways were; we all know, but I think if my
hon. friend will examine the legislation he will see that every one of them is closed. Instead of entrusting the direction of the railway to three men we are entrusting it to seven men. We believe that in doing so we cannot only get seven men of as great integrity as that of the present trustees-and I have no criticism whatever to make of the integrity of the men comprising the trustee board-but I think we can get men of equal integrity and of greater business experience, and perhaps men whose associations with the industrial life of Canada will enable them to contribute more to the prosperity of the railway than can the present trustees.


Richard Bedford Bennett: Will they be full time
men?


Clarence Decatur Howe: No. We hope to have them do the wprk of the ordinary executive committee, that is, be available to meet at least once a week. They must be men close enough to the headquarters of the railway to take an active part in the management. As far as the connection between the government and the railway is concerned, it is just as remote under this bill-perhaps more so; I am not so sure of that-as it is under the present trustees.


Richard Bedford Bennett: It could not be more
so.


Clarence Decatur Howe: My very short experience
in politics has not led me to believe that a board given full control, such as the present trustees, is so vastly more impregnable to political influence than a board that has contact through a responsible minister. The minister has no powers in connection with the board of directors that he has not under the other board. The minister has no power to do with the railway as he likes. Large matters, matters of importance, arise almost every week wdiich necessitate discussion between someone in authority in the railway and someone in authority in the government. For instance the government is still the trustee of a great deal of railway property that is operated as part of the Canadian National system, and the Canadian National Railways are operating steamships which the government owns. Matters of that kind require conferences between the two bodies. These conferences are held between the responsible minister and the chairman of the board or someone who has the authority to represent the railway. That is the only connection that is provided between the government and the board of management. In other days we used to have a representative
C.N.R.-Board of Directors

of the minister on the board. That has been changed, for just the reason my hon. friend suggests, that such connection might be used to influence the board in respect of matters on which the government should have no say, matters purely relative to the railway. All that is done away with. But as regards matters concerning which the government must confer with the railway and the railway with the government there is provision for such conferences between the head of the railway and the head of the department at Ottawa, that is, between the Minister of Railways and the chairman of the board. I think that is the only proper contact, and as such it is provided for.
How my hon. friend can say that this is going to lead to graft and corruption on a scale never before known in Canada I cannot understand. It is assuming that you have a very corrupt minister of railways and a very corrupt chairman of the board of directors. It must be so, because these two provide the only contact between the railway and the government. They must both be corrupt and not one alone, if graft and corruption are to exist. It seems to me that my hon. friend used rather strong language in that connection.


Charles Hazlitt Cahan: I trust the minister has all the virtues. Undoubtedly his past life discloses that he is a man of high character and very considerable experience, but he has never been subjected to the political influences emanating from 170 or 180 members of parliament, each of whom is anxious to obtain some advantage for his constituency. The other day the minister professed that he did not understand very much about the exercise of political influence upon governments and ministers in the administration of public properties, but I suggest to him that whdn two years hence he comes back to meet us his eyes will have been opened, and he will know something more about practical politics as accepted in the public life of Canada.
In one respect I cannot see very much change. It is true that instead of trustees we are to have a board of governors. This board is not to give its whole time to the administration; one director of the national company is appointed chairman of the board of directors. I assume he would be chairman of the board of directors of the national company. It was suggested that Mr. Fullerton, as chairman, had certain veto powers, but this gentleman who is to be appointed chairman has practically all the powers of the board. He will be there all the time. He
[Mr. Howe.l
will be on the job, and the others will not be on the job a sufficient length of time to find out what is being done, or to advise as to how it should be done.
But that is not the point I wished to make when I said the bill opened the way to political influence. In 1933, after comparatively slight criticism, a bill was passed by a very large majority, and was passed unanimously in another place. That measure solemnly declared that for a certain length of time the board of trustees should be constituted and, except under certain prescribed methods, parliament relieved itself of the responsibility of changing that board. The present bill is a complete repudiation of what parliament did in 1933. It is a violation of the solemn pledge of parliament to these men to the effect that in their appointment as trustees they would 'be retained for a certain length of time without interference. It is a repudiation of the very platform upon which they were appointed, whereby they were to be relieved completely from political pressure, placed in a position where they would be above political influence and capable of administering the railways in the interests of all the people of Canada without fear or favour of any political party. The present measure repudiates that pledge. It starts out by saying that we are to repeal the act of 1933 in so far as it appointed these trustees to act as a board of management. We are to repudiate the pledges under which they were appointed. We are to remove them from office because we do not like the complexion of their faces or the colour of their hair. Possibly some of them had bee>
associated with those of another politics, stripe. The government is inviting subsequent parliaments, for the same political purposes and with the same view and scope of information, to repudiate the act in order that others who may be more acceptable to a later administration may be appointed in their place. That sort of action is unworthy of parliament. It is impossible for the directors who are to 'be appointed to assume that they are to be above political influence and control. When I say that I refer to political influence and control of a very reprehensibk character, such as we have found in the administration of public bodies in Canada in times past. That is my objection; I can see no sign of improvement in the changes the minister now proposes.


Mr. HEAPS:: Before the section is agreed to there are one or two observations T should like to make. I hope that future parliaments

C.N.R.-Board of Directors
will not get into the habit of changing the set-up of the Canadian National Railways management every time there is a change in the complexion of the House of Commons. It is a dangerous procedure. About 1932 we changed the set-up of the management, and now that there has been a change in government we are to have another change in the management of the Canadian National Railways. Nothing could be more inimical to the management of the railway and the confidence of the people in the Canadian National system than to have a management in which parliament and the people have lost confidence. I believe any government would find it very difficult to obtain the services of the most efficient men to handle the Canadian National Railways if those men thought their positions would be insecure and that they would not be retained if there were a change of government.
The three trustees are in a position where they are asked to resign and to a certain extent their usefulness has been impaired. I cannot see how logically they could remain in office and give the service required of them. But if under the present measure it is intended to appoint a committee of seven to handle the affairs of the railway I suggest that such committee should be appointed by the House of Commons at large rather than by the government. If that were done we would have at least something in the way of permanency of the men in office. I do not know whether the government has considered the suggestion, but I put it to the minister in the hope that it may be helpful. If the leaders of the different parties could get together and decide upon a committee of seven, the men to be appointed would have a greater degree of security than they could have if after a change of government they should find themselves in the position of the present trustees. That is one of the most unfortunate features of the present bill. It dispenses with the services of men, rightly or wrongly, and makes the position insecure. I offer the suggestion to the minister in the hope that he will give it careful consideration and that when a new board of directors is under consideration he will at least consult leaders of other groups in the house, in an effort to appoint a board which will have the full confidence of the House of Commons and the people of Canada.


Hugh Alexander Stewart: Mr. Chairman, the committee is dealing with the administration of the most important asset under the control of parliament, namely the Canadian National Railways. It is an asset which represents an enormous investment, an asset which if properly administered and properly developed 12739-215
will make an excellent contribution to the future development of Canada. The people of Canada have invested in this undertaking such an enormous sum of money that anything which relates to its administration should receive the most careful and serious consideration of the House of Commons and of the people of the dominion.
Conditions were such that it was deemed advisable to appoint a royal commission to investigate and consider the administration of the Canadian National Railways. The commission was one that commanded, I think, the confidence of the Canadian people. It undertook the task imposed upon it, and at great length and afteT the expenditure of an enormous sum of money made a report. That report indicated that the method of control or administration of the railways in the past had not been entirely satisfactory, and in pursuance and in keeping with the recommendations of that report a new method of control was devised. It was given the careful consideration of parliament, and that method of control by a board of trustees has been in force now for a little over two years.
The special committee set up to -consider the administration of the Canadian National Railways has just completed its work, and the chairman, of the board of trustees has made to that committee a statement which the minister has commended as a fair, reasonable and moderate one. That statement is not yet available to the members of this house, but it will be printed, I assume, in the votes and proceedings, and I suggest to every member of this committee to read it carefully and seriously. If that is done, then I am of the opinion that the members of this committee will come to the conclusion that the administration of the Canadian National Railways by this board of trustees has been successful; that it has under very difficult and trying conditions accomplished in large measure, so far as the circumstances permitted, the objects which it set out to accomplish; that economies have been made; that improvements in administration have taken place, and that policies have been initiated which, if pursued to their conclusion, will result to the advantage of the railways and of this dominion.
I submit that with that record behind us, with the reasons advanced for a change in the method of administration, and with the fact that we have set up a new organization which has been functioning for so short a time, yet even within which it has been able to demonstrate its value, we ought not now to return to what is to a large extent the form of administration which existed prior to the appointment of this board of trustees. As I under-

C.N.R.-Board of Directors

stand this bill, that is largely what it is; we are in large measure returning to the same old method, control and administration by appointees of the government as we had prior to the investigation by the commission. Results cannot be secured in a short period of time, in the administration of an enormous undertaking like the Canadian National Railways, and I submit that it would be just as sound for a man to plant a tree and in a few months pull it up by the roots to see if it was going to grow as for the minister to make this change at this time. If he will consider the situation he must agree that the board of trustees has not given a sufficient length of time in the control and administration of this road to demonstrate whether the present method is more successful than the old except in so far as the results already indicate that some progress has been made, and I submit that they should have an opportunity _ to demonstrate over a sufficient period of time their capacity to administer the affairs of the road.
The minister in introducing the bill gave some reasons why these changes should be made. I think the reasons he gave have been answered to a large extent by the statement of the chairman of the board of trustees. I submit that the proposed action of the minister under this bill is not in the public interest; that the board of trustees has not been given a sufficient opportunity, and that these changes are not in the interests of the Canadian National Railways or of the people of the Dominion of Canada. If there is one thing that is required it is a continuity of policy, and a change in the method of administration having been made as a result of an investigation by the commission, we ought to have an ample opportunity to test it out to see if it will produce the results which it was hoped it would, especially as there are already indications that good results have followed upon this change in the method of administration.
I submit, finally, that this whole proposition of the minister is a retrograde step; that we are going back to a condition of affairs which was condemned, which was not in the interests of the Canadian National or of its employees or of the people of this dominion, and I fear that the results will be disappointing both to the minister and to the people of Canada as a whole.


Clarence Decatur Howe: In reply, Mr. Chairman, I think we are all agreed that the Duff report made some very sound recommendations, but

whether in appointing the board of trustees the recommendations of the Duff report were followed as exactly as will be the case in the appointment of the seven directors proposed by this bill is a matter for argument. True, the set-up of the board of trustees was the set-up proposed by the Duff commission, but the personnel, as I stated in my opening remarks, hardly followed the recommendations of that report. This type of management was a very unusual one for a commercial corporation as far-flung as the national railways, and under this bill we are going back to the usual business organization. The entire set-up as proposed under this bill is usual in railways, directors being appointed for a three year term, one-third retiring annually, and with a chairman at the head who is an experienced railway man. I think this is the proper time to make the change. At the end of this year one of the trustees retires. I might say that the trustees themselves are quite emphatic in stating that the present system is not a proper one, and that the veto power given the chairman is not a proper power for federal trustees. If we wanted to replace a trustee whose term was up, I do not know where we could find a man of the calibre and background of experience necessary to fill the position. I doubt whether we could fill the position satisfactorily and I think this is the proper time to do what we are doing.


Hugh Alexander Stewart: Does the minister think a board of seven directors will be more likely than three trustees to carry out the recommendations of the Duff commission? What particular advantage would such a board have over the three trustees? The minister says that some of the provisions of the act are unsatisfactory, but is not the answer to that, amend the act?


Clarence Decatur Howe: We are doing that.


Hugh Alexander Stewart: You are doing more than amending it; you are wiping it out altogether. It is not an amendment of the act; you are putting in a different set-up. The minister might just as well admit that now as at any other time. The minister states that there are certain defects in the present set-up, but I submit to him that he should amend the act rather than wipe it out altogether. When a house needs repairs it is not necessary to tear it all down. If a roof is leaking, repair the roof; if there is a defect in the plumbing, repair it. You do not need to build a new house in order to correct some defects in the old one.

C.N.R.-Board oj Directors


Mr. JACOBS:: What happens when the house is suffering from dry rot?


Hugh Alexander Stewart: A house two years old could hardly have any dry rot. Like my hon. friend, it would not be old enough.


Charles Hazlitt Cahan: You have got rid of the old roof; that is my chief objection. The Prime Minister is in the chamber and I should like to have his attention for a moment. The government is now purporting by this bill to repeal some very important provisions of an act passed in 1933 known as the Canadian National-Canadian Pacific Act, 1933. Section 7 of that act, which is now being repealed, reads:
No trustee shall be removed from office, nor suffer any reduction in salary, during the term for which he is appointed, unless for assigned cause and on address of the Senate and House of Commons of Canada.
There may be differences of opinion with regard to a pledge contained in a statute passed by the House of Commons and Senate of Canada; there may be differences of opinion with regard to the terms of such pledge when it was under consideration when passing both houses of parliament; but I ask the Prime Minister, even although differences of opinion prevailed at the session of 1933 when the act was passed, is not some consideration to be given to the terms of a pledge which parliament made? Provisions were being made for the appointment of *three trustees to very high and important positions. Those appointments were similar to appointments to a court of appeal or a court of justice where the term was expressed in clear language, with the further provision that no one should be removed from office or suffer a reduction in salary, during the term for which he was appointed, unless for assigned cause and on address of the Senate and House of Commons of Canada. If that provision is to be wiped out by this bill, what confidence can hereafter be placed in the honour and integrity of a parliament that makes such a pledge and then two or three years later repudiates it by allowing the trustees to be removed without assigned cause and on address of the Senate and House of Commons of Canada after full consideration of the merits or demerits of the charges made against them? That was not a party pledge; it was a pledge contained in a statute passed by a majority of both houses. It declared that the men who were appointed and whose term of office was fixed should not be removed from office except for assigned cause and on address of the Senate and House of Commons of Canada. Such removal as is contemplated by this bill is not in accordance with the pledge.
12739-215J
While I dislike to use strong terms, I think opprobrium, if not dishonour, is placed upon the parliament that refuses to carry out a pledge so made.


William Lyon Mackenzie King: Mr. Chairman, may I say to my hon. friend that if at the time that particular clause was inserted there had not been very strong exception taken to it by the then Liberal opposition, I would say he was entirely right in what he is now saying. But one has to consider not only the opposition which was made at the time, but the grounds for it and the nature of it. It was stated very clearly, by the then Liberal opposition, that the particular plan adopted, of having these gentlemen removable only by address of both houses was a Conservative or Tory device to tie the hands of a Liberal administration should we come into office at any future time. I think it was stated very plainly that if that clause did carry, every effort would be made to see that the House of Commons, which was the representative of the people as a whole, would not have its hands tied with respect to the control of any industrial activity for which it might be held responsible.
My hon. friend speaks about the courts of the land and the tenure of office of judges and the grounds on which they are appointed, but this presents no parallel. A judicial position is an entirely different position to that of a director of a company. When a government is held responsible for the success or failure of a great industrial enterprise, it surely should have the right to have as directors of that enterprise persons in whom it has confidence. Otherwise, we would not have responsible government in a true sense.
I wish to repeat that the linking up of the Senate with the House of Commons in the control of everything which relates fundamentally to the finances of the country is a wrong principle and has always been recognized as such. My hon. friend may argue that the Senate was made a party to any dismissal of these gentlemen in order that their tenure of office might be secured, but he overlooks the fact that the House of Commons is the one body responsible for the administration of the different departments of government, that the government of the day has to take responsibility, and that any government returned by the people should, with respect to matters which relate to the finances of the country, be free to deal with those finances as its members think best.
For this reason I believe there is every justification for this particular clause being removed from the act. There is no ground
C.N.R.-Board of Directors

for contending that this implies any breach of faith or trust on the part of the present administration. As I said, it was made perfectly plain, when we were in opposition, that if we could possibly avoid it we did not propose to have our own and future parliaments bound in a manner which would hold them responsible for the administration, of public affairs and yet deny them the right of having in charge of those affairs persons in whom they had confidence.


Charles Hazlitt Cahan: Just one word. The right hon. gentleman has laid down this principle, that minority in the House of Commons who oppose any public bill are to be at liberty thereafter, should that minority become the majority, to repudiate any promise or pledge which parliament as a whole has given to particular individuals in their official capacity. He further introduces this suggestion. It has not been stated that the trustees are not prepared to cooperate fully with the government of the day; that suggestion has not been made. But the Prime Minister goes further and says; We are now making the Canadian National Railways the football of politics.


William Lyon Mackenzie King: I said nothing of the kind.


Charles Hazlitt Cahan: That is the only inference, that each successive government will be free to do what it pleases with regard to the provision for the organization and administration of that board, and a new government coming in, which does not like the colour of hair of these directors, or the colour of their eyes, or the particular smile which they bear upon their faces, is at liberty to put them out of office forthwith. Therefore no future tenure of office of directors or trustees of the Canadian National Railways can be regarded as secure. When that principle is once admitted and when parliament, in repudiation of its previous pledges, is prepared to carry out such a policy as that, does it not clearly mean and indicate that the administration of these great railways is to become purely a matter of party politics; that the door is wide open to the return of the system of corruption which we have had in times past in dealing with government railways? That is the precedent which, it seems to me, the right hon. gentleman is establishing. I am discussing this matter apart from his personality; I am not casting reflections upon him. But I do say this, that I do not know of a man in his government -and he has in i/t many members far whom I have high personal respect-there is not one of them, not even himself, who if placed in the position of Minister of Railways in charge of this can be expected to stand between his political party, demanding office
rM**. Mackenzie King.]
and demanding consideration, demanding this contract and that contract, between that horde, who are looking for patronage, and the public service, the public interest, which alone should command the care and attention of the government of which the right hon. gentleman is Prime Minister.


William Lyon Mackenzie King: My hon. friend has just said that I am seeking to lay down the principle that a minority must control the majority-


Charles Hazlitt Cahan: No; I said a minority in a previous parliament.


William Lyon Mackenzie King: The principle
I am laying down is that there is no minority which is superior to the majority when that majority is the people of the country as a whole; and the people of the country as a -whole have sent this present House of Commons to legislate with respect to the Canadian National Railways as it thinks right and proper. The whole question of a new enactment with respect to the Canadian National Railways was presented to the people in the last general election. It was one of the policies on which the Liberal opposition took a very strong and positive stand, and it was returned to power in virtue of it and the other policies it outlined. The authority of the present administration in this matter is an authority which has been derived from the people of Canada as a whole, and in no unmistaken voice or way; and we intend to exercise that authority in the light of the responsibility so placed upon us. I wish to take very strong exception to the assumption that just because a director is to be appointed by a Liberal administration he will be thoroughly corrupt in the carrying out of his obligations, whereas a trustee appointed by a Tory administration is always to be above criticism. That is a new doctrine, a principle that does not apply. The only principle that can govern in these matters of the administration of public affairs is the principle of ministerial responsibility. The ministry will be responsible for those whom they appoint as directors. If a mistake is made in the appointment, or if mistakes are made by their appointees, the members of the ministry will be answerable to their masters. But their masters will not be the Tory party but the people of Canada as a whole. That is the essence of the situation. No one knows better than my hon. friend, unless it is his leader, that in most of the legislation which was introduced having to do with financial matters, an effort was made by the previous administration to tie the hands

Questions
of an incoming administration, to tie future parliaments in such a way that they would be bound, not to policies to which they were committed, but to Tory policies which they believed to be inimical to the country's interests. This is one case in point, and it is not by any means the only one. Certainly, however, so far as the present administration is concerned, it is prepared, in so far as it is able, to secure the necessary power and authority to take full responsibility for the legislation it proposes. It is not going to be tied, with respect to what it deems to be necessary and in the public interest, by any clause in any act or agreement which says that with respect to great transactions involving the finances of this country-and that is what is always put up in connection with the Canadian National Railways, that it is a big financial problem

this House of Commons is to be controlled by the other house of parliament. It will in so far as that is possible be controlled solely by its own members, in the exercise of full ministerial responsibility.
Progress reported.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
Thursday, June 4, 1936