1938-05-10

[Stage Direction]
On the orders of the day:
Mr. GORDON GRAYDON (Peel):: Mr. Speaker, I should like to direct a question to the Prime Minister (Mr. Mackenzie King). In view of the fact that Victoria day falls on Tuesday this year, will the government consider declaring the Monday nearest May 24 as the legal holiday to be observed generally by the citizens of Canada in this instance?


Right Hon. W. L. MACKENZIE KING (Prime Minister):: My hon. friend was kind enough to give me an intimation of his intention to ask this question, and I thought it might be of interest to him and to other hon. members of the house if I stated the general position with respect to holidays as provided for in the statutes.
The following are the public statutory holidays in Canada, the dates of which are fixed by statute:
New Year's day Good Friday Easter Monday Victoria day Dominion day Labour day Remembrance day Christmas day.
The following are fixed by proclamation: The sovereign's birthday Thanksgiving day.

Shop Cards Registration
When New Year's day, Christmas day, Victoria day, Dominion day or the sovereign's birthday falls on a Sunday, the following day, in accordance with statutory provision, is observed as the holiday. It will be apparent from this statement that if Victoria day were to be observed on Monday rather than on Tuesday this year, the statute would have to be altered in the meantime. I may say that I have received some communications suggesting that there should be no change, because arrangements have already been made to hold certain celebrations on Tuesday, May 24. I presume once it is understood that the governor in council has no authority in the matter, apart from that given by the statute, it will be apparent that we cannot very well alter the arrangement for Victoria day, at all events for this year.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Hon. C. D. HOWE (Minister of Transport) :: At the last sitting the hon. member for Bow River (Mr. Johnston) made inquiry as to a return of correspondence between myself and the Canadian Broadcasting Corporation with reference to the change in the radio licence fee. The information was sent forward by our department some days ago but apparently the return has not been brought down. However, for the information of my hon. friend I may say there was no correspondence.



SHOP CARDS REGISTRATION


[Stage Direction]
Hon. FERNAND RINFRET (Secretary of State) moved the third reading of Bill No. 22, respecting the registration of shop cards by labour unions.
Hon. C. H. CAHAN (St. Lawrence-St. George):: Mr. Speaker, I happened to be
called out of the house on April 26 when this bill was in committee. I should now like to make a few remarks with regard to it.
The shop card, which is the subject matter of this legislation, is stated to be desirable in order to afford labour unions, whose members engage not in the production of wares but in the performance of services, means of registering their distinctive cards in order

that those establishments which employ, in the performance of services, members of these unions, may be enabled to use, by arrangement with the unions, the union shop cards and to prevent unauthorized use of the cards.
My only experience with shop cards has been in the barber shop in the city of Montreal, to which I resort occasionally, which displays a card indicating that all the employees of that shop are members of a certain labour union. This is a very proper method of advertising, and I think if it were within our power to do so we might approve of protecting that form of advertising so that a labour union might advertise that in certain shops the employees are all members of its particular union. A similar proposition was made to me some years ago when I was Secretary of State. I investigated the matter in so far as I was able so to do, and the opinion which I reached was at that time clear, and I think, decisive, that it is not within the legislative competence of the parliament of Canada to enact a measure such as this, except possibly by enacting an amendment to the criminal code that would make it a criminal offence for a competitive shop to misuse a card, or to deceive its customers by the display of a card, indicating that its employees were members of a labour union when as a matter of fact they were not such members.	[DOT]
However, when this bill was up for a second reading I asked the Minister of Justice, I think, or the Secretary of State, to have the matter investigated by the Department of Justice, and the Deputy Minister of Justice, for whom I have a great respect indeed, has reported an opinion which appears in Hansard of April 26 last, in which he states that this bill does not deal with trade marks; but he adds, at page 2265:
I am of opinion that the purpose and effect of the bill is to vest in certain labour unions a copyright which they do not now enjoy, and that the validity of the bill is supportable on the ground that it is copyright legislation within the meaning of section 91 (23) of the British North America Act.
As I have already stated, I was clearly of the opinion that this bill or a similar bill was not within the legislative competence of parliament, and that for parliament to enact such legislation beyond its powers would prove a disservice to the labour unions which requested its enactment. I am still of that opinion. I may individually commend the policy of this proposed act, but I think the utmost care should be taken to ensure its

Shop Cards Registration
enactment by a legislature which is constitutionally competent so to do, so that its validity may be beyond doubt.
I am of the opinion that provincial legislatures are competent, and that the bill, if enacted by a provincial legislature, would be valid beyond question.
This bill does not deal with "trade marks." It deals with "shop cards of labour unions." The shop cards are not designs, devices or words to be used to distinguish a manufacturer's or trader's goods, wares or merchandise, and therefore these cards cannot be deemed to be trade marks either at common law or by statute. The bill does not deal with industrial designs, which are defined by our statute law and protected. It is clear, I think, that a shop card is used for advertising purposes only. It advertises, as I have already stated, that the employees of a shop in which a shop card is exhibited are members of a particular labour union.
I remember that when the matter was brought before me as Secretary of State some years ago I spent a great deal of time in examining all the precedents, and I could find no judicial authority to the effect that there may be, by common or statute law, a copyright in such an advertisement.
_ Copyright was originally a common law right which by a series of statutory enactments became merged in the statutory right known as copyright, and since 1911 such statutory right exists in the United Kingdom and in all British dominions and possessions.
Originally, copyright was the exclusive right which an author or designer had, at common law, to print, publish or sell his own original work. Then it was decided by the courts that it included the exclusive right of multiplying copies of an original work. It gave protection also to sculptors, designers and engravers, to authors of literary works, musical compositions, and later, as this house well knows, to performing rights in musical productions. The law of copyright was also extended to protect paintings, drawings and photographs, and works of architecture. But I can find no decision in respect of copyright, either under common law or under the statute law, which purports to protect advertisements.
Chitty, J., in Lamb v. Evans, 1892, 3 Ch. 462, held that there might be copyright in the headings under which advertisements were classified, but not in the advertisements themselves. And in 1893 the court of appeal, 1 Ch. 218, held that though there might not
be copyright in advertisements, there might be copyright in the arrangement of a sheet of advertisements.
Recently it has been found that there is a copyright in the arrangement of statistics in regard to certain branches of insurance, so that those who originated those tables have a copyright in the tables and in their reproduction.
Tradesmen's catalogues may be the subject of copyright, but solely on the ground that the compiler of the catalogue has exercised skill and judgment in making his compilation.
Certainly these shop cards do not fall within that special category of advertisements. This bill does not purport to embody any criminal legislation whatsoever. Ko fines or other penalties are imposed by the bill. It merely provides that a labour union may have a shop card, not on the ground that the labour union is the author of the card, or that it designed the card, but by the mere fact that it has registered a card, as provided in the bill, in a new branch of the state department which is to be organized for that purpose.
Section 9 of the bill provides that a civil action may be brought for unauthorized use of the shop card. I quote:
. 9- t1) An action or suit may be maintained m any court of record having jurisdiction to the amount claimed, by any labour union which has complied with the provisions of this act as to registration, or by any authorized executive officer thereof, against any person, labour union, association, or corporation, alleged to be using without permission the shop card ot such labour union.
That, if passed by a competent legislature, might be commended. But the bill provides merely for a civil action for compensation for the misuse of personal or movable property, and under that provision, in a civil action, damages must be strictly proved. That is' under our English law of torts, an action for deceit. In other words, the bill deals with an alleged deceitful use of property, which is not a trade mark, or a copyright, and is therefore clearly, I think, within the exclusive jurisdiction of the provincial legislatures. The only action that lies under the terms of the bill is an action for compensation for the use or misuse.
Under these circumstances I am personally of the opinion that parliament should hesitate about placing this bill upon the statute books of the country, where it may mislead a number of labour unions, whose work I would highly commend and which should be commended; but they should be protected by a competent legislature, so that they may not be induced to bring actions which, before ultimately
Shop Cards Registration

decided, will involve them in litigation and very considerable expense. I will not now vote against the third reading of the bill, but I thought it was my duty, in view of what has taken place during past years, to express this personal opinion on the third reading.


Hon. FERNAND RINFRET (Secretary of State):: I hope my hon. friend will not deem it any discourtesy on my part if I do not reply at length to the remarks he has just made. (This bill has been discussed for some time on a previous occasion, when it was up for second reading, and then in committee. On that occasion I had to explain, with my colleague the Minister of Labour (Mr. Rogers), the reasons why we were bringing it in and recommending it to the attention of the house.
I regret very much to have to disagree with my hon. friend, for whom I have the greatest regard, as also for his legal knowledge; but I must insist that every care was taken in the preparation of this bill, with the aid of officers in both departments, and we are not apprehensive about the point which he has brought up to-day.
I wish merely to remind the house that an amendment to the then Trade Mark and Design Act was adopted on March 25, 1927, to permit the registration of shop cards. That obtained for five years, and never once during that interval has the department been seized of the least doubt as to the validity of such an amendment. In 1932 my hon. friend, who was then secretary of state, brought forward a new bill, the Unfair Competition Act, where he did define "trade mark" in such a way that it would apply only to wares and designs associated with wares, and would not include the registration of shop cards. There is not one word in that bill which does so in a positive way. It was only the effect of the bill, in that as it was dealing only with objects or wares it did exclude automatically the registration of shop cards. But not even when that bill was discussed in the house was there the least allusion made as to whether it was constitutional or not to permit by federal legislation the registration of shop cards.
Since 1932, practically every year, when the labour unions came to Ottawa with a program of desired legislation, the request was made to restore the registration of shop cards. It was pressed before me in 1936 and 1937. I may say that last year we had a bill practically ready to achieve that object, and it was delayed only on account of the short session, which, hon. member's will remember, we had last year.

When I introduced the bill this year, on second reading both the Minister of Labour and myself gave a very full explanation of the trend and the particular character of the measure, and I may add that even since this bill was first discussed there has not been the least intimation to the department, except by my hon. friend the former secretary of state, that it may not be within the jurisdiction of the federal parliament.


Charles Hazlitt Cahan: When the Unfair Competition Act was enacted-it is 1932 to which the hon. gentleman refers?-there was a full discussion in committee with regard to it; and that committee, was, I believe, an excellent one.


Louis Édouard Fernand Rinfret: There was nothing in the discussion in the house which in the least reflected this objection. I do not believe there was even an allusion.


Charles Hazlitt Cahan: The discussions of the committee are not recorded in Hansard.


Louis Édouard Fernand Rinfret: My hon. friend has been very moderate and exceedingly courteous, as he always is. This matter was submitted to the Department of Justice, and the department, through its deputy minister, gave the opinion which I placed on Hansard when the bill was up for the second time before the house. It was a very short one, and I surmise that the matter did not even appear obscure or at all contentious to the Department of Justice. It stated that whether it was a trade mark or copyright there was not the least doubt in the mind of the department that we had jurisdiction in the matter. After all, Mr. Speaker, a shop card or a design of a labour union is very similar in character to other objects which are protected under several acts of the federal statute. If it is a work of art or literature it is protected by copyright; if it is an invention of the mind, it is protected by the Patent Act; if it is a design distinguishing particular wares or objects it is protected by the trade mark act.


Charles Hazlitt Cahan: But this is neither.


Louis Édouard Fernand Rinfret: But does it not appear that a shop card representing the performance of services or the work of a labour union, which cannot possibly come under the other categories that I have mentioned, would enjoy similar protection under another act? In every case it is the protection of a moral property or right duly registered with the state.
I repeat, Mr. Speaker, that I do not think it is necessary for me to go into the details of

Farmers' Creditors Act
the bill again. I simply commend to the house the third reading of the bill, for the reasons I have given on previous occasions.


Mr. SPEAKER:: Shall the motion carry?


Charles Hazlitt Cahan: On division.
Motion agreed to on division and bill read the third time and passed.



FARMERS' CREDITORS ARRANGEMENT ACT


[Stage Direction]
The house resumed from Monday, May 9, consideration in committee of Bill No. 25, to amend the Farmers' Creditors Arrangement Act-Mr. Dunning-Mr. Sanderson in the chair.
On section 5-No new proposal after a certain date.
Mr. DUNNING:: This provides for proclamation.


[Stage Direction]
Section agreed to.
On section 6-Subsection repealed.
Charles Avery Dunning: This represents a minor amendment consequential upon the former one. The present reading of (j) in the bill means a proposal made 'by a farmer. In view of the change made in the previous sections enabling executors of farmers to make application, the word " farmer " is dropped.


[Stage Direction]
Section agreed to.
On section 7-Subsection repealed.
Charles Avery Dunning: In connection with section 7, it is proposed to drop subsection 3 of section 2 of the present act and substitute what is contained in section 10A of the bill now before the committee. The reason for the change is the wide difference in the opinions of courts and lawyers with reference to the procedure to be adopted by creditors under subsection 3, as it now stands, of section 2 of the act in case of default of a farmer which has been annoying and expensive to all concerned. For that reason it is desired to repeal that subsection and to provide a clear-cut method of dealing with the dishonest farmer, as was intended when the original act was passed, by substituting the new sections 10 and 10A. The real effect of sections 10A and 10A (2) is that whenever a farmer does not carry out the terms of the composition which has been made for him by the board of review, and the reasons for his
not carrying them out are not to be found in circumstances beyond his control, then the remedy provided is that the farmer shall revert to the position occupied by him in relation to his creditor before any order was made by the board.


Mr. SENN:: Who determines whether the farmer is responsible in the circumstances?


Charles Avery Dunning: The court.


Mr. TUCKER:: Is that supposed to be the only remedy? As I understand the decision of the courts at the present time, if someone were supposed to pay a 8100 debt at the rate of S20 a year for five years the creditor could sue, in the ordinary course, for that $20 when it became due. Is it intended now that this provision should be exclusive of other remedies? If a person had a $50 or 8100 debt due him, it should not be necessary for him, before he could sue for that debt, to have the scheme formulated by the board of review annulled. As I understand it, at present one can sue in the ordinary way for a debt due under a proposal that has been confirmed by the board of review, and that is very satisfactory in the case of small debts; it should not be necessary for creditors to have the composition annulled. Is that the idea of the amendment?


Charles Avery Dunning: This amendment provides the remedy set out in it in addition to any other remedies that may exist, particularly those that exist under provincial legislation. This is an additional remedy in the case of a farmer who dishonestly makes no attempt to carry out the terms of the composition that has been made in his favour. It means that under this legislation, in its relationship bo the bankruptcy law, the whole transaction so far as the board of review is concerned is wiped out and the farmer reverts to the position he occupied before any order was made.


Mr. GLEN:: Since the discussion on March 18, another case has been brought to my attention. A farmer who had already received an order from the board of review before the first payment was due called for an auction sale of his stock and equipment, and the creditors who went to the official receiver to find out what protection they had discovered that they had no remedy under the act. The clause as now drafted is sufficient for the purpose, but it will have to go further. When the matter was under discussion on March 18 I put on Hansard rules 48 and 49, which will be found at page 1494. There are four

Farmers' Creditors Act
reasons for the issuing of an order setting aside a proposal:	They apply where the
debtor has:
(a)	made a fraudulent or preferential conveyance, gift, delivery or transfer of any of his property;	_
(b)	with intent to defeat or delay his creditors, departed or remained out of Canada;
(c)	assigned, removed, secreted or disposed of any of his property with intent to defraud, defeat, or delay his creditors;
(d)	conducted himself to the satisfaction of the official receiver in such manner as indicates bad faith towards his creditors.
The courts have taken the position that the rules apply only prior to the granting of the final order by the board of review. Unless the rules are altered so as to apply to a farmer who has defaulted of his own accord and not in consequence of circumstances, such as climatic conditions, beyond his control; unless it is possible for action to be taken under the rules after the board of review's order is given, then the rules mean nothing. Section 10 (a) as now drafted is satisfactory in that it provides for the cancellation of the order should any of these four reasons be established-and they are serious enough to warrant annulment of the board of review's order. But the rules will have to be altered so as to remove any doubt there may be in the minds of the court that the rules apply after the board of review have made their review as well as before.


Charles Avery Dunning: The matter of amending the rules to make them conform to the intent of the section is now before the department and is under consideration. Of course, the provincial law of contract continues to operate in connection with settlements under this act, and we must be careful not to put in the act anything that might invalidate proceedings because of interference with provincial rights in that regard.


Mr. PERLEY:: What will be the position of the farmer if he finds himself unable to carry out the arrangement made prior to the coming into effect of this act? He has been unable to make the payments under the former arrangement; he is in default through no fault of his own. Will he have to have a new proposal formulated, or can he get an extension of time?


Charles Avery Dunning: He cannot be put into bankruptcy. It is clear that if the farmer is unable to carry out the arrangement through circumstances over which he has no control, this section does not apply. The court would not put that farmer into bankruptcy and thus have him revert to the condition he was in prior to

the issue of the original order of the board of review. As I stated on a former occasion, there is not and cannot be provision for rehearing. If we were to open that subject again I know what would happen. It would be just what has happened on previous occasions; those who wish to have a better deal for the creditors will insist upon some right of appeal from the decisions of the board, from the creditors' point of view. I am afraid that if we provided for appeals or rehearings the value of this legislation would be lost in a tangle of legal proceedings. So it is not proposed to change that part of the statute; there is no intention to create a right of appeal either way. We believe that in that regard the legislation 'has worked as well as can be expected, 'having regard to the difficulties always attendant upon legislation of this kind.


George Halsey Perley: Do we understand then that it would be within the competence of the board to grant an extension of time without having an appeal made by either creditor or debtor?


Charles Avery Dunning: It is not within the competence of the board, but it is within the competence of the court.


George Halsey Perley: The farmer would then be considered in default?


Charles Avery Dunning: No, the creditor must go to court to put him in default.


Mark Cecil Senn: If the farmer through no fault of his own is unable to meet his obligations, is there no time limit after which the creditor can step in and claim his right? Or will that state of affairs continue indefinitely?


Charles Avery Dunning: It is wholly a matter for the provincial courts, under the law. The creditor can go to court at any time and seek to demonstrate that the farmer is not meeting his obligation although able to do so.


Mark Cecil Senn: But in case 'he is not able to do so?


Charles Avery Dunning: That is a matter of adjudication by the judge in each particular case.


Mark Cecil Senn: If the judge decides that the farmer is not to blame, and is unable to meet his obligation, can the creditor at no time in the future get the right to press his claim?


Charles Avery Dunning: In any event, if there were no Farmers' Creditors Arrangement Act at all under provincial contract law the creditor

Farmers' Creditors Act
would have to take court proceedings. He is in exactly the same position in that regard with respect to the carrying out of the terms of any order of the board. His position is not changed; the law of contract regulates that.


Walter Adam Tucker: One point not to be lost sight of is the avoiding of expense as much as possible. As the wording now stands the first step would be to get an order of the board annulling the composition. That annulment would constitute an act of bankruptcy, and there would then have to be a subsequent application to throw the debtor into bankruptcy-in other words, two separate applications. In the past the practice has been to include both in the one application, for annulment of the composition and the declaration of bankruptcy. As it is worded here there would have to be two separate applications. Has that been considered?


Charles Avery Dunning: It is difficult to get over that situation. In practice I think there would be no second application, because the object of the creditor in most cases would not be to put the farmer into bankruptcy but rather to put him back in the position he occupied in relation to his creditors prior to the order. That could be accomplished on the first application. Creditors generally have not found it to their advantage to put farmers into bankruptcy in the ordinary sense of the term. Only in very rare cases would a second application bringing into effect the ordinary provisions of the Bankruptcy Act be required. But in any case on application to the court the dishonest farmer could be put back into the position he occupied before the board of review made its order.


Walter Adam Tucker: I do not think the minister got the point of my first question. If an order is made that someone is to pay a certain sum of money, say $100, in instalments of $20 a year, and the payments are not made, would it be necessary to have the composition annulled before the creditor could sue for the instalments? I take it the minister is under the impression that he would have to have that composition annulled before he could sue.


Charles Avery Dunning: No, I am sorry if I gave that impression. The annulment rests not upon the farmer's inability to pay but upon his honesty in the matter. With respect to the question of suit for the instalments, that is a matter coming under the provincial law of contract, which differs in different provinces. In this legislation we do not interfere with whatever may be the rights of the creditor under provincial law with respect to contracts.


Mr. STEWART:: The minister made a statement as to the law, concerning which I think there may be some question. This act is based upon the insolvency of the farmer. Once he comes under this act on the basis of insolvency, I am inclined to think that the remedies provided by this act are all that are available to the creditor. When a compromise has been effected and an order made providing for payment of instalments over a period of months or years I do not think the creditor can use that order as the basis of an action on contract. It seems to me it must rest for its strength and for any remedies for failure to comply with it upon the provisions found within the four corners of this act; so that if there is default I doubt whether there is an action in the civil court on the terms of the order or compromise. But that is not the objection I rose to point out to the minister.


Charles Avery Dunning: Will my friend permit me to deal with that point first? -because I am under the disadvantage of not being a lawyer although attempting to deal with a complex legal matter.


Charles Hazlitt Cahan: The minister is well on the way to becoming a very successful advocate.


Charles Avery Dunning: Thank you. I am advised, with respect to the point now under discussion, that in the various provinces there have been many decisions, all of which, although arriving at the conclusion by different roads, concluded that the order of the board does constitute a new contract and is enforceable under the ordinary law of contract prevailing in the province. Experience has shown that, and the Department of Justice takes the same view. Therefore I think my answer to the hon. member for Rosthern is a correct one, substantiated by legal decisions, that in so far as the order of the board of review is concerned, that order is enforceable in the ordinary way under the law of contract prevailing in the province, because it is held to be a new contract; but that if the creditor deems the debtor dishonest, then under the provisions of the amendment now proposed he may still avail himself of these remedies.


Hugh Alexander Stewart: As I have said, that is not the point I rose to bring up in connection with this section. I still think it is not a matter of contract; it is an order, and the order stands for what it is worth, which after all I think is very little in most cases.
The objection I wish to urge to this section is in connection with the procedure outlined here. I submit, Mr. Chairman, that it is entirely inconsistent with the procedure that has been laid down in other sections of the act.
Farmers' Creditors Act

Let us see just what is the scheme under this act. A farmer finds himself in financial difficulty, insolvent. He initiates the proceedings; he files a notice and a proposition and all that sort of thing. The proceedings are taken for his benefit and at his instance; an order is made or a compromise is arrived at, which again is for his benefit and to his satisfaction. The hands of the creditors are tied. They cannot move. The farmer goes along and falls into default; he does not carry out his own proposition, or the scheme that has been adopted. Then I submit that the ordinary, regular and fair procedure would be for that farmer to come back to the court and make application for further indulgence, for an extension of time or some modification of the plan, and show that his failure to carry it out has not been his fault. Under this section the procedure is the opposite. The unfortunate creditor whose hands have been tied is the one who must come to the court. He, forsooth, must launch an application; he must take the burden of the proceedings, not because of any default on his part or because of any failure by him to comply with the order of the court. He has to launch these proceedings because somebody else, the farmer, has failed.
Just look at what he has to prove. He goes to the court and makes his application. I do not know just what will be the procedure; I suppose that will be defined in the rules and regulations. Probably he will have to draw up a notice, of motion to serve on the farmer to attend at a certain time and place to show cause why something should not be done against him. Well, the creditor has to go to this expense and take this trouble. He is without knowledge; he is working in the dark. All he knows is that there has been default and that he is not getting what the court ordered him to get. So he has launched these proceedings and served notice on the farmer to come to court. We will say the farmer does not attend the court at all and the judge says, " You have to prove to me that this default is due to something within the control of the farmer." How are you going to prove that? The farmer has not come; he has defaulted again and the judge cannot move because he has no proof. Will he issue a subpoena or summons to bring the farmer to court?


Charles Avery Dunning: What does a judge usually do when there is default in appearance?


Hugh Alexander Stewart: If he has specific authority to do certain things then he may do them. In the ordinary case of default of appearance, say in aD action on a promissory note, the
fMr. Stewart.]
plaintiff will be able to swear of his own knowledge that the debt has not been paid and that the farmer is indebted to him; but in this case in order to succeed the creditor would have to prove that the default-


Charles Avery Dunning: He would have to prove that the farmer was able to pay and did not pay.


Hugh Alexander Stewart: He would have to prove that the farmer was in default deliberately, that he was able to do something; and he would have to prove it, which would be something entirely beyond his knowledge. You are putting upon him an onus, under this section, that I submit should be upon the farmer, the man for whose benefit all these proceedings are devised, the man who gets the benefit of this legislation. Here you reverse the whole procedure and place upon the creditor the burden of getting what the court has said was his right. You are really putting the cart before the horse. I submit that the whole procedure is wrong; it is contrary to the principles of the act itself and contrary to justice. It is not fair. This section should be redrafted in such.a way that the farmer, who is in default on his own proposition, is the one who must come to the court and get some readjustment or rearrangement. He should have to discharge the onus of proving what might be fair and equitable and just. Here the whole procedure is reversed, and this adds another objection to this act which I submit is worthy of consideration. I see many added difficulties, obstacles and delays in the way of a creditor getting his rights under this act. As I have said, I think this clause is drafted the wrong way about. The procedure should be quite the opposite to that laid down under this section.
Then as to subsection 2, the proposition is that he may be thrown into bankruptcy. I do not propose to deal with that just now, but if the creditor goes through all this procedure then the farmer is right back where he was before. The extension or compromise or scheme is set aside; the farmer is back where he started, and in addition to any other remedy the creditor might have, he must start all over again. This is the third round for him. The farmer has brought him in the first time. The creditor has had to bring the farmer in the second time, and now he has to start all over again. I do submit to the minister that this is putting too many obstacles in the way of the creditor. It is making it too difficult and it is increasing the hardships already manifest in the operation and administration of this act. It adds to the long delays that are

Farmers' Creditors Act
inherent in the act as drafted. In my opinion it simply encourages the dilatory man to go along and default in his arrangement or compromise in the scheme set out for him and see how long he can get away with it, how long it will be before some creditor will go through this procedure of bringing him before a judge. The onus of proof is on the creditor. It seems to me that is an unreasonable provision. I contend that in this extension we are providing another strong argument for the repeal of this act as soon as possible, at least in Ontario. I am sure the operation of this act under these expanded and amended provisions will create a deep sense of injustice. They will cause delays and add expense to the proceedings. I submit that the section has been drafted on the wrong basis.


Charles Avery Dunning: The remarks of the hon. member for Leeds (Mr. Stewart) illustrate better than anything else the difficulty of dealing with this kind of legislation. As a matter of fact the complaints with respect to the section in the original act which this amendment is proposed to replace came entirely from creditors. The draft now before the committee appeared first in votes and proceedings and later in the reprinted bill. Because of its appearance in the reprinted bill it became public and I have received from creditors nothing but commendation. I must confess that my hon. friend makes out a pretty good case that this proposed amendment would cause further injustice to creditors. I believe he used an expression of that kind. If that is the view of the committee I am quite prepared to drop this amendment.
It is a sincere effort to meet complaints received from creditors generally regarding the operation of the present subsection 3 of section 2. This amendment was designed to provide effective machinery for dealing with the dishonest farmer. There is not an hon. member who wants to protect the dishonest farmer, but every one of us wants to see the honest farmer who is paying according to his ability get as fair a chance as possible under the legislation, subject to judicial decision as to the circumstances of the particular case. I repeat what I said yesterday that we in the house cannot undertake to make judicial decisions with respect to particular cases; we can only put in the law such provisions as enable a judge, taking into account all the circumstances, to render a decision fair to both parties in the case.
The power proposed to be granted by this amendment will be in addition to such remedies as the creditor would have normally under provincial legislation, to enable him
to bring the dishonest debtor into court and to get from the court a decision that by reason of the dishonesty of the debtor, the debtor should be put back in the position he occupied before the order of the board of review was issued. I am in the hands of the committee and I should like to have a full discussion on the matter. As far as the government is concerned we are not insisting on this amendment, but we believe it to be fair having regard to all the circumstances.


Hugh Alexander Stewart: If a compromise, an
arrangement or a composition is not carried out, all the creditor has to do is go to a judge and get permission to proceed.


Charles Avery Dunning: That will be found in subsection 3 of section 2.


Hugh Alexander Stewart: That power is there
already.


Charles Avery Dunning: My hon. friend missed the point. The creditors claim that the power there now is not good and that the power proposed by the amendment is good. My hon. friend takes the opposite position. He says that the remedy in the present law is good while that proposed in the amendment is not good.


Hugh Alexander Stewart: I did not say that. I say that he has a remedy now and that this appears to be an alternative.


Charles Avery Dunning: Not an alternative, an additional right. The present remedy reads:
In any case where the affairs of a farmer have been arranged by a proposal approved by the court or confirmed by the board as hereinafter provided, part I of the Bankruptcy Act shall notwithstanding section seven thereof thereafter apply to such farmer but only failure on the part of such farmer to carry out any of the terms of the proposal shall be deemed to be an act of bankruptcy. Provided that such failure shall not be deemed an act of bankruptcy if, in the opinion of the court, such act was due to causes beyond the control of such farmer.
As a layman, that appeared to me to be fairly clear but lawyers and creditors tell me that it has been virtually impossible to get a decision under that section, particularly in some provinces. In certain provinces decisions such as are contemplated by the amended section have been rendered, but in many provinces the complaint has been that no decision could be obtained favourable to a creditor in the case of a dishonest fanner. My hon. friend as a lawyer can read the two sections side by side. He can read, as I have, the judicial decisions both ways, and
Farmers' Creditors Act

I think he will agree that at least some clarification is required in order to have some uniformity in the decisions.
Mr.	STEWART:	I think the minister
has missed my point to a certain extent. My contention is that where a farmer who has an extension or a compromise fails to carry it out, then the creditor ought to have his rights restored and be placed in the position of being able to proceed as if the order had not been made. _
Mr.	DUNNING:	Automatically?Mr.	STEWART:	Or on application tothe court. The farmer should know whether he wishes an extension and whether he expects to be able to carry out its provisions. If he does not go to the court and get an extension, then the creditor has the right to proceed. His rights	are revived and reinstated because of the default. Under this proceeding, the onus is put upon the creditor and I contend that that is an undue onus. I am simply contending that the creditor should have certain rights and if the farmer wishes to postpone the granting of those rights, it should be up to him to make further application.Mr	DUNNING:	The law as it now
stands places the onus on the creditor. The creditor must go to court in order to demonstrate that part I of the Bankruptcy Act-


Hugh Alexander Stewart: All he has to do is
demonstrate that there has been default.


Charles Avery Dunning: He has to demonstrate
something else; he has to demonstrate that the default is due to causes beyond the control of the farmer. Let me read the existing section in part:
. . . provided, part I of the Bankruptcy Act shall notwithstanding section seven thereof thereafter apply to such farmer but only failure on the part of such farmer to carry out any of the terms of the proposal shall be deemed to be an act of bankruptcy. Provided that such failure shall not be deemed an act of bankruptcy if, in the opinion of the court, such act was due to causes beyond the control of such farmer.
Therefore the creditor to-day must initiate proceedings and take the farmer into court in order to prove that the failure to carry out the terms of the compromise was due to causes within the farmer's control.


Hugh Alexander Stewart: If he wishes to take him into bankruptcy, he may do so. But he does not wish to take him into bankruptcy- That is the last thing he wishes to do-and he should be at liberty to proceed for recovery in his own way.


Charles Avery Dunning: He must do it in accordance with the provincial law of contract.


Hugh Alexander Stewart: No, not in bankruptcy.


James Allison Glen: I hope my hon. friend from Leeds (Mr. Stewart) is not correct in his contention, because this clause in the bill was inserted, as I thought, because of the argument I made in the discussion of the 18th of March. If my hon. friend is right in saying this is not what I want, then I do not know what I want. What I want is an additional remedy for the creditor in the case of a dishonest debtor. I know that the board of review in Manitoba take this position, that they have made a new contract following the old contract on which the application was made, and that that new contract is subject to the provincial law, and in the case of default in carrying out the terms of the order of the board of review the creditor has the remedy of going to court and taking foreclosure proceedings, depending on the state of his security. In addition to that, the courts have held that the rules do not apply so far as the proposal before the board of review is concerned, after the order has been made, and the creditor is left in the air; he has no remedy at all. But this new section gives the creditor an additional right to what he already has under the provincial law. It gives him an opportunity in an inexpensive way to make an application to the court, which in Manitoba is the county court; the creditor can apply to the county court for cancellation of the proposal. If he has to take foreclosure action on the board of review's order all he has to prove is default, and the farmer in defence would have to show that the default was caused not by his own act but by causes beyond his control. That is exactly the position we are in to-day. But this gives the additional remedy not of taking foreclosure proceedings but of going to the ordinary county court and there making a demand for cancellation because of the dishonesty of the farmer debtor.
I hope my learned and hon. friend will see that this provision should not be taken out. It is a serious matter in Manitoba, and I am quite sure in Ontario, and we want this remedy as against the dishonest debtor. In the case where cancellation takes place it means that you go back to the original debt and the order of the board of review reducing the value of the land, and the farmer debtor will then be in the position he was in before.


Hugh Alexander Stewart: I think that ought to take place automatically where the farmer makes default unless he himself institutes proceedings and gets an extension. That is what I am contending for.

Farmers' Creditors Act


Mr. ROBICHAUD:: While I would not wish to see the section dropped, I am inclined to agree with the member for Leeds (Mr. Stewart) that the onus should not be put on the creditor to show that the farmer defaulted through his own fault. I think the onus should be on the man who is looking for the favour. If you added a few words or changed the phraseology of one line I think it would meet the situation. I suggest that after the word "aforesaid" in line 4 the words be inserted, "unless the farmer satisfies the board that such default was due to causes beyond his control." Instead of putting it negatively, put it affirmatively, so that unless the farmer can satisfy the court that such default was due to causes beyond his control, the court may annul.


Mr. LAWSON:: Sometimes when too many lawyers get into a discussion it is said that it creates confusion worse confounded, but in view of the remarks of the minister as to the meaning of the present law on the statute book, and at the risk of creating further confusion, I should like to point out what I conceive to be the difference and what I think is the issue now, if I may so describe it, between the 'hon. member for Leeds and the Minister of Finance.
In the present act, as I understand it as read by the minister, because of the phraseology of the section the onus is upon the creditor.


Charles Avery Dunning: At the present time?


James Earl Lawson: Not at the present time. Because of the way this new section is phrased, I think it does impose that onus upon the applicant, who of necessity under this section must be the creditor.


Charles Avery Dunning: If my hon. friend will permit me, the complaint of creditors to-day is that that is just the position the present section puts them in, and they have had from various judges in the provinces ample warrant for that statement.


James Earl Lawson: If that be so, this section puts them in that position much more strongly. Let me point out why. If the minister will observe the section, there are two conditions which must exist in order that the court may set aside the composition previously made, and those two conditions as they are phrased in this section are what we call in law conditions precedent.


Charles Avery Dunning: In the amending section?


James Earl Lawson: 
Louis-Prudent-Alexandre Robichaud: If the minister would adopt my suggestion I think it would be much simpler. It would then read this way:
Notwithstanding any of the provisions of the Bankruptcy Act, in any case where the affairs of a farmer have been arranged by means of a proposal for a composition, extension of time or scheme of arrangement approved by the board or confirmed by the board as in this act provided, if the farmer defaults in carrying out any of the terms of the composition, extension or scheme aforesaid, unless he

The farmer,
-satisfies the court that such default was due to causes beyond his control, the court may, on the application of any secured or unsecured creditors-
Do so and so. The onus is on him to prove then that his default was due to causes beyond his control.


Charles Avery Dunning: It is said that in the multitude of counsellors there is wisdom, but I am inclined to doubt it. The creditors very evidently attached importance to the feature of the proposed amendment which involves what is not existent in the present law, and that is that the debtor, under the amendment, reverts to the position he occupied prior to the making of any board order. From the creditor point of view it is believed that that constitutes a most salutary check on dishonesty on the part of debtors,-


James Earl Lawson: I think we all agree.
Farmers' Creditors Act


Charles Avery Dunning: -the knowledge that the remedy here proposed-not in the present law, remember-constitutes an important change, that if the debtor is dishonest under the composition which has been made in his favour by the board of review the penalty may be, in the judgment of the court of course, that his indebtedness to his creditor shall be restored to the position which it occupied before any board order was made. Again I say to those who are anxious with respect to the reasonable rights of creditors that this amendment as drafted has had without exception the approval of all those who correspond with me endlessly on behalf of the creditors. They believe it to be a sound provision and an improvement on the present law; indeed I would hate to tell members of the committee the opinions expressed of the judicial decisions which have been rendered in various parts of Canada with respect to the present subsection 3 of section 2 of the law which governs this matter. Everyone expresses satisfaction with the intention and with the additional remedy provided. Speaking as a farmer and not now as a quasilawyer, I believe that the creditors are right in thinking that the additional remedy of saying to a farmer, "Now, if you don't live up to the terms of your composition-"


Charles Hazlitt Cahan: But no one has opposed that. I have listened to the discussion very carefully.


Charles Avery Dunning: Everybody is in favour of that?


James Earl Lawson: Oh, yes.


Charles Hazlitt Cahan: I think the minister misunderstands the contention of the hon. member for Kent, NJ3. (Mr. Robichaud) which strikes me as a very proper suggestion at least for consideration. He is not objecting to the views which the minister has expressed as to the remedies which result from default, but he is suggesting that as a matter of evidence it may easily be proved that the farmer is in default, that can be proved by the creditor; but it is more difficult for the creditor to prove that the default was beyond the control of the farmer.


Charles Avery Dunning: Well, he will not be interested in proving that, but in proving the opposite.


Charles Hazlitt Cahan: All that the hon. member for Kent is suggesting is that that subsection should be so worded as to leave the proof of default upon the creditor, but to place upon the farmer the burden of proof that his default is due to causes beyond his control. That is the gist of the whole discussion.

I feel that 'the suggestion of the hon. member for Kent is well worthy of consideration by the minister and his legal advisers.


Charles Avery Dunning: I must say that the hon. member for St. Lawrence-St. George has succeeded in penetrating my head with the idea much more effectively than have those associated with him. That is due perhaps to my dulness.


James Earl Lawson: No, to his lucidity.


Charles Avery Dunning: Can we consider that the interpretation of the suggestion as given by the hon. member for St. Lawrence-St. George is assented to by the hon. member for Kent and the hon. member for Leeds? Are we all agreed?


Hugh Alexander Stewart: That is what we have been trying to get all the time.


Walter Adam Tucker: I must say that I do not agree. One point is being overlooked. The minister says that the farmer reverts to the position in which he was in before he made the application; but he reverts to a much worse position, because then he can be thrown into bankruptcy, whereas under the Bankruptcy Act as it stands at present the farmer cannot be thrown into bankruptcy. This parliament, when it passed this act said that if a person took advantage of the act and did not carry out, due to his own fault, the obligation placed upon him by the order of the board of review, he could be thrown into bankruptcy, whereas before that could not be done and when it did this it tried to protect the farmer and hedged that right of his creditors around with a great deal of precaution that farmers would not be thrown into bankruptcy on a wholesale scale. That, I think, is the point which is being overlooked, and that is why this was drafted so carefully.


James Earl Lawson: The hon. member for
Rosthern is discussing the next subsection of the bill, subsection 2. We are dealing with the point under subsection 1 of 10A. I suggest to my hon. friend, so that the discussion may not be more confusing, that he wait till we get to that subsection and then deal with the point he is raising.


Louis-Prudent-Alexandre Robichaud: I am satisfied that my suggested amendment meets the point absolutely. We will start from the third line on
page 4:
... if the farmer defaults in carrying out any of the terms of the composition . . .
Leaving out the rest.
. . . unless he satisfies the court that such default was due-

Farmers' Creditors Act
Take out the word "not."
-to causes beyond his control, the court may annul-
And so on. So the burden is thrown upon him to satisfy the court that his default was due to causes beyond his control, and not on the creditor to show that his default was not due to causes beyond his control. That meets the point. In the fifth line, instead of "such default was not due to causes," after the word "aforesaid" I would have it:
-unless the farmer satisfies the court that such default was due to causes beyond his control, the court may annul . . .
And so on.


Mr. CLEAVER:: I should like to support the contention advanced by the hon. member for Rosthern. As I read this amending section, it grants to the creditor an extraordinary remedy. Under a certain set of circumstances and in the event of certain proofs being made to the court, the creditor and the debtor are reinstated in their original positions. In many cases the penalty would be a very severe one. Under these circumstances is it fair to put on the debtor the onus of virtually proving that he is not a criminal?


Hugh Alexander Stewart: Not a "criminal."


Hughes Cleaver: That he has not committed an act of bankruptcy? As I read the amending section as it is now, if the creditor wants to penalize the debtor to the extent of this extraordinary remedy of making the debtor liable for the original indebtedness, the creditor must have some evidence to substantiate that, and the onus is on him. I am entirely in support of the section as drafted.


Hugh Alexander Stewart: The creditor is not asking for any extraordinary remedy. All he is asking is that this farmer pay what he was ordered to pay or what he agreed to pay, and if he is in default let the onus be upon him to show why he should be allowed to go on indefinitely in default. All the creditor is asking is that the man carry out the terms of his compromise or scheme approved by the court. There is no extraordinary remedy in that; he is asking for his own plain, ordinary rights, which the court granted him, and when he is not getting them the onus should be on the party in default to show why.


Louis-Prudent-Alexandre Robichaud: As a matter of fact the onus will be on the farmer. If the creditor takes him to court the farmer will have to prove that his default was due to causes beyond his control.


Charles Avery Dunning: That is what I understand will happen.


Louis-Prudent-Alexandre Robichaud: Why not bring the legal proceedings in line with the facts? There will not be any hardship on the farmer; he will have to prove in any case that the default is due to causes beyond his control. He is the only one who knows the causes of the default and the court will no doubt ask him to show that those causes were beyond his control.


Charles Avery Dunning: Having got clear what the suggestion is, I am prepared to debate the principle, and to debate it rather upon the practical issues just stated by my hon. friend from Kent. As a practical matter do we not all know perfectly well that if a creditor believes his debtor to be dishonestly evading the obligation created by the board's order, that creditor will proceed to take the debtor into court and endeavour to prove, out of the debtor's own mouth, what the conditions were that caused the default? That will be the practical way in which it will work.


James Earl Lawson: How will he make the debtor a witness? You cannot call a man against his own interest.


Charles Avery Dunning: Really, I have a great deal of sympathy with Jack Cade. Let me take the other side of the case. We must not put in the hands of the creditor such a weapon as will enable him unduly to harass an honest debtor. If we reach the place, as the result of accepting suggestions that would involve that any creditor, in the case of any default on the part of his debtor in fulfilling the terms of the order of the board, could say, "I will haul you all into the court, fifty or a hundred of you, and it is up to you to prove that you are honest in default"-


Some hon. MEMBERS:: No.


Hugh Alexander Stewart: He proves that the debtor is in default; that is all.


Charles Avery Dunning: It seems to me that in the provinces in which this act is most needed, to grant to the creditors this additional right beyond what was contemplated in the original statute, and to couple with it the provision that in order to avail themselves of that right of setting aside the whole order they must prove that the debtor was dishonest, is not an unreasonable provision. If they are to have on the one hand the right of putting the farmer in bankruptcy, which ordinarily they would not have under the bankruptcy law, and in addition to that the right to have the debt reinstated to the
Farmers' Creditors Act

amount and und'-r the conditions which existed prior to the board's order, then I say it is not too much to ask the creditor under these conditions to prove that his debtor is dishonest. That is a matter of principle.


James Earl Lawson: Once you put it on the basis on which the Minister of Finance has now put it, it becomes a matter of opinion, and I have no wish to quarrel with anyone as to what the principle should be on which you should proceed. When I was on my feet before I was dealing with the question, what the section meant as it stood. If you want it to mean what the minister indicates, then leave it as it stands. As I know from experience, however, the minister is broad in his reasoning with respect to these matters. May I point out to him that if the section were changed as suggested, so that once the debtor was in default he would have to satisfy the court that it was through causes beyond his control, there would not be introduced any innovation into the principles of our law generally. In the long run, despite the quips that are frequently made, in ninety-nine per cent of all cases law is common sense. One very well-established fundamental principle of British law is that though the onus of proving anything is generally upon the applicant or the plaintiff, or upon him who asserts, nevertheless, there is a well-defined exception, namely, where the thing is peculiarly within the knowledge of the respondent or the defendant. Let me give a simple illustration. Let me assume that as the Minister of Finance walks out of this building to-night, a stone falls from the top of the building and strikes him on the head or on the shoulders, and he survives. Under the ordinary principles of law, in order to recover against the owner of the building, he would have to show that that stone fell by reason of the negligence of somebody, in other words, that somebody did that which he ought not to have done, or failed to do that which he ought to have done, and that the person so negligent was an employee or the owner of the building. In the very case that I have cited, however, the law makes an exception. It says: No: it is not reasonably possible for the injured person to know Why the stone fell upon him. If a stone falls off a building which a man owns and keeps, it is within his peculiar knowledge what the conditions are, and so the law in that case puts upon the defendant or the respondent the onus of satisfying the court or the judge or jury, as the case may be, that he was not responsible. I have merely tried to illustrate the principle which I say this section ignores.

Having done that, I say that if the minister and the government still feel that the onus should be on the creditor-because it is their legislation-and despite the fact that the creditor is not in a position to know or easily to find out whether or not the debtor is in default by reason of dishonest motive or in consequence of causes beyond his control, then, of course, I have nothing further to say.


Walter Adam Tucker: If the suggestion contended for is given effect to, this will be the situation. Farmers in Saskatchewan are in [DOT] default of payments owing to certain companies at the present time under proposals confirmed by the board of review. All such companies would have to do would be to prove that the farmer was in default, and unless he at once hired a lawyer and went to court to prove that the default was due to causes beyond his control, he would be subject to an order throwing him into bankruptcy as a matter of course. Hon. members are contending that the onus should be upon him to prove that the default was beyond his control. Surely that should not be the intention. In regard to the suggestion of the last speaker, a great many bankruptcy offences are mostly within the sole knowledge of the person whom it is sought to throw into bankruptcy: for example, trading after he knew he was insolvent. That is proved out of his own mouth by examining the insolvent for discovery. So when we give to creditors the right to throw into bankruptcy farmers who otherwise could not be thrown into bankruptcy, there should be some protection given to them. When the farmer is in such a condition as to be unable to pay his debts he should not be required to travel long distances and hire a lawyer to prevent his being thrown into bankruptcy.
I uphold the Minister of Finance in his attitude on this point, but I have enough sympathy for creditors in these times to think that they should not be required to make any more applications than are necessary.


Mr. BOTHWELL:: Does the hon. member not think it is proper that if the farmer has entered into a composition that he arranged himself, and then defaults on it, the onus should be on him to show why he is in default?


Walter Adam Tucker: Most of these orders, at any rate in Saskatchewan, were applied for by farmers seeking such relief as they could get. They came before the first board of review, which apparently had doubts about the validity of the act, and so did not go nearly as

Farmers' Creditors Act
far as the present board in cutting down debts, and orders were made which everyone knows now cannot be carried out. Farmers took advantage of that remedial legislation to get as much relief as they could under that law provided for their benefit. But everyone knows that they cannot carry out the orders made. Under the amendment proposed by some hon. members they will be thrown into bankruptcy unless they can go where the court sits and hire a lawyer to prove that the default is beyond their control. I suggest that if the creditor wants to throw the farmer into bankruptcy, which apart from these special provisions he has no right to do, the onus should be on him to prove the essential points, just as, if he wanted to throw a trader into bankruptcy, he must prove the act of bankruptcy. If a bankruptcy order is sought against a trader by reason of his having traded after he became insolvent there would have to be proof of the offence. The trader is not required to prove that he was solvent all the time he was trading. The creditor must prove his case before he can get an order. In the case of the farmer it was carefully provided in the Bankruptcy Act that he could not be put into bankruptcy, no matter how much he owed or how wrongly he acted.


Hugh Alexander Stewart: Can he not go into bankruptcy?


Walter Adam Tucker: He can do so voluntarily, but he cannot be thrown into bankruptcy. What we are asked to do here is to say that if a farmer takes advantage of an act for the adjustment of his debts and then cannot carry out the arrangement he shall be thrown into bankruptcy unless he can prove that it was not his fault. That I say is giving to creditors a right which the act never intended them to have.
As the hon. member for Leeds pointed out, the creditor is forced, in the amendment actually before us, to take it in two stages: first to apply for an order annulling the composition, which order would constitute an act of bankruptcy, and then to apply for the bankruptcy order. In order to avoid the necessity of this second application I would suggest that something be added at the end of subsection 2 providing that the court, having found the creditor to have proved his case and having made such order of annulment, might thereupon declare the farmer bankrupt, so preventing the necessity for a second application.


Louis-Prudent-Alexandre Robichaud: I think the hon. member for Rosthern forgets that the words "on the application of any secured or unsecured creditor" are still in the section. We are not taking them out. Application will have to be made by the creditor. But there is no doubt that in practice the debtor will have to prove that his default is due to causes beyond his control, so it is not shifting the burden at all. The suggested amendment is simply putting the section in line with what will actually take place. The creditor will still have to start the ball rolling, and the debtor will have to come to court and defend himself, whether or not he has a lawyer.


Charles Edward Bothwell: It seems to me that
the cases to which the hon. member for Ros-them referred, decided some years ago in Saskatchewan, can be reconsidered under subsection 2 of section 1. I do not think we have reached the stage where we have to absolve the [DOT] debtor from every responsibility and place the onus always on the creditor. The case presupposed by the section we are dealing with is that of a man who has received some kind of composition and has defaulted on it. Surely he has then come to the stage where he should have to explain why he defaulted; the onus should be on him. If he has to make a new application he does so under subsection 2 of section 1. But if he comes to the stage dealt with in section 8, surely the onus should be on the debtor.


Walter Adam Tucker: How can he make a
second application?


Mr. DOUGLAS (Weyburn):: I am in
favour of leaving this amendment as it is. It should be viewed in the light of actual happenings, and the happenings in the province from which I come are these. The great majority of the farmers who have had a composition are in default, by reason of having had a succession of crop failures. These defaulters fall into two classes; those unable to fulfil the terms, and those unwilling to do so. The Minister of Finance was very clear both last night and to-day in pointing out that the object of this amendment is to reach the people who were dishonestly refusing to pay when in a position to do so. I think the latter class will be admitted to be by far the minority of the debtors. Now the amendment clearly places upon the creditor the onus for initiating proceedings to annul the composition. It says that either a secured or unsecured creditor can initiate proceedings to annul the composition. Any creditor who would initiate such proceedings must have

Farmers' Creditors Act

some reason to believe that the debtor is dishonest, that he is able to pay but unwilling, to do so. Otherwise he would not initiate the proceedings, and if he has such knowledge or information he is the person who should be obliged to prove that. Otherwise you are going to assume that this large mass of debtors who, because of climatic conditions, have not been able to meet their obligations and fulfil the terms of their new contracts, are dishonest; that all are unwilling to carry out their contracts until they can prove that they are unable to do so. In other words you are going to assume that they are guilty until they prove themselves innocent. Surely if this section is going to place the responsibility upon the creditor for initiating annulment proceedings it ought to place on the same creditor responsibility for proving the unwillingness of the farmer to pay. I think this is by far the most logical approach to the matter. In the original act, as it now stands, the onus was not placed upon the farmer.


Some hon. MEMBERS:: Yes, it was.


Thomas Clement (Tommy) Douglas: Subsection 3
of section 2 of the original act states:
Provided that such failure shall not be deemed an act of bankruptcy if, in the opinion of the court, such act was due to causes beyond the control of such farmer.
The onus was not placed upon the farmer to prove that the conditions were beyond his control.


Mr. ANDERSON:: The court has not
knowledge of its own; it can only act on evidence, and that evidence has to be supplied by the farmer.


Thomas Clement (Tommy) Douglas: It will have to be supplied by the farmer under this section. The act now says:
In any case where the affairs of a farmer have been arranged by a proposal approved by the court or confirmed by the board as hereinafter provided, part I of the Bankruptcy Act shall notwithstanding section 7 thereof thereafter apply to such farmer but only failure on the part of such farmer to carry out any of the terms of the proposal shall be deemed to be an act of bankruptcy. Provided that such failure shall not be deemed an act of bankruptcy if, in the opinion of the court, such act was due to causes beyond the control of such farmer.


James Earl Lawson: That puts the onus on
the farmer.


Thomas Clement (Tommy) Douglas: It does not
place the onus directly on the farmer.


James Earl Lawson: It places it upon him,
whether directly or indirectly.


Thomas Clement (Tommy) Douglas: I submit that the amendment now proposed will place the same responsibility upon the farmer.


James Earl Lawson: No, because, unfortunately, under the present section you set up a condition precedent before the farmer may be called upon to open his mouth. That condition is that he be in default through causes which are not beyond his control. That is your difficulty.


Thomas Clement (Tommy) Douglas: But I maintain that if you are going to place the responsibility upon the creditor class for initiating these proceedings, they must have some reason for doing so, and therefore the onus should be upon them.


Hugh Alexander Stewart: The only reason the
average creditor would have for taking any action would be that he had an order or agreement providing for the payment of money, and he was not getting it.


Louis-Prudent-Alexandre Robichaud: I do not wish to continue this discussion unduly, because it is more or less immaterial to me how the bill passses; but, as I see it, my suggested amendment would not change the principle of the section one iota. It would simply redraft the section to bring it to conform with legal practice, I think.


Charles Avery Dunning: I indicated earlier in the proceedings that I was more or less in the hands of the committee with respect to this section amending the present provisions of the act. Certainly I have reached a definite conclusion in my own mind, and it is that I would be far better to take the opinion of the creditors outside of this house than to take the opinion of those in this house who are endeavouring to stand by the normal, reasonable rights of creditors. This amending bill has been on the order paper for a very long time. The reprinted bill has been available for two or three weeks, in any event, and I am quite sure that most of the lawyers representing large creditors have obtained copies of it. I have had communications about it from creditors, and without exception they say this is a great improvement, and satisfaction has been expressed.
Frankly I anticipated criticism of this amendment from the other point of view. I anticipated that I would be accused of providing remedies for creditors which did not exist under the present law, and in fact that is the case. A remedy for the creditor is provided in the case of a dishonest debtor, but only in such case. I am willing to have a free vote of the committee on the section. I think we

Farmers' Creditors Act

understand each other fairly well; I believe we understand the different points of view, and I stand by the section as it appears in the bill.	_


[Stage Direction]
Section agreed to.
The CHAIRMAN:: I would remind the committee that section 7 has not been passed.


Charles Avery Dunning: Sections 7 and 8 refer to the same matter. One repeals a section and the other inserts something in place of it.
Section 7 agreed to.


Walter Adam Tucker: I did not know that this was coming up last night and was not in the chamber when it did. I should like with the consent of the committee to ask the minister if there is not any possibility of softening his heart in regard to section 2, dealt with last night, in regard to the debts of farmers who have died. The date set out in section 2 is July 3, 1934. If that date could be put back to the beginning of the depression, say even to 1931, it would help a great deal. A great many people got into their difficulties in 1930, 1931, 1932 and 1933, and it seems to me that if a man died in 1933, and his people are trying to carry on, they should receive some consideration. I do not ask that it be put back for more than about three years; then it would take in a great many people in the west who have been affected by drought conditions. I imagine there would be more than a hundred people in Saskatchewan alone who would benefit if this date were put back about three years. I do not wish to take up further time on the matter if the committee's mind is made up, but it appeared to me that the date of the act coming into force was taken more or less without considering the matter as fully as desirable, and that no harm would be done if the date should be put back to, say, 1931.


Frederick George Sanderson: I would point out that this section was carried last night.


Walter Adam Tucker: I know; I asked the indulgence of the committee to mention the matter.


Frederick George Sanderson: With the unanimous consent of the committee.


Charles Avery Dunning: I understood that my hon. friend did not want to initiate a new debate on the matter but desired to place his views before the committee. I can only say that consideration was given to the point he mentions in setting the date. We must remember that we are dealing with legislation for the whole of Canada. The reversion now provided goes back in fact nearly four years.
51952-ITS}
My hon. friend says it ought to go back seven years, that the estate of a man who died seven years ago should be put in this position. I am afraid that would be going too far. I gave a great deal of consideration to the matter, to the representations of the chairmen of the boards of review with respect to it and to those of representatives of farmers' organizations, and I am quite sure that in establishing the date as that of the coming into force of the original act I am meeting ninety per cent of the representations that have been made to me with respect to the matter. I say that by way of explanation.
Now, Mr. Chairman, I believe there is just the preamble to carry.
On the preamble.


Hugh Alexander Stewart: I should like to say just a word in regard to section 8, which inserts section 10A into the bill. In the third line on page 4 of the bill are the words "if the farmer defaults." The minister quite properly thought it necessary to amend a former section in connection with the use of the word "farmer," and under this amendment propositions might be made by persons other than farmers.


Charles Avery Dunning: Applicants.


Hugh Alexander Stewart: I think a corresponding change should be made in this section.


Charles Avery Dunning: If the debtor defaults.


Hugh Alexander Stewart: Exactly. I think that
would widen it.


Charles Avery Dunning: This illustrates how useful it is to have a lawyer on this committee. The suggestion is that the word "farmer" in the third line on page 4 be struck out and the word "debtor" be substituted therefor.


Charles Edward Bothwell: Would the minister be good enough to read the definition of "debtor" as given in the original act?


Charles Avery Dunning: If we had only one
lawyer we would be all right.


Charles Edward Bothwell: It seems to me that "farmer" is the correct word.


Charles Avery Dunning: There is no definition of "debtor" in the act.


Charles Edward Bothwell: The word "farmer" has been used all through the act, and it presupposes that a man must be living on and farming the land before he is entitled to the benefits. It does not refer to the ordinary debtor as the public understands the word.
Pelagic Sealing


Hugh Alexander Stewart: We have extended the act to include executors, who were not provided for in the original act. Under a scheme of this kind there might be executors who were not farmers at all.


Charles Edward Bothwell: Would it not be better to use ''farmer" or "personal representative?"


Hugh Alexander Stewart: Anything to widen the
definition. "Personal representative" would be all right.


Charles Avery Dunning: The word "farmer" occurs again in the same section. Having two legal advisers causes a little confusion.


Mr. DUFFUS:: The remarks made by the hon. member for Swift Current bring to my mind a particular case of a gentleman in Ontario who owns many sections of land in Saskatchewan. For years this man has lived in Saskatchewan most of his time. Recently he has been going west in the spring at seeding time and again at harvest time. He has paid almost 8100,000 in interest and taxes. Prior to 1930 he paid his interest and taxes in full. His case is now before a board of review, and some of his creditors are endeavouring .to establish that he is not a farmer under the act. I think the committee should clearly establish his standing in that respect.


Charles Avery Dunning: If that case is before
a board of review I do not think this committee can be of any assistance in the matter. It is under consideration by a board in pursuance of the law, and I do not think we could render a judicial decision. After listening to the hon. member for Swift Current, I believe we had better leave the word "farmer" alone. The definition of a farmer is given as one who tills the soil.


[Stage Direction]
Preamble agreed to.
Bill reported.


[Stage Direction]
The house resumed, from Tuesday, April 26, consideration in committee of Bill No. 98, respecting the North Pacific Pelagic Sealing Convention-Mr. Michaud-Mr. Sanderson in the chair.
On section 8-Pelagic sealing by Indians.
Hon. J. E. MICHAUD (Minister of Fisheries) :: I should like to offer an amendment to this section, that the last words in the section "and shall be forfeited to His Majesty" be

deleted and the words "and shall be liable to forfeiture to His Majesty as hereinafter provided" be substituted therefor.


Clarence Decatur Howe: I move accordingly.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 9 and 10 agreed to.
On section 11-Penalty for violation.
Joseph Enoil Michaud: There is a proposed
amendment to this section, to add as subsection 2 the following:
Where any property is seized in respect of an offence against the provisions of section 8 of this act and a conviction is made in respect of such offence the justice making the conviction may adjudge and order as forfeited to His Majesty for the public uses of Canada the property so seized: provided that such property shall not be disposed of pending any appeal or any proceeding in which the right of seizure is questioned or before the time in which such appeal or other proceeding may be taken has expired.


Clarence Decatur Howe: I move accordingly.


[Stage Direction]
Amendment agreed to.
Hugh Alexander Stewart: As I recall it, there was some suggestion that this clause might be amended to read in this way:
Every person guilty of an offence against this act or of a contravention of any regulation shall be liable upon summary conviction . . .
And so forth.
. . . unless some other penalty is provided by this act.
Is there not another penalty? That was the suggestion at the time.


Joseph Enoil Michaud: That amendment has been before the committee.


Mr. NEILL:: Was there not some suggestion made by the leader of the opposition that some such amendment would be necessary because of section 6, which provides a different penalty, two years' imprisonment, and so on?


Hugh Alexander Stewart: Exactly.


Frederick George Sanderson: There was an amendment to clause 11 which was carried.


Hugh Alexander Stewart: What was the amendment? Was it adding some words in the same line of clause 11?


Frederick George Sanderson: The amendment was carried, but I shall read it again. It was to add after the word " shall " in the second line the following: " Unless some other penalty is expressly provided therefor in this act."
Section as amended agreed to.
Bill reported.

C .N.R.-R e funding



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Finance) moved the second reading of Bill No. 107, respecting the Canadian National Railways and to provide for the refunding of matured, maturing and callable financial obligations.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Sanderson in the . chair.
On section 1-Short title.
Charles Avery Dunning: Mr. Chairman, there
was a very full discussion of the general principle of the bill on the introduction of the financial resolution. At that time some questions were asked by various members of the committee. I have before me a mass of information, and if hon. members would be good enough to repeat their questions, some of which interlock, I shall be very glad to answer them as we proceed with the various clauses.


[Stage Direction]
Section agreed to.
On section 2-Power for refunding.
Hugh Alexander Stewart: Has the minister put on Hansard a record of the maturities that he proposes to refund under this section?


Charles Avery Dunning: They were put on Hansard as part of the record when the resolution was under consideration. I have not checked up the record since. I have not the Hansard before me; but if my hon. friend, who has Hansard in his hands, would be good enough to look further on in the discussion, he will find the list there.


James Earl Lawson: Was that the list which
amounted to $280,000,000?


Charles Avery Dunning: I cannot say as to the
total amount, but it was a complete list of maturities up to, I think, 1942.


Hugh Alexander Stewart: The last part of clause
2 reads as follows:
. . . securities ... as defined in chapter ten of the statutes of Canada, 1929, and/or of any company or companies controlled through stock owmership by any company comprised in Canadian National Railways.
What is the scope of that? Would that include any of the very, very long list of companies that-?


Charles Avery Dunning: Yes. It is the same
provision as has been in every one of the preceding acts.


Hugh Alexander Stewart: But it would cover any
of the securities in any of that long list of companies that are controlled by the Canadian National Railways?


Charles Avery Dunning: It covers the list of
securities as shown in the annual report of the Canadian National Railways system.


Hugh Alexander Stewart: The minister has not
the page reference?


Charles Avery Dunning: The hon. member will
find it in Hansard. I am advised that the list is contained on page 2329, April 28, "Maturities by years." The list is there, covering the whole of the securities which are dealt with by legislation.


[Stage Direction]
Section agreed to.
On section 3-Issue of substituted securities.
Hugh Alexander Stewart: The amount here, 1
notice, is 8200,000,000, whereas the amount of the securities mentioned in the list read into Hansard is apparently in excess of that.


Charles Avery Dunning: Yes, but we are not expecting that my hon. friends would be willing to give us authority to deal blanket-wise with the whole issue of outstanding securities. The amount in the previous legislation of 1935 was $200,000,000, and I did not think it would be wise to ask for authority greater than that which was given on that occasion. As I indicated in the discussions on the financial resolution, the power then given has been utilized to the extent of within, I think, five or six million dollars-in that neighbourhood, anyway. As I further indicated, the interest savings effected amount to over $3,500,000 annually as a result of the refunding effected under authority of the last statute, which this one seeks to replace. I did not think it wise to ask for authority for more than $200,000,000, and I doubt if there would be a willingness to extend it.


Hugh Alexander Stewart: There is no'limit on the time during which this refunding may be arranged, is there?


Charles Avery Dunning: No, except that maturities within the next few years amply exhaust the authority.


Mr. STIRLING:: This year, I see, there are $21,000,000 of issues maturing, and next year there will be nearly $36,000,000?


Charles Avery Dunning: Yes.


Grote Stirling: Does the minister contemplate proceeding right away with such schemes under this authority?
C.N.R.-Refunding


Charles Avery Dunning: It is difficult to answer that question. Arrangement of time and place of maturity is necessarily one of our most valuable assets in, disposing of matters of (this kind, and I should not like to indicate in advance to the holders of bonds or to the market that anything might be done on a particular date. I have found it of advantage to move rather suddenly in such matters.


Grote Stirling: When things are all propitious?


Charles Avery Dunning: Yes. My hon. friends who were questioning the amount will notice there are bonds maturing or callable before December 31, 1943, amounting to $207,600,000, which exceed the authority here given.


[Stage Direction]
Section agreed to.
On section 4-Approval of governor in council.
Charles Avery Dunning: The same provision.


Hugh Alexander Stewart: Is there anything different in this from what has been found in the preceding legislation?


Charles Avery Dunning: I shall just make sure. Section 4 is identical.


[Stage Direction]
Section agreed to.
Section 5 agreed to.
On section 6-Cancellation and cremation of original securities.
Hugh Alexander Stewart: It is all consequential
upon the sale?


Charles Avery Dunning: Yes.


[Stage Direction]
Section agreed to.
On section 7-Loans authorized to National company not exceeding aggregate amount of $200,000,000.
Hugh Alexander Stewart: This is a similar provision to the one in the former legislation?


Charles Avery Dunning: Yes. Subsection 2 is
new. and makes it quite clear that if the dominion government makes a temporary loan, securities of the railway company guaranteed by the dominion may be issued to pay for the temporary loan. That has always been done, in any case, and this is to make it clear that there is no question about the authority.


Hugh Alexander Stewart: The minister was good enough to say that he was prepared to read into Hansard the answers to the questions of certain hon. members, and if he will be

good enough to do that in respect of any who are absent to-day I think it would be satisfactory'. I understand that the leader of the opposition and the hon. member for Danforth asked for certain information, also the hon. member for Rosthern.


Charles Avery Dunning: I think the information asked for was, in most instances embodied in the table which I got the permission of the house to insert afterwards in the proceedings, on the last occasion. I believe that on April 28 the whole table of all the securities issued was included in those proceedings. I do not know of any other specific question, except that the hon. member for Comox-Alberni asked about the guarantees given by the province of British Columbia. The hon. member was under the impression that some arrangement had been made whereby the province was relieved of that obligation. I have ascertained that no such action has been taken. There is no relieving of that province of obligations any more than any of the other provinces that have guaranteed, and as a matter of fact in the last provincial accounts the amount guaranteed is shown by the province as a contingent liability. That answers the question of the hon. member for Comox-Alberni.


Hugh Alexander Stewart: I assume that the interest on those obligations has been paid by the dominion.


Charles Avery Dunning: There is no question about that. The leader of the opposition asked for information regarding the latest Canadian National Railways bond issue. I have before me a complete memorandum showing the transaction in detail, which I shall read into Hansard if I may.
Subscription lists were opened on January 10, 1938, for a $50,000,000 Canadian National railway company dominion guaranteed bond issue. The issue was comprised of four-year two per cent bonds dated January 15, 1938, and due January 15, 1942. The issue price to the public was 99-25, yielding 2-20 per cent to maturity. There were also thirteen-year three per cent bonds dated December 15, 1935, and due December 15, 1950. The issue price to the public was 97, yielding 3-29 per cent to maturity. Net prices to the company were 99 for the four-year bonds and 96-25 for the thirteen-year bonds, or a cost to the company of 2-27 per cent and 3-36 per cent respectively. The issue was over-subscribed and the books were closed at 10.15 p.m. on the offering day. Allotments were made as follows:	four-year bonds, $20,000,000, and

C.N.R.-Refunding
thirteen-year bonds, $30,000,000. The proceeds of the issue, totalling $48,675,000, were used in repayment of temporary loans obtained from the government for capital expenditures and the retirement of miscellaneous obligations.
I shall detail in Hansard what repayments were made. I can read it at the moment, but I can get it more intelligently in tabular form later. In round figures, the 1932 loan of $8,077,000 carried an interest rate of 5J per cent. The 1933 loan of $8,228,000 carried an interest rate of 4} per cent. On the 1934 loan by the company to the government of $10,-
747,000	the interest rate was originally 4J per cent. On the 1935 loan of $7,293,000 the interest rate was originally 4 per cent. With respect to this group of four loans, the interest rate as between the government and the Canadian National railway company was reduced to 3J per cent as from January 1, 1937; that is, a little over a year ago a readjustment in the rate was made to bring it more in conformity with the cost of money to the government than the rates formerly in existence, from the time the loans were originally made by the treasury to the Canadian National Railways. On the 1936 loan of $7,011,000 the rate was 3J per cent from its inception, and on the 1937 loan of $7,317,000, the rate was 34 per cent from its inception. So that the total repaid by the company to the government as a result of the floating of this guaranteed issue was $48,675,000. The amount of discount on the new issue, $2,325,000, was paid to the government from working capital of the company, reducing still further the amount advanced under the 1937 Financing and Guarantee act. The amount of temporary loans remaining unpaid as between the company and the government, on the books of the dominion at March 31 of this year, was $2,392,000.
The table follows:
1932		$ 8,077,338 33 interest rate 51%*
1933	
8,228,101	10	"	"	4f%*1934	
10,747,973	98	"	"	4J%*1935	
7,293,065	84	"	"	4 %*1936	
7,011,230	75	"	"	3J%1937	
7,317,290	00	"	"	3i%______	$48,675,000 00
'Reduced to 3J% as from Jan. 1, 1937.


Hugh Alexander Stewart: Are the rates mentioned by the minister those at which the government borrowed money at that time?


Charles Avery Dunning: I believe that was the basis used, generally speaking, in determining the rate of loans. Of course, it is not anticipated generally that amounts will be
allowed to be outstanding as between the treasury and the company on capital accounts over long periods of time. But in adjusting the financing of railway obligations to the general volume of national financing, it is necessary sometimes to defer refundings which otherwise might have been made at an earlier date, and so we have this accumulation for four years. The interest rate situation was reviewed and the rate reduced, as I have indicated, to 3J per cent, which was approximate to the effective rate; I believe there was a differential, but it approximated the rate at which the government was borrowing money. Then the whole matter was cleaned up by the issue which was made on January 10, 1938, leaving a small balance of $2,392,000 odd outstanding as between the Canadian National Railways and the government as at the end of the last fiscal year.


Grote Stirling: Has the minister handy a reply to the question of the hon. member for Danforth as found at the bottom of page 2343 of Hansard:
I therefore repeat my question, What portion of this $200,000,000, which is part and parcel of the $978,000,000 at present guaranteed . . . originates with the provinces, and what portion consists of bonds of a kind to which no dominion or provincial responsibility or guarantee or mortgage is attached.


Charles Avery Dunning: Obviously I cannot answer that question literally because the questioner asks what portion of the $200,000,000 will be used for this purpose. The $200,000,000 is under a general authority and may be used for refunding any one of several issues depending upon whether or not we exercise our right to call certain perpetuals. If we exercised our right to call the four per cent perpetuals, that would involve one kind of answer, whereas if we did not exercise our right to call the four per cent perpetuals, obviously the $200,000,000 authority would extend over a longer period and embrace a wider list. As a matter of fact, has not the information been already put on Hansard?


Grote Stirling: I see there is a table at page 2331.


Charles Avery Dunning: On pages 2329 to 2331 the figures are set out showing in each case the source of the guarantee. If it is a dominion guarantee, it is there stated; if it is provincial, the province is indicated; and if it is unguaranteed, there is no notation in the column headed " Guaranteed by."


Grote Stirling: That probably answers the question.


[Stage Direction]
Preamble agreed to.
Bill reported.
Natural Resources


[Stage Direction]
Right Hon. ERNEST LAPOINTE (Minister of Justice) moved the second reading of Bill No. 106, to amend the Manitoba Natural Resources Act, the Alberta Natural Resources Acts, and the Saskatchewan Natural Resources Acts.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Sanderson in the chair.
On section 1-Short title.
Grote Stirling: Was there considerable
discussion during the resolution stage?


Mr. LAPOINTE (Quebec East):: The purpose of the bill was explained. This bill is to confirm supplementary agreements which have been signed by the dominion government, represented by the Minister of Mines and Resources (Mr. Crerar) and by the provinces of Alberta, Saskatchewan and Manitoba. Under the statutes transferring the natural resources to the three western provinces the interests of the dominion in all lands, mines and minerals were transferred to the crown in the right of the respective provinces. But apparently some doubt has been raised in the minds of some of the provincial authorities as to whether it is clear that the transfer included the waters and water powers. This bill is merely to remove those doubts. The agreements have been signed by the three provinces and by the Minister of Mines and Resources, and the legislatures of the three provinces have confirmed the agreements. There cannot be any change accorded to them, and we are not losing anything. It is rather to accede to the wishes of the legal officers of the provinces so that no doubt should exist.


Grote Stirling: It has no reference to
anything in the national parks?


Mr. CRERAR:: No. The agreement covers just the point mentioned by my colleague the Minister of Justice, and another one relating to conservation of gas and oil in the Turner valley. The first point is to make it clear that waters and water powers were transferred to the provinces when the natural resources generally were transferred. I think our law officers held that the water powers and waters are included in the term "lands"; but apparently there is some doubt in the
IM>. Stirling,]
minds of the legal officers advising the provinces of Alberta and Saskatchewan particularly, and to put the matter beyond any question the supplementary agreement was entered into.
On the other point, as to conservation, the transfer provided that resources which had been alienated or disposed of by the federal government by contract or licence prior to the transfer should not be disturbed except by regulations or changes which would apply generally throughout the province. That, I assume was to guard against any possibility of discrimination. However, it was found by the Alberta government that it was desirable to put into effect certain conservation policies in the Turner valley, which, as hon. members know, is the site of a crude oil field in Alberta. The first drillings developed gas, from which naphtha and some other oils were taken. Later the crude oil field developed. But the value of the crude oil wells depends in a large measure upon the pressure of gas that may be retained several thousand feet down in the earth. The Alberta government wished to put into effect a policy which would conserve or control the escape of this gas; that is, that they could say to individuals or companies, You must take steps to prevent this gas from escaping and thus lowering the pressure. In 1932 the Alberta legislature passed an act, known as the Turner Valley Gas Conservation Act, to effect this purpose. According to the information supplied to me, at least ninety per cent of the operators in the Turner valley favoured that legislation; but there were one or two, one particularly, who took exception to it. The question was carried to the supreme court, and the supreme court declared that under the transfer agreement the province did not have the power to make such regulations unless it made them to apply generally over the whole province. So there was a condition that, for instance, in another oil field at Wainwright the province did not wish to apply these particular policies of conservation because it was thought the result would be detrimental to the operators. Consequently what is sought in this bill is to modify or change the agreement, giving the province of Alberta the power to deal with this particular condition which exists in the Turner valley. According to the information given to me, as I have stated, that commends itself to the judgment of an overwhelming majority of the operators in the Turner valley. Only one or two take exception to it. The technical officials of the Department of Mines and Resources have examined into the matter, and they commend

Natural Resources
it strongly as a necessary step to maintain as long as possible the life of this Turner valley oil field.


Grote Stirling: The operators believed
in decentralization?


Thomas Alexander Crerar: It might be put in that
way.


Hugh Alexander Stewart: I assume that over the
period of years while these resources were administered by the dominion, before being turned over to the provinces under the prior agreements referred to in the bill, obligations must have been incurred from time to time and contracts entered into by the dominion government and rights created. When the resources were turned over to the provinces and these agreements made, were there any outstanding obligations on the part of the dominion which parties might ask the dominion to enforce, although the resources have been turned over to the provinces; or have the provinces assumed all obligations into which the dominion entered?


Thomas Alexander Crerar: The latter is correct.


Hugh Alexander Stewart: Then I assume there is
provision in the other agreements that the provinces undertake to fulfil all obligations of the dominion in respect of these resources?


Thomas Alexander Crerar: Yes; I think that is contained in the original agreements. The point at issue is this: There is no doubt that the Alberta legislature can apply conservation policies in the Turner valley, provided they are also applied generally over the whole province. But that would operate detrimentally to the operators, say in the Wainwright field, according to advice given to me. Consequently what is sought in reference to this point is to endow the Alberta government through its legislature with the power to set up conservation policies in this particular area where they are very much needed. I can assure the committee that I think the legislation is necessary.


Hugh Alexander Stewart: What right would this central government have in respect to the matters to which the minister has referred? If we have any rights, how can we delegate them, if the jurisdiction is still vested in this parliament? I would be under the impression that this parliament has no jurisdiction whatever in the matter which the minister has mentioned. But if I understood him correctly he suggests that the effect of this agreement will be to release or relinquish any rights this parliament has with respect to this control, and vest them in the province. Am I right?


Ernest Lapointe: By a paragraph of the original transfer agreement,
which has been ratified by the imperial parliament, it was agreed that the provisions of the said agreement might be varied by an agreement confirmed by concurrent statutes of the parliament of Canada and of the legislature of the province. Therefore there is no doubt that we can vary the original agreement by concurrent legislation, and this has the force of law by an act of. the parliament of the United Kingdom. We are authorized to vary without going back to that parliament.


Hugh Alexander Stewart: Does this vary the original agreement in any way?


Ernest Lapointe: It is supposed to, in the case of the Turner valley. In the other case it is merely the removal of a doubt.


Hugh Alexander Stewart: I just want to find out what rights were left with this government in connection with the Turner valley.


Ernest Lapointe: I cannot add anything more to what my hon. friend has said in that connection.


Thomas Alexander Crerar: I have probably failed to make my point clear. The Alberta government, through the legislature of that province, can bring in conservation regulations, if I may describe them in that way, but under the original transfer agreement those regulations must be made to apply generally over the whole province. What they wish is to obtain power to pass regulations not applicable to the whole province; in other words, they wisli regulations to apply to a particular area because in a peculiar way that area requires them. Under the judgment of the supreme court in 1933 they have not that power. As a matter of fact, the Alberta legislature thought it had the power, and the previous government of that province passed the act to which I referred a moment ago, dealing with the conservation of the Turner valley gas. The court here, however, held that the legislature did not have power to pass such an act unless it applied generally over the whole province, which was not what they desired. This amended agreement seeks to give the government of Alberta, through its legislature, power to make regulations which may apply only to the Turner valley situation.


Hugh Alexander Stewart: It is a difficult point.


Ernest Lapointe: May I add this, which I read in the agreement with Alberta, with regal'd to the matter of the Turner valley:
-by paragraph 2 of the said natifral resources transfer agreement the province agreed that it would carry out, in accordance with the terms thereof, every contract to purchase or lease any crown lands, mines or minerals and
Railway Act-Snow Fences

every other arrangement whereby any person had become entitled to any interest therein as against the crown, and further agreed not to affect or alter any term of any such contract to purchase, lease or other arrangement by legislation or otherwise, except either with the consent of all the parties thereto, other than Canada, or in so far as any legislation may apply generally to all similar agreements relating to lands, mines or minerals in the province or to interests therein, irrespective of who might be the parties thereto;-
In other words, the Dominion of Canada bound the province at the time so that the province would not alter any term of any contract with any party unless all the parties were agreed or unless such alteration by legislation would apply generally to all agreements relating to lands, mines or minerals, irrespective of the place or the person affected. Apparently this worked some injury in that particular district, and paragraph 2 is to be amended by adding these words:
-or is legislation relating to the conservation of oil resources or gas resources or both by the control or regulation of the production of oil or gas or both, whether by restriction or prohibition and whether generally or with respect to any specified area or any specified well or wells or by repressuring of any oil field, gas field or oil-gas field, and, incidentally thereto, providing for the compulsory purchase of any well or wells.
That will enable the province to make new arrangements with regard to certain wells in a specified area, which it could not do under the original agreement.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Schedule agreed to.
Preamble agreed to.
Bill reported.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


[Stage Direction]
Mr. A. B. DAMUDE (Welland) moved the third reading of Bill No. 15, to incorporate Niagara Falk Observation Bridge Company.
Mr. J. R. MacNICOL (Davenport):: May I express the hope that the senate will give this bill its considered judgment the same as was done by this house.


Walter Edward Foster: The hon. gentleman is
out of order.


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


[Stage Direction]
Mr. OSCAR L. BOULANGER (Bellechasse) moved that the house go into committee on Bill No. 5, to amend the Railway Act.
Motion agreed to and the house went into committee, Mr. Sanderson in the chair.
On section 1-Snow fences.	'
Clarence Decatur Howe: I am entirely in accord with this bill except in one respect. This bill amends a very important act, and for that reason it has been scrutinized closely by the law officers of the crown. The fear is that amendments of this type will alter the basic character of the Railway Act. While this bill was in committee, the word "land" in line 12 was struck out. The law officers feel that if this amendment is allowed to stand it will set a precedent and have the tendency to turn the railway board into a court for small claims. The board does deal with land damages, and if the word "land" is allowed to remain in the bill, the provisions of the bill would be consistent with the purposes for which the board was created. Therefore, I would ask my colleague, the Minister of Mines and Resources, to move that section 1 of Bill No. 5, to amend the Railway Act, as reported by the committee on railways, canals and telegraph lines, be amended by inserting the word "land" before the word "damages" in line 12, page one of the said bill.


Thomas Alexander Crerar: I move accordingly.


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


[Stage Direction]
On the order:
House in committee on Bill No. 6, to amend the Government Railways Act (as reported from the standing committee on railways, canals and telegraph lines, recommended that the bill be not proceeded with).-Mr. Boulanger.
Mr. OSCAR L. BOULANGER (Bellechasse): Mr. Speaker, I would ask for permission to withdraw this bill.
Bill withdrawn.

Immigration Act


[Stage Direction]
On the order:
Resuming the adjourned debate on the motion o£ Mr. Cahan for the second reading of Bill No. 19, respecting appeals to the judicial committee of the privy council.
Charles Hazlitt Cahan: Mr. Speaker, as the hon. member who moved the adjournment of the debate (Mr. Finn) is not present this evening, perhaps this bill may be permitted to stand by consent and still retain its place on the order paper.
Order stands.



IMMIGRATION ACT


[Stage Direction]
The house resumed from Friday, March 11, consideration of the motion of Mr. Neill for the second reading of Bill No. 38, to amend the Immigration Act.
Alan Webster Neill: Mr. Speaker-


Walter Edward Foster: I would direct the attention of the house to the fact that should the hon. member now speak he will close the debate.


Alan Webster Neill: I rise to a point of order. There has been a misunderstanding about that. When this bill was up before, the order was called and I nodded my head, indicating that I was ready, and your honour put the motion for second reading. I was just about to rise to speak, as was my right, when I heard the clock striking nine o'clock. Knowing that the rules did not permit any debate after nine o'clock, I did not commence my remarks, feeling confident that you would protect me. At that moment the hon. member for Cariboo (Mr. Turgeon) made some remark to the effect that he would move the adjournment of the debate on this bill which was closely allied to another bill. His statement that this bill was allied to another bill was so ridiculous that I took it as a jest, and in a jesting manner I said that I would rise to a point of order as they were not allied. If the hon. member had said that the moon was made of cheese, I would not have interrupted him because that would have been his privilege. According to the rules no practical debate can take place after nine o'clock. I am in the hands
of the house, but with all due deference I submit that I should be permitted to speak on the second reading of this bill which I am sponsoring.


William Lyon Mackenzie King: The impression on this side of the house was that the hon. member had moved the second reading of his bill and expected the vote on it to come immediately. He has just told us that such was not his intention, but that he had intended to speak and would have proceeded to do so but for the action of another hon. member in moving the adjournment of the debate. I am sure the house will be quite prepared to accept my hon. friend's statement and allow him to proceed with the second reading.


Alan Webster Neill: I thank the house and the Prime Minister for his courtesy. There is no doubt that technically, according to the record in Hansard-


William Lyon Mackenzie King: There was no disposition at all to close off the discussion.


Alan Webster Neill: Mr. Speaker, in moving the second reading of the bill I wish to discuss it.


Walter Edward Foster: It would be well if, before the hon. member moves the second reading, the order now standing for resuming the adjourned debate be discharged. It is mentioned in the orders of the house as: "Resuming the adjourned debate on the motion of Mr. Neill for the second reading of Bill No. 38, an act to amend the Immigration Act."


William Lyon Mackenzie King: I move:
That the order for resuming adjourned debate on second reading of Bill No. 38 be discharged and an order for the second reading of the said bill be substituted therefor.


[Stage Direction]
Motion agreed to.
Mr. A. \V. NEILL (Comox-Alberni) moved the second reading of Bill No. 38, to amend the Immigration Act.
He said: Mr. Speaker, the number of this bill is 38, and its title, "an act to amend the Immigration Act." It has no connection whatever, express or implied, with Bill No. 11, although some member made some comparison between the two, but there is no connection at all. Bill No. 11, if you compare it with this bill, might be allied in the sense that two people travelling in the same train to a common destination could be said to be allied, although they would hardly be called allies because they might be utterly antagonistic in aim and outlook.
Bill No 11 is an act respecting Japanese immigration, and it definitely and specifically,
Immigration Act
[Stage Direction]
by name, excludes Japanese nationals from entering Canada. The word "excludes" is not used, but that is the effect, and it is admitted to be so.
Bill No. 38, which is now before the house for second reading, and is an act to amend the Immigration Act, has nothing to do with that at all. It makes no reference to excluding anybody by name or by race. It does not even restrict orientals alone but applies to seventy-four per cent of the world's population, comprising many races, and, of course, an enormous population. It does not even stop them from entering Canada if they comply with certain conditions laid down in the bill.
I shall now explain the bill. It amends the principle that has been in our Immigration Act now for twenty-five years. I refer to section 3 of the Immigration Act, chapter 93 of the revised statutes of Canada, paragraph (t) of which provides that among those who are prohibited immigrants are those over fifteen years of age physically capable of reading who cannot read the English or French language or some other language or dialect. That is our law to-day and has been for many years. This bill simply goes a very little further, makes a very fair amplification of the same principle, and says in addition that the language which they use must be commonly spoken by and native to the people of some country or some political division in Europe. That is the only change it makes. It only brings us in Canada into line with Australia and New Zealand, of which I shall speak later.
Moreover, this is what I might call a legislative olive branch. When the Prime Minister (Mr. Mackenzie King), speaking on the second reading of Bill No. 11, indicated the opposition of his government to that bill, I considered the situation. In politics I think it is a good axiom, when you cannot get the right remedy for the grievance of which you complain, while not relaxing your determination to get it, to accept such minor measure as you can get as a palliative for the time being, and use that as a stepping-stone to obtain a greater measure of justice which no doubt time will bring. So in this bill I gathered up all the objections, all the prejudices, all the propaganda, all the opposition to Bill No. 11, and I said: I think the government is wrong; but the government is in the majority, and the government majority must rule. Therefore let us abandon this bill for the moment until the government is perhaps better informed by the result of a general election-
Charles Avery Dunning: Is Bill No. 11 abandoned?


Alan Webster Neill: For the moment. We are dealing now with Bill No. 38. So I said: Let us wait until the government is better informed as a result of a general election, which in British Columbia at any rate will show very definitely what the wishes of the people are. My definition of democracy-it may be a wrong one-at least contains this provision, that the government, those who govern, should govern according to the wishes of the governed, provided that their wishes are sufficiently and definitely and legally expressed. And so we say: Abandon for the moment the proper principle contained in Bill No. 11 and adopt this lesser measure of a totally different kind, which will in some measure placate the people of British Columbia, whose views have been expressed very plainly.
I hold in my hand a summary of the presentations made by the Pattullo government of British Columbia to the Rowell commission. It summarizes fifteen important items, and the one which they apparently deemed of sufficient importance to put first is this:
Oriental immigration into Canada should be prohibited, and as many orientals as possible returned to their home countries.
Then here I have a resolution passed within the last few weeks by the council of the city of Vancouver, a Conservative minded body. This is not the chronic obsession of some solitary member, but expresses the feeling of the people of British Columbia as reflected in a resolution passed by the city council of the largest city in the province and the third largest city in Canada. They ask that the dominion parliament enact legislation to prevent a further influx of these people into . our country.
This bill asks nothing like that at all. It does not ask that these people should be sent home or that they should be excluded, it asks simply that the immigrants shall be restricted to those who can read the language indicated. While I am anxious to secure the best that can be obtained for the people of British Columbia, in friendliness to the government, too, I should be glad to see them accept this bill because it is a way out of the unpopularity that will accrue to them if they reject Bill No. 11 without accepting some reasonable substitute.
It is customaiy, in introducing a bill, to anticipate the objections that will be made against it and to defend the bill against such attacks, but in this case I am at a loss because I do not see how anybody can object to this bill. I cannot see in it anything to which anyone could take exception.

Immigration Act
One of the charge? made against Bill No. 11 was that it was aimed at Japan, and certainly it was. But this bill is nothing of that kind at all. Japan is not mentioned first or last, neither directly nor indirectly, nor by inference. The restriction is entirely general, and general to such an extent that, as I say, it applies to seventy-four per cent of the world's population. The most sensitive pro-Jap advocate could not find any loophole for complaint in this bill.
Another objection made was that it touched the pride of the Japanese nation; that the word "exclusion" was antagonistic to their pride. That expression which I have heard for the last seventeen years is a mere subterfuge, a mere diplomatic phrase, that is trotted out when it suits them. It is wholly incompatible with what we have observed of their ideals in diplomatic and other fields, of their sense of their obligations, and so forth. It is a mere phrase used where convenient. However, I am willing for the moment to accept it at the face value. It utterly falls down as applied to Bill No. 38, because this bill contains no reference to exclusion. Under the bill, in fact, it is impossible totally to exclude anybody, because it leaves the door open to those who can read the English or French language; we go further in our gracious hospitality, and we will take in anyone, even from the continent of Europe, who can read any language that is current there. Surely that is neither a hard nor an unreasonable condition considering the condition of the world to-day; and it is of almost universal application.
Another argument was-I have heard it again and again, and I have heard it cited by the Prime Minister-that Japan particularly objected to that phase of any exclusion because it was aimed at them specifically. They said they would not mind at all if it was general and took in all nations; but their pride, or what they call their pride, was touched because they were specifically named. If that is the case, this bill is right into their hand; it should suit them. We do not exclude anybody, but we restrict immigration- from where? From India-our own vast domain of India-from China, Japan, South America, the Malay peninsula and those countries in the neighbourhood, Siam and Borneo, constituting a large number both in races and in population. In 1922, when the restriction resolution was before the house, the Hon. Charles Stewart was minister of immigration. The resolution called for the exclusion of orientals. Mr. Stewart introduced an amendment which struck out the word "exclusion" and substituted the words "effective restriction."
I asked the Prime Minister of the day, who was the same gentlemen who now occupies that position, if we could understand by that such a measure of restriction as, for instance, was used in Australia, and he assured me that that would be the case. I have the quotation if it is needed. Well, we have not got so far yet. Sixteen years have passed; we have been looking for a phrase to meet the situation, and I suggest we have it now. This bill does that. It gives us an effective restriction equivalent to that in Australia without using the words "total exclusion."
We have precedents. The lawyers are great on precedents; they want to go slow until they see that a thing has been done before. We have a precedent of our own. For twenty-five years an educational test has been administered to people coming in. We have the precedent of Australia. This is what the Australian act says with regard to prohibited classes:
Any person who fails to pass the dictation test:
That is to say, who, when an officer or person duly authorized in writing by an officer dictates to him not less than fifty words in any prescribed language, fails to write them out in that language in the presence of the officer or authorized person.
It will be noticed that this goes much further than my bill, because it meahs any language at all, whereas I would be satisfied with any language of Europe. Their law requires any language prescribed by the government, and the government always takes great care to prescribe a language in which the immigrant cannot qualify. For instance, if he can speak six languages they would try him with the seventh, in which he would be bound to fail. I may say that in New Zealand the law is the same, but with this difference, that there they allow anyone to qualify if he can write fifty words in any language of Europe, whereas in Australia it is just "any language."
There is an incident connected with that which may be of interest to our Scotch friends in the house. Originally in Australia the words were also "any language of Europe"; but apparently some Scotsman got himself appointed inspector, and from some weird sense of humour he set a Chinaman to write out fifty words in Gaelic as being a prescribed language of Europe. The case will be found in the law books of 1905, Rex v. Wilson. But the Supreme Court of Australia decided that Gaelic was not a "language of Europe," very much t'o the disgust of the Scotch contingent, and there was very nearly a revolution. Kilts were donned and sporrans
273S
Immigration Act

were waved-or whatever you do with sporrans-claymores were drawn and the fiery cross was sent abroad in the land. The government realized the danger of the situation, and capitulated, and at the next session of the house they changed the act to read "any language," which allowed the Gaelic brand of language to be used also. But in New Zealand it is "any language of Europe," and that is all I ask in connection with this bill.
Take another precedent, affecting the East Indians, those who live in India. They are our own fellow citizens, and some of them qualify ethnologically as being Aryans and therefore white men; but we prohibit them from coming into Canada, and the way in which we do it is by the barest subterfuge. We say they cannot come in unless they come in a ship proceeding directly from the port of embarkation to the port of debarkation in Canada, and moreover they must come on a through passage ticket. Then we take steps to see they cannot get a through passage ticket. It is done as simply and obviously as that. They might complain about it; but still that is the way we do it; that is the precedent.
I cannot think of any other objection. It is sanctioned by our own immigration law; it is sanctioned by our custom as regards the East Ihdians; it has been the law of New Zealand and Australia for at least thirty years. As I said, it is an olive branch, and it is also a test of the sincerity of the Japanese who are opposing this bill. We have met every objection to Bill No. 11, and have obviated it-. I ask the house to note also that there is in the bill a provision that it will not come into effect until July, 1939, which gives ample time for the amenities of diplomacy to come into operation and also to make such arrangements that immigrants on the water would not be incommoded, but would have ample time.
To sum up; the law is of general application. It has been in force thirty years in the sister dominions of New Zealand and Australia. It is merely idle talk to say that we must not do this lest we offend one small nation comprising seven per cent of seventy-four per cent of the world population, and now subject to a similar restriction in these other dominions. If the house, and of course the government, will accept this bill I would be willing, with the consent of those hon. members who have promised me their support of Bill No. 11, to withdraw it. But I would say this to the government: British Columbia wants Bill No. 11 and will not be satisfied until

she gets it, and she will get it after she has expressed herself sufficiently strongly at the election. But for the moment this bill would meet the situation and would meet a very serious situation in British Columbia. I cannot too strongly impress upon the house and the government how serious that situation is. It is all very well as long as things are going along smoothly, but there is a very strong and bitter undercurrent about this matter. You may gauge its importance when you find the city council of Vancouver taking it up, and every paper carries resolutions passed by this or that body along the same line. British Columbia will not be satisfied with anything but Bill No. 11. But for the moment, for the sake of peace, for the sake of the representations made by the Prime Minister and the views he expressed, founded upon what he says is his greater and inner knowledge of international matters, it would be a reasonable and fair compromise to accept this bill and satisfy British Columbia for the moment, and it would be a measure of justice. I earnestly commend it to the consideration of the government and of the house.


William Lyon Mackenzie King: Mr. Speaker, on a point of order, before we proceed any further, the rules of the house as adopted on June 14, 1923, among other provisions contain the following:
In the text of the bill, on the left hand page, new matter shall be indicated by such typographical means as may best suit the varying circumstances of each case, such as brackets, italics, underlining, asterisks, etc. Opposite each clause, on the right hand page, the enactment amended thereby, or so much thereof as is essential, shall be printed with the proposed changes to be made therein similarly indicated.
The bill that the house has before it has nothing at all opposite the clause on the right hand page. It is true that on the left hand side new matter is underlined; but the opposite page does not contain what the rules state should be complied with, namely so much of the enactment as is essential to be printed with the proposed changes to be made therein similarly indicated. Before we proceed further, I would ask your honour to give a ruling on the point whether the bill does comply with the rules of the house.


Walter Edward Foster: Do any other hon. members wish to speak to the point of order?


Alan Webster Neill: On the point of order, I submit that the bill does comply with the essential feature of the rule, which is that changes shall be indicated by such typographical means as may best suit the varying circumstances of

Immigration Act
each case, such as brackets, italics, underlining and so on. That is done in the bill before us. The part which the Prime Minister says is left out is the "explanatory notes" on the right hand page, but that omission in so sense interferes with the essential part of the bill. The bill is so simple that I suppose the law clerk who drew it-I did not draw it-thought it unnecessary to put, in explanatory notes, what is so obvious. A number of bills have gone through the house since that rule was made and they have had no explanatory notes on the right hand page, the reason being I have no doubt, that the bills were so obvious as to render such explanations unnecessary. I would call attention to page 348 of the rules, subsection (3) of paragraph 7:
When a clause repeals an existing section, subsection or other minor division of a section, that section, subsection or division, or so much thereof as is essential, shall be printed opposite the clause.
The purpose of the explanatory notes on the right hand side of the bill is to enable us to see what we are amending. In this instance we are not striking out anything in order to substitute something else, and therefore it was impossible to print on the right hand page the provision to be struck out-impossible for the simple reason that nothing was being struck out. I have not looked up other bills on the file; but hon. members will find, on looking through their files, case after case where nothing is printed on the right hand page of the bill.


Mr. CHURCH:: On the point of order, may I point out that Bill No. 11 is altogether different from Bill No. 38, which is now before us. The bills are not even allied. I am surprised that the Prime Minister (Mr. Mackenzie King) has raised the point. The hon. member for Cariboo (Mr. Turgeon) moved the adjournment of the debate so that no one else could speak. Is this a free parliament or not? None of the rules quoted is at all relevant to the bill, because Bill No. 11 deals with an entirely different principle. I do not think the point of order is well taken.


Alan Webster Neill: I would call attention to Bill No. 106, which is a case in point. There are no explanatory notes on the right hand page, but that would not prevent the passage of the bill.


Thomas Alexander Crerar: The hon. member for Comox-Alberni proposes in this bill to substitute a new paragraph (t) of section 3 of the Immigration Act. He does so by adding a few words that are underlined in his bill, but he also seeks to attain his purpose by leaving out of paragraph (t) as it now stands in the act, a very important provision.


Alan Webster Neill: What is that?


Thomas Alexander Crerar: The method by which the test of literacy shall be applied.


Alan Webster Neill: That is not left out.


William Lyon Mackenzie King: Before you give your ruling, I might call your attention, Mr. Speaker, to another paragraph in the rules which ought to govern in this matter:
A memorandum by the draftsman explaining briefly the reasons for each clause, shall be appended to the bill, or distributed therewith. Whenever practicable the memorandum shall be printed on the right hand page of the bill, in paragraphs opposite the clauses referred to and numbered correspondingly.
There is in or with this bill no memorandum whatever by the draftsman explaining the reasons for its clauses.


Walter Edward Foster: I have listened to the objections raised by the right hon. the Prime Minister (Mr. Mackenzie King) and also by the Minister of Mines and Resources (Mr. Crerar), and in my opinion both points raised are well taken. The rules that appear at page 348 of Beauchesne were adopted by the house to govern bills of the sort now under consideration. Bill No. 38 does not comply with any of the requirements set out in paragraphs 2, 3 and 4 on page 348. I must therefore declare the bill out' of order.


Alan Webster Neill: I feel very much tempted to divide the house on your ruling, Mr. Speaker, when we look at the words " whenever practicable...."


William Lyon Mackenzie King: "Whenever practicable " follows independently.


Alan Webster Neill: The rule says that whenever practicable the memorandum shall be printed. I do not wish to detain the house, but I do not think the government gets very much credit out of its method of disposing of this bill.


Walter Edward Foster: Order. The ruling has been given and the hon. gentleman may appeal if he wishes to do so.
Japanese Immigration



JAPANESE IMMIGRATION


[Stage Direction]
The house resumed from Tuesday, March 22, consideration of the motion of Mr. Neill for the second reading of Bill No. 11, respecting Japanese immigration.
Alan Webster Neill: Mr. Speaker, I assume I am in order in speaking now.


William Lyon Mackenzie King: The hon.
member is closing the debate.


Walter Edward Foster: I wish to direct the
attention of the house to the fact that the hon. member in speaking now closes the debate.


Louis Édouard Fernand Rinfret: As a matter of fact, Mr. Speaker, the hon. member has the floor. Hansard will show that on the last occasion on which the bill was under consideration he had begun his speech. He therefore has the floor.


Alan Webster Neill: This is Bill No. 11. Having been defeated on one front, I have to fall back upon a line of defence which I hope will be more acceptable to the government. When the bill came up last on March 22, I had spoken for a minute and a half before the hour had elapsed. A member on the government side, writing home to British Columbia, had this to say in his news notes:
It was expected that a vote would take place }n this but Mr. Neill, who rose to speak at 3ve minutes to nine refused to end his remarks and let the vote take place.
That statement is neither correct nor fair. It was not five minutes to nine but one and a half minutes, as shown by the records of the house and of Hansard. It is not fair, because it says I refused to let the vote be taken. I refused to let the bill be defeated at that time for the reason I shall give. This bill was brought up for second reading on February 17; it was spoken to by a number of hon. members in its favour, and then the Prime Minister (Mr. Mackenzie King) spoke against it and moved the adjournment of the debate. Subsequently it came up on three or four different occasions, when four and two and three hon. members respectively, on the government side spoke until the time elapsed. They were all against the bill, with the exception of the hon. member for Broadview (Mr. Church), who spoke for a few minutes. It was well known that the government intended to defeat
CMr. Speaker.]
the bill, because the Prime Minister told us at the beginning that he could not accept it. That would be the end of the bill for this session. As it was going to be defeated it did not make much difference whether it were defeated three weeks ago or to-day, but it was not fair that it should go out to the world after nine men spoke against it-I do not say they used sound arguments, but they did argue against it-and with no attempt being made to rebut their arguments. I did not want the bill to go to defeat without the house and country being informed as to the rebuttal arguments which could be put forward. That is important because this will not be the end of this bill; the fight will be carried to the next election. When the next election comes, I shall have ample time to visit the electorate of Vancouver island and the lower mainland and explain the situation to them fully. I am afraid some hon. members of the government party will have some difficulty in squaring themselves with their constituencies. They may say, "Yes, I voted for it, but the government would not permit it to carry." But they should have used their influence with their party to allow it to pass.
Let us deal now with some of the reasons alleged against the bill. First we were told: Do not worry about this bill; we will give you a committee of investigation to find out whether orientals are coming in illegally. But who composed the committee? A gentleman from Ottawa, and the head of the police department of Vancouver and of the immigration department, the two men on whom blame would rest if it were discovered that there had been any illegal entry. Human nature is the same in British Columbia as anywhere else. Does anyone think these men were going to condemn themselves? The real way to go about it, if there were to be an investigation along these lines, would be to appoint a retired supreme court judge; there are several available in British Columbia. But the really effective way to get practical results would be to do as was done in the war- have all orientals registered. That is no disgrace; I had to register, along with other people, and produce my registration card on demand. If that were done it would be a simple and ready test; for if any oriental could not show that he was in the country legally he would have no card.
On March 22 the leader of the opposition (Mr. Bennett) said he would endorse the bill if a proviso were put in that it should not come into effect until July, 1939. I hereby accept that condition, and hope for his support.

Japanese Immigration
The bill could easily have passed but for the announcement by the Prime Minister that the government was against it. I make full allowance for the inner knowledge that the Prime Minister has of international affairs, but I think he might have given us some information, lifted the curtain to some extent. When we compare the situation in Great Britain, where members of parliament, even cabinet ministers, rise in their places and speak with almost brutal frankness regarding the conduct of nations in Europe, even in the present strained situation, I think we might have had some explanation of the reason why it was so urgent that this bill be, not passed. I submit that the reasons given W'ere inadequate. We were told that it was calculated to provoke war. That is a very strong statement, one which, I think, is hardly justified. If we were proposing something unfair to the Japanese nation, to take some territory away from them, or some of their rights, or some of their land in British Columbia, or to deport them, there might have been some justification. But what are we doing? We are seeking only to regain control of our own immigration, with which we should never have parted. To dd so was a foolish thing, done by no other nation in the world. How can any nation, Japan or any other, object to our taking back control of our own affairs? One might as well complain because his neighbour comes and asks for the return of the lawn-mower that one borrowed from him.
Then it was suggested by the Prime Minister that as the immigration was so small- I think he put it at about 130-it was not worth going to war over, or provoking war over. Well, I can turn that argument roundabout. If the number of immigrants were only 130-it is not so, but let us assume that it was-is it worth Japan's while under present conditions to go to war over it, especially when they know that we are entirely within our rights?
The Prime Minister admitted, as reported at page 569 of Hansard, that Japan and China should be treated on an equality. But the principal argument alleged was that Japan might not like the action proposed. That is a poor reason. If we are going to be governed along those lines, we shall have to ask Japan if we have her permission to fortify British Columbia. I am sure she would not like that either.
Nations often do things that other nations do not like. The United States periodically raise their tariff against us; we do not like it. but I have heard it said often in this house that it is the right of the United
States to do that. The United States at one time imposed a quota against immigration from Canada; we did not like it but we knew it was their right. How ready we are to take offence against British public men expressing opinions concerning our affairs! Let one of even humble capacity travelling through Canada as a tourist make some casual observation touching upon the way we govern ourselves, and we rise up in arms and almost wave the bloody sword and say we will not be dominated by Downing street; let the British people mind their own business. I have often blushed at the way in which we have treated British visitors. But no offence is taken; Britain smiles and says:	They
are a young nation; they will learn better as they get older. Apparently it is right and proper that we should insult our friends but accept insults from other nations. Let me quote a dispatch * from Tokyo. This comes through the Associated Press; it is no propaganda of mine got in some hole-and-corner way:
Tokyo, March 7-Foreign Minister Koki Hirota declared in the Diet to-day that American-born Japanese, even though living in America, "should be educated as Japanese."
The statement was in reply to questions from Bunji Suzuki, labour leader, who asked if the government had any educational policy for those of the " second generation."
Hirota replied: "A majority of Japanese born in the United States in recent years cancelled Japanese citizenship. They must receive an American education. But they remain Japanese, and they should be educated as Japanese in order to retain Japanese virtues. For this purpose the semi-official migration association keeps close connection with them."
We know what that means. It means that Japanese bom in this country are maintaining a dual nationality. They leave our schools and get educated in their own schools. I wonder whether we would tolerate that if it were proposed in the British parliament, for instance.
Both the Prime Minister (Mr. Mackenzie King) and the Minister of Mines and Resources (Mr. Crerar) referred to what happened in the United States. What did happen? In 1924 the United States put a complete ban upon oriental immigration, and both hon. gentlemen quoted what Japan said at that time, with the vague suggestion that we had better be careful. That was all that was said, and what happened; I asked the Minister of Mines and Resources? Just exactly nothing happened. Even trade continued to flow along the usual lines between Japan and the United States. Nothing happened because they knew the United States were well within their rights. Did they go to

Japanese Immigration

war with the United States over that? They did not. The other day Brazil did the same thing. Japan made one of these infamous gentleman's agreements with Brazil, and I see that Brazil has become fed up with it and has passed a law cancelling the gentleman's agreement, imposing a very effective restriction against the Japanese. Did they go to war with Brazil over that? They did not. We read in the papers the other day that the government of Panama issued a most unfriendly, almost hostile, order that no Japanese fishermen were to come within so many miles of the coast of that country or they would blow them up. That is going pretty far; I would call that an unfriendly act. Did they go to war over that? They did not. Did they go to war with South Africa when that country negotiated a total exclusion agreement? Did they go to war with Australia or New Zealand when they did the same thing? They did not. If the Japanese swallow exclusion by these other countries but become insulted when Canada does the same thing, I say that is evidence of their insincerity, unsupported by any claim in international relationship or anything that governs as between friendly nations. When they say their pride will not permit them to be excluded, they are just as insincere as they are with all their talk about the loyalty of second generation Japanese. It comes out in their own parliament that they are arranging to have these second generation Japanese remain Japanese in thought and education.
Apparently the government is too apt to look at the Japanese angle and none other. Let us forget the Japanese viewpoint for a moment. Let us consider Canada; let us consider British Columbia, which will be a bloody shambles if there is a war in the Pacific. Let us think of that. Let us think of the Chinese viewpoint. The other day on the second reading of this bill the Prime Minister said that nations were slow to forget any injuries they thought they had sustained. Quite so; and he applied that to Japan. It also applies to China, does it not? Let us consider the Chinese viewpoint. In days to come we might be glad if we do something to make the Chinese forget that for sixteen years they have been excluded from Canada entirely, while we have let in Japanese. We have entirely excluded East Indians but have allowed Japanese to come in. It might be a good thing if we did something to make China forget that. It would be a fine gesture, would it not, not to give them any favour but to put the Japanese on equality with the Chinese, to put the two countries on the same basis. And it might be a good idea if we

could help China to forget the way in which our minister treated them. We sent to Japan an infirm, old man, unversed in diplomacy, not acquainted with the country, and he allowed himself to be loaded up to the hilt with Japanese propaganda. Then he came back and disseminated it throughout Canada. It was not a globe-trotting tourist who could be passed by with a smile; he was our accredited minister. Do you think China has forgotten that? If we passed this bill it would be a gesture which would help them to forget it.
Perhaps it is a question of expediency; perhaps it is the goddess of expediency that governs. Let us take her off her pedestal and treat everybody on the same basis; let us check off our minister and treat them all alike. If expediency is to govern, by all means let us play with China, because Japan will not be a powerful nation for very much longer, and she does not know the meaning of the word gratitude. China will come back a strong, virile, united nation, with a sense of gratitude to those who have been her friends, and offering an enormous potential market of four hundred million people to take our goods. With no country in the world is it so dangerous to adopt an attitude of not standing up for your rights as it is with Japan. The school bully always gets more and more aggressive, pushing around people who do not want to quarrel with him, until some small boy half his size punches him on the nose and then everyone wonders why someone did not do it before. We cannot afford to adopt an attitude like that. Let us, as the French say, "Ayez du courage"; let us stand upon our own feet. "Dare to be a Daniel; dare to stand alone; dare to have a purpose firm." We need not be truculent; but let us stand up for our rights. That is the best way by which to bring about peace abroad and prosperity at home.
I have been accused of trying to stir up racial prejudice. Not at all; I have only pointed out the impossibility of assimilating such an alien race. One of the greatest obstacles to assimilation is the lack of marriage between the two races. The other day I saw a record of the births of one hundred thousand Canadian children; of that number I think only seven were Eurasian, and nearly all of those were the issue of white individuals and Chinese, not Japs. I think there was only one or possibly two out of the one hundred thousand born to white and Japanese parents. They do not want to marry us and we do not want to marry them. Look at Europe, where for centuries the Greek and the Turk have

Northwest Territories-Furs
lived together in enmity. The best that civilization has been able to do is to move them by the hundreds of thousands back to where they came from. Look at the Arabs and Jews in Palestine, where the best solution that can be devised by the British government is to put a fence down the middle of the country and keep each race on its own side. Yet we talk about assimilating these people.
There is another point, perhaps the most important of all. A new policy has been developed in the countries of the world. It is now considered right and proper for a nation to interfere in the affairs of another nation, provided the second nation contains enough nationals of the first nation. That is what happened in Austria; that is what will happen in Czechoslovakia. Never in the world has there been such a coup d'etat as occurred in Austria the other day, because they had so many German sympathizers in that country ready to take action. Suppose we should be told some day that because Japan had thirty thousand nationals in British Columbia she insisted that they must be given the vote and all the privileges our own citizens possess, the opportunity to become lawyers, doctors and all the rest of it. What would we do about that?
Will the government meet the wishes of British Columbia or defy them? Will the government say that it is going to govern without regard to the wishes of those governed? That is not democracy; that is autocracy.
It is nine o'clock, Mr. Speaker.


Walter Edward Foster: The hour for private and public bills having expired-


Some hon. MEMBERS:: It is not nine o'clock.


William Lyon Mackenzie King: It is not nine o'clock yet, Mr. Speaker. Seeing there is still a little time left, I should perhaps direct your honour's attention to the fact that, under the ruling which your honour gave just a moment ago, this bill too is out of order; in fact, it would seem to me that the rule cited is even more applicable to this bill than the previous one, because, according to the words of the mover himself, it is impossible to understand this bill without some explanation. Again I would quote the paragraph from page 348 of Beauchesne:
In the text of the bill, on the left hand page, new matter shall be indicated by such typographical means as may best suit the varying circumstances of each case, such as brackets, underlining, asterisks, etc.-
51952-174J


Alan Webster Neill: I rise to a point of order, Mr. Speaker. It is nine o'clock.


Walter Edward Foster: The hour for private and public bills having expired, the house will revert to the order of business under consideration at six o'clock.



NORTHWEST TERRITORIES ACT


[Stage Direction]
Hon. T. A. CRERAR (Minister of Mines and Resources) moved the second reading of Bill No. 110, to amend the Northwest Territories Act.
Hugh Alexander Stewart: Explain.


Thomas Alexander Crerar: The purpose of the bill, Mr. Speaker, is to enable the government, through the council which administers the Northwest Territories, to exercise a closer control over the export or movement of furs from the Northwest Territories to any of the provinces. Abuses in this respect have developed during the last few years on account of the increasing number of people going into the territories and the augmented use of airplanes for transportation both into and out of the territories. Trappers frequently are taken to their trapping grounds by airplane and are brought out at the end of the season by the same method.
In 1927 the Northwest Territories Act was amended to provide that any one taking furs out of the territories must obtain a permit. A year or two later regulations establishing the charge that would be levied, was passed. This corresponds to the royalties imposed by every province in Canada on the taking of furs. This method worked very well, but, as I said a moment ago. the development in airplane transportation has led to evasions of the tax. It is suspected that much of the fur is being taken out without the necessary fee being paid.
This bill seeks to overcome this trouble by applying the principle applied by the Department of National Revenue in connection with excise collections. There is being added to the act a new section, the first clause of which reads:
A judge of the exchequer court of Canada shall grant a writ of assistance upon application made to him for that purpose by His Majesty's attorney general of Canada.
That is similar to the powers granted in connection with the administration of the Excise Act, only in that instance the writ of assistance may be secured from a judge
Northwest Territories-Furs

other than a judge of the exchequer court. Under authority of this writ of assistance the baggage of a passenger who is suspected of bringing out furs illegally may be searched. Other provisions in the amendment deal with the disposal of the furs and the vehicle by which they are being transported. Subsection 4 provides that sections 171 to 184 inclusive of the Customs Act shall apply. These sections would provide for the disposal of a vehicle that may be impounded.
The necessity of this provision is emphasized by the fact that there are practically only two airplane bases at which airplanes from the Northwest Territories would land. One is at Prince Albert in Saskatchewan and the other is at Cooking Lake, about fifteen or eighteen miles from Edmonton. When a trapper is suspected of bringing out furs illegally, it is impossible to get a regular search warrant to authorize the search of his luggage before he gets away. Once he gets away, it is almost impossible to locate him again. Provisions of this bill would enable prompt action to be taken.
For the information of the house I might say that the total value of the fur catch in the Northwest Territories for 1935-36, the latest figures obtainable, was $1,188,000 in round figures. In 1934-35 the value of the catch was $1,678,000. At the present time the cycle of the fur catch is low, but several years ago the value of the catch ran over $2,000,000. In 1926-27 the value was almost $3,000,000. The revenue from this fur catch amounted to $57,000 in 1938. The revenue in 1936 was $105,000, and in 1935 it reached the highest point in any single year, $146,000. This matter has been receiving the attention of the Department of Justice, the Royal Canadian Mounted Police and the Northwest Territories council, and they have come to the conclusion that the best method of dealing with these abuses is by means of the amendment to the act which I am now asking the house to adopt.


Hugh Alexander Stewart: Mr. Speaker, the principle of this bill seems to be to strengthen the powers behind this law and to provide additional facilities for preventing the abuses which apparently have grown up. Assuming, as we must, that the law is sound, I can see no objection to the principle of this bill. There is no question that our laws should be enforced and that we should provide adequate machinery and facilities for that purpose.


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

On Section 1-Judge to grant writ of assistance.
Grote Stirling: Is there any connection
between this bill and the spectacular fur robbery that occurred two years ago somewhere south of Aklavik?


Thomas Alexander Crerar: I do not recall the particulars of the incident to which my hon. friend refers. There may be some connection, but I cannot state definitely at the moment. Furs have been taken out illegally from the territories, and this practice is tending to grow and, I think, will grow still further with the increased use of the airplane. A trapper may go to his trapping ground by airplane, and an airplane brings him out when his trapping season is over. He does not report his furs to the authorities. He comes out, lands his furs at Edmonton, we will say, or Prince Albert, and sells them and there is no way of apprehending him. I am not a legal man and am not familiar with legal phraseology; but I understand that a writ of assistance is a sort of continuing search warrant issued to a particular individual; as I stated a moment ago, the bill has received the careful study not only of the officers of the department but of the mounted police and officers of the justice department as well, and the result of their combined wisdom as to how best to check this evil is the bill now before us.


Grote Stirling: How, practically, will the trapper go to work? Will he go to an official of the department and ask for permission to export so many furs?


Thomas Alexander Crerar: Yes; he is given a licence unless he is a native of the Northwest Territories. Indians and half-breeds are not required to take out a licence. The trapper is supposed to report his furs out at the expiration of his period of trapping; but in some cases he fails to do so, or he may report only part of his furs and sell the balance, and there is to-day no way of ascertaining whether he is reporting correctly. This provision is to enable a search to be made where it is suspected that a person is selling furs and evading the tax he should pay.


Mr. PELLETIER:: Are the provinces in
any way concerned with the regulations respecting furs illegally caught or sent out? Has there been any recommendation from any of the provincial departments of lands and mines with respect to the matter?


Thomas Alexander Crerar: This relates to the Northwest Territories.

New Westminster Harbour


René-Antoine Pelletier: But the minister said that the furs coming out of the Northwest Territories would be landed at Edmonton or Prince Albert, and I was wondering if the provincial governments had any jurisdiction, and. if so. if they had made any recommendations to the federal department.


Thomas Alexander Crerar: No; they have made no recommendations. As a matter of fact, they are not interested in the furs that come out of the Northwest Territories because they do not collect any royalties on such furs. It is purely a matter of interest to the federal administration.


Charles Hazlitt Cahan: I assume that the search under this proposed amendment can take place only within the Northwest Territories. It certainly is not intended to give these officers any special jurisdiction in organized provinces.


Ernest Lapointe: No; it has to be within the jurisdiction of the court or judge granting such writ.


Charles Hazlitt Cahan: Quite so. I was simply
replying indirectly to what the hon. member for Peace River (Mr. Pelletier) had said.


Hugh Alexander Stewart: As I read the explanatory
note, the offence is the carrying out or removal of furs from the territory. It says:
No person shall export, carry or cause to be exported or carried out of the Territories, any furs, without first having obtained a permit to do so.
That permit would not necessarily be issued to the trapper at all. I take it that a person might go in and buy the furs.


Ernest Lapointe: That is the law as it is now before this amendment.


Hugh Alexander Stewart: Will that not be the law still?


Ernest Lapointe: My friend is reading the provision under the law of May 7, 1929. The amendment is for the purpose of enforcing that law.


Hugh Alexander Stewart: I understand that; but suppose a person goes in to buy furs, and buys them from a native or trapper; he is the one who must take out a licence.


Thomas Alexander Crerar: He takes out a permit, but before he gets the permit the authorities have to 'be satisfied that the proper tax has been paid.


Hugh Alexander Stewart: Exactly, before he gets the permit ito take it out. Then I notice that the exchequer court is the court that may
issue the writ. Is there any other court having jurisdiction there and authority to issue the writ?


Thomas Alexander Crerar: No.


Hugh Alexander Stewart: No other court or
authority that could exercise the powers outlined in the bill?


Thomas Alexander Crerar: No. In that respect, as I said a few moments ago, this section is a little bit narrower than the similar section in the Customs Act dealing with the excise duty.


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


[Stage Direction]
Hon. C. D. HOWE (Minister of Transport) moved that the house go into committee to consider the following proposed resolution:
hat it is expedient to introduce amendments to the New Westminster Harbour Commissioners Act to extend the boundaries of the harbour and to provide remuneration for the services of the commissioners out of harbour revenues.
Motion agreed to and the house went into committee, Mr. Sanderson in the chair.
Clarence Decatur Howe: Mr. Chairman, the bill
founded on the resolution divides itself into two parts, as the resolution indicates. The first part is to include in the boundaries of New Westminster harbour a small area lying between the present jurisdiction of the New Westminster harbour commission and the jurisdiction of the North Fraser harbour commission. This area arises out of a change in the boundaries of the North Fraser harbour commission, and it is desirable to have either one commission or the other have jurisdiction over it.
The second part provides that the governor in council may set up such remuneration for the New Westminster harbour commission as the government may determine. The present situation is somewhat unsatisfactory. No provision is made for paying the commissioners, so the remuneration is obtained through appointing the chairman the commission manager of the port, for which he draws a substantial salary, and I believe that part of his salary is paid by him to his two fellow commissioners. It is believed that it is not desirable to do indirectly a thing which is not provided for in the act. Similar harbour commissioners throughout Canada are paid
New Westminster Harbour

small salaries for their services, and the government believes that the request of the city of New Westminster should be granted and that provision should be made for the remuneration of the harbour commissioners.


Grote Stirling: Is this an area which at present is in the North Fraser area, and is it going to be put into New Westminster?


Clarence Decatur Howe: No; this is a sort of no-man's land between the two. At one time it was included in the North Fraser harbour commission jurisdiction, but the boundaries of the North Fraser harbour commission jurisdiction were changed some three or four yeras ago, and for some reason that I cannot explain this territory was dropped from the jurisdiction of the North Fraser commission. At the moment it is administered by the Department of Transport, but I believe it should be administered by one or other of the harbour boards, and it seems properly to come within the jurisdiction of the New Westminster harbour commission.


Grote Stirling: Who now owns it?


Clarence Decatur Howe: It is owned by the crown and administered by the Department of Transport.


Alan Webster Neill: Would the minister tell us how many commissioners there are, what their proposed remuneration is, and from what source it will be obtained? Will it be from harbour dues?


Clarence Decatur Howe: There are three commissioners. It is proposed to pay each of the three a small salary from the revenues of the port. The port of New Westminster is, of course, a very busy one-


Hugh Alexander Stewart: A free port.


Clarence Decatur Howe: -and it has substantial
revenues. The business is considerable, and it takes a good deal of the time of the commissioners. It is proposed to pay each of the commissioners a small salary for part-time work.


Alan Webster Neill: I assume the remuneration will be paid from charges obtained on freights coming into the harbour, harbour dues.


Clarence Decatur Howe: There are no harbour dues, but there are certain revenues from leaseholds, ships' dues and one thing and another, including wharfage. The revenues of the port are quite considerable, although there are no harbour dues on ships, and this bill does not propose that such dues shall be instituted.


Mr. WALSH:: Are there three harbour commissioners there at the present time?


Clarence Decatur Howe: Yes. The late chairman, who is the appointee of the city, died recently; but the city have made a nomination to replace him and the nominee has been approved by the government, so there are three harbour commissioners. It is the practice to pay the chairman of the harbour commission of the harbour, and has been for some time, a salary as port manager. Of course it is somewhat irregular to have a member of a commission also an employee of the commission, which he is in fact under this arrangement; and instead of paying a salary of that kind to a commissioner as port manager it is proposed to pay each of the three commissioners a small salary. Perhaps the expenses of the port under this arangement will not be larger than they are at the present time.


William Allen Walsh: There will be no port manager appointed to replace the presumed retiring official?


Clarence Decatur Howe: I cannot say as to that.
Whether a manager will be appointed is a matter for the commission to decide. It is my understanding that it is not the intention to have a port manager appointed. However, I am not promising that for the future.


William Allen Walsh: This measure will not entail any additional expense as far as the Department of Transport is concerned? Revenues at the harbour will be ample to cover any additional expense which may be involved in paying additional commissioners over and above what has been paid in the past to the chief commissioner?


Clarence Decatur Howe: That is correct. The Department of Transport makes no contribution whatever to harbours of that class. This property is largely owned by the city. In every instance the harbours are self-sustaining. *


William Allen Walsh: Would the minister care to
comment on the principle involved in this measure, of paying harbour commissioners to look after the interests of a harbour, rather than having three commissioners on a voluntary basis, for the honour that goes with a position of that kind and the opportunity of service to their city?


Clarence Decatur Howe: 
William Allen Walsh: I do not know whether
I quite agree with the principle involved, be* cause to pay even a small salary for an appointment of this kind means that the position is liable to become somewhat political in its aspect, and the prey of office seekers. With each change of government some persons in New Westminster or the immediate vicinity will desire to replace these three commissioners, whereas if the commissioners were undertaking the task on a voluntary basis of service to their city you might get a higher type of person interested, and you would not be so likely to have a change, if the service had been satisfactory, with every change of government. I know there is a considerable agitation at the present time, in other harbours under the jurisdiction of the national harbours board, to have honorary commissioners under the jurisdiction of the board. The idea expressed is that these honorary officials would be particularly interested in their respective ports and in the cities which are especially connected with those ports. Here we have a departure from a principle which I think is a rather good one. I feel sure, judging by the calibre of the federal representative from New Westminster that there must be many people living in that city who would be glad of the opportunity to have this honour conferred upon them and to work in the interests of their harbour and their city.


Mr. REID:: I know it.


William Allen Walsh: Particularly in cooperation
and collaboration with the federal member for that district.


Thomas Reid: I know it,


William Allen Walsh: I believe that thereby the service would be very much improved. These men, without remuneration, would enter enthusiastically into their work; they would look at their positions from an altruistic point of view rather than from the viewpoint of the remuneration that they might receive. I am convinced that their services would be much more efficient. After all, you cannot get the type of man whom you would like to have actively interested in such a harbour as New Westminster, at the remuneration that you are prepared to pay. The compensation which may be given would not command the services of the best men available; at any rate it would not command their best service
or their full-time service. I feel that the principle involved in this proposal is one which is to be regretted. I urge upon the minister and the committee the desirability of amending this measure in such ' a way that we might at least try out for a period of time a service of commissioners who would not undertake the work for the sake of the remuneration which might be in it. I should like to hear an expression of opinion from the hon. member for New Westminster, who knows the situation better than I do. I am speaking only of the condition in general and discussing a principle. He knows the actual situation in detail. I should like him to make a statement regarding the principle involved in the bill and whether, in his opinion, the minister is correct in his presentation of it, or whether the ideas I have given voice to might not be more acceptable to the people of New Westminster than the sentiments expressed in the bill itself.


Thomas Reid: I shall be pleased to do so on the second reading of the bill.


Clarence Decatur Howe: I think we have an ideal
situation at New Westminster from the point of view of my hon. friend. We have a commission made up of two Conservatives and one Liberal, all active in the pursuit of their faith. The chairman of the board is an active Conservative. In my opinion we have excellent harbour commissioners at New Westminster. I believe the progress of the port has been due largely to the attention they have given it. The commissioners themselves have urged that the change be made. They realize the anomaly of being paid more or less by subterfuge, and they think it would be better in the interests of the port for them to be paid direct and legally rather than by the present method. The city of New Westminster, which owns a large part of the port, has endorsed the opinion of the harbour commissioners, and it is the view of the government that the recommendation is one which can very well be implemented.


Hugh Alexander Stewart: Has the government considered the wisdom or the feasibility of having this harbour operated, as other harbours are, under the national harbours board? That is the plan which has been adopted; it is an attractive proposal, and I do not know whether the experience of the minister would enable him to express an opinion on the advisability of having this harbour operated in that manner. We are told that it is an important harbour with a great deal of business, and possibly it might come under the jurisdiction of the national harbours board.
Xcw Westminster Harbour


Clarence Decatur Howe: The position of New Westminster harbour and of a number of others, such as the harbours at Hamilton, Toronto and three or four other places that I could mention, is somewhat different from the position of the eight harbours that have been brought under the national harbours board. Whereas in the case of the eight harbours that are under the national harbours board the larger part of the investment is federal, in the case of New Westminster, Toronto and Hamilton the larger part of the investment is municipal. Under the act the municipality is entitled to representation on the board, and the funds of the harbour in excess of those required to operate or improve the port revert to the city. In the case of these harbours the city has a much larger equity than the federal government. We looked into the question when the harbour board act was passed, and consideration was given the position of these harbours. It was thought then, and I have no reason to change my opinion, that harbours of that type where the investment is largely municipal should not be brought under the board.


Hugh Alexander Stewart: The minister says that the investment is largely that of the city of New Westminster. I have no doubt that is correct with respect to the harbour itself, but I am sure he will agree that very substantial amounts have been expended in dredging in the Fraser river for the purpose of making conditions in the harbour satisfactory; and from time to time, I believe, that must continue. Other control works also have had to be constructed all for this purpose. It appears to me, therefore. that there is a substantial investment on the part of the dominion as well as of the city in the harbour or in something that is necessary to make the harbour a success.


Clarence Decatur Howe: I quite agree that the dominion government have spent large sums in order to make the Fraser river navigable, but I doubt whether that has any particular bearing on the administration of New Westminster harbour. Similarly, I doubt whether the fact that the federal government have spent very large sums in developing the St. Lawrence river has any particular bearing on the administration of the ports along the St. Lawrence. Fraser river is the largest river on the Pacific coast and is an important artery of traffic, and whether the port of New Westminster were there or not considerable expenditures for improving navigation on the Fraser river would be warranted. However, as I say, this port falls into the category of ports in which the city has a definite and large investment.

The city has from time to time invested considerable sums in port improvements and these sums are a charge on the taxpayers of the city. It would be considered a high-handed act for the Department of Transport to step in and take over the harbour for operation under the national harbours board.
Resolution reported, read the second time and concurred in. Mr. Howe thereupon moved for leave to introduce Bill No. Ill, to amend The New Westminster Harbour Commissioners Act.
Motion agreed to and bill read the first time.



RADIO BROADCASTING


[Stage Direction]
Hon. C. D. HOWE (Minister of Transport) moved the second reading of Bill No. 52, respecting radio in Canada.
He said: This bill repeals the present Radiotelegraph Act, revising a number of clauses therein. The necessity for changing the act at this time arises out of the fact that all paragraphs in the Radiotelegraph Act having to do with shipping have been included in the Canada Shipping Act, 1934. Therefore there is at present a duplication between the two acts. While the clauses now included in the Canada Shipping Act are being deleted from the bill, the language of the bill is being modernized. The Radiotelegraph Act was passed twenty-five years ago. Since then matters relating to communication through the ether have developed greatly; additional uses of the ether waves have been developed, and new developments in radio broadcasting have occurred for which the present act has no proper provision. The purpose then is practically the rewriting of the Radiotelegraph Act in modern language and with provisions suitable to present day conditions.
Hugh Alexander Stewart: Will this bill have any
effect upon radio broadcasting under the broadcasting corporation?


Clarence Decatur Howe: The Radio Broadcasting Act governs the Canadian Broadcasting Corporation. This bill does not alter their position in any way. But the bill governs the relations of the Department of Transport to radio broadcasting in this way, that is it covers the collection of fees, the regulation of wave lengths and certain general regula-

Radio Broadcasting
tions which touch radio broadcasting as well as radiotelegraphy or any other use of the ether waves.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Sanderson in the chair.
On section 1-Short title.
James Earl Lawson: Perhaps this is the proper section on which to raise a matter that relates to this bill in particular, and in general to a practice which is growing up in this house in connection with bills, and which I think should be drawn to the attention of the minister. I refer to the practice of giving in the explanatory notes information which is misleading and, in some instances, deceptive. I observe that the explanatory notes to this bill read:
The proposed bill is a revision of the Radiotelegraph Act, R.S.C. 1927, c. 195. It is revised at this time primarily because those sections referring to ships have been transferred to the Canada Shipping Act, 1934. At the same time, this has provided an opportunity to clarify and somewhat strengthen some of the remaining sections of the act, particularly with regard to the licensing of radio receiving sets used for broadcast reception.
These notes are exceedingly deceptive. The truth of the matter is that this bill introduces three new principles not previously contained in the Radiotelegraph Act so far as that act related to receiving sets and radio broadcasting. Let me outline them briefly, and as we come to them section by section I shall deal with them in detail.
In the first place this bill establishes the new principle that a radio licence collector or inspector can enter and search a man's house on a mere allegation 'by him before a magistrate that there is a radio receiving set in the possession of the occupant of that house. Under the old act it 'is true that a duly constituted and duly sworn and properly instructed police officer, a regular officer of the crown, could obtain a search warrant. But by this bill that power is extended to a radio licence collector.
The second point is that under this bill the mere possession of a radio receiving set, even though it may not be in operation, even though it has never been in operation, is made an offence. Not only is it made an offence, but it is made an indictable offence. And the indictable offence is punishable, not by the alternative of fine or imprisonment, because once one is convicted of that indictable offence the judge or magistrate must impose a fine and a penalty within the limits prescribed by the bill.
In the third place, if a person is charged with an offence under this bill, even the mere possession of a radio receiving set, and despite the fact that it is an indictable offence punishable with severe penalties as I have mentioned, the onus of proving his innocence is put upon the accused.
Those are three separate and distinct departures in principle from anything previously contained in the Radiotelegraph Act. Therefore I take this opportunity, on the very first section of this bill, of protesting against the explanatory notes given at the head thereof, and in general against explanatory notes which may be attached to amending bills in this house. It may be that I am endeavouring to set too high a standard. But I think a responsibility devolves upon a minister of the crown, when he introduces a bill in this house, to see that the explanatory notes are truly explanatory of the principles involved in the bill; and where there are radical departures from former legislation, such as there are in this bill, those departures should be clearly and distinctly drawn to the attention of the house, so that hon. members may not be misled by such notes as those which appear in this bill.


Clarence Decatur Howe: The remarks of my hon. friend simply illustrate how deception can be found if a man is looking for deception. It seems to me that the explantory notes definitely call attention to the fact tha-t we are strengthening the provisions of the present act. It says:
. . . this has provided an opportunity to clarify and somewhat strengthen some of the remaining sections of the act, particularly with regard to the licensing of radio receiving sets used for broadcast reception.
How could that be made any clearer? As to providing for search, the first searches under this act were made in 1933. I remember very well my wife was almost frightened out of her life when a mounted policeman accompanied the radio inspector to our house and demanded to see her licence. I think my hon. friend was a minister of the crown at that time.


James Earl Lawson: No; I had not that honour.


Clarence Decatur Howe: Let me read the section of the old act and see if there is any material difference:
11. If a justice of the peace is satisfied by information on oath that there is reasonable ground for supposing that a radiotelegraph station has been established without a licence in that behalf, or that any apparatus for radiotelegraphy has been installed or worked in any place or on board any ship registered in Canada
Radio Broadcasting

within his jurisdiction without a licence in that behalf, he may grant a search warrant to any police officer or any officer appointed in that behalf by the minister and named in the warrant.
2. A warrant so granted shall authorize the officer named therein to enter and inspect the station, place or ship and to seize any radiotelegraph apparatus which appears to him to be there used or intended to be there used for radiotelegraphy.
I need not read the next paragraph, which provides the penalty for establishing stations and apparatus illegally. I see no great change in principle in this bill as compared with the old act, except that this bill makes it unnecessary to terrorize a house owner, as is done at the present time by a police officer in uniform marching into the premises.


James Earl Lawson: Let me point out the difference to the minister, if he does not see it. In the first place, under the old section it was no offence to be in possession of a radio. Let me give him the words that are added to the present section:
If a justice of the peace is satisfied by information on oath that there is reasonable ground for believing that a radio station-
Then these words are added:
-or a private receiving station has been established without a licence, or that any radio apparatus has been installed, or is being operated-
Then these words are added:
-or is in possession of any person in any place in Canada-
The minister says there is no deception. When a bill of this kind is introduced into this house, why should they not come out frankly and say in their notes what is the situation. The truth of the matter is that prosecutions were launched, and in the case of Rex v. Gignac, the citation of which I have not at the moment but which I could get if I had time to go upstairs, it was held by our courts that merely to prove that in a man's house there was a radio receiving set was not sufficient to convict that man of one of two offences, namely, that of establishing a radio station or that of operating a radio station. Because of that decision the government now proposes to amend this act to make it an offence to have in one's possession a radio receiving set, even if you never connect it and never operate it. At the moment I am not dealing with the principle of whether that should or should not be an offence.


Clarence Decatur Howe: Does my hon. friend say it is deception, when the courts say that is irregular, to correct the law?
[Mr. Howe.l


James Earl Lawson: No; I do not say it is
deception to correct it; what.I do say is that it is deception to introduce a bill into this house and to insert a headnote stating that this is a revision of the Radiotelegraph Act, and that it is revised at this time primarily because those sections referring to ships have been transferred to the Canada Shipping Act, 1934.


Clarence Decatur Howe: Is that a fact, or is it not?


James Earl Lawson: I leave it to the members of this house whether or not, in view of the actual changes, that is a deceptive statement to insert in a headnote for the information of hon. members.


Ernest Lapointe: "At the same time-"


James Earl Lawson: Yes; it goes on to say:
At the same time, this has provided an opportunity to clarify and somewhat strengthen some of the remaining sections of the act-
It is not the intention, by this bill, somewhat to strengthen anything. The truth, of the matter is that by this bill you create a new offence, and that new offence is to merely be in possession of a radio. You not only create that offence; you create it as an indictable offence, and on top of that you do not allow any discretion to the magistrate or judge as to penalty. He must impose both a fine and imprisonment; and on top of all that you put the onus of proving his innocence upon the man who happens to be in possession of the radio receiving set. That, I say, is a deceptive explanatory note; I protest against it, and I think .the practice should be stopped.


Ernest Lapointe: What my hon. friend has read is merely a preliminary explanation. The rules require that every change shall be explained. The changes are contained in the various sections of the bill which follow. Each has an explanatory note on the opposite page. This preliminary explanation was not necessary at all; it is simply to give more information to my hon. friend. It was not essential. What the rules require is that the changes should be explained as they occur, section by section. If the explanations are given properly with regard to each section of the bill, surely my hon. friend does not complain because this has been added at the beginning.


James Earl Lawson: I would not complain
of any specific thing if it stood alone; but let me put this to the minister. In the bills brought into the house by the Minister of Justice I have noticed that he is particularly careful to see that every change

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2 751
is made clear to the members: he even goes to the extent, I have noticed in the bills he sponsors, of having the words that are new in each section of the amending act underlined, which calls them to the attention of the members. I ask the minister to go through this amending bill from one end to the other and find one section where the added words are underlined. I notice another thing about the bills introduced into the house by the Minister of Justice. In the explanatory notes on the right hand side he will specify the changes that are being made and the extent of them. Let me give the minister a concrete instance, though I might deal with this very section. I pick out one in particular to illustrate what I mean. Let me read the note opposite section 9 of this amending bill:
9. This is existing section 11, paragraph 1, reworded to clarify and conform to revision made in new section 5.
As a matter of fact, section 9 creates a new offence, namely, merely to be in possession of radio receiving apparatus. Let us go back to section 5. The explanatory note reads:
This is existing section 6 reworded to clarify the intention.
Whose intention? The intention of the parliament that passed the original act was determined by the courts of the land in the case of Rex v. Gignac. Why not come out frankly in this bill and say in an explanatory note. "Because the courts have held that it is not an offence merely to be in possession of a radio, this section is intended to make mere possession an offence under this act?" That gives a concrete instance of what I have in mind in the protest I am making to the Minister of Justice.


Hugh Alexander Stewart: I am sure we are interested in the remarks of the hon. member for York South; and in view of the curtailed explanation and statement made by the minister on the introduction of this bill, and the explanations of some of these sections that have been given by the hon. member who has just spoken, I think in a measure his comment is justified. Speaking for myself, from the statement of the minister I gathered that this was a trivial, insignificant bill; that about all it did was to rewrite the existing act because certain provisions formerly in the act may now be found in the Canada Shipping Act. But now it appears that in addition we are having a flock of new offences created, new penalties imposed and people rendered liable to proceedings and
prosecutions in a way that was not possible formerly. It seems to me that there are some grounds for the protest made by the hon. member for York South. In view of the statement of the minister I am surprised to find these provisions in the bill. In the light of the statements that have been made I am sure that we shall give the different sections careful consideration as we go along.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
On section 3-Powers of governor in council.
James Earl Lawson: Paragraph (e) of this section is new. This section generally empowers the governor in council to prescribe the tariff of fees to be paid for radio receiving licences, authorizes the payment of a portion of the licence fees in effect to the Canadian Broadcasting Corporation, authorizes the governor in council to accede to any international convention and make regulations for the censorship and controlling of radio signals. The new paragraph (e) reads:
(e) make regulations imposing a penalty not exceeding $50 and costs or three months' imprisonment for the violation of any regulation made under this section for which a penalty is not already herein prescribed, and to provide that any such penalty may be imposed upon summary conviction.
I object to this form of legislation, irrespective of whether it is in this bill or in any other bill. When you impose penalties upon the subjects, who are all the people, I think those penalties should be prescribed in the law of the land. If it is the desire of the government to have a provision imposing a penalty I suggest to the minister that he have in this bill a separate section prescribing that for any offence under it, where no other specific penalty is imposed, the penalty shall be not exceeding $50 and costs or three months' imprisonment. I suggest that the principle of fixing, by governor in council, penalties for offences is wrong under any system of responsible government. I am not criticizing this bill in particular, but I suggest that this section be taken out. If you want to have such an omnibus penalty provision, let parliament say what it is going to be and have it included as a separate section.


Thomas Langton Church: Mr. Chairman, I referred to this matter the other day. I do not wish to criticize the minister, but I think it was a great mistake to have a debate go on such as we had the other day, and then to have to listen to the remarks of this man Ferguson
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from Winnipeg. This gentleman and his kind are opposing the broad principles of the Chamberlain government, in relation not only to the League of Nations but to international affairs. The Prime Minister of Great Britain has ordered the British Broadcasting Corporation to stop many of these broadcasts. Just the other day I was reading criticisms of this policy in two or three eminent British papers. I have placed on Hansard just what Mr. John Buchan said with regard to this when he was a member of the British house.
These are troublesome times, but even we cannot discuss matters of this kind. It may be because the Prime Minister has been busy with other matters, but the fact is that a large number of the public hear these debates over the radio. Wrong facts or half truths are broadcast, and we hear statements absolutely opposed to the policy of the British government in connection with international agreements. I think the time has come when broadcasts of this kind should be stopped. This should be done not only in the public interest but in the interest of the British Empire.
We are prohibited from discussing questions such as Japanese immigration and the rule of Japan in the Pacific. When we as members of a free parliament start to discuss these matters points of order are raised, but the radio commission permit debates to be broadcast which are certainly objectionable to a large portion of the population of Ontario and some of the other provinces. I have read a criticism that was made in the British House of Commons of such discussions. The hon. members for Rosetown-Biggar (Mr. Coldwell) and Essex East (Mr. Martin) spoke over the radio in a network linked up by the CBC with the NBC. I did not hear their addresses as I was on a train at the time. I read, however, with interest, their speeches on other matters.
They discussed what Mr. Cordell Hull said after the Brussels conference. What was the result of the Brussels conference? It was a failure. The British ambassador, Sir Ronald Lindsay, left his office on one side of Washington and walked a block or two to the office of the secretary of state. He asked him if the United States would join with Great Britain in making a protest to Japan, and he was told that the United States were going to act alone. All these matters come under what I describe as pan-Americanism. This broadcast was absolutely opposed to the interests of the British Empire. We are not depending upon the Monroe doctrine; we are not depending upon pan-Americanism; we are depending upon the British army, the

British navy and the British fleet to protect our shores.
What right has an outside commission to go over the heads of parliament? My right hon. leader asked if the government had been consulted at all. If we have any powers, why does the governor in council not reassert itself on behalf of this parliament and prevent these broadcasts under paragraph (d) of this section? I have no desire to criticize the commission or any official in it, but this is the view that I have taken in this house for many years. Mr. John Buchan, speaking in the British House of Commons when a member of that body, said that society consisted of the crank, the sentimentalist, and that appalling creature the publicist. Those are his words in criticizing the League of Nations Society. Two hon. members of this house and an outsider were engaged in a discussion the other day over the Canadian Broadcasting Corporation's service which was linked up with the broadcasting lines of the United States. In my opinion that broadcast should not have been allowed.
In section 3 we have the powers of the governor in council set out, and I trust that the governor in council will take the responsibility for acting in such a situation, because if we pass this section, which is a new one, the governor in council is directly responsible for what these people say in their discussions over the air. The government stopped it in England where it was held to be contrary to public policy, but anyone can go on the air through the Canadian Broadcasting Corporation and enter into discussions that are not in the public interest. In the great crisis of the past six months the settled policy of the Chamberlain government has saved not only the empire, but the whole world from war.


William Lyon Mackenzie King: Mr. Chairman. I must say that I find myself very much in sympathy with the hon. member for Broadview (Mr. Church) in the remarks which he has just made. At the present time we have been very careful not to discuss in this parliament the proceedings of other parliaments, and I believe that a rule which we find it advisable to observe here should also be observed by the commission in connection with broadcasts that may be made under its authority.
These are very critical times, as all hon. members of the house know, and as the citizens of the country generally know. In ordinary times we would not think of criticizing in this parliament the policies of a government or the proceedings of a parliament of another

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part of the British Empire. The policies of Great Britain, of Australia and New Zealand are their own policies, their own domestic affairs, and it is not for this parliament to say whether Liberals or Conservatives or the Labour party of Great Britain are right or wrong in what they are advocating.
So far as any policy relates to our own affairs, we are at perfect liberty, of course, to discuss as fully as we please the effect of government policy. What I am referring to at the moment is not whether, with respect to some particular matter, a policy is right or wrong. Each country is free to discuss in its own parliament any policy from the point of view of that country itself. I do not think, however, that one parliament should become critical of the proceedings of another parliament in another part of the world, particularly in times like these. What applies to debates in parliament should apply equally to broadcasting under a commission which derives its authority and powers from parliament.
One of the great difficulties in Europe, a condition which make the situation there so impossible of solution, is the perpetual broadcasting by one country of its comments upon the internal affairs of some other country. I think the British government have very wisely taken the view that while they wish to accord the greatest liberty possible to broadcasting, it is not proper either in parliament or out of parliament for criticisms to be made of the internal affairs of other countries where those criticisms are likely to prove embarrassing to the government and administration of the day. I think it is only right to say what I have said; and possibly more is not necessary at this time to ensure that by the commission itself a policy will be followed similar to that which all hon. members of this house seek to follow in their discussions.
Section 3, paragraph (a) and (b) agreed to.
On section 3, paragraph (c).


Mr. BLACKMORE:: It seems to me, Mr. Chairman, that a penalty of not exceeding $500 is a tremendously severe one to be left in the hands of the governor in council without reference to parliament. I may be inexperienced in these matters, but it seems a severe penalty to me.


Clarence Decatur Howe: There is no change in that
provision. It is a very serious offence to interfere with an international convention. There are on this continent only 107 channels for broadcasting purposes, which must take care of 900 existing radio stations, and it will therefore be realized that there must
be very efficient policing by each country of the channels within it. This provision is in the present Radiotelegraph Act. Those charged with administering these acts realize what a very serious offence it is to interfere with an international convention.


[Stage Direction]
Paragraph agreed to.
On section 3, paragraph (d).
Mr. LANDERYOU:: This seems to be
quite a paragraph. The governor in council may "make regulations for the censorship and controlling of radio signals and messages in case of actual or apprehended war, rebellion, riot or other emergency." The government is going to make regulations in respect of all these matters. What is meant by "other emergency"? What does the government consider an emergency?


Clarence Decatur Howe: This is no change from the
present legislation. Of course, to be recognized by a government as an emergency a situation must be a very, very serious one. The only change we are making here is to change the word "radiotelegraph" to "radio."


John Horne Blackmore: In view of certain
things which are being rumoured and the power which is here being given to the governor in council to deal with all these matters and "other emergencies," and to prescribe the punishment when the emergency is merely apprehended, it seems to me that we are conferring power upon a group of men, whoever they may be or whenever they may be acting, which will render them pretty nearly absolute dictators of the use of radio in this dominion. I personally object to that very strongly. I believe in freedom of speech. I believe in free discussion. I am completely in sympathy with the remarks of the hon. member for Broadview (Mr. Church) and of the Prime Minister (Mr. Mackenzie King) with respect to not discussing matters affecting other states that may cause complications in their domestic affairs and trouble perhaps between them and us. But I think we cannot do otherwise than face the fact squarely, that there is a disposition on the part of certain people in this country to say that other people are wrong and to prevent them, whether they are right or wrong, from discussing what they have to say. This is going to lead to disaster as sure as we live, because men are going to become more and more bitter, as they are doing, and where we are going to end no one can foresee. I believe it would be quite in order for me to suggest to the minister that some change be made in the wording of this
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paragraph so as not to leave it entirely to the governor in council to decide what the term "other emergency" shall mean.


Mr. WEIR:: What does my hon. friend
think about the licensing of the press then?


John Horne Blackmore: The important thing at the present time is the use of the radio; but since my hon. friend has been impertinent enough to break in with another matter not in any way connected with this, let me tell him that the "licensing of the press" made no attempt to prevent any party or group from presenting its views at as great a length as it desired. The Alberta government never attempted to limit free discussion or intended to do so. But just as sure as we are in this chamber to-night, there have been attempts made to prevent in this country free discussion of vital matters pertaining to our domestic affairs. I do not charge the minister with any wrong intention, because I have a great respect for him, and as he says, these words were in the previous act. But in the light of conditions as they are to-day we cannot be too careful. If fascism has its word to say, I should like to hear fascism express itself fully and completely over the air, so that we can all hear about it; and if communism has a case to present, let it do the same, so that the people may hear the whole story. Then, if liberalism, conservatism, the cooperative commonwealth federation and social credit have ideas which can compete successfully with those ideologies, let the people hear.


Mr. SPENCE:: Shut them all off.


John Horne Blackmore: There we have the
voice of fascism-"shut them all off!" I just wish to register my disapproval of that wording, and to urge the minister that it will be wise to specify just what is meant by it. Let me repeat that to give this body power to decide what is an emergency and what is an apprehended emergency is conferring upon them tremendous powers.


Clarence Decatur Howe: This act has been on the
statute books in its present form since 1913. It was invoked only during the years of the great war, and all countries find such a provision a very necessary part of carrying on war. I think there is no possibility that the governor in council will invoke it for any minor situation.


John Charles Landeryou: Nevertheless it places a tremendous power in the hands of the governor in council. I believe that regulations governing this question should be set out by parliament. Otherwise entirely too much power is being placed in the hands of

the governor in council, which may not be used in the best interests of large sections of the people of Canada. We know how the power has been exercised in the past by the governor in council, and that some people in this country have not been pleased with it or have not derived much satisfaction from the powers they have exercised. Now is the time parliament should assert itself and establish regulations regarding these matters, and not leave them entirely in the hands of the governor in council.


[Stage Direction]
Paragraph agreed to.
On section 3, paragraph (e).
James Earl Lawson: I suggest to the minister that he very seriously consider, in that connection, that a penalty be prescribed not by regulation, making a separate section of the act, if he so desires, to provide that for offences for which no specific penalty' is prescribed there shall be a penalty not exceeding a fine of $50. Probably the Minister of Justice would agree with me, if he gives the matter a moment's consideration, that it is not good legislation to have penalties prescribed by the governor in council on general principle. I admit there is an exception in the case of the preceding one, covered by section 3 (d), because that is to meet an emergency condition under emergent circumstances. but this paragraph (e) is only to deal with ordinary run-of-the-mill offences which are not specifically provided for with some penalty otherwise in the act.


Hugh Alexander Stewart: I cannot think that the minister has read some of the speeches of his leader and of the Minister of Justice, delivered in the last parliament. If he had, I am sure he would not have presented to the house a bill containing this provision. I remember that on many occasions the present Prime Minister and the Minister of Justice very severely condemned legislation by the governor in council, and condemned it when it did not occupy the field of imposing penalties, and they were particularly severe whenever it was suggested that the governor in council might impose a penalty. I cannot believe that the Minister of Justice saw this section before it was presented to the committee. Certainly it is in direct opposition to the position his party have taken during a period of four or five years in connection with similar sections in other legislation. The position taken by the hon. member for York South is absolutely sound. A penalty of this kind ought to be found in a section of the act, and it ought not to be left to the discretion or to the judgment of the governor

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iu council to impose penalties. We should know, when a penalty is being imposed, what it is, the extent of it and what it is for, why the penalty is imposed. I call attention to the fact that this is a new section; that it is not found in the act. The minister cannot justify it on that ground. He is inserting a new section which, as I have said, is contrary to the position that was taken and adhered to and reiterated and emphasized by the Prime Minister and the Minister of Justice in the years gone by. I am sure the Minister of Justice will agree with me that on former occasions he has taken the position which I am now taking.


Ernest Lapointe: I would be afraid to deny that.


Louis-Prudent-Alexandre Robichaud: As regards this clause 3, paragraph (e), inasmuch as I had to disagree with the hon. member for York South this afternoon, I am very glad at this time to say that I agree with him. I do not think we should give the governor in council the power to make regulations to impose penalties. To my mind it is just as easy to insert the provision in a section of the act. For instance it could be subsection 2, reading as follows:
Any person convicted of a violation of any of the regulations made under this section for which a penalty is not already herein prescribed shall be liable upon summary conviction to a penalty not exceeding fifty dollars and costs or three months' imprisonment.
It would be just as easy to have it in a section of the act as to make it subject to regulation by order in council.


Mr. LANDER  YOU@: Once more I wish to protest against legislation of this kind. I made a protest under paragraph (a), where they can make regulations. Now I find that the governor in council can impose a penalty, and they are given absolute control. Parliament is given no right to say what the penalty shall be or what the regulation shall be.


Clarence Decatur Howe: Since all the serious thinkers seem to agree on this point, if paragraph (e) can be allowed to stand we shall suggest an amendment.
Mr. BLACIvMORE: I am glad that the minister has taken that attitude, because, while I would not suspect this government of doing such a thing-


James Houston Spence: The hon. member puts too much confidence in them.


John Horne Blackmore: -once these paragraphs are passed there is a complete and perfect set-up for the development of a
dictatorship between one session of this parliament and the next, and nothing can be done to prevent it. Everything can be done by order in council. Dictatorships have started in other parts of the world just as easily as that.


Frederick George Sanderson: All other paragraphs of clause 3 are carried.


Mr. ESLING:: In this discussion as to licences and penalties, I wonder whether the minister would think it unreasonable if I asked him to inform the committee the government's attitude in connection with radio patents. I fully realize that patents come under another department, but at the same time it is up to the minister to initiate any action for the relief of the public. For instance, let us take an example such as this: A man purchases a radio and pays his licence fee of $2.50. It just so happens that he bought that radio in the United States- why? Because the action of Radio Patents Limited permit the radio manufacturers in Canada, about twelve in number, to charge anywhere from 50 to 100 per cent more for the same style of radio produced in Canada than is charged in the United States. That man has paid his licence fee and along comes Radio Patents Limited and asserts its right, as it contends, to confiscate that radio and destroy it. It makes the purchaser sign an undertaking that he will not bring a radio into Canada; that he will not use one; that he will not sell one, or manufacture one. That situation is created entirely by a series of patents held by a holding company, and these manufacturers lease from that holding company the privilege of using their own patents. And, of course, the royalty they pay is tacked on to the cost of the Canadian-made radio.
We know that the matter is before the tariff board, 'but in the meantime the government is in full possession of the facts. It knows that these people will assert their right, so-called, to confiscate a man's radio. The government knows that the purchase price in Canada is anywhere from 50 to 100 per cent in excess of the price in the United States. In view of these facts, does the minister not think that, without waiting for action on the part of the tariff board some action should be taken at once to relieve the public of these impositions made by Radio Patents Limited?


Clarence Decatur Howe: I think the government has taken the logical step in ordering a full investigation of the situation. The situation has been known for many years and there has been a growing realization of it. It is, of course, a complicated matter. Our patent
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Jaws are there, and it is our own patent laws that make the situation possible. Bringing out the full facts and disclosing all sides of the question is a necessary step before any action can be taken.


Mr. JOHNSTON (Bow River):: I understood the minister to say, when this question was under consideration before, that the matter was receiving the attention of the tariff board. I brought it up because I had letters from my own constituency. In one instance a salesman told me that there were three hundred convictions on file. I was of the opinion that this was an exaggeration; but even if it is, that point should be definitely established. I understood the minister to say that the matter was before the tariff board for a ruling. Has there been a ruling on it?


Clarence Decatur Howe: It was referred to the tariff board in February and they are now assembling the facts, but no ruling has been given.


Charles Edward Johnston: There will be a definite ruling on that?


Clarence Decatur Howe: Yes.


William Kemble Esling: Action could be taken under the combines act. It does seem unreasonable for the public to have to continue suffering under these impositions. Under section 11 of the combines act immediate action could be taken to remedy the situation. It is almost incredible that a Canadian citizen cannot purchase a radio in the United States, bring it into Canada after he has paid the duty, and enjoy the possession of it, but that is the fact. He cannot bring a radio in from any country even though he pays the fully assessed duty and the sales and excise tax. He simply cannot bring it in and call it his own. Just ihink of any corporation having the power to confiscate a man's radio after he has paid for it and paid the government duty and obtained his licence, while the government does not interfere but is simply willing to wait for the tariff board to investigate the matter, though we know that this condition exists. We have already put the facts on Hansard; we have stated cases. There is the case of the Winnipeg concern where they were permitted to sell their radios on condition that they paid a royalty and all legal charges. We had cases in Prince Rupert. There was a case in my own home town. A man simply refused to sign the undertaking, and he was told that if it occurred again Radio Patents Limited would exercise its right to confiscate his radio and destroy it, a radio that he had paid for and brought in. It is true he brought it in under the $100 exemption, tout he declared it and got his clearance. It makes no difference,

however, whether you bring it in under the $100 exemption, or in the regular course, paying the customs duty; Radio Patents Limited still asserts its right to confiscate your radio and destroy it. Let me ask the minister this question: Is there any reason under the sun why that state of affairs should continue? Should there not be more speedy action than is possible as a result of a mere reference to the tariff board? Is the matter going to drag for another year? I know just about how much has been paid in royalty by these radio manufacturers to Radio Patents Limited for the privilege of using their own patents, and then that royalty is tacked on to the price of the Canadian-made radio. Does the minister not think that there should be more immediate action than we can obtain by waiting for the outcome of a long drawn out hearing by the tariff board? The combines act would permit of such action, and the public would feel much better disposed towards the department and the radio business in general if such action were taken.


Charles Avery Dunning: Perhaps a word as to
the manner in which the present reference to the tariff board originated might be useful at this stage. Representations were made to the government last year regarding unreasonably high prices, particularly of radio products. Allegations were made that these outrageous prices were probably made possible by the operation of the tariff. Other statements were made similar to those just made by the hon. member, and denials and qualifications and all the rest of it came in great volume from those affected. The government determined that I should make a reference to the tariff board with respect to the bearing of tariffs on the conditions revealed in the radio industry. But in examining the matter for the purpose of reference it did not take me long to come to the conclusion that such an investigation could not lead to anything of value unless it included a full investigation of the manner in which the Canadian patent law operates with respect to radio. I would point out that the patent law operates with respect to any commodity coming within its provisions; there is no difference in the treatment of radio or radio tubes and parts and the treatment of any other commodity under that law. But because of the circumstances to which my hon. friend referred I believed that no investigation by the tariff board could produce useful results unless there were combined in the reference the investigation of the manner in which the patent law operates in connection with the price structure and prices charged and the provisions of sale of radio parts. For that reason this method

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was chosen as being the one most likely to bring out the facts of the situation both from the standpoint mentioned by the hon. member and with respect to the bearing of the tariff on the cost of radios and radio parts.
I	expect that the tariff board will be proceeding very shortly with the hearing, which I can assure my hon. friend will be a very thorough investigation into the whole matter. I think we have at our disposal no more effective machinery for investigating the whole matter. An investigation dealing only with the patent law would be subject to two difficulties: (1) that the patent law is the same with respect to any article which is patented, and any abuse which exists may not be confined to radio but possibly extend to other patented articles; (2) an investigation based only on patent law would ignore the tariff aspects of the problem. So for that reason it was thought well to hive an investigation before a body competent to go into all aspects of the matter and to give to parliament and the country the facts upon which judgment could be intelligently based. There are many views on the matter. Personally I am inclined to the view expressed by the hon. member, but certainly that view is contradicted very strongly by those interested in the business. By the means we have adopted we shall be sure of a complete understanding of the facts. The tariff board can call to its assistance auditors and experts of any kind, go right into the business of the people concerned and get all the facts.


Mr. COLDWELL:: I wish to support the
hon. member for Kootenay West (Mr. Esling), and, I am glad to know that the Minister of Finance (Mr. Dunning) has taken the steps which he has. There is one angle to this business that requires to be carefully investigated. It concerns people who brought in small radios under the S100 exemption. I drew the attention of the house last year to a case of which I have knowledge in which the purchaser of an automobile radio and a small cheap house radio was forbidden by the radio patent corporation to use either of them, then subsequently granted a permit. The point is that the patented tubes and so on in these radios paid a royalty in the United States; then by what law can the radio patent corporation collect a further royalty? If our law is weak in that respect, I should like to see the gap closed by this parliament.


Clarence Decatur Howe: I have an amendment to
suggest to section 3 covering the objection to paragraph (e):
That clause 3 be amended by striking out paragraph (e) and inserting a subsection 2 51952-175
reading as follows: "Any person who violates any regulation made under this section for which no penalty is provided shall be liable upon summary conviction to a penalty not exceeding fifty dollars or three months imprisonment."


Hugh Alexander Stewart: Are the words "and costs" in there?


Clarence Decatur Howe: The words "and costs" should go in.


Ernest Lapointe: I so
move.


[Stage Direction]
Amendment agreed to.
Paragraph as amended agreed to.
Section as amended agreed to.
On section 4-Ministerial regulations.
Mr. BARBER:: I believe the question of
licence fees for broadcasting companies would come under this section. The question I want to bring to the attention of the minister relates to some confusion which seems to exist. A small station in my district, each time it applied for a licence in the last five years, applied for increase of power from 100 to 250. Other small stations in the upper country have received an increase to 1,000, but this station does not require that amount of power to cover its district, which is a valley in the mountains. But each time it made application it was said that the matter would have to be taken into consideration by the officers of the department. Looking over the file I noticed in the communications of the last two years that the department said that the matter would have to be considered by officers or some technicians of the Canadian Broadcasting Corporation. Then the broadcasting corporation write back and say it is a matter for the department. I discussed the matter with the manager of the broadcasting corporation a couple of days ago and he promised to go into it thoroughly. But there appears to be considerable confusion. I wonder if that could be explained.


Clarence Decatur Howe: The procedure in connection with a change of power is set out in the broadcasting act. The application must go first to the broadcasting corporation, and a recommendation is then furnished by the corporation to the governor in council, which may or may not carry out that recommendation. The final action rests with the governor in council. So far as the particular application of my hon. friend is concerned, I may say that his application has passed all these stages, and I think it became law to-day.

Radio Broadcasting


John Horne Blackmore: I wonder if the minister would explain what is meant by paragraph (a), so that we may understand why such a law should be passed.


Clarence Decatur Howe: This simply prescribes the form of the application. In other words, if you apply for anything from the Department of Transport, you do it on a prescribed form setting out the information required.
Paragraphs (a), (b) and (c) agreed to.
On section 4, paragraph (d).


John Horne Blackmore: Would the minister explain this paragraph in order that we may be quite clear as to what is meant by "conditions and restrictions"? It may help the minister to understand what I have in mind if I tell him that not very long ago there was a radio station approached by a gentleman who wished to deliver a speech over it. That speech was perfectly harmless; it was quite angelic as compared with some of those to which reference has been made to-night; yet the man in- charge of the station said that he dare not allow that speech to be delivered because he feared he might lose his licence. This gives rise to a great many suspicions.


Clarence Decatur Howe: There is nothing in this act which governs in any way the subject matter which may be broadcast over the stations of the corporation or any other broadcasting station. This simply governs the more technical aspects. If my hon. friend will study the broadcasting act which was passed by this parliament two years ago, he will find all the provisions governing the matter to which he refers. I may say, however, that owners of private stations who for Some reason of their own do not wish to carry certain broadcasts are very much in the habit of blaming it on some censorship by headquarters, but I can assure my hon. friend that the censorship by headquarters has been very rareiy used, and then only after numbers of complaints have been received as to the nature of a certain program.


[Stage Direction]
Paragraph agreed to.
On section 4, paragraph (e).
Thomas Clement (Tommy) Douglas: This paragraph provides for the licensing of radio receiving sets. On a previous occasion the minister promised to give some consideration to the possibility of having the licence fee for battery sets less than the fee for electric sets. I wonder if the minister has given any further consideration to that matter, and if he would care to say anything about it at this time.
[Mr Howe.]


Clarence Decatur Howe: The licence fee for battery sets is, in fact, less than the fee for other sets. There was no change in the licence fee for battery sets; the change was made only in connection with power-operated sets.


Major James William Coldwell: Was that the original intention? I understood the licence fee was the same for all sets. Was that changed subsequently to the discussion in the house?


Clarence Decatur Howe: I cannot say whether or not it was subsequently; it may have been. There was, in any event, a change made before the regulation was published.


James Earl Lawson: Is it not a fact that
there was an original order in council passed? My recollection is that last December or January an order in council was passed providing for an increase in radio licence fees, in respect of all receiving sets, to $2.50, to become effective April 1, 1938. Then, subsequently, my recollection is that there was an order in council passed-though I do not believe the second order in council was tabled in the house-amending the original order and providing that in the case of battery sets the fee should remain at $2.


Clarence Decatur Howe: No; there was no second
order in council. The first order in council contemplated regulations, and subsequently regulations were issued providing for the fee, but there was only one order in council.


James Earl Lawson: Has the minister power
to prescribe the fee? I thought the tariff of fees was prescribed by order in council.


Clarence Decatur Howe: As my hon. friend says,
there were two orders in council, but the second simply authorized the detailed regulations under the first. The first order in council mentioned certain regulations to be passed later. The second order in council issued the regulations, and when those regulations were issued the distinction was made between power sets and battery sets.


James Earl Lawson: When were the regulations issued which provided for the fee of S2 on battery sets?


Clarence Decatur Howe: I should think some time in March. I know a considerable time was required in which to issue the licence forms.


James Earl Lawson: That is what I had in
mind.


Clarence Decatur Howe: That is right; the regulations were issued later.


Mr. NEEDHAM:: Then I understand that the old rate applies to battery sets?

Questions


Clarence Decatur Howe: Yes.


Joseph Needham: And that would apply
also to car radios, which are run by batteries?


Clarence Decatur Howe: No; it applies to houses which are not connected to a source of electric current. It does not apply to cars.


Major James William Coldwell: If a battery set is operated in a home where they have electric power, it pays $2.50?


Clarence Decatur Howe: Yes, if there is electric power in the home.


Major James William Coldwell: Even though a battery set is being operated?


Clarence Decatur Howe: Yes.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Wednesday, May 11, 1938