1939-03-14

PUBLIC ACCOUNTS-MOTION FOR CONCURRENCE IN FIRST REPORT

[Stage Direction]
Mr. W. A. FRASER (Northumberland, Ont.) presented the first report of the standing committee on public accounts, and moved that the report be concurred in.

Priority of Government Measures
Hon. H. A. STEWART (Leeds):: Mr. Speaker, in the ordinary course I presume that without unanimous consent the motion to debate this report cannot be proceeded with to-day.


Mr. SPEAKER:: The point is well taken.
The motion stands as a notice for to-morrow. Forty-eight hours' notice of motion is required.
Motion stands.



RADIO BROADCASTING-MOTION FOR CONCURRENCE IN SECOND REPORT

[Stage Direction]
Mr. A. L. BEAUBIEN (Provencher) presented the second report of the special committee on radio broadcasting, and moved that the report be concurred in.
Hon. H. H. STEVENS (Kootenay East):: I was not in the committee during the last few moments when, apparently, this report was agreed upon, but I am opposed to the suggestion that this committee should now sit while the house is in session. I do not think there is any need for it. I think it is unwise, unless in cases of absolute urgency, that committees should sit while the house is in session. Had I been in the committee I should have voiced my objection there, but I left just before the committee rose, and I assume that the report was agreed upon afterwards.


Mr. BEAUBIEN:: May I say to my hon.
friend that it is not the intention of the committee to abuse the privilege. It is merely that members of the committee thought it would be advisable to have it, and they could then decide whether or not they wished to exercise it.


[Stage Direction]
Motion agreed to.


Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That the name of Mr. Deslauriers be substituted for that of Mr. Dussault on the special committee appointed to study and report on matters pertaining to elections and electoral districts of Canada.
That the name of Mr. McNevin (Victoria, Ont.) be substituted for that of Mr. Wood on the special committee appointed to study and report on matters pertaining to elections and electoral districts of Canada.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: My attention has been drawn to the remarks of my hon. friend the leader of the opposition (Mr. Manion) at the close of yesterday's session, in which he suggested that the government should bring on to-day a motion to go into committee of supply, rather than proceed with the bill with respect to the defence purchasing board. My hon. friend further mentioned that he thought the government ought to bring in a motion to go into supply on Mondays and Tuesdays, and he made some other suggestions.
May I say to my hon. friend that he will doubtless recall the little discussion we had in this house a month ago, and again a week ago, with reference to the business of the house and the government getting along with the public business. At that time my hon. friend felt that supply was not a very important matter, that it was brought before the house when nothing else was available, and he alleged that we had not brought in measures of public importance and sought to chastise us on that account.


Mr. MANION:: It was merely a return chastisement.


William Lyon Mackenzie King: No. There was a good deal said in the preliminary part of my hon. friend's remarks. Perhaps the house would be interested in hearing them as they bear upon his request of last night. They will be found in Hansard, page 1617:
Here is a list of matters called public business dealt with so far this session; let us see how important they are. There was of course the speech from the throne. Then, supply. Supply comes in as a sort of filler-in; it is one of the measures brought in when we have not anything else to proceed with. When the government runs out of its regular business it brings on supply. While the estimates are in a sense public business, they are not important enough or urgent enough to have everything else sidetracked in order that they may he dealt with.
Now, I wonder what my hon. friend would say to me if, after having had this advice, I were instead of going on with other important legislation, to proceed with supply.


Robert James Manion: The government has been proceeding with it on Thursdays and Fridays.


William Lyon Mackenzie King: No, I do not think we have. I believe that, if my hon. friend looks over the records, he will see that unfortunately we have taken up very little supply on either Thursdays or Fridays. We

Priority of Government Measures
have been trying to get on with the other measures which, as my hon. friend the Minister of Mines and Resources (Mr. Crerar) mentioned last evening, we were anxious to get over to the other house as soon as possible. In the latter part of his remarks my hon. friend made special mention of the two measures which we spoke of proceeding with to-day and which were announced last night by the Minister of Mines and Resources as the ones intended for to-day. I quote from page 1624 of Hansard:
Mr. Manion:	We have been dealing with
the trade treaty, but the right hon. gentleman has been shelving it for other measures. We have been led to understand since the house opened that they were about to bring in a measure for a defence purchasing board. Why have they not brought it on?
We are now trying to proceed as rapidly as we can with the trade agreement. We are also tiying to proceed as rapidly as we can with the defence purchasing board bill. Those are the two measures which, we feel, ought to be given priority over all others, and they are the two which the leader of the opposition suggested should come on, because of their importance, before other measures. I should like to oblige my hon. friend in every way I can, but I would say this. From the beginning of the session the government has tried to get on with the public business, with the measures which we regarded as the most important. A great deal of time was taken up in the debate on the address and on other resolutions which were moved, but these two measures I have just mentioned are ones which we could not proceed with on that account and are anxious therefore now to proceed- with as rapidly as possible. I think that if we are to have due regard to public business and the rapidity with which it is to be carried on, we should continue with those measures.
May I point out to hon. members, what I believe is well known to them but which perhaps requires emphasis at the moment, that a motion to go into committee of supply means, as my hon. friend has indicated, that in all probability the opposition will then introduce an amendment in the nature of a want of confidence motion, which may occasion debate and which may run on in this house for a week or longer. If that is what the government is to expect, there is all the more reason why, before legislation which we regard as important is again held up because of other matters which the opposition wish to discuss, we should get on with the measures to which the government attaches particular importance. I hope that we shall make sufficient progress this week with the legislation

which is on the order paper in the nature of resolutions and bills which we wish to get across to the other house, to enable us to call for supply at a comparatively early date; but I say to my hon. friend that if we are to get on with the important measures we must take first those which for the present we regard as the most important, and take up somewhat later the matters which we think can be better dealt with at a later stage.
I should perhaps also remind the house of what the hon. member for Kootenay East (Mr. Stevens) said to us, speaking on Wednesday, February 14, with regard to the government controlling the business of the house. His remarks will be found at page 918 of Hansard:
Control of the house is always in the hands of the government, and from my recollection that was never more so than it is to-day, having regard to the government's huge majority.


Henry Herbert Stevens: Well, let us get on with the business.


William Lyon Mackenzie King: That is what I want to do, and that is why I am explaining to the house why the government thinks it would be preferable to take up legislation which is on -the order paper in the nature of bills and resolutions before we move to go into committee of supply, because once we move to go into committee of supply we know that a debate may be provoked in this house which may occupy an indefinite number of days.


Robert James Manion: I wish to say just a word with regard to the remarks of the right hon. gentleman. The reason I mentioned this matter last night was that it has been the custom of all governments once in a while to move to go into supply on Mondays and Tuesdays, to give to any private member the right to take up some subject in connection with which he thinks redress is required. There was no intention, may I say, on the part of our party of taking up more than perhaps part of a day in discussing the question. However, so far as I am concerned the right hon. gentleman can bring it on when he wishes. I am not going to worry about that any further. I merely suggested it because it looked to me, and it does yet, as though the government were dodging the question of moving into supply. I am not going to argue any more about it. The government can do as it wishes.
The Prime Minister (Mr. Mackenzie King) has a very clever habit of picking out some little slip of the tongue and harping on it, referring to it over and over again. That

Pacific Ocean Defence
is what he did when he picked out the remark I made about supply. I simply meant this, and we all know it to be true, that when this government or any other government run out of business, they swing over to the estimates of some department. There is no particular hurry about them. They are not particularly helpful to anything; they are merely fillers-in. That is what I meant, and I stick to it. When governments have no other legislation ready, they move over into estimates, perhaps public works or agriculture-agriculture by preference on Friday, for example. We know that that is so, and that is all I referred to. The Prime Minister keeps on harping on the fact that I said "supply." Everyone knows that the government has to get supply, but what I meant was that governments constantly move into estimates when they have nothing else to move into.
With regard to the defence purchasing board, I quite agree we should get on with that. I certainly had no desire to delay the [DOT]government's business at this time, and as regards the attitude which the right hon. gentleman has taken to-day, I repeat what I have said on a number of occasions. We have done nothing on this side of the house to hold up the business of the government. The questions that have been debated have been of the utmost interest. Certainly none will assert that important questions were not brought up in the debate on the address, and I submit that the Bren gun question was of the utmost importance, so much so that a good many of the details in connection with the defence purchasing board are, I contend, the result of the Bren gun investigation. Again, the trade treaty is public. business; no one will deny that. I say, therefore, that we have not been holding up public business in any manner. However, whatever the right hon. gentleman desires will suit me.
As regards a vote of want of confidence, that was not our desire. One of our members did wish to bring up a certain question because he is of the opinion, and I agree with him, that it is of the utmost importance. With a view to expediting public business, I would suggest that instead of a want of confidence motion, after we have disposed of the defence purchasing board, the Minister of Labour (Mr. Rogers) might bring on his resolutions with respect to youth training and unemployment, and on that motion the remarks which the hon. member on this side wishes to submit to the house might then be made. That would suit us and it would not delay matters, because the subject is one that will be discussed in any event. After
we have got through discussing the defence purchasing board, the Minister of Labour, I suggest, might take up the resolutions with respect to youth training and unemployment and the other question could then be discussed. I am not asking for favours; I wish to have that distinctly understood. I neither ask for them nor am I particularly anxious to give them. My right hon. friend can do just as he likes.


William Lyon Mackenzie King: In order to keep the record straight, I might point out that no mention was made last night of the resolutions of the Minister of Labour (Mr. Rogers), but since my hon. friend has suggested that they might be taken up at an early day, I will say now that we shall take them up to-morrow the first thing.


Robert James Manion: Suppose we are not through with the discussion of the defence purchasing board? My right hon. friend was so anxious to have it disposed of that I should like to see it done.


William Lyon Mackenzie King: I was going to say-my hon. friend rather threw me off the track by saying we might go on to-day after concluding with the defence purchasing board bill-that we would go on with the resolutions if we got through with the defence purchasing bo-ard. He led me to assume the other measure would be through to-day.


Robert James Manion: Sometimes I should like to throw the right hon. gentleman off the track.



PACIFIC OCEAN DEFENCE


[Stage Direction]
On the orders of the day:
Mr. H. C. GREEN (Vancouver South):: May I direct a question to the Prime Minister? A dispatch from London, dated March 12, and published in the Ottawa newspapers yesterday, contains an announcement by the Dominions Office that there is to be a conference on Pacific ocean defence questions, to be held at Wellington, New Zealand, at which there will be representatives from the United Kingdom, Australia and New Zealand. In view of the fact that Canada has serious defence problems on the Pacific ocean, will it be possible for Canadian representatives to be sent to this conference?


William Lyon Mackenzie King: The government of Canada has not received any communications from any governments with respect to this particular conference. I think the reason is clear. The conference to which my hon. friend has
Royal Visit

made reference is one which is being held with respect to matters affecting the southern Pacific, and evidently the governments immediately concerned have not thought it advisable to invite the Canadian government to send any representatives. Until we are invited it would be as wise for us not to accept.



ROYAL VISIT


[Stage Direction]
On the orders of the day:
Mr. J. H. BLACKMORE (Lethbridge):: I wish to direct a question to the Prime Minister (Mr. Mackenzie King). Inasmuch as requests are coming in for certain members of parliament to 'be in their home cities at the time of their majesties' visit, will the Prime Minister tell us where he expects members to be during that time?


William Lyon Mackenzie King: I do not know that I can answer my hon. friend's question exactly in the form in which he has put it, but as I understand the essence of it he wishes to know whether parliament will have prorogued or will be adjourning over the period of their majesties' visit to Canada, or whether we shall continue to sit here while their majesties are in this country.


John Horne Blackmore: And whether there will be in Ottawa any functions which members will be expected to attend.


William Lyon Mackenzie King: I believe I made it clear at the beginning of the session that the government is most anxious that the fact that their majesties are coming to Canada shall not in any way interfere with the business of this house-that the visit shall not be permitted in any way to be used as a means of influencing hon. members with respect to the length of time parliament is to sit. I therefore indicated at the time that if parliament was not ready to prorogue when their majesties came to Canada, we would adjourn over the period of their majesties' stay in the dominion. Since then, there has come to me from different sources, from members in different parts of the house, an intimation that, if we are not through at that time, hon. members probably would prefer to continue sitting during the time of their majesties' stay in the country, with a very short adjournment for the period of time in which their majesties will be in this city. There seems to be a considerable body of opinion in favour of that-


Some hon. MEMBERS:: Hear, hear.
[Mr. Mackenzie King.)


William Lyon Mackenzie King: -even from the intimations that have come while I have been speaking. I do not think that any decision should be reached on this point until we see how we get along with the business between now and the time when their majesties are expected to arrive. By Easter we may have a general idea of the amount of business that remains, we shall see by then what progress has been made. I would say at once, however that when it comes to making a decision on the point, an effort will be made, with respect to whatever conclusion we arrive at, to have it in accordance with what appears to be the consensus of view of hon. members.
As regards the period of their majesties' visit to Ottawa, every effort will be made to have matters so arranged that hon. members of both houses of parliament will be able to attend all functions that may arise in connection with that visit, with regard, of course, to what may be customary with respect to a state dinner at government house. But I may say at once that the government intend to have a parliamentary dinner when their majesties are here, which will be confined to members of both houses of parliament, so that there will be opportunity for all hon. members to be presented to their majesties, accompanied, if they are fortunate enough to have them, either by their respective wives or by an unmarried daughter.
With regard to other functions, the unveiling of the national war memorial, the laying of the cornerstone of the supreme court building, the trooping of the colour on parliament hill, all these functions will be so arranged as to make special provision for the probable attendance of members of the House of Commons and the Senate.
Perhaps this would be a good occasion on which to intimate to the house what his majesty has graciously signified his willingness to do in the event of parliament having concluded its business at the time of his arrival in Canada. Should parliament have concluded its business and be prepared to prorogue, his majesty has graciously signified his willingness to prorogue parliament himself. Lest this consent on his majesty's part might be construed as an indirect way of exerting pressure on hon. members to hasten the conclusion of the session, I have asked His Majesty the King through His Excellency the Governor General whether in the event of our not having concluded our business by that time we might not have the great privilege of having his majesty assent to one or two bills which might be held for that purpose, so that hon. members could participate in a function in which the king along with members of both

Defence Purchasing Board
houses of parliament would be taking part in these buildings. I am pleased to announce that his majesty has graciously signified his willingness to give the royal assent to any bills which may be held for that purpose, so as to ensure that there will be at least one function within the walls of these houses of parliament at which the king and members of both houses of parliament will be present.



NATIONAL DEFENCE


[Stage Direction]
Hon. IAN MACKENZIE (Minister of National Defence) moved the second reading of Bill No. 38, to establish a defence purchasing board.
Mr. JEAN-FRANQOIS POULIOT (Temis-couata): I have just listened to the statement of my right hon. leader (Mr. Mackenzie King), that his majesty may during his visit in Ottawa give his assent to a few bills passed by parliament. Of course such bills should be good legislation. I wonder if this bill is good legislation?
The other day I adjured my hon. friend the Minister of National Defence (Mr. Mackenzie) not to proceed with the resolution upon which this bill is based. Now of course we have to study the bill. There are two things to consider about this piece of legislation. In the first place it is the work of the interdepartmental committee which was headed by Doctor Skelton of the Department of External Affairs. So much for the past. What is to happen in the future? This is a transfer of power from the Department of National Defence to the Department of Finance. What was said last Friday on the resolution preceding the bill has been questioned by the press. A paper which I mentioned yesterday said that my attack upon a public official who is in no position to answer back illustrates the quality of Mr. Pouliot's sportsmanship and of his courage. I want every hon. member of the house to read the evidence as contained in the official files kept in the office of the clerk of sessional papers of this house, referred to in Hansard of February 13. It is the evidence given by the judge advocate general before the Bren gun commission. It was only on that day, at the thirty-second sitting of the commission, that Judge Davis realized what was the trouble in the whole Bren gun business. Every hon. member who takes the trouble to read that evidence will want then to read the complete evidence which is downstairs, assimilate it and
be guided by it. Hon. members will understand that there is in the Department of National Defence as judge advocate general a man who is not competent. He is not here, of course; if he were here he could not act as judge advocate general.
There is nothing I find so silly as to say that here we attack a civil servant, and that we attack a civil servant who is not here. If any one of us talks with his wife about the roast beef which has been burnt by the cook, it is not necessary for the cook to be present at the conversation. If you say that your boots have not been well shined by your servant, it is not necessary for the bootblack to be present at the conversation. If you say to your wife or your friend that your butler has stolen your whisky, it is not necessary for the butler to be there to hear of it; and they are not supposed to listen through keyholes. We are here to decide upon our own business, the business of governing- not to attack or to criticize anyone, but to pass judgment upon what is wrong and praise what we think is right. There is no lack of courage in saying that. There is courage in not being afraid of blackmail of that sort. What has been written by that paper is just pure blackmail, trying to frighten members of parliament. Moreover they were bold enough to make suggestions to the Prime Minister and other members of this house to stop free discussion in this house. Will there ever be a padlock law applied to this house? That very paper protested against the Quebec padlock law, but now they want every hon. member of parliament to be tongue-cuffed. That as to courage.
I want to say something about the progres-. sive and nefarious influence of some high-posted civil servants, who probably do not mean badly but who are intriguers of the worst kind and who try to serve their own interests or the interests of those who are close to them rather than the interests of the state.
In the first place we will see to what extent some friends will act together. Some years ago, in 1924, there were two professors of the faculty of arts of Queen's university, in the political and economic science branch. They were in active service. One was Doctor Skelton and the other Doctor W. C. Clark. The former is now under secretary of state for external affairs; the latter is now deputy minister of finance. I have in my hand a most interesting book, the Canadian Parliamentary Guide for 1939, which contains some autobiographies. In one of these, it is interesting to note, there is a gap covering seven
Defence Purchasing Board
[Stage Direction]
or eight years; that is, the autobiography of Doctor Clark. If you will look at page 672, sir, you will see-
Walter Edward Foster: Order. I do not think the hon. member is quite in order. The motion before the house is for the second reading of Bill No. 38, concerning the establishment of a defence purchasing board. I think the discussion should be confined to the advisability of establishing such a board.


William Lyon Mackenzie King: Apart from that, Mr. Speaker, I am sure my hon. friend will agree that I am the last person in this house who would wish to curtail in any way his freedom of discussion; but I do feel that, as leader of the House of Commons, it is part of my duty to see that members of the public service, who are not in a position to speak for themselves during the course of debates which take place in this house, should be protected against any remarks in the nature of a reflection upon themselves, or references to their personal history such as the hon. member I gather was about to make. It must be obvious that members of the public service have to look to the administration for protection in the discharge of their duties; and if deputy ministers or leading public officials or any members of the public service are to be attacked here, in justice to them they should have the right to make reply on their own behalf from wherever they may happen to be. If that method were to be adopted with regard to the conduct of our public affairs I am afraid the public service of the country could not be carried on in the manner in which the country has a right to expect it will be carried on.
I hope my hon. friend will see that in dis-. cussing the matters he is dealing with at the present time, it is not necessary for him to bring in personal matters which really have no bearing on the question before the house.


Mr. POULIOT:: I will not insist further on that point, Mr. Speaker, but in due course I will obtain that information by means of questions placed on the order paper, and I shall be satisfied if I receive complete answers to those questions.
What I want my chief to understand, however, is that I have no personal grievance against Doctor Skelton, Doctor Clark or any other man in the service. What I am very much concerned about is the fact that daily the high officials of the civil service are acquiring greater importance at the expense of the government. This is a matter of great concern to me, because these men are responsible to no one. Many times when a

minister wants to get some information from these officials-and I am not referring to these two in particular-th'ey think they are superior individuals. They feel that members of the House of Commons count for nothing, though we are here, working daily, meeting people in all walks of life and trying to do our best for them. We need the civil service to help us in our work. That is my humble contention, and I am sure my chief agrees with me.


William Lyon Mackenzie King: In order to
make my position quite clear may I say that my hon. friend would be quite justified in attacking me or in attacking the Minister of Finance (Mr. Dunning) with respect to any official within our departments who may not be performing his duties as he should. But we are the persons to be attacked; we are the responsible ministers, and the same would apply to the ministers of the other departments. My hon. friend is quite within his rights in bringing to the attention of the house anything at all in connection with the attitude of individual public servants; and, speaking for myself, if officials of any department with which I have to do are assuming attitudes which they should not assume towards members of the House of Commons or the Senate, I will be the first to speak to them about it. But I would say, knowing him as I do, that Doctor Skelton is the last man in the world who would seek for a moment to be other than wholly deferential to all hon. members of the house, and I believe the same is equally true of Doctor Clark.


Jean-François Pouliot: I agree to a certain extent with what my right hon. leader has said. I should like him to understand that I have no vengeance to satisfy. I am much above that. What I endeavour to do, at times, is simply to enlighten the government as to what is going on, for their own good. Of course according to parliamentary practice a minister is responsible for everything that is done by those under his control; but with the new system of things-and this defence board is part of that system-I feel that the ministers will have less and less authority over the civil service.
My understanding of government is the understanding which was held by my great grandfather and my grandfather, who were also privates in the great Liberal army. It is that a member of parliament is entitled to all information concerning the expenditure of public money and that the minister who is in charge of a department is responsible for everything that is done by his department.

Defence Purchasing Board
What I regret, sir, is that to-day there is a strong tendency to lean upon the shoulders of somebody else; it is still the old story, "My little brother broke the glass." No one is responsible for anything. When 'any member of parliament writes to a department for information he is almost always told that he has come to the wrong door. In fact, for your information, Mr. Speaker, as well as that of my right hon. leader and all other hon. members of the house, I would say that out of the sixty letters I have to write daily for my constituents at least half if not two-thirds are due either to the silliness, the stubborness or the great importance of some officials of the civil service. So, instead of having the leisure to read some public papers which I must read I have to w'aste my time dictating useless letters because those to whom I have written did not give satisfactory answers in connection with very ordinary routine matters.
It is not my pleasure to rise to-day and to address the house on this bill. I do not do it for pleasure. I do not do it as a matter of entertainment; in fact I realize that my speech is very dull. I do it from a sense of duty and, in the best possible spirit and as a good Liberal, I give warning to the government. I want the principle of ministerial responsibility reestablished as it was at the time of Sir Wilfrid Laurier, as it was at the time of Blake, Baldwin, Lafontaine, Cartier and all the others. Those people may have made mistakes, but they were true imitators of the British parliamentary system.
Of course, I cannot understand a department which is not complete, like the human body. The Department of National Defence is one which requires quick action. At its head there is a minister. Then there is one deputy minister, and other branches of the department operate under each of the head officials. If this bill is adopted the Department of National Defence will be like a body deprived of its arms. It will have no ammunition, unless there is agreement by the Department of Finance. Who are the experts in armoury and gun making in the Department of Finance?


Mr. DUNNING:: None.


Jean-François Pouliot: Well now, that is a direct and timely answer. The experts in gunnery and armoury shall be left with the Department of National Defence. By exception we have two experts in the House of Commons-only two. There is the hon. member for St. John-Albert (Mr. McAvity) who was on the imperial munitions board, and the hon. member for Huron, who made munitions during the war. In addition to that, none of us knows anything 71492-118
about the making of munitions. The Minister of Finance has just said there is no one in his department who is expert in such matters. Well now, what will happen when there is an order or a requisition for a certain quantity of munitions, in a contract exceeding $5,000? The Minister of National Defence will have no authority to decide upon it. He may receive requisitions from Great Britain or from some other country, and those requisitions will be sent to the Department of Finance.
Then, we will have a board composed of four people-and this is in accordance with the report of Mr. Justice Davis. Who will those four men be? One will be a capable and experienced corporation lawyer, a com-merical lawyer who has had wide practice in dealing with large commercial contracts. You know, sir, that most of the trouble experienced by this country in regard to watered stock has been due to corporation lawyers. As a rule, corporation lawyers are a failure at politics, and no one has experienced that more than the present leader of the opposition (Mr. Manion), who is a distinguished medical doctor. There is no need for any corporation lawyer on that board. In fact, if somebody requires information about the solvency of a company which has sent a tender on a piece of ammunition he has only to subscribe to Dun's. It will cost $25 per annum, and he will receive all possible information concerning solvency of any company. If the Minister of Finance wishes to be more economical, he may ask the Bank of Canada to supply information concerning the solvency of any company which sends in a tender. Therefore there is no need for a commercial lawyer who has had a wide practice in dealing with large commercial contracts. And here is the point: It is just because the one who is now judge advocate general has had no experience at all in commercial contracts that one is required on the board.
Then the second suggestion is that there shall be a representative of labour. That is a farce, because the Department of Finance has no authority to prescribe hours of labour. You know, sir, the fate of the social legislation enacted by the House of Commons, but which was declared ultra vires by the privy council. There is no possibility of using the services of any representative of labour in connection with those contracts. We have no authority to do that. Unless the constitution is changed, the government can do nothing, except give a fat job or sinecure to a parasite of some kind.	.
And now we come to the capable and experienced manufacturer. This is dangerous,

Defence Purchasing Board

because such capable and experienced manufacturer must have some friends to protect underneath. I find that provision most dangerous.
Then there is mention of a chartered accountant, under the Minister of Finance. This is what I have preached in the house: Instead of having accountants from the Department of Finance the Minister of National Defence should have his own chartered accountants. If we look at the British publication which shows the personnel of the British war office, the British admiralty, the air department and the department for the coordination of defence, we see the number of chartered accountants who are appointed to look after the expenditures of each department. But here all the accountants of all departments are in the Department of Finance. This is another most dangerous step. Officials of the various departments are all intermingled. We have the example of the Minister of Finance being the head of the accountants in all departments. There is not a single accountant in the civil service who is not under the Minister of Finance. With a few exceptions, the legal advisory counsel of various departments are under the Minister of Justice. You have also a lawyer like the chief advocate general of the department of pensions, who is not a lawyer at all, and whose only qualification was to study medicine for one year. Then there are the translators, who are mostly under the Secretary of State, although they are scattered amongst various departments. I am against that, Mr. Speaker. There is no more hierarchy; there is no order in the departments. The minister cannot give definite instructions to any one of these men who are amongst his employees because they are under another minister and to reach them he has to communicate with that other minister, one of his colleagues. I am strongly opposed to that in principle.
There is another thing which also causes me the deepest concern. It is that all that intermingling, if I may call it that, is an arrangement to allow various officials to be entirely free to do just as they please under the authority of no one. The further away the authority is, the lesser in degree, in my humble view. I have studied many files and what I notice-and I wish to bring this to the attention of my right hon. leader and his colleagues

is the easy way in which several high officials try to evade all authority and all responsibility. That may not always be noticed, of course, but it is a very dangerous practice. My right hon. leader knows that if there is communism in Russia to-day it is due entirely to the extravagance of bureaucracy;

and in Germany and Italy the members of their bureaucracy were so powerful as to cause the destruction of democracy in those countries. Their influence was not always apparent. They were like termites, which were undermining the pillars of state. Today there is no more democracy in Russia, there is no more democracy in Italy, there is no more democracy in Germany; and here in Canada we are on the eve of having a dictatorship of bureaucracy. We should see the connection between the editorial staff, the whole staff of the Ottawa Journal, and the staff of the civil service commission, to understand what is behind the insults of which I have been the victim. I do not pose as a martyr, because I do not care what is said about me in praise or blame. I try to do my duty. In fact, Mr. Speaker, ever since I have been in politics I have been called so many names as to exhaust the richest vocabulary, and what can be said of me now can be only a repetition. Therefore I am indifferent to abuse. But what I regret is that some people do not see what is behind this. If order is not restored in the civil service we shall run the risk of falling down as other countries have done where bureaucracy was not checked.
Of course, it is always unpleasant to say something of anyone which is not a compliment; it is not a pleasure, but duty must come before sentimentality. Moreover there is the popular side to consider. People are thinking more deeply now than they ever did before, and they are very much concerned about these special privileges that are granted to the very few.
A man cannot be judged by his salary. Here we receive an indemnity of 84,000. Of that, all of us may pay perhaps $1,000 for insurance, give away $1,500 for gifts in our constituencies, and for travelling expenses, and what is left? Very little. There is $1,500 to live on, and we have to run into debt. We are not considered important because we receive a very small indemnity. But if the members of the House of Commons were receiving as much as the two officials whom I mentioned at the beginning of my speech, we should all be great men because our incomes would be much higher. That may seem stupid, but it is the view of many people. In the civil service, however, when a man has reached his maximum salary he is considered a genius, even if he was dumb when he was earning but little at the start.


Walter Edward Foster: Order. I have already called the hon. member's attention to the fact that he was wandering away from the

Defence Purchasing Board
question before the house, and I must again remind him that he is not in order in continuing to discuss the affairs of the civil service on this motion.


Jean-François Pouliot: Sir, I shall not persist, but the reason I was doing so was that this bill makes mention of a new body to be created in the service, and in my view we have enough civil servants now-more than enough if they were all competent. In conclusion, sir, I say that if the incompetent ones were replaced by competent ones there would be no need for this new board.


Mr. M. J. COLDWELL (Rosetown-Biggar):: Mr. Speaker, I rise to discuss not the civil service but this bill, one of the most important measures which has been placed before this parliament since it assembled in 1936. The bill in my opinion adopts and commits parliament and the country to a most momentous policy. We are asked by this measure to concur in the principle of the private manufacture of arms. To this principle a very large section of the Canadian people are very thoroughly opposed; and before the house is even asked to adopt the principle laid down by the bill, every opportunity should be given for careful consideration of its provisions.
The resolution foreshadowing this bill was placed on the order paper on January 25. The minister discussed the resolution last Friday, March 10, and the bill was distributed in the usual way to the members on Saturday last. From what I have been able to see of this bill, and because many of the members have been otherwise engaged since the bill was distributed, I submit that hon. members have had insufficient time to go into its details.
The group with which I am associated regrets that the government has felt it necessary to abandon the policy of the manufacture of armaments in publicly-owned plants.


Mr. MACKENZIE (Vancouver):: That is not correct.


Major James William Coldwell: I heard the interruption, "That is not correct." Having read carefully the minister's speech and having noted that, for example, the minister placed on the record the minority rather than the majority report of the committee of the United States senate which reported upon the public manufacture of armaments-


Ian Alistair Mackenzie: Both.


Major James William Coldwell: No.


Ian Alistair Mackenzie: Oh, yes. May I interrupt my hon. friend-


Major James William Coldwell: Well, I have read the minister's speech.
7X492-118J


Ian Alistair Mackenzie: I distinctly said that the majority report was for the extension of government manufacture.


Major James William Coldwell: I have read the minister's speech, and all I can find is a very brief reference to the fact that he has just stated. However, that is beside the point. Suffice it to say that the bill itself, as I shall endeavour to show in a few minutes, emphasizes the private rather than the public manufacture of arms, and the purchase from private manufacturers.


Ian Alistair Mackenzie: May I
interrupt my hon. friend again? As reported at page 1757 of Hansard, I said:
The majority report was for the extension of the principle of nationalization.


Major James William Coldwell: As I say, the minister
did mention it, but the minister placed on record substantially the minority report, favouring private manufacture, making only a brief reference to the much more important report of the majority of that committee.
In my opinion the bill as presented to this house does not give adequate control of profits incidental to the private manufacture of arms. It deals only, for example, with contractors selected without competitive bids. In support of that statement I direct attention to the explanatory notes which are printed opposite page 2 of the bill, where I read:
Net profits on contracts awarded by the board-
That is, the board named in this bill.
-without competitive tender, and subcontracts in connection therewith, are to be limited to five percentum per annum on the average capital employed or to be employed in the performance of the contract. Effect is to be given to this provision by the levy of a tax equal to the amount by which profits exceed the maximum of five per centum per annum on the average capital employed.
And may I again emphasize this:
Net profits on contracts awarded by the board without competitive tender. . . .
Then, if we turn to section 7, page 6 of the bill, subsection 9, we find these words:
For the purposes of this section the word "contract" shall include contracts entered into under the authority of this party and subcontracts in connection therewith, but shall not include (a) contracts awarded as a result of competitive tender or subcontracts in connection therewith, and (b) contracts or subcontracts to the extent that such contracts or subcontracts are performed outside of Canada.
Then if we turn back to section 4, subsection 4, on page 3, we find this:
In respect of all contracts, the board shall, wherever practicable, invite tenders either by means of advertisements in the public press or otherwise.
Defence Purchasing Board

"Where practicable" tenders shall be invited. In other words, and primarily, the bill contemplates the calling of tenders for the making of arms; and contracts entered into by tender, according to the section I read immediately before this one, are not. so far as the five per centum profits go, under the control of the board. In the minister's speech on Friday last he made the statement that in the past few years this government had awarded by tender some sixty per cent, I think it was, of the contracts, and forty per cent by the other method.


Ian Alistair Mackenzie: That is
where bidding was available.
Mr. COLDWE'LL: I think I have confirmed the statement I have just made, that if that proportion is maintained-perhaps it will not be, but if it is-some sixty per cent of the contracts so awarded would not come under the provisions of this bill. I notice that the minister nods his head in approval of that statement.


Ian Alistair Mackenzie: Mr. Speaker, all these would come under some of the provisions of the bill. They would not come under the taxation provisions of the bill.


Major James William Coldwell: Exactly. They all come under some provisions of the bill; but the point I am just making is this, that we object to the making of profits out of what we regard, rightly or wrongly-we are all entitled to our opinions-as in a measure blood money. We say, and I think the minister agrees, that as far as the limitation of profit is concerned under this bill, the companies to which I have referred do not come under all, but only that part of them which do not secure contracts by competitive tender. We say that the whole of them should be controlled.
The limitation of profits in this bill is also somewhat obscure. If we turn to section 7, subsection 1, at page 4, we find these words:
The maximum net profit-


Walter Edward Foster: I am sorry to have to interrupt the hon. member, but at the present time the house is not in committee. I would prefer that he confine his remarks to a discussion of the principle of the bill, and defer the discussion of particular sections until the house is in committee of the whole on the second reading. It is the principle of the bill which should now be considered.


Major James William Coldwell: Mr. Speaker, I always try to abide by the rules of the house and to accept a ruling without question. But at the

moment I am engaged in discussing the principle of this bill, and I find it very difficult indeed to discuss the principle without referring to some of the clauses. Of course if your ruling is that I must not do so, I shall abide by your ruling.


Walter Edward Foster: I would ask the hon. member to confine himself as much as possible to a discussion of the principle of the bill. He might quote some of the clauses of the bill to draw attention to what the bill appears to him to be, but he should not at this time go into a discussion of the bill clause by clause.


Major James William Coldwell: Thank you, Mr. Speaker; I will endeavour to abide closely by the rules. With your permission I must refer from time to time to some of the phraseology of the bill. If, then, we may just look at section 7, subsection 1 we shall see the principle involved:
The maximum net profit received by any person in respect of any contract to which this section applies shall be limited to an amount equal to five per centum per annum on the average amount of capital of such person employed in the performance of the contract.
And a little further on we have this:
. . . shall be based upon the actual cost (less depreciation at a rate deemed reasonable by the board) of the physical assets including plant, machinery, equipment and working capital. ...
1 am anxious to find out when we get into committee just what the term "working capital" involves, because upon its definition, I take it, a great deal will depend in relation to the limitation of profits under this bill. Of course if it includes capital used in the purchase of material and in the employment of labour, the definition would indeed be very wide, and the real profit, therefore, increased substantially. I submit, therefore, that the first part of the bill does not satisfy that large body of public opinion which demands the elimination of private profit in the manufacture of arms, or even the substantial curtailment of private profit in that manufacture.
So far as we in this group are concerned, my hon. friend from Weyburn (Mr. Douglas) and others of the group have moved on occasion the point of view we hold, which is that in the manufacture of munitions and war materials private profit should be eliminated, and for this purpose the industry should be brought under public control. That does not mean that one would expect those engaged in the industry to render services to the nation without recompense, but it does mean that at least the element of private profit

Defence Purchasing Board
should be eliminated. Therefore, in any bill which is brought before this house dealing with this particular matter, not forty per cent but one hundred per cent of those supplying munitions and arms to the Dominion of Canada should be brought under the control of parliament in relation to profits that are made; if they are allowed at all.
Turning to part II of the bill, we object to the manner in which the bill has been presented. The bill should have been divided into two-there should have been two bills- because it deals with two different things. The first part of the bill quite clearly deals with the purchase of armaments, which in my opinion ought to be considered apart from the financing of capital expenditures under the Department of National Defence. I submit to the minister that we may find ourselves in this position, that while we may agree with one principle of the bill we may be in direct conflict with another principle of it. It is therefore unfortunate that it has been brought down in this particular form. It would have been more satisfactory to the house and particularly to our group had it been brought down in two bills instead of one.
I am not a lawyer and therefore may not understand the import of section 17 of part II of the bill, and until some explanation is given I would hesitate to vote for it. A good many members of the house are uncertain what the clause means. Perhaps it can be explained later before we are asked to vote upon it.
While we welcome the suggestion of a defence purchasing board as a method of meeting a given situation, we should have been better pleased had the government contemplated wider public manufacture of munitions. I realize, of course, as I believe most members do, that the manufacture of all that is required would not be possible, but at this moment a greater measure of control over private manufacture ought to have been instituted in a bill of this sort.


Mr. A. A. HEAPS (Winnipeg North):: A few remarks which the Minister of National Defence (Mr. Mackenzie) made in this chamber last week, when he introduced the resolution on this subject, prompt me to rise on this occasion to say a few words on the question of a defence purchasing board.
In the first place I asked the minister what was to become of the interdepartmental committee which has been functioning for so many months. When I put that question to him, as usual with him, he spoke of the magnificent work which the committee had done while it was in existence and said that if I carefully perused the bill when it was
introduced I would ascertain what was to become of the committee. I have casually gone through the bill, and if I understand anything of what it proposes it seems to me that in one way the interdepartmental committee goes out of business while in another respect it is resurrected.
I have no objection to what has been done in that respect, but if the interdepartmental committee had done such splendid work while it was functioning I do not see why it should go out of existence. Personally I believe that those wrho comprised the committee were all men of excellent character and great ability, and I feel that the persons who will be appointed to the new defence purchasing board will in their own way be no better men than those who until now have been functioning in that particular regard. If that is so, I wonder why we have this bill at all. As I say, in one way we are doing away with the interdepartmental committee, and in another way we are resurrecting it. In the measure itself we find that before a contract is finally approved, the Minister of National Defence makes a requisition to the proposed board, then it goes through the Department of Finance, then it is approved by the governor in council. I think that is a cumbersome way of doing government business. I may be alone in that assertion, but I have more confidence in existing departmental officials than to believe that it should be necessary for a contract to go through three departments before being finally approved of. Is there any other contract of more than
85,000	which has to go through the same routine as is proposed here? If there is I should like to know what department deals with contracts in such a manner.
When the minister spoke on Friday last he paid this group indirectly a very fine compliment. He did not intend it, and that is why I say it was indirect. In his lengthy speech he paid more attention to the seven members of this group than he did to the duties which the new defence purchasing board is expected to perform. He spent more time in trying to point out the fallacies of the things we stand for than he did in discussing the purpose of the resolution. If there was one thing which ho tried to impress upon the house it was the fact that, unless there were some incentive, people who might make munitions could not, be expected to engage in the successful production of armaments.


Mr. HOWARD:: Hear, hear.


Abraham Albert Heaps: There is at least one hon. member who agrees with that. The Minister of National Defence is a very able lawyer.
1S68
Defence Purchasing Board

If I wanted a lawyer to defend me I would go a long way in an effort to secure the services of the hon. gentleman, because after hearing his fervid oratory-when he is in his ordinary mood and is not over-excited- I believe there is hardly a jury whom he could not convince. Consequently I would go to considerable lengths to secure the services of so able a lawyer.


Charles Avery Dunning: It is better not to need one.


Abraham Albert Heaps: 
Mr. FINN:: Love of country.


Abraham Albert Heaps: I wonder if the minister
would tell us what it was.


Ian Alistair Mackenzie: Faith, I suppose.


Abraham Albert Heaps: Well, to a certain .extent his faith has been rewarded. But I am still wondering what it was that prompted the minister to come and sit in this parliament.


Ian Alistair Mackenzie: I think it is true that every hon. member of this house is here because he wished to serve the public interest.


Abraham Albert Heaps: I am glad to have that statement from the minister. He prefers serving the public interest to seeking monetary reward. That is what I am getting at. If the minister and other hon. members of this house can serve the people of this country without the urge of monetary reward, why cannot the manufacturer of munitions be on the same basis? That is all I am asking. The minister says it requires the incentive of monetary gain; I believe that munitions can be produced without the incentive of monetary reward, just as so many hon. members of this house are prepared to give their services in the interest of Canada.
Further I believe that once you open the door to profit-making in the manufacture of munitions, the profit cannot be limited to five per cent, no matter how many audits are made of the books. I think it has been proved over and over again that these limitations do not limit. I would far rather see the government itself go into the production of munitions as far as practicable. I am

satisfied the government could do it on an efficient basis, just as the Ontario government runs its hydro, the city of Toronto its street railway system, or the city of Winnipeg its hydro. There is in this country to-day wherever you go a growing feeling of hostility to the making of profits out of armaments and munitions. When men are asked to serve in the military forces for SI.10 a day it is not a question of profit as far as they are concerned; it is a question of duty to their country. In the same way we should expect men to serve their country in time of need by producing munitions without profit.
I notice that the bill provides for the appointment of one paid officer, the chairman, and three others who will be given their out of pocket expenses and a per diem allowance. I am wondering what incentive there is to those three men to give their best services on this board. As to who is to comprise the board, I have just as much faith in the officials of the government who are in a way directly responsible to parliament as I have in any persons who may be put on the board. I believe that in .many respects this bill will not achieve the purposes for which it is intended. All it will do is create another department of government. I do not know where there are any greater experts outside than we have inside the service. Past experience with boards of this kind has not shown them to be very successful. All I hope is that if the bill goes through in its present form, at least there will be appointed to this board men of such a calibre as to merit the confidence of this house and the country.
Under the provisions of the bill now before us the functions of the board will not be very important, because once they have rendered a decision on certain contracts, those contracts will still come under the jurisdiction of the permanent officials of the Department of National Defence and the Department of Finance, and their decisions will ultimately have to be approved by the governor in council. That seems a cumbersome way of doing business. I would prefer to see a simpler method of awarding government contracts, a method under which those who award them will be directly responsible to this house.


Robert James Manion: I wish to say only a few words at the present stage; I shall reserve any detailed suggestions until the bill is in committee. Unfortunately the demands on the time of all hon. members are such that we have not as much opportunity as we should like to study questions of this kind. However I have read the bill a few times, and I have read over again the speech of the Minister of National

Defence Purchasing Board
Defence (Mr. Mackenzie). As other hon. members have emphasized, I believe the bill is one of very great importance; I cannot think of any subject before the people of Canada to-day which is of more importance than the proper handling of the money that is to be spent in huge amounts by the Department of National Defence.
I want to refer briefly to one or two remarks made by the minister in regard to selected lists of contractors under past governments. In the first place, of course, I know nothing about this; I accept the statement of the minister in regard to the number of contracts let to those on selected lists. I had nothing to do with that department; I had my own troubles in the department of which I was the head, and had little time to follow the doings of other departments. At the same time I remind hon. members that during the time the Bennett government was in power we did go through a world depression, and an attempt was made at that time to allocate contracts of various kinds in such a manner as to relieve unemployment in various parts of this country. I also agree that possibly the use of selected lists may at times be the best way to deal with contracts. I do not wish to go into that question at length.
There is this also to remember: that in that period the whole world was hoping for peace, as unfortunately we cannot do with such confidence now. The German dictator had not come to the zenith of his power as he has recently. We all remember how Great Britain refrained from rearming, as many now think she should have done. We in Canada were in the same position. I made it my business to look up the amounts expended on armaments by Canada in the last ten years. I find that for the five years we were in power the total estimates of the Department of National Defence for defence purposes amounted to some $75,000,000. This year alone an expenditure of $63,000,000 is proposed.


Ian Alistair Mackenzie: I believe that includes some amounts for unemployment relief.


Robert James Manion: Probably it does, but that amount is almost equal to the total for the five years during which the Bennett government was in power. For the past two years the figure was $70,000,000, just about equal to the total amount spent during the five years of the Bennett government. I am not giving these figures in any spirit of criticism; I believe that with present world conditions we must be prepared to defend ourselves. As I said during the debate on the address Canada cannot sit back and depend upon other countries, however friendly they may be, to defend us if we are in trouble. Because of this huge expenditure, however, it seems to me all the more necessary that we should do everything in our power to avoid the errors of the past, if errors were made, as no doubt they were.
I have never questioned the statement that errors were mad'e during the war, though I have never checked up to see if that was so; and I presume such errors were serious. All the more reason, therefore, that at this time, when thank God the world is not at war, we should be very careful so to spend this huge amount of money that there cannot come from the public any condemnation of what we call our democratic parliamentary system.
To a certain extent I believe hon. members to my left, the Cooperative Commonwealth Federation, are right when they say the public demands or at least desires nationalization of the entire manufacture of munitions in Canada. The hon. member for Rosetown-Biggar (Mr. Coldwell) admitted, I thought very fairly, that this is too much to hope for. I forget the exact words he used, but he admitted, in terms with which I agree, that such nationalization is really too much to expect. However, I think if we could get nationalization without too much in the way of capital investment by the government, and without getting into government manufacture on a huge scale, it would meet with the approval of the people. At any rate the people do desire, in fact they demand, that there must be no unfair profits, which is what I would call profiteering, in regard to these expenditures. In other words if they cannot have nationalization, they demand that we must have full and absolute control of profits.
With the object of the bill and the principle behind it, as I said the other day, I believe we all agree; that is, the principle of cutting down profits as far as possible. Whether or not this bill will accomplish that end I do not know; some of its sections I think require elucidation, and when we are dealing with it in committee I intend to ask certain questions and make certain suggestions in an endeavour to improve the bill. To show what can be done by private enterprise, however, I should like to refer to the Canadian Annual Review of 1918, which contains a very good account of the work done during the war by the imperial munitions board. Even though it may be a little tedious I am going to take this opportunity of putting some extracts on record, because I am convinced that the business men of Canada are the equal of the business men of any other country in the world. I am also convinced of something
Defence Purchasing Board

with which some may disagree; that is, that the business men of Canada, if given the opportunity, are ready to do their share in serving this country. I believe that, and I believe business men should be given a greater opportunity to serve without remuneration. Therefore I believe that with a better appreciation of what they did during the war-much of it for profit I admit-we might safely come to the conclusion that by calling in the business men of this country to assist whatever government may be in power we can obtain service for this dominion which we cannot secure if we merely maintain in its entirety the old profit motive.
I quote from page 542 of the Canadian Annual Review of 1918:
To the imperial munitions board, which succeeded the famous Shell Commission in 1915, under appointment by the imperial government and with Sir Joseph W. Flavelle as chairman, much of this success was due. Prior to August, 1914, Canadian manufacturers knew nothing of shrapnel or shell-making and had never made a cartridge case or fuse; by December 31, 1915, under the Shell Commission, they had exported $57,241,852 worth; in the next three years, under the imperial munitions board, they had exported nearly a billion dollars' worth- $296,505,257 in 1916, $388,213,553 in 1917; $260,711,751 in 1918. The total for the whole war period was $1,012,548,501, with contracts in hand which would largely exceed that figure, as a manufacturing total. In 1915 desperate efforts were being made to produce fuses; at the beginning of 1918 Canada was turning them out at the rate of 2,750,000 per month and of such high quality as to win congratulations from the imperial authorities. By this time the making of 16,000,000 boxes to carry munitions overseas had been carried out and the production of explosives such as cordite, T.N.T.. acetone, methyl-ethyl and nitric acid steadily developed and maintained; large orders from the United States were on hand including 7,000,000 shells, 10,000,000 forgings and 2,000,000 cartridge cases; over 300 aeroplanes a month were being produced and large orders for steel ships were under way. The board in these months was spending $1,000,000 a day in Canada, and contracts had been given or were being worked out by 950 manufacturing firms. As the year 1918 passed on the work of the board grew in volume and variety. National munition plants were put in operation at a cost of $15,000,000 in Montreal, Renfrew, Trenton, Toronto and Parry Sound, and in them powder and high explosives were made, fuses loaded, steel and forgings produced and aeroplanes built.
A little lower down on page 543 there is a quotation from a statement by the British war cabinet, which I think is worth putting on record:
Dealing at this juncture with production, as it had been in 1917, the British war cabinet declared that "the manufacturing resources of Canada have been mobilized for war production almost as completely as those of the British isles/' and added these detailed facts-

This is the statement by the British war cabinet:
15 per cent of the total expenditure of the ministry of munitions in the last six months of the year was incurred in that country.
That is, in Canada.
She has manufactured nearly every type of shell from the 18-pounder to the 9-2-inch. In the case of the 18-pdr., no less than 55 per cent of the output of shrapnel shells in the last six months came from Canada, and most of these were complete rounds of ammunition, which went direct to France. Canada also contributed 42 per cent of the total 4-5 shells, 27 per cent per cent of the 6-inch shells, 20 per cent of the 60-pdr. H.E. shells, 15 per cent of the 8-inch and 16 per cent of the 9-2-inch. In addition Canada has supplied shell forgings, ammunition components, propelants, acetone, T.N.T., aluminum, nickel, aeroplane parts, agricultural machinery and timber, besides quantities of railway materials, including no less than 450 miles of rails torn up from Canadian railways, which were shipped direct to France.
Then this article goes on to say:
Ships to the value of $64,000,000 were put under construction by the board; the operations at Shawinigan in producing calcium acetate, and acetic acid grew to large proportions and included cellulose acetate for aeroplane wings with important orders, also, from the United States-
Over on the next page it gives the complete figures of our exports during the four years, in regard to quantities. There are a good many other details which I do not wish to put on record, but I think these are worth while:
Shells	 65,343,647
Fuses	 29,638,126
Fuse parts	 16,174,073
Cartridge cases	 48,627,673
Percussion primers	 35,386,488
Shell forgings	 6.412,115
Explosives; chemicals (lbs.) ... 111,297,107 Metals; compounds (lbs.). . .. 107,282,336
Lumber (feet)	 53,327,107
Exploder containers	 13,285,000
Then it goes on to deal with the matter in greater detail. I quote this, sir, because I think it should be on record in justice to our business men. It shows the magnificent work that was done during the last war. I repeat that it is my opinion that given the opportunity, particularly in peace time when there is not the pressure that existed during the war, we can produce munitions in Canada in the same splendid way that we did during the last war, as is illustrated by what I have just quoted. I repeat that I believe we should do more, I do not mind saying that on one occasion I proposed to my own leader, in connection with another matter, to call in the business men of Canada to assist us in certain matters. I believe if some of our leading business men were given a chance

Defence Purchasing Board
such as Mr. Purvis was given in regard to unemployment, if they were brought in to assist, that they would gladly do so in any way they can-just as members of parliament as was mentioned a few moments ago, desire to assist their country. Undoubtedly that is the desire of members of parliament. I believe they are working for the good of Canada, whatever the criticisms may be that are opposed to that suggestion.
I repeat I would prefer that there should be no profits at all in the manufacture of munitions for Canada. But, after all, the government has looked into the matter thoroughly. The minister reviewed the attitude of the governments of various countries, and it is the opinion of the government that we cannot go in for the manufacturing of munitions by ourselves. Therefore the government must do everything it can to maintain full control of profits, such as they are.
I have made the statement that I believe discussion in the house on the Bren gun inquiry has had much to do with the improvement of the bill. The bill is a refutation of the statement which has been made outside the house, as well as in it, that the Bren gun discussion merely held up the business of the country. Had it not been for that discussion I believe this bill would not be as good as it is. I believe the government will admit it is more ready, because of the criticism it received-and perhaps it claims some of that criticism was unjust-to see to it that the bill is as close to perfection as possible.
For example, had the measure now before us been in force-even as it now stands, without the improvements which I hope will be made as a result of discussions in committee- there would have been competition in the Hahn contract. There was no competition in that contract, either through public tender or, through use of a selected list. To my mind a selected list would have done away With the severe criticism of the Hahn contract. Then, there would have been no letter of introduction to one man, to the exclusion of all others, or the making of one man the representative of Canada. There would have been no pressure on Great Britain. There would have been no stock profits.
When the minister is on his feet I would like him to explain further what he said as it is reported at page 1759 of Hansard. In reply to a question of mine he stated in effect that in the Bren gun contract the possibility of stock profit had been done away with.


Ian Alistair Mackenzie: The first time it was attempted.


Robert James Manion: But, as a matter of fact, under the Bren gun contract there was an opportunity to make a million in profits. That is one of the things which was most offensive to the people. If there had been some such provision as appears in the bill, a limitation of profits to five per cent or ten per cent on the capital, there would not have been the same danger of huge profits such as are going to be made in the Hahn contract.
There are a couple of suggestions I should like to make in regard to the bill. One of the great flaws in it-I mentioned it the other day in my remarks-is that there is not close enough connection between the proposed defence purchasing board and the defence council. As the minister knows, the defence council is made, up of the Minister of National Defence, as president, and the deputy minister of national defence, as vice-president; and the members are the chief of general staff and the director of naval services. The associate members are the adjutant general, the quartermaster general, the master general of the ordnance and the director of the Canadian air force. I believe one of the weaknesses of the bill is that there is not sufficient liaison, if I may use that term, between the defence council and the board proposed in the bill. I suggest there should be a closer association-


Ian Alistair Mackenzie: May I interrupt?


Robert James Manion: Yes.


Ian Alistair Mackenzie: Although it is not specifically provided for, in several places in the bill there are opportunities where the chairman of the board could consult the council with reference to requirements of the Department of National Defence. I refer to stock on hand and requirements for the future.


Robert James Manion: I admit that. There is opportunity for the minister, who is president of the defence council, and would be the liaison between the two.


Ian Alistair Mackenzie: Yes.


Robert James Manion: I do not think that is sufficient. My own opinion is that the minister or the government could improve the bill. I was going to refer to the minister, but by virtue of his office he would have access to the board. But, let us take, for example, the master general of the ordnance, who does much of the purchasing of supplies and who has a military training. He could be placed on the purchasing board, as a non-voting member, if you like. Or, it might be done the other way, namely by placing the chairman of the purchasing board on the defence council.
Dejence Purchasing Board

The point is that there should be some member in addition to the minister who is associated with one body and has a place on the other so as to achieve a closer liaison than there would be under the bill.
At page 9 of the Bren gun report there is a suggestion from the Artillery Association of Canada, and one from the conference of defence associations. They suggest the setting up of a munitions board, not a purchasing board such as proposed in the bill. The quotation I wish to read is on page 9. It is as follows:
There was also read into the record a resolution passed on November 13, 1936

That is two and a half years ago.
-by the conference of the defence associations -a body comprised of senior officers appointed by the different service associations who meet for a conference each year. The infantry association, the cavalry association and the artillery association each appoint four of their senior officers to represent them at what is known as the conference of defence associations, which meets in Ottawa and at which matters pertaining to the militia are discussed. The resolution of November, 1936, read as follows:
"That this conference of Defence Associations urges the government of the Dominion of Canada to take immediate steps to create a munitions board or some similar body to control the production within Canada of such munitions as can now be made here satisfactorily and to prepare plans for the effective mobilization of our industrial resources in the event of war, and that a copy of this resolution be sent to the Prime Minister and the leader of the opposition."
This had reference to the late leader of the opposition. The report goes on:
And the following resolution unanimously passed in February, 1938, by the officers of the artillery association (both the permanent and the non-permanent force officers) was read:
"That steps should be taken by the government to appoint a munitions board-
The same suggestion.
-under the chairmanship of a skilled manufacturer to provide for the manufacture of all munitions which can be efficiently produced in Canada."
In view of these suggestions made by the only associations in Canada which really represent all different branches of Canadian defence forces, I think the government might be well advised to accept some such suggestion as I am making. I say that because it seems to me that the munitions board would go much farther than it is proposed the purchasing board shall go. In fact, I have had a couple of representations from members of the conference of defence associations urging that the defence purchasing board is not sufficient. On the other hand I have been told that at least one of the very prominent members of that association supports the board. The

minister may have information with regard to that. Anyway, I repeat that there has been opposition by a couple of members-


Ian Alistair Mackenzie: May I
ask a question?


Robert James Manion: Yes.


Ian Alistair Mackenzie: What
could the munitions board do that this proposed board could not do?


Robert James Manion: It would go much farther. After all, the proposed purchasing board merely puts into effect the requests of the minister.


Ian Alistair Mackenzie: No.


Robert James Manion: The minister is the man who puts matters up to the board, after they have been passed upon by the defence council.


Ian Alistair Mackenzie: But then they survey the entire requirements of the department, in conjunction with the experts of the department.


Robert James Manion: The minister may be right. I am glad to be corrected by the minister, who says that this board goes as far as a munitions board would go. If so, I shall be more satisfied. But it is claimed by those who took it up with me-I do not know that I asked them to specify the difference, but it did seem to me that they were right-that a munitions board will go much further. The purchasing board, in my opinion, should have a closer association with the defence council than it has at the present time. I have said all I wish to say on that- subject, and I have now only one or two suggestions to make.
I think that what we require in this country is, first, good equipment for the money expended. Second, we need efficiency and speed in manufacture. Third, we require the elimination of profits, if possible. Apparently that is not entirely possible, but there should be the full control of profits, not only on contracts which are not let by tender but on contracts which are let by tender. I do not know that that can be done, but I believe some further investigation should be made in that regard. I do not wish to go into it in detail now, but when we come to the appropriate clause of the bill I shall have a few questions to ask. Finally, we all want wise and honest expenditure of the money of the Canadian people.
In regard to my suggestions, let me briefly recapitulate the points I have made. First, we must try to bring about a closer association between the defence council and the purchasing board. Second-and this may have been covered by the minister to a certain

Defence Purchasing Board
extent-if the government is not willing to go into government manufacture on a large scale, it could certainly have pilot plants in various parts of Canada which would serve at least as a check on the cost of munitions being manufactured by private concerns. Third, I think it would be well to have something in the way of a committee of both houses, to discuss, in camera if necessary, the whole defence problem of Canada; questions *will be coming up in the house, on the estimates of the department, for instance, which the minister will not care to answer. He will probably, and truthfully, tell us that in the public interest certain questions which we ask cannot be answered. These questions might well be discussed in camera by a committee of both houses, which would serve to reassure the people generally, even though they were unacquainted with the work of the committee, that everything was being carried on in a proper manner, from all aspects.
Finally I should like to see this bill improved, and we can do that better perhaps as it goes through the house, in order to satisfy public opinion in regard to profits. It seems to me that defence expenditure is so important that it is no exaggeration to say that on the proper expenditure of this money we shall have to depend if or when we are called upon to fight for our very national life.


Mr. T. C. DOUGLAS (Weyburn):: Mr. Speaker, I desire to make only a few remarks on this bill before it goes into committee.
A perusal of the bill indicates that the government is now embarked on a very large rearmament program. There are two ways in which the government can get armaments: either by manufacturing them, or by purchasing them from private manufacturers. This bill would indicate that in the main the government proposes to follow the practice of purchasing from private manufacturers.
I want to draw two facts to the attention of the government, and particularly of the Minister of National Defence (Mr. Mackenzie). The first is that despite his eloquent speech of last Friday, to my mind he has not yet given any good and sufficient reason why the government cannot manufacture a great many armaments and materials of war in its own arsenals.


William Lyon Mackenzie King: May I interrupt my hon. friend for a moment? Two or three hon. members who have spoken from his group have said over and over again that the government's policy is to encourage manufacture by private interests, and not to have the manufacturing done under government auspices in its arsenals or other government
establishments. There is nothing in this bill which would justify that statement, and it is not true as a statement of government policy.
I want to assure my hon. friends that the question whether certain contracts are to be given to private firms or the work done in government workshops is one which will be studied as we go along with reference to the different contracts that have to be made, equipment or supplies that are required, and the circumstances under which alone they can be made. There is nothing in this bill which justifies the statement that the government is committed to the one policy rather than the other.


Thomas Clement (Tommy) Douglas: May I point out to the Prime Minister (Mr. Mackenzie King) that there is nothing in the bill to justify any belief to the contrary.


Charles Avery Dunning: Oh, yes. Section 2
specifically provides for government manufacture.


Thomas Clement (Tommy) Douglas: But this is a purchasing board


Charles Avery Dunning: We would not need one to purchase from ourselves.


Thomas Clement (Tommy) Douglas: This bill
provides for a purchasing board whereby the government may purchase its requirements, and it contains all the provisions for the letting of contracts. The minister would not suggest that we will let contracts to ourselves.


Charles Avery Dunning: If my hon. friend will permit me, we would not need a purchasing board to purchase from the government's own factories.


Thomas Clement (Tommy) Douglas: Exactly, we would not.


Charles Avery Dunning: We do not.


Thomas Clement (Tommy) Douglas: Therefore the fact that this board is being set up, and the fact that we are to provide large sums of money for national defence, indicate that we now propose to purchase from private manufacturers.


William Lyon Mackenzie King: If my hon.
friend wants to present the government's policy in its true light, it would be this. The government is not in a position to say that it is going to have all armaments and munitions manufactured in government arsenals and workshops, that there is going to be a monopoly in the provision of armaments by government workshops and arsenals. All that the bill implies is that there will of necessity be some orders placed with private concerns, and that being the case this bill
Dejence Purchasing Board

makes provision for a defence purchasing board to deal with contracts where such are to be entered into. That is the true position.


Thomas Clement (Tommy) Douglas: Of course the Prime Minister can make that statement if he likes, but it is apparent that some contracts will have to be given to private firms.


William Lyon Mackenzie King: And those are the ones we seek to control by this bill.


Thomas Clement (Tommy) Douglas: The Minister of National Defence the other day weighed the arguments pro and con in respect of public manufacture. Speaking of differences of opinion in the department itself, he said that certain senior officers were in favour of public manufacture, and then went on to say, at page 1760 of Hansard:
Others of equal senior rank pointed out that the capital cost of constructing and equipping the several plants advocated would run between $30,000,000 and $35,000,000.
Then he went on:
I think I am safe in saying that on principle the government favoured state manufacture. However, at that time we were faced with a most serious financial problem.
He proceeded to outline what the government's policy had been, that the policy has been the purchasing of armaments. By this measure we are providing the machinery whereby the government may continue to purchase from private manufacturers. The Prime Minister spoke of the extent to which that might be done. The extent to which the government will purchase from private manufacturers and the extent to which they will manufacture in their own shops will be left, of course, to the decision of the government, but the fact remains that nothing was said by the Minister of National Defence the other day to indicate that the government proposes to extend the machinery for producing in its own plants.


Ian Alistair Mackenzie: Most
definitely he did.


Thomas Clement (Tommy) Douglas: Oh, no.


William Lyon Mackenzie King: He referred to the Lindsay arsenal in specific terms.


Thomas Clement (Tommy) Douglas: Exactly, and pointed out that we could not use it.


Charles Avery Dunning: Let my hon. friend quote correctly from the minister's speech-and not misquote.


Thomas Clement (Tommy) Douglas: I will read what the minister said in that regard. I quote from page 1758 of Hansard:
Just a comment or two on these findings.

He was referring to the findings of the interdepartmental committee presided over by Doctor Skelton.
As suggested in No. 1, the government is making the maximum use of its own arsenal plants. I say that deliberately. The advice given me by the officials of the Department qf National Defence and by the highest ranking officers, those who are in favour of the principle of public ownership, in regard to the development of the Lindsay arsenal is that until we proceed with the filling group and the ammunition group at Valcartier, until we have made Quebec available, we should not proceed with the development of the Lindsay arsenal as planned for the manufacture of small arms ammunition. It must be kept in reserve. However, since this government came into office the production of our necessities at the arsenals at Quebec and Valcartier has been increased by four, six or seven times. We have made a modest beginning at the arsenal at Lindsay and it is my fervent desire that as soon as possible we should proceed with the further development of the facilities at Lindsay.
Let me now return to what I was pointing out.


Charles Avery Dunning: The hon. member will find it rather difficult.


Thomas Clement (Tommy) Douglas: Here we have provision for a board for the purchasing of armaments. There can be no denial of that. Here is the machinery being set up-a commissioner with three others; provision made whereby they can either call for tenders or have a selected list; a requisition is received from the Minister of National Defence; they arrange a contract; that contract goes to the Minister of Finance; if he approves it is referred to the governor in council, and if they approve it is signed. Now, however much the government may not like it, the fact remains that here is a board for purchasing armaments.


William Lyon Mackenzie King: May I ask my hon. friend this question, so that we can get the point perfectly clear? Do I understand he is arguing that, for example, aeroplanes which are required, which are part of the defence equipment, should be made in government workshops; or that searchlights, which are part of the equipment for the defence department, should be made in government workshops? Unless he is arguing that all the equipment and supplies must be manufactured in government workshops, I say that where matters such as these are concerned the government should have a board of this kind if it wishes to control contracts.


Thomas Clement (Tommy) Douglas: There is no need for me to start telling the government what could be manufactured under public-ownership and what could be manufactured privately. The fact is that things other than aeroplanes and searchlights and equipment of

Defence Purchasing Board
the kind mentioned by the Prime Minister are being manufactured and have been manufactured by private concerns.


William Lyon Mackenzie King: Why, certainly.


Thomas Clement (Tommy) Douglas: Bren machine guns, and shells, are being manufactured now by private manufacturers for the government under contract, and nothing was said the other day by the minister to indicate that that policy is to be changed. On the contrary, every indication is that it will be continued. If the Prime Minister says it is not so, I shall be only too pleased to hear it.


William Lyon Mackenzie King: May I make the government's policy clear now, so there may be no doubt about it? The government does not propose, with regard to the provision of arms and equipment, to have them manufactured wholly under private industry, nor does it propose to have them manufactured wholly under public ownership. It proposes to distribute the work between the two in the light of the best advice it can obtain as to what would be most in the public interest.


Some hon. MEMBERS:: Hear, hear.


Thomas Clement (Tommy) Douglas: I am very
glad, Mr. Speaker, that some hon. gentlemen opposite can find satisfaction in that statement. I cannot find any satisfaction in it.


Charles Avery Dunning: Well, we don't wonder at that.


Thomas Clement (Tommy) Douglas: It is said that some will be manufactured privately and some under public ownership, in the light of the circumstances, but according to the government the circumstances lately have been such that the bulk have gone to private manufacturers Nothing has been said by the government to indicate that that trend will be reversed, and in view of the increased expenditures expected it would appear that policy will be not only continued but accentuated.
The Minister of National Defence said the other day that one of the greatest arguments against state manufacture was the cost. I have already read the passage in which it is stated that the capital cost of constructing and equipping the additional plants advocated would amount to between thirty and thirty-five million dollars. But in respect of at least two contracts the government is buying the machinery in order to have the munitions manufactured by private concerns. Would it cost any more to buy machinery and have the government manufacture the munitions than for the government to buy the machinery and let private concerns manufacture them? We have three arsenals, and I do not think anybody has suggested that they are working to full capacity. There are railroad shops across Canada which could be utilized for this purpose. Even though it should cost more- and I believe that point is debatable-the confidence created in the minds of the Canadian people would more than make up for any cost which would be involved, to say nothing of the fact that, as I see it, labour conditions among the men employed in government-owned factories manufacturing war materials would be much better than in some factories which will receive contracts through this purchasing board. So I say that no good reason has yet been shown by the Minister of National Defence or by the Prime Minister why these armaments should be secured by purchase from private manufacturers.
May I take a moment or two to point out to the government the price we are going to pay for not having state manufacture of armaments? By the giving of these contracts to private manufacturers we are helping to build up the armaments industiy in this country. We are helping to build up another link in that chain of armament racketeers which now extends around the world because of the blood money they made in the last war, because of the tremendous profits they are making to-day in almost every country- interests which have had a large part to play in the bringing about of international discontent, suspicion and distrust. Sometimes I am alarmed when I look at the figures and realize that Canada is rapidly becoming a munitions dump for the world. We passed in this house a bill to limit the-


William Lyon Mackenzie King: "Munitions
dump." What does my hon. friend mean by that?


Thomas Clement (Tommy) Douglas: Mr. Speaker, it is a military term. A munitions dump is usually a place where they keep large supplies of munitions. I will use the word "arsenal" if the Prime Minister prefers it. I used a term commonly employed; if it is not a parliamentary term I shall very gladly replace it with a more suitable term.
I have here something else from the Dominion Bureau of Statistics, namely the exports of military planes from this country. What do I find? We have heard a great deal recently about the defencelessness of Great Britain and the need to assist her. But I notice that last year, whereas Canadian firms manufacturing military planes and parts exported to Great Britain about $86,000 worth, we exported to Turkey, for instance about $2,000,000 worth.


Charles Avery Dunning: Of what?
Defence Purchasing Board


Thomas Clement (Tommy) Douglas: Military
planes and parts.


Charles Avery Dunning: Military planes?


Thomas Clement (Tommy) Douglas: Military
planes and parts. That is what I said. I have here the list of licences issued each month for the export of munitions and weapons of war from Canada. This is furnished by the Department of National Revenue. I am amazed when I go over it. I will just read off the figures:
Value of arms, ammunition and
Period	munitions exported from Canada
February, 1939		.... $ 71,178
January, 1939.. .: ..	.. .. 131,689
December, 1938			 126,198
November. 1938			 101,993
October, 1938			 165,675
September, 1938			 223,388
August, 1938			 92,473
July, 1938			 183,145
June, 1938			 285,922
May, 1938			 833,221
A part of the last mentioned represents the supplying of aeroplanes to Turkey.
April, 1938	$ 179,160
March, 1938	 1,104,373
This represents the shipping of aeroplanes and munitions to Turkey and Japan.
February, 1938	 $444,046
January, 1938	 94,192
A year ago last December the amount was $82,000; in November a year ago it was $46,000, Turkey again being one of the chief recipients, and so on. Over the last four or five months large quantities of shells have been shipped out of Canada. From private manufacturers of arms in Canada are going weapons of war-to whom? In many instances, not to Great Britain.


Charles Avery Dunning: Not to Great Britain? Let the hon. member correct that immediately.


Thomas Clement (Tommy) Douglas: Not exclusively to Great Britain. I do not say there is none to Great Britain, but it is not exclusively to Great Britain.


Charles Avery Dunning: Shells are going to Great Britain.


Thomas Clement (Tommy) Douglas: Yes; shells are going to Newfoundland and Australia and military planes are going to Turkey and Japan. Large quantities of nickel and copper for the manufacture of shells are going to these countries.


Mr. DEACHMAN:: How does the hon. member know that it is for the manufacture of shells?
[Mr*. Dunning.]


Thomas Clement (Tommy) Douglas: The hon;
member is fond of statistics. If he will take imports of nickel into Germany over the past ten years he will find that the large imports of nickel and copper into that country from Canada coincided almost to a month with the large rearmament program that was carried out in Germany.


Robert John Deachman: Has the hon. member the figures for the last ten years?


Thomas Clement (Tommy) Douglas: I have them, but not here; I have the figures for the last three years. Our exports to Germany in hundredweights have been:
1936		 10,136
1937		 23,151
1938		 20,233
What I want to point out is this. By purchasing from private manufacturers of armaments we are playing our part as a government and a people in helping to finance and support an armament ring who, as every student of the last war and of the years following the war will remember, constituted a serious menace to the peace and good government of the world. Somebody suggests that not only are we helping to build an armament ring, but that this armament ring is in turn helping to arm countries, which, if their present actions are any indication of their policy, are likely to become, and in some instances have become, international aggressors. The cost of building up private armament manufacture in this country is to strengthen the hands of a group of people who all through the last war sold armaments and weapons of war, to one another; even though their own countries were at war.
I would refer hon. members to Philip Noel-Baker's Private Manufacture of Armaments, Merchants of Death by Engelbrecht and Hannighen, the Nye report by the United States senate, and The Private Investor by. E. Staley. Any one of a dozen authoritative works can be consulted to bear out what I have said. German boys died at Verdun on barbed wire made in Germany. French aluminum found its way into Germany; Canadian nickel and British glycerine and guncotton found their way through Sweden into Germany. Since the war it has 'been known that these armament racketeers, by means of propaganda through newspapers and radios which they control, have fostered suspicion and distrust. It is still within the memory of most members of this house that one disarmament conference at Geneva was to a large extent wrecked by the machinations of a United States armament agent who was sent there to engage in activities that are a disgrace to the human race.

Defence Purchasing Board
In my opinion nothing could be more serious for a country that loves peace, for a people who talk about neutrality, than to become a link in the international armament chain, and that is what we are rapidly becoming.


Mr. MARTIN:: Why does the hon. member say that? With a good deal of what the hon. member has said I agree, but we must be reasonable in our utterances. The statement he has just made is surely one that should be substantiated-that -we are becoming part of an international racketeering ring.


Thomas Clement (Tommy) Douglas: I have before me sessional paper 107. I will not read it all, but it gives the lists and dates and the amounts of munitions which these companies have been exporting from Canada, starting in 1935.


Charles Avery Dunning: Can the hon. member give the total over those years? I should like him to substantiate the statement that Canada is getting into an international armament ring. Let him do so by telling us what have been the exports of all these materials of which he speaks.


Thomas Clement (Tommy) Douglas: Here is the National Steel Car Corporation of Hamilton, Ontario, with at least twenty batches of exports.


Charles Avery Dunning: Where to?


Paul Joseph James Martin: Are they part of this ring?


Mr. CLEAVER:: And what is the value of these exports?


Thomas Clement (Tommy) Douglas: I shall be glad to make this speech myself without assistance.


Charles Avery Dunning: We are merely interested in the truth; that is all.


Thomas Clement (Tommy) Douglas: I am glad to hear the minister is; that will be news to a great many people.


Hughes Cleaver: Oh, no; give us that information, please.


Thomas Clement (Tommy) Douglas: I have here the list of exports by these different firms, with the different values.


Miss MACPHAIL:: Maybe the Department of Finance will add them up.


Thomas Clement (Tommy) Douglas: I find in the list Canadian Industries Limited, Fleet Aircraft of Canada Limited, with two pages of exports of war material-


Mr. GOLDING:: Are these firms racketeers?


Thomas Clement (Tommy) Douglas: They are
manufacturing materials for war. Take nickel.


Hughes Cleaver: I should like to put a question to the hon. member.


Thomas Clement (Tommy) Douglas: Will the hon. member wait a moment. I am developing my point and do not wish to be interrupted.


Hughes Cleaver: Well, I. rise to a point of order. The hon. member has made a charge that the National Steel Car Corporation of Hamilton is in an armament ring. I ask him to substantiate that charge or withdraw it.


Walter Edward Foster: If the hon. member makes statements he should be able to substantiate them.


Thomas Clement (Tommy) Douglas: The hon.
member surely is not familiar with the sessional paper. This is a list of companies who have received permits to export arms and articles of war under section 290 of the Customs Act.


Hughes Cleaver: I am sorry to have to interrupt again, but I rise to a point of order.


Agnes Campbell Macphail: What is the point of order?


Hughes Cleaver: The hon. member distinctly charged that the National Steel Car Corporation of Hamilton was in an armament ring. I ask him to substantiate or withdraw that charge.


Walter Edward Foster: I think that is not a point of order. If the hon. member makes statements he should be able to substantiate them.


Thomas Clement (Tommy) Douglas: I pointed
out that this company along with a number of others has been receiving permits from the Department of National Revenue for the export of war material.


Charles Avery Dunning: Where to?


Thomas Clement (Tommy) Douglas: The Minister of Finance keeps interrupting, asking, "Where to?" The Minister has been a long time in this house, I have not been here very long; but I should expect a man in his position, if he wanted to ask a question, at least to rise in his place and ask it politely. I object to men lounging in their seats with a silly smirk on their faces-


Some hon. MEMBERS:: Order.


Walter Edward Foster: Hon. members wishing
to ask a question usually rise in their places, but on account of the Minister of Finance having been ill I do not think he should be criticized for not doing so.


Charles Avery Dunning: I desire no quarter on that account; I apologize here and now to my hon. friend for not rising and asking his
1S78
Defence Purchasing Board

permission to ask a question. Have I his permission now to ask him where the munitions manufactured by the National Steel Car Corporation were exported to? I am not speaking for that company, but I should like to know. I think my hon. friend might be courteous enough to answer that question.


Thomas Clement (Tommy) Douglas: I am prepared to answer it, but I object to interjections of the kind that we have had this afternoon. I have here the exports for every month for the past fourteen months; the minister must be familiar with them. The names of the companies are here, the amounts, the categories-they come under seven different categories, shells, howitzers, machine guns, aeroplanes, etcetera, with the destinations for which they are intended. I am prepared to pass this over to the minister, but surely he does not expect me to stop in the middle of my speech to add this up. I have given the total by months.
I point out that those exports of war material and munitions are on the increase, and that we are in serious danger of becoming involved in a serious situation. I have just placed on the order paper this afternoon a question relating to a report which came to me this morning from a fairly authoritative source, as to box cars being broken up in the Canadian National railway shops at Port Mann, B.C., and the scrap metal shipped to Japan on Japanese boats. I do not know whether that is true, but I know that exports of nickel and steel and scrap-iron for the latter part of 1937 and all of 1938 showed a very great increase, and that increase coincides with the Sino-Japanese war which began July 8, 1937. I point out that while the Minister of National Defence may feel that state manufacture of armaments is a costly proposition, yet over a period of years, in terms of what we may have to face if this country becomes embroiled in a war, if the international armament manufacturers succeed in getting their finger in this country, the cost will be very much greater than any price we could be called upon to pay for state manufacture.
The other day the minister quoted Mr. LJovd George. I was interested in observing in the Glasgow Evening Times of May 6, 1936, a report of the appearance of Mr. Lloyd George before the royal commission on the private manufacture of and trading in arms at the Middlesex Guildhall. Mr. Lloyd George explained at the outset that he was in full agreement with the proposal that the manufacture of arms ought to be a government

monopoly, and set forth his reasons for forbidding the private manufacture of arms. The report proceeds:
On political grounds, he said, it would avoid the creation of powerful vested interests whose prosperity depended on war and preparations for war. The enormous increase, amounting to tens of millions in a few weeks, in the value of the properties of the armament firms of this country upon the intimation of a program of rearmament on a great scale by the government was in itself a startling demonstration of this peril.
And the war-time Prime Minister of Great Britain goes on to point out to the extent of two and a half columns that during the war private enterprise failed to meet the demands of the situation. He said that contractors in all sincerity, because their eyes were bigger than their stomachs, contracted to produce certain material that they had not the capacity to produce. He cited a case in which one contractor promised 12,000,000 shells and was able within the given period to produce only 1,000,000 shells. He says that more and more throughout the war the country had- to depend on Woolwich, the government arsenal. I believe the experience of Mr. Lloyd George should be of some value to us, and that the government as they proceed with this rearmament program ought to give serious consideration to the feasibility of manufacturing under government ownership. Mr. Lloyd George said:
When you contemplate the possibility of another great war, what matters most is the facilities we possess for speedy expansion on the most effective lines.
Here nationalization of armaments has an enormous advantage over private firms.
When in 1914 it came to the need for increasing our supply of munitions on an enormous scale private firms broke down completely.
So first I ask for some more adequate explanation why we should not have government manufacture, and second, have we measured the cost of continuing with private manufacture? I am satisfied, despite the sincerity of the Minister of National Defence and of the Prime Minister and his cabinet, that no matter how carefully any bill like this may be worded, it would be difficult to limit profits if the strain of war should come upon us. Attempts to do this were made by Mr. Lloyd George in Great Britain, by Mr. Baruch, in the United States, and in this country. We know that all of them failed. Under the present Prime Minister of Great Britain legislation was passed attempting to limit profits on the manufacture of war materials, but it has not been successful. Just the other day a newspaper report from Great Britain carried the statement that recruiting was behind for the simple reason that profits

Defence Purchasing Board
on the manufacture of armaments were said in some cases to be as high as forty per cent. If that is true it is an unfortunate state of affairs, and I doubt if this legislation can stop that.
This government or any government that wants to stop excessive profits being gained out of the making of instruments of death is to be commended. I am prepared, and hon. members of this group I am sure are prepared to support any such move. But we are not prepared to support something that will be merely a blind, that may give the impression of doing something when it is not doing it. We are eager to see the real thing, but we are not going to be satisfied with a spurious substitute. Nor are the people of Canada who pay the taxes, who are going to carry the burden of this extension of defence, going to be satisfied. If war should come, the rank and file of the young men of Canada, of my own age and younger, are going to bear the brunt of the sacrifice; and it behooves this or any other government, and even this parliament, to take steps now to set on foot a defence policy which, so far as it is humanly possible, will include the public manufacture of war materials, with the view that if sacrifices are necessary in this country, they will be sacrifices of all the people for all the people rather than sacrifices of all the people for a few of the people.


Mr. DAVID SPENCE (Parkdale):: Anyone who has had experience in awarding contracts can readily see that most of the- discussion to-day has been carried on by people who have had very little experience along that line. I am not one of those who would try to bring about the nationalization of armament manufacture; nor, on the other hand, would I allow private interests to make big profits out of it. As the leader of the opposition (Mr. Manion) said this afternoon, however, there are still honest people in this world, and we should not be so suspicious about everybody. There are in the business world to-day a number of men who would be tickled to death to make armaments, and who, if given the opportunity, would make them for less than the five per cent profit.
I have awarded contracts for many years, and I do not believe that awarding contracts on a plus five per cent or plus ten per cent basis is a good system to adopt. Big interests, and even smaller interests, have often manipulated matters in such a way as to make that cost fairly high. They can increase the salaries of their executives by $5,000 or $10,000 each; or, if they do not like that, they can call meetings of their boards more often than is
necessary and pay their directors S5,000 a meeting. I know this has been done by some gold-mining interests and some liquor interests. That is why some of these companies have not paid dividends for several years; the profits have been eaten up by high salaries of executives, and by directors attending meetings more often than is necessary and being paid 85,000 for spending an hour at these meetings. That is done by Some of the big interests in Toronto, and I am not referring to munitions at all.
I believe we should establish an experimental station where there will be experts, under the Department of National Defence, who will know exactly how much it will cost to make any commodity that may be required if we should engage in a war, which we all hope will not happen. My idea is that we should get the lowest price possible. You could have the specifications of the particular article you have to buy, or perhaps a sample of the article itself; then call in a number of the people who are established in that business, firms with real machinery which you do not have to put in for them, and ask them to quote a figure. At the same time your own experts could be figuring out a price with . which you could compare the tender. That is what they do if they build a trunk sewer, a road, a bridge or anything else; they have an expert staff figure on the cost of the undertaking. In that way you would know that the firm would not be making more than five per cent. -But if you say a firm can have this business but that they must not make more than five per cent, then they will make their overhead so high that when they get their five per cent on it they will, in reality, have a much larger profit.
I do not see how the profit is going to be kept down to five per cent unless some such measures are taken, although at the same time I am not so terribly suspicious of the business men in Canada. I am perfectly satisfied that Canadian manufacturers to-day are walling to do anything they can to save this country, and that there are just as many honest business men and manufacturers as there are honest people of other classes. If you put some confidence in them, ask them to come to your support and to give you advice, they would be delighted to do so, and in that way you could get together with them.
I am all for this purchasing commission, but I want to warn the government that the members of this commission must be born bargainers; they must not be just the tools of anybody who may come along. They must be able to read the men with whom they are doing business; they must be prepared to
Defence Purchasing Board

adopt schemes and methods whereby this country will receive the utmost return for each dollar that is spent. Everyone would not make a purchasing agent, as hon. members know, and I warn the government that they will have to be careful in selecting the personnel of this commission. As I have said already, this five per cent profit will be the most difficult thing in the world to handle. Something has been said about auditors who will cheek up everything; well, all the auditors in the world cannot check up some people, because, while figures do not lie, liars figure.


Mr. D. G. ROSS (St. Paul's):: I think the hon. member for Parkdale (Mr. Spence) is under a slight misapprehension if he thinks all contracts come within the five per cent limitation. The bill itself states that this board is to limit costs and control the profits on these contracts, but in another place I notice that the five per cent applies only to contracts which are not competitive.


David Spence: Let it apply to all.


Douglas Gooderham Ross: We have heard a great deal about dividing up armaments between public and private manufacture. I believe at present we have some small arms ammunition being made in public plants, but the machinery of our arsenals is rapidly being transferred to private plants. I do not think that is a very good division as between public and private ownership.
If the government had followed the suggestion of the defence council of Canada, which was also urged by both General Ashton and General McNaughton when they were chief of the general staff, we would be well on our way now towards some kind of government arsenal; we would have commenced the policy of having pilot plants for the manufacture of arms. It may be that the emergency was not recognized at that time, but now we find ourselves in a state of emergency. We are in a hopeless situation and the government, quite rightly, is turning from pillar to post in an attempt to make up the deficiencies in connection with munitions. But ive must not look to the present only; we must look to the future as well, because I feel certain that it will be not a matter of five years or ten years but probably, fifty years that this country will have to be prepared to defend itself.
Let us now look for a moment at the methods which I understand were pretty well agreed to at the defence conference of 1937. One of the first principles adopted by that conference was that all the nations of the

commonwealth should cooperate with respect to the defence of the empire, and in connection with that cooperation I believe different methods of manufacturing munitions were also discussed. For many years in Great Britain they have had their arsenals and their pilot plants, and the pilot plants having to do with the manufacture of large arms also have been useful in connection with the manufacture of peace-time commodities. For example, one process with respect to big guns is used to-day in the manufacture of turbo-generator shafts. I think there the idea is that the manufacture of small arms in those plants should pay a certain percentage of the cost of the experimentation which takes place in their other pilot plants.
Let us go one step further. In Great Britain the practice has been to pick out firms of known capacity, with the machinery in their plants, and allow them to tender for government contracts. As a general rule not one but two or three are selected and asked to tender. I imagine profits are fair, and that is their way of doing it. But they do pick out the outstanding firms. I do not believe it can be said that Canada has followed the British practice with respect to at least two contracts. We know about one contractor, a radio manufacturer, who has never manufactured armaments and of another, a building contractor, who is given a government armament contract. I do not believe that when we let contracts in that way we are following the British practice.
Let us consider the situation with respect to Australia. They have developed their own arsenals and their own pilot plants. I have before me a picture which appeared in the Toronto Globe and Mail of March 2, showing a new anti-aircraft gun constructed in the ordnance factory at Maribynong, Victoria. The gun is being operated by the members of the first anti-aircraft battery, from Mosman, now in camp at Narrabeen, in Australia. The gun is shown in the picture. Are the Australians so much more clever than we are? Is it a fact that they can make these things, and that we cannot?
Let us consider the position we are in to-day. If we were confronted with an emergency and had our own arsenal and pilot plant we would be in a position to act. We would have our processes and our jigs, and almost everything necessary to show the manufacturer how he must operate. But we have not made that preparation. We would have to fish around to have different industries give us prices of one kind or another, and the amount of success we might have is open to question.

Immigration Act-Deportations
While at the present time we have to buy our munitions from private industry, there is no doubt that we should be developing our own public arsenals, so that we may have the advantage of using them in the future.
I believe the defence purchasing board is worth while, but I do not think it goes far enough. I do not see how it will bring about a decision as to whether munitions are to be manufactured in private or public factories. That apparently is a matter of government policy. In my view we should have a munitions board which would have powers wider than those of the proposed purchasing board. I believe control of the manufacture of munitions for the land, sea and air forces of Canada, together with the design, distribution and production of the necessary parts, should be under the control of a munitions board. While I favour the purchasing board, I repeat my belief that it does not go far enough, and would urge the government to try to do more of the work in our own arsenals, and to build them up 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-Short title.
Mr. MacNICOL:: Are we passing the intro-iuctory part?


The CHAIRMAN:: We are dealing with
section 1 which states that the act may be cited as The Defence Purchases, Profits Control, and Financing Act, 1939.


John Ritchie MacNicol: I have no objection to proceeding with this section. I was, however, going to ask the minister the significance of limiting costs, as indicated in the preamble, and if in such limitation of costs there will be adequate protection for labour in the factories?


Ian Alistair Mackenzie: The hon. member is dealing with the preamble, and we are dealing with section 1. Speaking generally, I would say that the preamble would be considered last.
Section 1 agreed to.
Section 2, paragraph (a) agreed to.
On section 2, paragraph (b)-"contract."


Robert James Manion: Mr. Chairman, it is almost six o'clock, and I suggest that we might lay this aside until we resume this order of business to-night. There are questions in connection with the section which I should like to ask.
At six o'clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clock. PRIVATE BILL



INDUSTRIAL LOAN AND FINANCE CORPORATION

[Stage Direction]
On the order:
Second reading of Bill No. 21, respecting Industrial Loan and Finance Corporation-Mr. Vien.
Hon. J. L. ILSLEY (Minister of National Revenue):: Mr. Speaker, before the hon.
gentleman moves the second reading of this bill, perhaps by leave of the house I may be permitted to make a brief announcement on behalf of the government. The government is impressed with the dimensions and seriousness of the evils of unregulated money lending in Canada at the present time and will introduce legislation of a general nature to regulate the small loan business and to curb the loan shark evil. This legislation will be introduced this session, very soon, within a few days, I hope. It will be introduced in either this house or the other.
I do not think it is necessary for me to say more at the present time; for this is not the time or the place to go into the nature of the legislation. In view of what I have just said perhaps the hon. member would let his bill stand.


Mr. VIEN:: Very well, Mr. Speaker.
Bill stands.



IMMIGRATION ACT


[Stage Direction]
Mr. A. W. NEILL (Comox-Alberni) moved the second reading of Bill No. 14, to amend the Immigration Act.
He said: Mr. Speaker, I explained at some little length on the first reading the purpose of this bill. I might perhaps take a minute now to say what it does not do.
It has been suggested from an unfriendly source that this bill is the evidence of a dark conspiracy to which I have lent myself for the purpose of turning Canada into a dumping ground for European criminals. That is a fine appeal to those who are terribly and entirely ignorant of the facts of the case. But the most casual acquaintance with the bill itself or with the conditions to which it refers will show the absurdity of such a contention.
The present Immigration Act prescribes a number of prohibited classes which are not allowed to come into Canada. My bill never affects that section or those people in any way.
1S82
Immigration Act-Deportations
[Stage Direction]
shape or form. It does not allude to them; it does not deal with them; and it cannot possibly make it easier for any criminal to get into Canada. So that argument falls to the ground. There is not much opportunity for dumping criminals under that.
The present act says that those not yet domiciled, that is those who have not yet lived five years in Canada, and who commit certain crimes which are named in the act can be deported, and in fact must be deported. With one exception my bill does not affect those who commit such crimes. So there is small ground for suggesting that under that section Canada will be a dumping ground for criminals. Section 40 of the present act, among the crimes mentioned, lists that of having been a public charge; in other words, having been at some time, however remote, on relief. We have often heard it stated in a spirit of sarcasm that being poor was a crime, but here it is definitely found a crime because it is listed with living on the avails of prostitution, polygamy, and offences of that kind; and a person can be deported for having been at some time, under some unfortunate circumstances, on relief. A serious penalty is provided, that of deportation. A person can be sent back with the odium of being a prisoner.
My first impulse was to phrase my bill so that under no circumstances could a man who had been on relief be deported on that ground alone, but during times of great depression there are cases where a number of people who are proposed to be deported are quite willing to be deported, and that provides an easy channel for making them deportable. On the other hand, they may be British born. I know the case of a man who came out here, a good mechanic. He got a job and brought his wife and family over. Then his job petered out through no fault of his, and he was out of work. After he lost that job, he was fit for nothing but common labour work. He took sick and went on relief for a few weeks. He was automatically, compulsorily reported for having been on relief, because that is the way the law reads. The clerk of the municipality, or his equivalent in an unorganized territory, must report such a case; the government immediately appoints a board to investigate the circumstances, and if the board finds the facts are as stated, that the man has been on relief, the board must automatically order deportation. That is subject only to an appeal to the minister, with which I shall deal a little later.
There is an appeal to the minister; yes, that is true. But if the man has no political friends, and people in such a situation seldom 
have, he is handicapped in approaching this far distant minister along channels with which he is very imperfectly acquainted. There is this also to be said. There have been cases of ministers-I could name them-who have been indifferent to their duties, and who simply signed on the dotted line; and when the case of Tom Jones comes before him ordered to.be deported, on the appeal the minister gives a most casual glance at the papers, sees that his deputy and those under him have O.-K'd the deportation, and naturally and not unreasonably agrees with them.
The point I am trying to make is that the appeal is made primarily or almost entirely from the decision of the board and intermediary officers-there is an inspector and someone else-to a minister who is largely guided by the advice of these very men, and the brief which is presented to the minister in regard to the case is drawn up by one of the very men who have already condemned the man to deportation. Can you think, sir, human nature being what it is, no matter how fair-minded this officer intends to be, that he would not put into that brief something at least of his own conviction that the man ought to be deported?
The process is this: The board of inquiry orders the man deported because he has been on relief. The case then goes to an inspector, and, I rather think, another official; then it goes to Ottawa where it is passed on by two competent, sound officials here; if they all agree on deportation, the case goes to the minister, who glances over the papers-or perhaps he does not-and says to himself, "These are my officials, reliable men, quite familiar with the case, and I am not," and too often he is apt to sign on the dotted line and acquiesce in the decision of his officials.
All that my bill asks is that this board inquiring into the case, if deportation is being asked for solely on the ground that the man has been on relief, may have the power, and that they shall use it, to recommend against deportation. At the present time they have no alternative than to order the man to be deported.
It is true that there is in a rather obscure section of the act, totally unknown to the man who is going to be deported, a provision that the board may also submit their views on the subject. But they have already damned the man, sentenced him to be deported, and if they accompany that with a recommendation that he had better not be deported, it does not have half the weight that it would have if the original recommendation had been against deportation. That is one of the main purposes of the bill

Immigration Act-Deportations
The bill has two phases, but that is the main idea, so that the board of inquiry, if in their judgment the circumstances are such that the man has every prospect of being a desirable citizen and it was only by accident, perhaps sickness or ill health or something like that, that he happened to go on relief for a few weeks-the board may recommend that he be not deported. They may, it is true, so recommend now, but in a sort of back-door way. That is, they may accompany their recommendation that he be deported with a letter that maybe he had better not be deported. That is rather a peculiar way of dealing with the matter. I want it dealt with straightforwardly so that there will not be any doubt, and I want the board to have power to do that. That is one of the purposes of the bill. There is not much opportunity there to make Canada a dumping ground for European criminals.
The other purpose of the bill is to give the same powers of recommending against deportation in the case of those who, because of having been on relief or possibly because of some minor offence, would be deported to a country where a heavy punishment, possibly death, would await them for some political crime they had committed which would not be a crime in this country. I make it specifically clear that it does not apply to extraditable offences or to anything which would be a crime in this country.
I have in mind the case of a man whose sole offence is, perhaps, that his mother or his grandmother was of a certain racial origin in Europe and who, if he goes home, is certainly liable to be sent to a concentration camp and possibly a great deal worse; for it is almost incredible how small an offence is made the subject of most serious punishment, in these cases. I therefore propose to make it permissive only to those government officials who have heard the man's tale, and the onus is on him. I have known a case where a man produced distinct evidence that he was going home to his death for some offence for which in this country he was not liable to death. In that particular case the minister used his discretion. I am quite content that the responsibility shall be on the man to prove his case. I do not say that a board of inquiry should run all over Europe investigating these matters. But I think that if a man is able to substantiate his contention in a case of that kind the official should have at least the permissibility, so to speak, of recommending against his deportation. As I
have said, it does not apply to extraditable offences or to those which would be punishable in Canada.
It has been Britain's boast almost since Britain was Britain that once a man touched British territory he was free. You remember, Mr. Speaker, that when slaves came from the south they could turn on their pursuers once they put their foot on Canadian soil and'say that they were free men. Cases have been known where refugees have swum out to a British ship in a harbour and once they touched the side of the ship they were free from prosecution or pursuit from the officials of the country where they had been.
History tells us that Britain has benefited greatly by allowing liberty to all who came to her shores. I believe that the glass industry was started by refugees from Holland. Certainly the lace and woollen industries were started by refugees from the continent. Canada also has not lost much through the empire loyalists who came to us under similar conditions. But that is entirely too mercenary a view to take of the matter, and I do not want to emphasize that point.
This bill is quite limited. It does not open the door to refugees; it does merely two things. It gives the board the power, on inquiring into charges against possible deportees, to recommend if they choose, and only if they choose, against deportation-in the one case, where the deportee has been guilty, if it is a case of guilt, only of having been on relief; and in the other case, where he is going to very severe punishment, perhaps death, in the country of his origin.
The minister kindly suggested that I should discuss this matter with his officials. That is an excellent idea, because a person can get much better results across a table than he can across the floor of the house; and I did so. The aspect of it which I grasped, the viewpoint of the officials as I got it, at any rate, was that they do now do a great deal of what I have been asking to have done, but they do it by an act of grace, an act of compassion; that these officials do try to understand the circumstances of the man- and I do not deny it, for there are many excellent officials-they do study the case; if they think it is not one calling for deportation they - so recommend to the minister and he gives his official decision against it. Yes, but the only objection to that is that they are now doing by a side-door what ought to be done openly. They are giving that clemency to a man by compassion and, so to speak, the grace of God which it ought to be his right to claim. We must always consider thf
1S84
[Stage Direction]
Immigration Act-Deportations
human element. Officials change; ministers change; we might quite conceivably have officials who were negligent or careless in their duty, and a minister who is the same way, and they would just go along the line that ''This man has been ordered deported, and the man who saw him ordered deportation, so I guess we had better let it go through," although the case might be a very trivial one indeed. Officials tell me that that is not done; they cited case after case where a man had been relieved from deportation at the last minute by their own investigation and recommendation, and I give them all credit for their action in. that regard. Nevertheless the fact remains that the minister's judgment is almost bound to be swayed by the recommendation, the brief, which is presented to the minister, and that brief is drawn up by an official who has already decided against the man. Can one conceive of a man convicted in a court going to a higher court and having the brief asking for favourable consideration in that higher court prepared by the prosecuting counsel in the lower court? That, I think, is almost a comparable instance.
Therefore really the bill is not demanding a great deal. According to the officials' own viewpoint, I am only as it were legalizing or legitimizing what they say they very often do, but I am making it a matter of right rather than a matter of grace. That is the whole thing so far as I see it as regards those two points, and I think the minister might let the bill go through, or at least consider it, because it cannot do any harm and possibly it might save to Canada a few desirable citizens whom we want, instead of having them deported.
Mr. THOMAS REID (New Westminster):: Mr. Speaker, while the bill introduced by the hon. member for Comox-Alberni (Mr. Neill) has considerable merit, it might create a dangerous situation if it were adopted - in its present form. It is true that the hon. member who introduced it has talked chiefly with reference to British subjects coming to this country who, because for some reason or another they become destitute within five years, are subject to deportation. But I have in mind a condition of affairs in British Columbia which might very well rise if the bill passed in its present form.
In 1931, when relief became prevalent throughout Canada, many nationals of foreign states applied for assistance in British Columbia. I took the trouble to investigate in Vancouver and other cities as to the nationalities of those applying for relief, and I found that many Japanese citizens were included 
among those applicants. Their cases were investigated, including the length of time they had been in this country; it was found in 1930 and 1931 that many of those who applied for relief had not been in Canada five years, and they were ordered to be deported. As soon as the Japanese discovered that they were liable to deportation because, having been less than five years in the country, they were applying for relief, they immediately- shall I say-took cover; those who had been less than five years in Canada and were destitute either denied the fact or were kept by their friends until they had lived here five years, and then they applied for relief. It is stated in the explanatory note:
_ This bill will have the effect of protecting immigrants on relief pending their naturalization.
I can visualize how welcome this bill will be to those from a country like Japan who are living in British Columbia,, and who could procure relief which in many instances might be a greater amount than they were receiving by way of wages; the relief money might be a gold mine to them. Owing to the fact that the Japanese can live so cheaply, the relief, meagre as it is to British subjects or to Canadians, would be very acceptable indeed to them, and would be applied for right away.
I realize that there is some merit if one argues along the line of the odd British subject or so who comes into the country with money and for some reason or another loses it shortly after his arrival. I can see how unfair it would be to deport such a person. At the same time I am thinking of conditions in British Columbia. Those of us who would like to see the bars put up against the further entry of orientals, especially Japanese, have a certain point of view, and I can see that if .this bill passes in its present form it may be seized upon by nationals from that country who might not be deported, as they were in 1930 and 1931, and as they are still liable to be. To set up a board and then leave it with the board to say whether proceedings for deportation should take place or not might give rise to a racial cry. If no proceedings were taken against subjects from Great Britain, and then proceedings were held against nationals from other countries, I am afraid a serious racial cry would be raised.
I would rather see the act remain as it is even though the odd British subject may have been deported-and there are not many- because if the bill passes in its present form, interpreting it as I have done in the light of the remarks of the hon. member, and from
18S5

Immigration Act-Deportations
what I have read of the bill itself,, I think it would open the door to people from other countries like Japan, who might take full advantage of the opportunity to go on relief and stay in the country, when as I said at the beginning they would be liable to deportation.


Mr. ANGUS MacINNIS (Vancouver East):: I wish to say but a very few words in support of this bill. The hon. member for Comox-Alberni (Mr. Neill) and I have not always agreed on many matters, but I say to him now that the introduction of this bill does credit to his humanitarian instincts. I support the bill for two distinct reasons. In the first place I think this amendment should be given careful and serious consideration; as a matter of fact, it should be accepted, because we should not have on the statute books a provision that merely to become a public charge under the conditions that prevail in the country to-day shall be considered a crime. At least it should not be classed among the other reasons that are set out in the section under which a person may be deported, that he has had to apply for relief. May I, for the benefit of hon. gentlemen, who possibly may not be acquainted with it, read section 40 of chapter 93 of the Revised Statutes of Canada, 1927. That section reads:
Whenever any person, other than a Canadian citizen or person having Canadian domicile, shall be found an inmate of or connected with the management of a house of prostitution or practising prostitution, or who shall receive, share in, or derive benefit from any part of the earnings of any prostitute or who manages or is employed by, in, or in connection with any house of prostitution or music or dance hall or other place of amusement or resort habitually frequented by prostitutes, or where prostitutes gather, or who in any way assists any prostitute or protects or promises to protect from arrest any prostitute or who shall import or attempt to import any person for the purpose of prostitution or for any other immoral purpose, or who has been convicted of a criminal offence in Canada or who admits the commission prior to landing or entry to Canada, of a crime involving moral turpitude, or has become a professional beggar or a public charge . . .
That is, who loses his job and has to appeal to the authorities for relief. In this section, such a person is classed with the others who are enumerated in the first part of the section. There are a number of other persons mentioned in this section who may be deported, but I do not believe that becoming a public charge, in the sense that a person has to apply for relief, should be considered a cause for deportation in Canada.
I support the amendment also because of the conditions that exist in many parts of
Europe to-day. We know there are a great many people who because of race or because of their political opinions find conditions in their own country intolerable. For instance, we know that in Germany people of the Jewish race are persecuted and driven out of the country; but there is another class of people in Germany who are persecuted, and who as a matter of fact are in a worse position than the Jews because they cannot leave the country. I refer to the Social Democrats. The Jew can make his case known, and if it is known that he is a Jew every effort is made to get rid of him; but the Social Democrat cannot admit that he is a Social Democrat because he would be immediately subjected to persecution. Because of that fact, he cannot make application to leave the country. So he has not the opportunity to leave.
There are people in Canada who have been here three or four or five years and who may be socialists in their political opinions. If we deport such people because they have become public charges, in the sense that they have applied for relief, we are sending them back, as the hon. member says, to certain death or at any rate to spend the rest of their lives in concentration camps.
For these reasons I submit that the amendment should 'be accepted. I do not agree with the position taken by the hon. member for New Westminster (Mr. Reid). We allow people to come into Canada, and to me it makes no difference whether they are white, yellow, black or 'brown, we should not discriminate against them. They have been allowed to come in under the laws of Canada, and while here, through their productive efforts, they have added to the wealth of the country. We should not in any way discriminate against such people because their skins may be yellow and their eyes slanted. We shall have to raise our moral concepts a little higher than that and get away from some of our racial prejudices if we are to hold our place in a world that can be called civilized.
I hope that the government will consider this amendment favourably and take the necessary steps to make it law.


Hon. T. A. CRERAR (Minister of Mines and Resources):: The amendment proposed by the hon. member for Comox-Alberni (Mr. Neill) is an important one. In the operation of the act abuses such as those to which the hon. member has referred might creep in. I do not say there is not the possibility of abuse or perhaps of injustice being done. But as far as my observation has gone in the administration of the Immigration Act since I have had
18S6

Immigration Act-Deportations
any responsibility for it, I do not think that has happened. The hon. member for Vancouver East (Mr. Maclnnis) referred to section 40 of the act, which sets out a number of offences which might lead to an inquiry and deportation. Among those is the offence, if such it may be called, of becoming a public charge. That section provides that:
... it shall be the duty of any officer cognizant thereof, and the duty of the clerk, secretary or other official of any municipality in Canada wherein such person may be, to forthwith send a written complaint thereof to the minister, giving full particulars.
In other words, some individual who has been in the country less than five years and has not acquired domiciliary rights in Canada may be on relief. Under the act the duty is imposed on the secretary of the municipality in which he lives to notify the minister to that effect. Then section 42 contains this provision:
Upon receiving a complaint from any officer, or from any clerk or secretary or other official of a municipality against any person alleged to belong to any prohibited or undesirable class-*
That is, for instance, one who may have been on relief.
-the minister, the deputy minister, the director or the commissioner of immigration may-
Not shall.
-order such person to be taken into custody and detained at an immigrant station for examination and an investigation of the facts alleged in the said complaint to be made by a board of inquiry or by an officer acting as such.
The procedure I think is fairly clear up to that point. It is the duty of the official of the municipality to report to the minister that the person is on relief. The minister or the other officials designated in section 42 may order an inquiry or may not. As a matter of fact, I think the inquiry is usually ordered.


Mr. NEILL:: Always.


Thomas Alexander Crerar: Well, I would not say
always, but usually it is. The inquiry is then held and all the facts ascertained. And the board of inquiry may order deportation. That does not mean deportation forthwith. The person who is-shall I say-accused has the right of appeal direct to the minister. Under the law the board of inquiry must advise the man of that right.


Alan Webster Neill: Will the minister excuse
me? He says it does not mean deportation forthwith, but the very wording of the section says "he shall be deported forthwith."


Thomas Alexander Crerar: That may be correct, but I am speaking of the practice-


Alan Webster Neill: But that is the law.


Thomas Alexander Crerar: -and in any event his appeal must be considered by the minister before deportation can take place. As a matter of fact, the report of the board of inquiry is sent to the superintendent of immigration for the district concerned. It then comes to the immigration branch, is examined by officers of the department and in the final analysis must come to the minister, and the law imposes upon the minister the duty of dealing personally with these appeals. One of the matters I have to deal with almost every day in my ordinary conduct of the business of the department is these appeals. Deportation is not always ordered. Often the officials of the department say, "Deportation is not justified in this case." I recall cases where the officials-I am speaking now of the senior officials in the department- have recommended deportation-sometimes they make no recommendation-and I have not accepted their recommendation because on examination of the evidence I did not think deportation warranted. I quite admit the position of the hon. member for Comox-Alberni that the law as it stands may impose a hardship upon a person who is charged with being on relief. But I say that since I have had anything to do with this matter-I speak only of my own observation-that is pretty effectively guarded against at the present time.
The proposed amendment suggests further that such a person who may otherwise be subject to deportation, if he makes representations to the board of inquiry that deportation would be likely to place him in a position where he would suffer trial and punishment, or punishment without trial, in the country to which he would be deported, can claim the right to have this taken into account by the board of inquiry. The amendment would impose upon the board of inquiry the necessity of conducting an investigation into such an allegation.


Alan Webster Neill: No, merely to listen to the man.


Thomas Alexander Crerar: No. Let me read the
governing clause:
Provided horvever, the board may report against the deportation of such person where the sole complaint against such person is that he has become a public charge, or where the board of inquiry, in addition to an investigation of such complaint, has inquired into and investigated, which it is hereby empowered to do, any representations made by such person to the effect that were he deported he would be liable to suffer trial and punishment or punishment without trial in the country to which he would be deported. . . .

Immigration Act-Deportations


Alan Webster Neill: They investigate the representations.


Thomas Alexander Crerar: Precisely. What does that mean? A person who comes before a board of inquiry on the ground that he lias become a public charge says, "I do not want to be deported because if I am sent back to Germany or Austria or Russia or some other country I shall be sent to a concentration camp or tried for some offence and my life may be endangered." Under this provision, as I read it, it would be necessary to have such a complaint or assertion inquired into and investigated before deportation could take place. That would impose upon the board of inquiry a duty which I do not think it would be practicable for it to discharge. Consequently I think it would make the administration of the law in that regard very difficult.
I quite admit the contention of my hon. friend that occasion may arise of hardship of the kind described being imposed upon some individual by a deportation order. But while that may arise, I can say to the house quite frankly that I do not think it has resulted in any of the cases that have come to my attention. Let me make it clear, Mr. Speaker, that I am not speaking of any previous administration, because I do not know anything about any other administration. I do say, however, of my own knowledge that when deportation orders have been issued there have been occasions when the board issuing the order has recommended that it should not be put into effect. There have been cases in which the officers more immediately on the spot have made such recommendations; there have been occasions when, after these matters came to the notice of the senior officials of the department, as in due course they must, they have made such recommendations and, when none of these things happened, there have been cases that have come to me in which I have allowed the appeal.
Under those conditions I think I should say to the house that the administration of this act at the present time is carefully guarded to avoid inflicting upon any person charged with being on relief the penalties theoretically provided by the law. I may say further that I considered bringing in some other amendments to the act, because some clarification is required in one or two respects in connection with this matter of deportation so far as provincial laws are concerned; but it was decided to let the matter stand over until next year, when it is the intention of the department to bring in some amendments to the act. I do not know how far my hon. friend wishes to press his amendment. I believe in its present form it would be difficult to accept, because I am afraid that any complaints which might be made by a person to the effect that he would suffer serious penalty if deported could not usually be investigated. So I would suggest to my hon. friend, and I would be glad to have him give the matter consideration, that the point in his amendment that I believe has some merit might well stand over until another session when, if I have anything to do with the administration of the department, I shall be glad to see that it is included in the amendments submitted.


Mr. WOODSWORTH:: Just before the minister takes his seat, would he explain how this amendment would embarrass departmental administration if it were passed?


Thomas Alexander Crerar: I have exhausted my right to speak; but if I may reply to the hon. gentleman, the provision here, which I mentioned a moment ago, would be a very difficult and indeed impossible matter of administration. The hon. member for Comox-Alberni may not agree with me, but let us suppose we have before a board of inquiry a person charged with having become a public charge. That board must examine into his case. If they find he has become a public charge he may say, "Oh, I don't want to be deported. If I am sent back to Germany or Austria I will be punished; I will be sent to a concentration camp; my life may be in danger." Then it becomes the duty of the board to inquire into and investigate that statement. How could a board sitting in Winnipeg, for example, investigate his record in Germany or Austria in order to find out whether or not he was telling the truth?


James Shaver Woodsworth: Why not?


Alan Webster Neill: Mr. Speaker, the minister has dealt very fairly with the arguments I have put forward, and not in a partisan or one-sided manner. For instance, he admitted quite frankly that the act distinctly says that if the board of inquiry finds certain facts to be true the man shall be deported forthwith. That is one of the things to which I object. The minister made a point when he said my bill possibly would require a board of inquiry to investigate at great length, perhaps in foreign countries, the representation of the man concerned that he was in danger of losing his liberty or his life. That provision could have been amended very easily in committee. All I wanted was to have the board listen to the man and pay attention if he proved his point beyond question.

Fisheries Act-Beam Trawling

Then the minister admitted quite frankly that under the present act hardships may result, and after all the purpose of my 'bill was to prevent such hardships. As the hon. member, for Winnipeg North Centre (Mr. Woodsworth) has said, I do not see that any great harm or embarrassment would arise from the adoption of this 'bill. Nevertheless the hon. gentleman, as a minister of the crown, has indicated that he is not willing to allow the bill to go through, but that he is willing to give these points consideration in amending the act next year. So on the principle that half a loaf is better than no bread I would suggest to my hon. friends to my left that it is always better to take what you can get and keep on advancing than to be totally turned down.
Before asking permission to withdraw my motion, I should like to say a word with regard to the argument put forward by the hon. member for New Westminster (Mr. Reid). It was unfortunate and, I think, wholly unnecessary that the racial cry in regard to Japanese should have been introduced into a discussion of this kind. It serves no good purpose; it is utterly and entirely remote from the purpose of the bill, which is intended to apply to Canada as a whole. The hon. member spoke of the large number of Japanese who were asking to go on relief and said that if my bill did not pass they could be deported. There is nothing under high heaven in my *bill that would save them all from being deported under those circumstances; surely the hon. member must be aware of that. Then the hon. member spoke of opening the door. He must know that by no possible twist of reasoning or construction could it be said that my bill proposed opening the door to Japanese immigration. I notice that he took the opportunity to advertise to the house, and I assume for home consumption, his high desire that there should be no further immigration of orientals into British Columbia. That comes with singularly bad taste, Mr. Speaker, from an hon. member who is on record in the pages of Hansard of last year as voting against a bill which was carefully designed to prevent the immigration of Japanese.
In the circumstances, Mr. Speaker, I would ask the consent of the house and of my seconder to withdraw the motion for second reading.


Thomas Reid: On a question of privilege, Mr. Speaker, I want to make a denial. I did vote against one bill, but I voted in favour of the bill that was introduced by the hon. member to exclude Japanese from the province of British Columbia.


Alan Webster Neill: In other words, the rooster went behind the barn on the second occasion.
Motion (Mr. Neill) withdrawn.



FISHERIES ACT


[Stage Direction]
Mr. J. J. KINLEY (Queens-Lunenburg) moved the second reading of Bill No. 37, to amend the Fisheries Act, 1932.
He said: Mr. Speaker, this bill purports to make a short amendment to subsection 2 of section 56 of the Fisheries Act, 1932. Under section 56 it is provided that every person shall be guilty of an offence and shall incur a penalty who attempts to fish or to cause any other person to fish with otter trawls or similar equipment, except under licence from the minister, and in order to qualify for such licence at the present time such vessel must be registered as a British ship in Canada and be owned by a Canadian. The present amendment would change this qualification to read "unless such vessel has been built in Canada and is registered as a British ship in Canada and is owned by a Canadian."
The bill does not decide the question of the merits whereby a licence is granted, but it does make a difference in what vessels can apply for a licence to the further extent that they must be built in Canada.
Mr. Speaker, it is nearly nine o'clock, and I should like to see the bill receive consideration and perhaps go to a committee. I know the minister from Nova Scotia is interested in it, and it may be that he would want to make an announcement to the effect that we could send the bill to a committee. Perhaps that would be the best thing to do, because it is a matter of detail. I suggest the bill is important and a matter worthy of the consideration of the house, especially of the fisheries committee. Therefore, as the hour has almost expired I shall not say anything further at this stage, but will, in order to advance the bill to-night, ask that it be sent to the fisheries committee.
Robert Emmett Finn: Mr. Speaker, the hon. member for Queens-Lunenburg (Mr. Kinley) has introduced the bill and made a few remarks in reference to it. There is grave doubt in my mind as to whether the bill will accomplish the object intended. I suggest that the bill is not really intended for the purpose of stopping the trawlers. The [DOT] bill provides that unless a trawler is built in Canada and has British registry it shall not be permitted to bring fish into any Canadian port.

Defence Purchasing Board


Mr. KINLEY:: May I explain. It does not affect the merits whereby a vessel sha.ll get a licence. It only says that in order to qualify, before she can even apply for a licence she must be built in Canada.


Robert Emmett Finn: I agree with the hon. member for Queens-Lunenburg-"before she can apply for a licence" and have the right to bring fish into a Canadian port, she must be built in Canada. But in the bill as it stands there is nothing to prevent any Nova Scotian-the National Fish Company, wdiich is a monopoly -building vessels in Nova Scotia, as they are doing, putting them under British registry and, ipso facto, they become and have the right to become trawlers under order in council. I do not think the bill should be hastened so quickly into committee. I say it should remain in this house until the Minister of Fisheries (Mr. Michaud) is here. This is the place to discuss the bill in detail, because it is of absolute importance to the hook-and-line fishermen of Nova Scotia that it be discussed in the house fully and then go to committee.
I was surprised last night, in conversation with the Minister of Fisheries, a conversation which was not private, when he told me that he believed the day of the hook-and-line fisherman of Nova Scotia was gone. I do not agree with the minister. If he is correct, their livelihood is gone.
As I am not on the fisheries committee I shall continue the debate until nine o'clock, and then move the adjournment, so that the matter may remain in the house where every hon. member who so desires may discuss the merits of it on the return of the minister.
Last year three trawler licences were issued from April 1 for one year, whereas before they had been for three years. Now there are five, I believe, to be applied for. An organization known as General Sea Foods, a United States company, with head offices in the city of New York and subsidiary offices in Boston is applying for two licences. This company is occupying space at the Halifax terminal. They have taken all their books and all information which would denote how much they make, away from the Halifax office, and no person in Nova Scotia or under the provincial act can find out anything about the amount of business the corporation does.
I say that condition is not fair to the fishermen of Nova Scotia. Only to-night I was reading where a small motor-boat had gone out from Yarmouth; and had it not been for one of the government boats tied up there that went to the assistance of that motorboat which, even with anchor down, was, on 71492-ll9i
account of the gale, heading towards the reefs, the lives of those fishermen would have been lost. If the fishermen along the coasts of Nova Scotia attend to their work, even unto death, in order to make a living, then I say we cannot trifle with their means of livelihood, and hand over to commercial interests privileges which are in the nature of a combination.



NATIONAL DEFENCE


[Stage Direction]
The house resumed consideration in committee of Bill No. 38, to establish a defence purchasing board-Mr.	Mackenzie (Vancouver)-Mr. Sanderson in the chair.
On section 2, paragraph (b)-"contract."
Douglas Gooderham Ross: We have here that .the bill deals only with contracts in excess of 85,000. What is to prevent one firm or one person from having twenty contracts of 15,000 or less each? Under those circumstances he would not come under the measure. I would suggest the paragraph might be amended by adding the words "or having more than one contract aggregating the amount of 85,000 or more," or words to that effect. It is easy to see that many contracts would not come under the board at all.


Ian Alistair Mackenzie: The
principle involved here is the same as obtains in the Department of Public Works, where there is	a rule that the
department must call for tenders on contracts over 85,000. That is the same principle that is being followed in this legislation. I suggest the public interest is fairly well safeguarded by the provisions as they appear in the legislation.


Mr. BROWN:: What amount of last year's appropriations was expended on contracts under 85,000?


Ian Alistair Mackenzie: I would have to ascertain that later; I have not it before me at the moment.


Douglas Gooderham Ross: There may be a
principle involved that operates, but there is nothing in the bill, is there, to take care of that 85,000 or under?


Robert James Manion: Before the minister rises,
I wish in a general way to support the remarks of my hon. friend, so far as the prin-
Defence Purchasing Board

ciple is concerned. I believe that the $5,000 limit so far as these contracts are concerned is the proper idea, but I have been informed by contractors themselves, by one of them quite recently, that in some departments of government-I am not suggesting this department-the very policy which the hon. member has just mentioned is carried out; that is, contractors are given contracts for under $5,000, and that is repeated so that they do not reach the stage of calling for tenders. I do not know just how this could be corrected, but I believe the minister is sincere in wanting to have this properly done. I give him credit for that, and I should like to see some clause inserted so that no individual contractor would be able to get a series of contracts under $5,000 without tenders being called for.


Ian Alistair Mackenzie: I am
inclined to agree with the suggestion of my hon. friends. Although the $5,000 limit is here, there is nothing in the legislation to prevent the purchasing board itself from dealing with contracts under $5,000. Under the legislation they have the exclusive right of dealing with contracts over $5,000, but they are not prevented from dealing with contracts under $5,000. The main idea was not to clutter up the work of the board with numerous contracts of small amounts. But the suggestion that has been made by my hon. friends is worthy of consideration, and I shall be glad to look into it.


Mr. HOMUTH:: Further on, this same
clause says:
.	.	. provided that the foregoing definition
shall not extend to any defence equipment, manufactured in an arsenal or factory owned and/or operated by the government of Canada or to projects carried out by persons in the employ of His Majesty the King in right of Canada.
I have in mind, for instance, the Montreal Construction Company, which is operating with government machinery.


Frederick George Sanderson: I would point out to
the hon. member for Waterloo South (Mr. Homuth) that he is dealing with clause 3.


Karl Kenneth Homuth: No. Mr. Chairman, I
am dealing wtih section 2.


Frederick George Sanderson: We are on paragraph
(b) of section 2.


Karl Kenneth Homuth: That is what I am speaking to. The Montreal Construction Company might be classed as a company that is operated by the government in view of the fact that its machinery is government owned and the government advances everything in connection with the operation of the plant.
'
It is just a question whether contracts could be given to such a firm without the sanction of this board.


Ian Alistair Mackenzie: There
is no question whatsoever that if a contract such as that given to the Montreal Construction Company is contemplated in the future, it would definitely come under this legislation with reference to the control of profits. This proviso refers only to arsenals owned by the government.


Abraham Albert Heaps: Who will have control of
contracts under $5,000?


Ian Alistair Mackenzie: The
Department of National Defence under this legislation, but there is nothing in it to prevent the purchasing board, if it so desires, from dealing with all contracts. It is purely a question of the most efficient management. The board might possibly be overworked if they had to deal with all contracts. A parallel case would be the practice in the Department of Public Works where contracts over $5,000 must be submitted to public tender.


Abraham Albert Heaps: Is it the present intention of the minister to allow his department to have in its own jurisdiction the control of contracts under $5,000?


Ian Alistair Mackenzie: That is the intention of the legislation which is now before the house.


Mr. BAKER:: I think it is fair to say that all contracts should be under the control of this board. It is easy to give ten or twenty contracts of $4,800, something just under $5,000. I would rather see all contracts under the board.


Ian Alistair Mackenzie: While I am prepared to give every consideration to the views of this committee as expressed, I think perhaps we had better leave it to the experience of the board in the working out of the legislation, because it might be overloading the board to give them control of every small contract, say for one or two hundred dollars.


Robert James Manion: I suggest this in that regard. Apparently it is the unanimous opinion that some control should be exercised over contracts under $5,000. I quite agree with the minister that we do not wish the board to be cluttered up with a great many one hundred dollar purchases, but perhaps a clause could be framed whereby all contracts should be at least submitted to the board, so that they would be aware of what was being done and would have to pass upon them at any rate. I should like to see such a clause inserted.


Ian Alistair Mackenzie: That all contracts should be referred to the board?


Robert James Manion: Yes, and that they should have to pass upon them, if you like. They might not have to do the actual letting of the contracts, but they could pass upon them. Suppose some successor of my hon. friend were not so high-minded as he and decided to hand over to some individual contractor a number of contracts under $5,000 over a a period of time. If the board were made aware of what was going on, it could refuse to pass upon them. I do not think it would be difficult to draft a clause to cover that point.
I do not think it is necessary for the board to pass upon every small purchase. Perhaps a limit of $1,000 could be imposed, that all contracts of that amount must be submitted to the board for them to initial, so that they would be aware of everything that was going on within the department.


Ian Alistair Mackenzie: I am anxious not to load up the board with so much work that its really vital function will be retarded. While I appreciate very much the suggestions that have been made, I think it should be left to the working out of the legislation, but I can assure my hon. friend that as long as I am in the department the points he has mentioned will be taken good care of.


Abraham Albert Heaps: When this new board is set up, this whole question will depend upon the permanent officials?


Ian Alistair Mackenzie: Yes.


Abraham Albert Heaps: A good deal of purchasing is done by contract and a good deal by requisition, and I think there should be a distinct cleavage between orders by requisition and orders by contracts. The department may, by ordinary requisition, order something costing over S5,000, and there may be no need for a contract. That must happen on many occasions where work is done upon requisition, without any contract, by the ordinary officials of the department. But where contracts have to be entered into, small contracts may often lead to larger ones, so I think contracts should be left to the body designated by this bill. It should have the power to award contracts, and requisitions could be made in the ordinary way by officials of the department.


Thomas Clement (Tommy) Douglas: Referring again to the phrase:
.	.	. provided that the foregoing definition
shall not extend to any defence equipment, manufactured in an arsenal or factory owned and/or operated by the government of Canada.
Defence Purchasing Board
I am interested in that, in view of the statement made by the Prime Minister this afternoon that the government was not contemplating giving a monopoly of manufacture either to government arsenals or private manufacturers. I wonder if the minister could give us some idea of what weapons and what equipment are being manufactured in the arsenals compared with the equipment which is being manufactured by private corporations, and about what amount of money has been expended in the one compared with the other over, let us say, the last three years.


Ian Alistair Mackenzie: Expenditures in government arsenals in 1936-37, 193738 and 1938-39 to date were $6,025,469. That includes the dominion arsenal at Quebec, the dominion arsenal at Valcartier, the dominion arsenal at Lindsay, the repair shops at Esquimau dockyard, the Esquimalt armament supply depot, the repair shops at Halifax dockyard, the armament supply depot at Halifax, and some stations and depots under the Royal Canadian Air Force.


Thomas Clement (Tommy) Douglas: Are those the orders given to these public arsenals?


Ian Alistair Mackenzie: It is the amount spent for government purposes in government-owned arsenals in various parts of Canada. The amounts by years are as follow:
Year
Amount
1936-	37	
1937-	38	
1938-	39 to date

That includes production and the purchase of machinery. I have not the actual amounts for machinery broken up. I was not able to get that except as part of the other expenditures.


Thomas Clement (Tommy) Douglas: I do not think I made myself clear. What I wanted was this. It was pointed out this afternoon that some of the government's equipment will be made by private companies; some of it on the other hand will be made by government arsenals. I was wondering what munitions, guns and equipment over the last three years have been made in government arsenals, and on the other hand how much has been spent on orders or contracts to private corporations. How would they be related, and what material would be made in each case?


Ian Alistair Mackenzie: In government arsenals production has been practically all of small arms ammunition, with 4-5 and 18-pounder shells to a limited extent, but up to the capacity of the production at the present time in regard to both.
Defence Purchasing Board


Thomas Clement (Tommy) Douglas: How much
money would that represent?


Ian Alistair Mackenzie: As I said the other day in the house, it used to be a matter of departmental policy to reserve Lindsay as an arsenal for small arms munitions. But with the very much increased production of small arms ammunition in Quebec arsenal in the last few years, as a matter of policy it will now be quite possible not to reserve Lindsay arsenal for the purpose for which it used to be reserved. With regard to machinery in private plants, just two plants were mentioned in the debate in the house. The total machinery in the Montreal plant is of the value of about S235,000; in the other, I am told, it is 8844,000. That is paid for as to two-thirds by the Canadian government and one-third by the British government, and is entirely owned by the Canadian government.


Hughes Cleaver: This afternoon, when this matter was under discussion, the hon. member for Weyburn made these statements:
We are playing our part as a government and a people in helping to finance and support an armament ring who . . . constitute a serious menace to the peace and good government of the world. . . . Since the war it has been known that these armament racketeers . . . have fostered suspicion and distrust. ... In my opinion nothing could be more serious . . . than to become a link in the international armament chain, and that is what we are rapidly becoming. . . . Here is the National Steel Car Corporation of Hamilton, Ontario, with at least twenty batches of exports.


Frederick George Sanderson: Order. The hon. member. for Halton, is, I think, out of order. He is repeating something which was discussed this afternoon. We are now on the bill, paragraph (b) of section 2.


Hughes Cleaver: I am speaking to the
word "contract" in section 2, paragraph (b) of the bill. I again ask the hon. gentleman to withdraw that statement. There are many employees of the National Steel Car company living in my riding.


Some hon. MEMBERS:: Order.


Frederick George Sanderson: The hon. member is
definitely out of order.


Robert James Manion: Mr. Chairman, I do not
like to oppose the minister in this regard. I believe that he is doing this in good faith. At the same time I am strongly of the opinion that that figure of 85,000 is too high, and I am going to move an amendment:
That the word "five" in the twentieth line be deleted and the word "one" substituted therefor.
(Mr. McKenzie.]
Before I sit down may I say that I appreciate the attitude the minister has taken that he does not wish to have this purchasing board cluttered up with small contracts. The purchasing board can easily protect itself in that regard by proper organization, through which it can be arranged that the smaller contracts will be merely glanced over by them, and one of their officials associated with the department will be able to check up with them. My opinion is that the figure should be "one," or if the minister prefers it, that all contracts should be submitted, as I suggested earlier in my remarks. But I think the simplest way is to make it $1,000 instead of $5,000, because then the department will be able to make small purchases without cluttering up the machinery of the purchasing commission.


Mr. POWER:: I think the $5,000 limit was arrived at largely by analogy to other matters. As my hon. friend knows, under the Public Works Act any contract of over $5,000 is subject to the procedure of calling for public tender. Under regulation of, if I am not mistaken, the treasury board the same thing applies, that all contracts of over $5,000 must be submitted to council. But that is because $5,000 is considered to be a fairly reasonable amount.
Perhaps if we went to the genesis of the legislation we would conclude that it arises out of the desire of the minister and the government and the house generally to avoid any criticism of what are known as munition contracts. I do not suppose anybody in the house desires that the ordinary administration of the department should be in any way interfered with. The objections are with respect to munition contracts. I can hardly conceive of any objectionable munition contract which would be under $5,000. What is in the mind of the public at this time and in the minds, I think, of all of us, is to prevent what is called war profiteering, profiteering in blood. We have heard it often enough on the hustings and in this house. It seems to me that the bill goes pretty far when it states that this board, which, after all, is a board to deal with munition contracts, shall have full power and authority to inquire into these. Heaven knows, it will have work enough. Does any hon. member suggest that a contract for clearing snow at the citadel at Halifax or at Quebec, the sort of contract which is called for in the ordinary course of business of the department, and represents under $5,000, probably $1,500 or $1,300 for the whole *winter, should be submitted to the special board? It is dealt with without even going to council; no order in council is called for in these cases.

Defence Purchasing Board


An hon. MEMBER:: Such contracts would not come under the act, anyway.


Charles Gavan Power: Contracts for conservancy, contracts of all kinds that are just the ordinary necessary part of the business-"requisitions," the hon. member for Winnipeg North called them-are contracts for which tenders are asked in every case. I do not think anybody would contend that this board should have to deal with that kind of thing.
Mr. MAN-ION: I do not argue that this board will deal with that, and I do not think, if the clause is changed from $5,000 to $1,000, the board will do any such thing. For example, when the board is told that there is a piece of work necessary-to use the example cited by the Minister of Pensions and National Health, clearing the snow at Halifax-once it is explained to the board that that is the purpose of the contract the board can dispose of it just as rapidly as the department could. It is merely a safeguard. I was informed this very day by a big contractor that in some departments of the government-and I am not blaming this government particularly, perhaps, more than past governments-by keeping contracts down below $5,000 large amounts of work are given to favoured contractors. I am told that by a contractor who has had very big dealings with governments. In view of that, and in view of the desire not only of the house but of the country to have these contracts above suspicion in every way, I make that suggestion.
I have enough respect for the board which the government will appoint to believe that by a proper type of organization they can easily handle such matters as the Minister of Pensions and National Health refers to, in regard to snow clearing contracts and matters of that kind. Once the explanation is made by the liaison officer, whoever he may be, between the department and the purchasing board, it is not necessary for the purchasing board to demand that there be a contract. They know the routine contracts as well as the minister will know them, and once the facts are disclosed the purchasing board will show its own common sense by dealing with them just as they are dealt with now, so long as they are handled in a fair and proper manner.
I do not wish to be captious or unfair in my criticism, but I suggest that the minister would be well advised to accept the amendment or to put the matter in some other way. I am not holding out for the amendment, although I will hold out unless something is offered in its place. If a clause is inserted providing that all contracts shall be
submitted to the board for its approval, in a more or less formal way, that will satisfy me; otherwise, unless something else is offered by way of substitution, I shall have to stand by the amendment.


Ian Alistair Mackenzie: I would refer my hon. friend to section 4. If $1,000 were substituted for $5,000, the board would have exclusive power and the department would have no power.


William Lyon Mackenzie King: The other day when this subject came up in another connection, the hon. member for St. Lawrence-St. George (Mr. Cahan), if I remember rightly, expressed the hope that when the defence purchasing bill came before the house, no effort would be made to have any transfer from the Department of National Defence to the finance department. He said that a move of the kind would be in the nature of a departure from the principle of ministerial responsibility. I do not agree with that view. I do not think there is any departure from responsible government in having financial matters referred to a treasury board, but I do think there is something still owing to ministers of the crown, who are heads of different departments, that they should all to as great an extent as possible be treated alike with respect to the administration of the affairs of their several departments. I would certainty look upon a request to transfer every contract, no matter how small the amount might be, over $100 and up to the figure named here, from the Department of National Defence to the Department of Finance, for examination, as a distinct reflection upon the Minister of National Defence compared with his colleagues. For that reason, anxious as I am to see this legislation made as tight as it possibly can be to effect the purpose aimed at, I would not be prepared to support an amendment which would have the effect I have mentioned.
I believe the present Minister of National Defence (Mr. Mackenzie) is quite as capable of seeing that all contracts in his department are just as honourably awarded, and business in that department as well carried out, as other ministers of the crown are with respect to their departments. Under the statute mentioned by the Minister of Pensions and National Health there is a provision that wherever contracts are in excess of $5,000, public tenders must be called for. The amount of $5,000 was fixed in this particular legislation with that precedent in mind, and I think it is a pretty fair basis to go on. I do submit that this legislation is a departure, going a long way in a new direction, and the effort
Defence Purchasing Board

we are making in the matter would, I believe, only be impeded in the long run if at this stage we tried to go further along the road of change than we are going in the bill which is now before us. I am sure the leader of the opposition has the same purpose we have in seeking to make this measure as acceptable as possible to the public; but having had a good deal to do with the administration of large departments, he knows that there are many matters that do not appear on the face of things when legislation is being put through, which come to play an important part later on in administration. If after this measure is on the statutes and its efficacy tested it is found that there is some special reason why contracts of a smaller amount should go before the board, that will be time enough to consider the question; but for the present we are, I believe, going far enough if we retain the figure now proposed.


Karl Kenneth Homuth: I cannot see the logic of the Prime Minister's argument. To make the change from 85,000 to SI ,000 is no reflection on the minister. If there is any reflection at all on the minister it is the fact that the larger contracts will be dealt with by the Department of Finance, and that is provided for in the bill. Some of the suggestions made by the Minister of Pensions and National Health would not come under this bill at all. This bill has to do with the purchase of munitions and supplies; it has nothing to do with shoveling snow or doing work of that sort. I think we can very well make the change from $5,000 to $1,000.


Mr. BROOKS:: It does not seem to me that there is any provision for the purchasing of machinery for the equipment of factories. The government has already spent large sums of money for equipping arsenals and for assisting in the equipment of other factories, and it will need to expend large sums in the future. Looking over the section I do not find that the money expended for this equipment is included in the definition here. Is the purchase of machinery for the equipment of factories included?


Ian Alistair Mackenzie: For future purposes, yes; any equipment above $5,000.


John Ritchie MacNicol: Paragraph (ii) of (b)
refers to the construction, erection, repair, improvement or extension for the department of buildings, and so on. Had this law been in effect at the time the contract was let for the operations in the Inglis plant or in the plant in Montreal, would contracts for the alteration of those plants have been handled by this board, had the board been functioning then?
r*Tr Mackenzie King.]


Ian Alistair Mackenzie: Yes.


Alfred Johnson Brooks: I understood the minister to say that equipment for factories is included. Where do we find that in this section?


Ian Alistair Mackenzie: In (b)
(i):
the purchase for the department of any armaments, munitions, military, naval or air force stores, ships, aircraft, or any other equipment. . . .


Alfred Johnson Brooks: That seems hardly broad enough.


Robert James Manion: May I say just a few words in reply to the Prime Minister. I am not in any way reflecting on the minister, and I have no intention of doing so, but I do not agree with the right hon. gentleman that this is the same as every other department. I am open to correction, but I am not quite sure that the figure in regard to all other departments is $5,000.


Charles Gavan Power: I have not checked on it, but so far as calling for public tenders for construction of public works is concerned, I am sure that is the figure.


Robert James Manion: I am wondering. I was trying to throw my mind back to the Department of Railways and Canals which let contracts amounting to many millions in the few years I was there. I think the limit was $2,500, not $5,000, but I am not certain.


Charles Gavan Power: There is this distinction to be made, that under the Public Works Act tenders must be called for if the amount of the contract exceeds $5,000. What I am not quite sure but almost sure of is that all contracts amounting to over $5,000 in any department must go before council. Under that amount they need not.


Robert James Manion: I thought it was $2,500 in the Department of Railways and Canals, but I am subject to correction. At any rate I repeat that this is not quite the same as other departments. There is no demand from anyone in this country as far as I know that the ordinary departments of government, whether Public Works or Agriculture or Trade and Commerce, should have a board appointed to look after their contracts. But there is an insistent demand that the purchase of munitions and war materials should be handled in a different manner.


Mr. FACTOR:: Substantial orders.


Robert James Manion: Yes, it is substantial orders of which I am thinking. The minister said that nobody could make a very large amount of money out of a contract for $5,000. But repeated contracts for amounts just under

Defence Purchasing Board
$5,000 given to friends might mean a great deal of profit. I am not suggesting that this department would attempt to do that, but I know no reason why the department should not be glad to put this legislation into such shape that no one could have any ground for making such an accusation. There was a suggestion that the requirement should apply to all contracts. I realize that small purchases of supplies for the department, up to, say $1,000, might well be left out. But I do not think a purchasing board would find any difficulty in so organizing itself that it could deal with these smaller contracts in a way that would not interfere with the efficiency of the department, but would give assurance to the people in regard to purchases of munitions at any rate, whether by this government or the next-because this legislation will go on when our government comes in next year, so I want to get it in good shape.


Charles Gavan Power: They may get a better man as chairman.


Robert James Manion: Well my hon. friend will be in the senate by that time. He is one who,
I hear, is ready to desert the sinking ship.


Charles Gavan Power: "They won't kill me, James, to make you king."


Robert James Manion: I should like, however, to see the legislation in good shape. I do not see any reason why the government should object to lowering that figure to $1,000. I have not heard any argument that makes me think it should not be lowered, so as far as I am concerned it stands.


Douglas Gooderham Ross: In this connection the paragraph reads:
. . . provided that the foregoing definition shall not extend to any defence equipment, manufactured in an arsenal or factory owned and/or operated by the government of Canada, or to projects carried out by persons in the employ of His Majesty the King in right of Canada.
My hon. leader, speaking to-day on the resolution, pointed out that he did not think this 'bill went far enough; that the board's advice should be available to the defence council with respect to the manufacture of munitions by the government. Why deprive the Department of National Defence of the advice of this board in connection with any projects they intend to carry out themselves? Why not let them have something to do with it?


Ian Alistair Mackenzie: Government arsenals are supervised by government officials, and we could not purchase from ourselves. That is why the operations of the purchasing board would not extend to government arsenals.


Douglas Gooderham Ross: That answers one part, but the paragraph also includes "projects carried out by persons in the employ of his majesty," such, for instance, as fortifications of one kind and another. Surely the advice of these business men would be of value to the department in carrying out such projects. Why exclude them? Everything possible should be done to satisfy the public mind.


Abraham Albert Heaps: To what department of the government will this defence purchasing board be directly responsible?


Ian Alistair Mackenzie: To the
Minister of Finance, who brings the recommendations of the board before the governor in council.


Abraham Albert Heaps: They will not be under the
direct jurisdiction of the Department of National Defence?


Ian Alistair Mackenzie: No, in
no way at all, except that the requisitions go from the department to the purchasing board, *and they have certain powers by way of getting information and cooperating with some of the officials of the Department of National Defence in regard to requirements.


Abraham Albert Heaps: I wonder whether that is
an altogether desirable arrangement. Here we are going to have two departments purchasing supplies for the Department of National Defence. Duplication of that kind should be avoided. I could see that a reduction of the amount from $5,000 to $1,000 might make difficulties for the Department of National Defence. I am inclined to think even the $5,000 will make some difficulty. I think there should be some direct contact between the Department of National Defence and the proposed board. Would it not be desirable for the purchasing board to come under the Department of National Defence and then report to the Department of Finance? As it is now, we are setting up a new department probably in competition with the Department of National Defence.


Ian Alistair Mackenzie: As I
pointed out the other day in speaking on the resolution, in the organizations that we had in this country in 1915 and 1918, in one case the board reported to the Prime Minister and in the other to the Minister of Finance. The whole idea is to make it responsible to the treasury, following the well established practice in Great Britain where the treasury scrutinizes contracts of this kind. I think it is in the interests of the Department of

Defence Purchasing Board

National Defence to have it in this way, because it will do away with a great deal of criticism and allow the officials of the department to concentrate on the work of organizing our defence forces.


Abraham Albert Heaps: When the proposed board
is set up, is it the intention that any of the expert officials of the Department of National Defence shall, so to speak, go to the finance department?


Ian Alistair Mackenzie: No, but I can imagine that a few who have been doing this work would be seconded for duty under the jurisdiction of the new purchasing board.


Thomas Clement (Tommy) Douglas: I was trying
to get the relative production of the government arsenals compared with that of private contractors. I shall not labour that point, but does the government propose to extend the field of operation of government-owned plants beyond what they are now doing? I understood from the minister that now they mainly manufacture small arms ammunition and small shells. Is it the government's policy to extend that, or will that relatively small production by the government arsenals remain so compared with the increase in manufacture by private contractors?


Ian Alistair Mackenzie: I stated the other day, I think, that the production at Valcartier had been increased to about six or seven times the previous production in regard to small arms munitions, and I further stated that it was my desire, and I believe the desire of the government, to extend the production in government arsenals as far as practicable. As a matter of fact, at the present moment we are working on a scheme in regard to the development of the Lindsay arsenal.


Howard Charles Green: Take, for example, rifles or heavy machine guns; how are they to be acquired? Are they to be manufactured in dominion arsenals or are they to be purchased?


Ian Alistair Mackenzie: As my hon. friend probably knows, all the heavy machine guns are imported from Great Britain. The question of whether whatever government may be in power will proceed with the erection of a gun factory in Canada is a matter for consideration. At the present time we are proceeding, as my hon. friend knows, to have light machine guns manufactured in Toronto, while the heavier machine guns are all being imported from the old country.


Howard Charles Green: Is it the government's policy to purchase rifles or to manufacture them?
(Mr. Ian Mackenzie.]


Ian Alistair Mackenzie: The gov-emment's policy in that regard will be determined in the future. At the moment I am not in a position to state definitely what it will be.


Mr. STIRLING:: What instances can the minister give of projects carried out by persons in the employ of His Majesty the King in the right of Canada?


Ian Alistair Mackenzie: That
would refer to day labour directly employed by the crown.


Grote Stirling: Such as what?


Ian Alistair Mackenzie: Any
works done by the department by day labour; the work at Trenton, for example.


Mr. PELLETIER:: In the case of a joint contract in which the Canadian department was interested in cooperation with the British war office, if it was decided to award a contract in Canada for the manufacture of equipment that might belong to both the British war office and the Canadian department, would contracts of that type come under the jurisdiction of this board?


Ian Alistair Mackenzie: If it were for more than $5,000 it would come under the jurisdiction of the proposed board.


René-Antoine Pelletier: Even though it might originate with the British war office?


Ian Alistair Mackenzie: Yes.


Frederick George Sanderson: There is an amendment before the committee moved by the leader of the opposition, that the word "five" in line 20 of paragraph (b), section 2, be struck out, and the word "one" substituted therefor.
Amendment negatived: yeas, 32; nays, 63.


Howard Charles Green: On several occasions earlier in the session the suggestion was advanced that the government should make use of certain Canadian National railway shops for the manufacture of at least some of this defence equipment. As I read section 2, it is not clear as to the class in which such supplies would come. Would they be purchased by the board, or would they be considered as manufactured by the government? I hope the minister will give serious consideration to that proposal. In the Journal of the Parliaments of the Empire for October, 1938, I find this, dealing with the way in which South Africa is procuring defence equipment:
It had been decided to establish new railway workshops at Pretoria to build medium sized lorries convertible into armoured vehicles for railway and government purposes. A joint

Defence Purchasing Board
committee of defence and railway experts was now examining the possibility of a subsidy by the defence department to the railways-
I understand these are government railways.
-for the purpose of acquiring and working certain heavy presses and a forging plant, which would be in a position to engage in aspects of armament manufacture at present beyond the means of local industry.
What arrangements have been made in regard to the Canadian National railway shops?


Ian Alistair Mackenzie: There
are no definite arrangements, except in so far as they were included in the surveys which were made for the information of the department in regard to the capacity of various plants. With regard to the other question asked by my hon. friend, I would think it largely a matter of opinion as to whether the Canadian National workshops would come under that subsection. My personal opinion is that they would.


Howard Charles Green: Would it not be well to
make it clear in the latter part of the section?


Charles Gavan Power: If the Canadian National
Railways entered into a contract with the government as the Canadian National Railways I imagine that contract would go before the defence purchasing board; but if the Canadian National shops were taken over and operated by the government it would be equipment manufactured in an arsenal or factory owned or operated by the government of Canada. I think that would be the answer to my hon. friend's question
Paragraph (b) agreed to.
Paragraphs (c) to (e) inclusive agreed to.


[Stage Direction]
Section agreed to.
On section 3, subsection 1-Board constituted.
Mr. HAYHURST:: We have a chairman
and three other members making up this board. Would any of these be public officials?


Ian Alistair Mackenzie: That
has not been determined up to the present time. As a matter of policy that has not yet been decided. During the debate to-day the suggestion was made by my hon. friend the leader of the opposition that possibly one of the officials of the defence council might be appointed to this board, but so far as the government is concerned we have not yet given the question any definite consideration.


Karl Kenneth Homuth: I think this is one of
the most important sections of the whole bill. This afternoon the leader of the opposition advanced the suggestion that a member of 71492-1201
the defence council should belong to this board. If that is not acceptable to the government, then I would suggest that the chairman of this board should be made a member of the defence council, as has been done in England. In the old countiy, even with its years and years of armament manufacture, they found themselves up against a difficult situation in the last year or two. They were not getting deliveries of war materials as they had expected to get them. Instead of changing everything round and upsetting the whole system, however, they simply enlarged the system and made the head of their munitions purchasing board, or whatever they call it, a member of the defence council. I do think that, as my leader suggested, one member of the board should be a member of the defence council; or, in the alternative, that the chairman of this board should be made a member of that council. I believe there should be a closer relationship between the defence council and this board than is provided in this legislation, and I believe we should have some assurance from the minister that something along that line will be done. I think it is essential for the proper working out of the system.


Ian Alistair Mackenzie: In regard to the point raised by my hon. friend and referred to this afternoon by the leader of the opposition, in any event it would not be necessary to embody that in this legislation. As my hon. friend knows, by order in council, the minister can at any time add to the defence council. But without consenting to the suggestion being introduced into the legislation at the present time, I should be glad later on to give every possible consideration to the suggestion of the hon. member.


Thomas Clement (Tommy) Douglas: In passing
contracts of the kind indicated, it is important that some consideration be given to conditions of labour under which men will work on contracts. Has the government given consideration to having one of the members of the board a representative of organized labour?


Ian Alistair Mackenzie: I can
assure the hon. member the government has given no consideration whatsoever to either the individuals or their occupational qualifications. In the recommendations of Mr. Justice Davis there was a suggestion that one of the four should be from a labour group. I shall be glad also to give consideration to the suggestion of the hon. member.


Robert James Manion: In regard to the matter to which reference has just been made by the hon. member for Waterloo South (Mr. Defence Purchasing Board

Homuth) and to which I referred this afternoon, may I say I believe the government and the minister would be very wise to reconstitute the board along the lines suggested. It seems to me the board would be far better able to carry out its duties if on it there were a permanent member of the defence council. My personal suggestion would be either the ordnance officer or the chief of general staff. In my opinion, either of those gentlemen would be suitable, in addition to the minister.
I do not wish to move an amendment to that effect, and I have thought the minister would hold up the clause, give it further consideration, and then advance it in altered form. If he were to do that, I would be satisfied. Otherwise I would like to move an amendment that the board consist of five members. The present personnel would remain as it is, but one of the members of the defence council would be added. I will leave this to the minister or to the government. I believe my suggestion would strengthen the board because it would involve direct connection with the council, in addition to the connection it may have through the minister. There would be direct connection between the defence purchasing board and the defence council, and I believe the suggestion would add very much to the usefulness of the board and, generally, would bring about much greater efficiency than otherwise there might be.
By virtue of his office the minister is a member, and with another permanent man with whom they could discuss the whole problem it seems to me the activities of the body in question would be strengthened. For example, the board would consist of four people. I should suppose that the chairman would be something by way of an industrialist who would understand the making of contracts and for that reason would be in a position to deal, in a businesslike way, with contracts given. The other three would act in an advisory capacity and would come in occasionally. It seems to me the chairman of the board, who would be a permanent official, would be happy to have the services of someone who would know military matters even better than the minister himself, or a man like myself, if I were minister. I do not pretend to know much about matters of that kind. I should think the chairman should be happy to have someone from the permanent staff with whom he could discuss the whole matter. I am not making the suggestion with any intention of embarrassing the minister, but I do believe it would improve the legislation materially.


Ian Alistair Mackenzie: I appreciate the remarks of my hon. friend. As we have not tied up the legislation by any specific occupational qualifications, I feel, in regard to the suggestion made that, although I have the highest possible regard for the present chief of general staff and the master general of the ordnance, I think the carrying out of my hon. friend's suggestion would have to be left to future developments.
In regard to the relationship between the board and the defence council, I can assure my hon. friend that so far as I am concerned every effort will be made to establish a close liaison between the two. I should not like by an amendment to the legislation at the present time to accept any specific occupational qualifications of members from the defence council, or from any other quarter.


Robert James Manion: I was not suggesting any individual officer. As a matter of fact, I had written out an amendment in these words:
That the word "four" in the thirteenth line on page 2 be deleted, and the word "five" be substituted therefor, and that the following words be added to the clause in line 16, "with one member of the defence council, other than the minister."
The member would be chosen by the minister himself. If the minister has some objection, and if he feels that he cannot accept it, I should like to press the matter. If he says he will accept it, then he may move the amendment himself, if it suits him better to do so. I do not care about that. Otherwise I should like to move the amendment myself, and if the government wishes to vote it down, it is their choice.


Samuel Factor: With all due respect to the leader of the opposition, I think it would be a mistake to have either the chief of general staff or the ordnance officer on the purchasing board. Presumably the board is to be set up for the purpose of keeping a check on the requisitions put in by the Department of National Defence. Before putting in a requisition for war munitions, that department is likely to consult the very official who subsequently would be on the purchasing board, and the two duties of that officer would conflict.	_	.
I believe the personnel of the board should comprise persons altogether apart from the Department of National Defence, and be persons who would be able to check up on all requisitions put in by that department.


Alfred Johnson Brooks: I believe I see the force of the argument of the leader of the opposition. As I understand it, the requirements of the different branches, including the naval and

Defence Purchasing Board
air forces, would originate with some member of the defence council. That person might be the head of the naval service or the head of the air service. As the requirements originate in the defence council, it would seem to me to be a very good idea to have the chairman of the board either sit in with the defence council or have the chief of general staff sit in with the purchasing board. Certainly there would be a connecting link between the two, and it would be the means of giving a clear understanding to the board of what the requirements were for, and why they were being sought.


Mr. MUTCH:: In disagreeing with the suggestion of the leader of the opposition may I say that it does not seem important to me, once the decision has been made within the department that certain contracts should be called for, that there should be anyone from the defence council on the board. My understanding is that it would be a business committee. While I have the highest regard for the military knowledge and accomplishment of the present defence council, some of them having a sufficient number of medals to make them bowlegged, carrying them around, it would seem to me that their military accomplishments do not necessarily in any sense of the word make them business men. The mere fact that a man might be an excellent military officer or a leader of men in the defence of his country does not necessarily- and in my opinion probably would not-make him a valuable member of the board.


Grote Stirling: The hon. member for Royal has put forward a suggestion which had occurred to me, and which I was about to make, that if the government is prepared to give consideration to the idea of a liaison or close linking between the board and the defence council it might perhaps better go in the direction of the chairman or even a member of the board being present at meetings of the defence council, for the very reasons the hon. member pointed out. The purchases which will have to be made will be naval, military, air and civil, and it might not be as easy to choose a member of the defence council capable of speaking on all four branches as it would be to have the liaison effected by the chairman of the board sitting in on the defence council.


Charles Gavan Power: In reply to the suggestion of the leader of the opposition may I point out that, after all, this is to be a board which is presumed to apply whatever talents and capacities men in business are supposed to have in connection with the purchase of
supplies. It was at least hinted in the Davis report that the very training of men engaged in military life is not such as would make them very readily able to discuss, negotiate and enter into contracts of this kind, and I think anyone who has had a little experience of military life would come to the conclusion that it is not a business training, at any rate, whatever else it may be. But the idea of the act is that the military men, whether they be army, navy or air force, having come to the conclusion that certain equipment, guns, munitions or whatever it may be, is required, will submit their requirements to the purchasing board under clause 4, and their requisition must specify in detail:
(a)	the defence equipment to be purchased, the quantity thereof and specifications therefor, the time and place of delivery, the parliamentary appropriation available for such purchase, the quantity of such defence equipment already in the possession of the government of Canada or contracted for but not yet delivered, and such other data as may be considered requisite; or
(b)	the defence project to be constructed, erected, improved or extended, the location of the same, the plans, drawings and specifications therefor if necessary, the estimated cost, the approximate date at which such project is required to be completed, the parliamentary appropriation available to meet the cost thereof, and such other data as may be considered requisite.
The point I wish to make is that the Department of National Defence and the officers thereof, whether they be on the militia council or in any one of the branches, are the people who are charged with the duty of requisitioning what they require. I do not know what purpose would be served by having them on the purchasing 'board except to go there as advocates of what they require; and should it so happen, as perhaps it might, that they might be more extravagant in their -ideas than perhaps a business man would be, they would be just one more advocate on the board to persuade it to accede to that particular thing.	It	would seem	to me	thepart of wisdofn	rather to have	the boardoutside the department to decide whether the requisition made was fully justified. I would think from a business standpoint that would be the proper thing to do, giving to the board the fullest power to inquire why these things were required, and at the same time giving to the department, naturally as a corollary, the right to show the board that they require such and such	a	thing rather	than	thisparticular thing	or	that they require	this
particular kind of munitions rather than another kind of munitions. It seems to me that the set-up will work pretty well, and that to do what is suggested might seriously impair the work of the board.
Defence Purchasing Board


Angus MacInnis: Mr. Chairman, I agree with those who have said that this is a very important section of the bill, but it is a section that I do not think this committee can do very much about, nor do I think we would be wise in trying to do anything about it. If this bill has been sincerely put forward to fulfil a definite purpose and need, as we must accept that it is, then the governor in council will be anxious to select the best individuals possible to carry out the functions of the board, and I do not think we are justified in trying to restrict the governor in council in any way whatsoever in the selection of the board. Unless individuals of ability and integrity are selected, the bill will not fulfil the functions we expect, and for that reason I do not think the committee should even make suggestions to the governor in council as to who should or should not be on that board.
As I understand it, this purchasing board will perform the function that an individual performs acting in a similar capacity with a private company or a municipal council or possibly a provincial or federal government. The members of the board need not have military training; they need not be concerned about that. They will be told what is required, and the functions of the board will be to buy what is required in the best possible market and to the best advantage of the people of Canada. Consequently, the government itself should be interested in getting the best men available, men of the best ability and integrity. I believe the greater number if not all of the members of the board can be found within the civil service itself, people who will be able to give better sendee than any appointees from outside.


Frederick George Sanderson: An amendment has been moved by the hon. leader of the opposition (Mr. -Manion):
That the word "four" in the thirteenth line on page 2 he deleted and the word "five" be substituted therefor, and that the following words be added to the clause in line sixteen:
"With one member of the defence council other than the minister."


Robert James Manion: If the hon. gentleman who has just taken his seat (Mr. Maclnnis) is correct in his argument that we should not put any restrictions at all upon the governor in council in selecting the board, then to be logical he should take the attitude that we should not have a board at all.


Angus MacInnis: No.


Robert James Manion: If we should not have restrictions upon the minister, we should not have a board to restrict, so I do not agree with my hon. friend's argument.

The remarks made by the Minister of Pensions and National Health (Mr. Power) merely strengthen me in my idea that I was right, because he points out that by clause 8 the board may, through the department, investigate or require information. But so far as I have read the bill-and I have read it pretty thoroughly two or three times-the only person with whom the board has any contact at all is the minister. It does not say that specifically in the bill, but it is certainly implied here, there and everywhere throughout the different sections.


Charles Gavan Power: Look at paragraph (f) of section 8.


Robert James Manion: Paragraph (f) provides that the board:
(f) shall have power to require any officer or employee of the department to furnish to the board any information which he may have in regard to any of the matters falling within the scope of the duties and powers of the board.
All right. But look at clause 6:
It shall be the duty of the board to supervise the performance of all contracts which may have been entered into pursuant to the provisions of this Part with a view to assuring that such contracts are performed in accordance with their respective terms.
Imagine, if you like, the chairman of this board, a business man, as undoubtedly he will have to be, possibly with military training but very unlikely; he is going to supervise the letting of a contract for the department, and all he has before him are the specifications. He has nobody to talk them over with except the minister. True, he may call in the officers of the department; but if he had with him on the board an officer of the department who was familiar with its needs, a man who understood the military engineering requirements of the department, he would have somebody there who would be in a position to advise him all the time. Otherwise he is going to have to ask the minister, "Can I have such and such an officer brought here to talk over things?" Probably it can be worked, but I think it would be very much to the advantage of the board if the chairman, the business man, has someone associated with him with whom he can talk over these different matters which come before him, these different contracts, the requirements of the department in various ways, from, if possible, the military and naval points of view.


Charles Gavan Power: One could not expect that the military man would know anything about the air or that the naval man would know anything about the army. So, to follow up my

Defence Purchasing Board
lion, friend's argument, all three men on the board would be soldiers, and we would be back where we started.


Robert James Manion: They would know more
than either the minister or myself.


William Lyon Mackenzie King: Perhaps I
might say a word with regard to what the leader of the opposition has just said. I do not know that he has fully appreciated just how difficult it is, not only for the minister but for the cabinet as a whole, to decide whether or not the requisitions which come from the defence department are absolutely necessary to the extent to which they are made out. As a member of the government, with others of my colleagues I have had occasion in the last couple of years to meet on several occasions with members of the defence council with respect to the requisitions which they were making upon the government in the form of proposed estimates, to consider those estimates with a view to discovering whether what was being requested was absolutely necessary or whether what was proposed was in excess of what was really required. My experience on these occasions- and I think it was the experience of my colleagues as well-was that unless we had some independent board to whom we could refer the requisitions with a view to ascertaining whether they were really necessary, there was no way of getting that information except taking in its entirety what the heads of the different departments said was required.
Take, for example, the militia. Take the air; take the naval service. All of these branches of the defence department have asked from this government amounts vastly in excess of anything that appears in the estimates as brought down. They have told us that what we have brought down to this house at the present time is not at all adequate for the situation as they see it. We have had to examine them and cross-examine them, and study the matter very carefully ourselves before having estimates brought in here. My hon. friend knows that estimates are discussed in the cabinet as a whole, but the defence estimates in addition have been considered by a sub-committee of the cabinet with members of the defence council. I say to my hon. friend, from the experience I have had on that committee of the cabinet dealing with the heads of services of the defence department, that I feel one of the most necessary of all things is to have a board which will be entirely independent of the heads of the defence branches, which will be in a position to advise the government, if the government wished to be so advised,
as to whether or not what is being asked for is absolutely necessary in the circumstances. That objective would be defeated in part, I think, by what my hon. friend has suggested. There is nothing to prevent this defence board from having the closest contact with the head of each branch of the defence department. Not only can they meet, but they are expected to have close contact with the heads of these branches. But to attach to that board itself the head of any one of those services, or one who is supposed to represent all of them, would, in my opinion, tend to defeat one of the very objects for which the board is being appointed.


Robert James Manion: Is my right hon. friend suggesting that this board is going to .advise the government as to our requirements from a military or a naval standpoint?


William Lyon Mackenzie King: Quite.


Robert James Manion: I do not think this board should do any such thing. This board is a purchasing board. As I understand it, it is to see that all contracts entered into by the Department of National Defence are honest and above-board; that they are efficiently carried out, and that the government and the people of Canada get their money's worth in all regards. The minister has not said who are going to be on the board. He has not given us any indication.


Ian Alistair Mackenzie: I do not know.


Robert James Manion: But he has not contradicted what I think must be true, that the chairman will be a business man, not a naval or military man. The minister said in reply to me that he probably would not be both, anyway; therefore he is going to be a business man. The other three will be advisory. Are these three advisers and the business man to come to this government and tell them what we are going to need in the way of defence? I do not think they are going to do that. But if the government are convinced by their advisers that a contract is needed for the defence of this country, the board is going to see to it that a contract is entered into which is decent and is fair to the people of Canada. That is all that is intended, so far as I can see.


William Lyon Mackenzie King: My hon.
friend may know more about the legislation than I do, but I can assure him that, along with my colleagues, I have given a great deal of thought and consideration to this bill, and one of the objects the government had in mind in the appointment of this
Defence Purchasing Board

board was that the board should have power to ascertain, if so desired, whether or not what was being asked for by the defence department was absolutely necessary. I think that is clearly set forth in section 8, which at the moment I need not go into in detail. But observe the very first paragraph :
For the purpose of carrying out its powers under this part, the board
(a) may inquire into the requirements, whether actual or anticipated, of the department for defence equipment, or for defence projects, the specifications thereof and the reasons therefor.
That is the very first of the powers given to the board, to inquire into these things to see whether they are necessary or not.


Alfred Johnson Brooks: May I ask the Prime
Minister from whom they would make their inquiries if it would not be from the very men he has mentioned?


William Lyon Mackenzie King: They will make these inquiries from the officers of the departments They will weigh the reasons, and they will take any means which they may think most advisable to satisfy their minds on this point. Paragraph (f) of section 8 says that the board-
. . . shall have power to require any officer or employee of the department to furnish to the board any information which he may have in regard to any of the matters falling within tlfe scope of the duties and powers of the board.
I must say that I think that aspect of the board's work is one of the most important of the duties it will have to discharge, and I believe that that duty will be much better performed if the personnel of the board is kept quite distinct from that of the defence council, although I agree that, as between the chairman of the board and the members of the defence council, there should be the opportunity for the fullest possible kind of collaboration in any particular which either of them may consider to be desirable.


Robert James Manion: In view of that, will the Prime Minister give us some idea as to what he considers these four men should be. One man is to give his full time, and three others will be in an advisory capacity, because all they are receiving is their out-of-pocket expenses. The Prime Minister suggested a few moments ago in his remarks that he thought this board should be independent of the defence department, and surely one man put on from the defence council is not going to be able to vote down four. He is only one out of five; he is well diluted, if I may use that word, and the four can vote him down
any time. He is there only to give them advice. I would have no objection to the suggestion made by a couple of other hon. members, that it be worked the other way, and that the chairman of the board be a member, if you like, of the defence council.


Ian Alistair Mackenzie: That
would not require to be inserted in this legislation at all. That could be easily done afterwards-could be considered.


Robert James Manion: This legislation should be reasonably complete. I do not care for the minister's suggestion, which he has made three or four times to-night, that we should pass the legislation on his word that he will do this, that and the other thing which are not taken care of in the legislation. I do not think we should be asked in this committee to do that. We should know the type of people of which this board is going to be composed. Certainly, if it is to be a board which will go to and advise the governor in council what we require in the way of defence, naval, air and military, it is going to be a pretty wide board. It is to be composed of four men, one of them giving his permanent time, a business man who probably does not know anything at all about military, naval or air affairs, and the other three just giving support to him. That, to me, is the most extraordinary proposal I have yet heard in regard to this legislation.


Karl Kenneth Homuth: I would say that the very argument used by the Prime Minister and the Minister of Pensions and National Health is an argument in favour of the amendment. If, as the Minister of Pensions and National Health says, these military men have not necessarily the business ability required, they are nevertheless going to make certain recommendations. Let us take, for instance, aeroplane engines. The best aeroplane engine in the world is the Rolls-Royce. Suppose they said we needed 100 or 200 Rolls-Royce engines and the recommendation went to the purchasing board. The board would make inquiries and would find out that these engines would have to be bought in England. What else could they do? This board, working along with the defence council, would have to ascertain what was the best engine to use in aeroplanes, and if the Rolls-Royce engine could not be obtained then something else would have to take its place. They might say, "Let us develop an engine in Canada." Some of the automobile firms could do it. The work of the two boards would be so closely coordinated that in my opinion they ought to have a much closer working arrangement than is provided for in this bill.

Defence Purchasing Board


Charles Gavan Power: The suggestion is not quite accurate. I am not familiar with all the work of the Department of National Defence, but it seems to me it is never the defence council that makes requisitions. The matter which my hon. friend is discussing, the question of aviation, would be one for the head of the aviation branch. At present it goes to the director of contracts and the director of contracts is a civilian. May I remind the committee that traditionally in Great Britain it has always been considered advisable to have civilian direction of matters of this kind. The direction of military services has been, as far as possible, under somebody not connected with the active army, and to a large extent the same thing obtains in the navy. It so happens that since the last war the incumbents sf these positions have been men who have served in the army, but they are not as a rule, professional soldiers. That tradition, I believe, has arisen for a reason. The people of Great Britain have not wished their defence departments to be ruled by professional soldiers, and I think that is pretty well inbred in the British tradition.
Personally I am not convinced that when the aviation branch goes to this board and says, "We think the best engine is the Rolls engine," it would not be better to have the board say, "Look here, young fellow, the Rolls engine costs too much; we cannot afford it; if another engine will do just as well, let us have it." It is the same in every department. I suggest to the leader of the opposition that in the Canadian National Railways the purchasing agent was not an engineer. I do not know whether he is or not, really, but as a matter of fact he had not been practising as a professional engineer. I refer to Mr. Vaughan. When it came to buying engineering equipment or locomotives, it was likely that the man who wanted to buy the locomotives or a certain type of railway truck would go to Mr. Vaughan and say, "We need this type of equipment," and I suggest that in the course of his duties Mr. Vaughan might reply, "That is too expensive; can you not get a cheaper one that will serve the same purpose?" Many times he may have had difficulties with his technical men- I do not know that he had; I am only guessing. The leader of the opposition was Minister of Railways and he may have heard some such thing.
In a department like the Department of National Defence, technical men might ask for the very best equipment, when perhaps another kind would be just as good. I suggest that the purpose of the board is as much control over purely technical men, who
naturally cannot have the business knowledge of people outside, as it is for anything else, and I say that without intending to cast the least reflection on any member of the militia council or on the Department of National Defence.


René-Antoine Pelletier: We in this comer rather agree with the attitude of the Prime Minister towards the amendment. We feel that this board is an entirely different department. It will be a supply department to meet the needs of the Department of National Defence. What I cannot find logical in the attitude of the leader of the opposition is this. He criticized bitterly the closeness of certain contracts in the Department of National Defence. Well, here it is proposed to move these things as far as possible from the Department of National Defence, but now he seeks to bring in some liaison officer, thereby nullifying the attitude he has taken in the past.
Furthermore, the very fact that there would be someone from the defence council as a member of the proposed purchasing board would be detrimental to the board; for this very good reason, that as time goes on the board itself might very well become used to taking suggestions made by a member of the defence council; and inasmuch as a part of their duties would be to look into records and make certain that the requisitions of the Department of National Defence are what are really needed, the time might come when, instead of making inquiries as fully as they should do in the line of their duty, they might simply take the word of the representative of the defence council and let things slide in that way. If that connection were made it would be harmful to the board. They should have as much freedom of action as possible. If the amendment is proposed we will oppose it.


Robert James Manion: If that is the case, I must sadly accept the opposition. I would point out to the hon. member that my criticism was not of the department having something to do with the contracts. My criticism was of the government generally for permitting the Bren gun and the Montreal Construction Company's contracts. It was of the whole government and perhaps of the minister, if you will. I was not, however, criticizing the technical officers of the department. The technical officers are the only people who, as far as I am aware, know anything about these matters. I do not accept the minister or his assistant, the Minister of Pensions and National Health, as an authority, as knowing any more about the matter than I do from the technical point of view. I suggest that
Defence Purchasing Board

the board be not merely a group without knowledge of these matters, their only liaison being the minister, so that in the ordinary course, when they wished to have some matter discussed, the minister might send them anyone he pleased.
May I deal with a remark made by the Prime Minister, that he hoped this board would advise the government as to how much they should spend-in other words that it should help them make up the estimates for the Department of National Defence. That is boiling it down to a sentence.


William Lyon Mackenzie King: When requisitions come from the Department of National Defence to this board, one of the duties of the board will be to satisfy itself that these requisitions are necessary to the extent to which they are made out.


Robert James Manion: I do not see how this board will satisfy itself in that regard. The board is being placed above the military machine. I have no reason to think it is not a good machine, and now a certain number of men are to be brought in and put above the whole defence department. That is what it amounts to.
Showing that these sums of money are already allocated, we have already passed clause (ii) which says that this means any contract for:
(ii) the construction, erection, repair, improvement or extension . . . which involves an expenditure by the department of a sum in excess of five thousand dollars, and for which parliament has appropriated moneys or authorized commitments.
In other words, the money has already been appropriated.


Charles Gavan Power: Not	specifically. Suppose
they need 10,000 blankets, we do not come to parliament for that. And the board might say that 5,000 would do.


Robert James Manion: But from what T understood the Prime Minister to say this board is to advise the government how much money is to be spent. The Prime Minister said the S63.000.000 is nothing to what the Defence department wanted if added all together.


William Lyon Mackenzie King: I said that
the greatest difficulty the government had was to be satisfied in its own mind that all of these things are necessary. The government's mind will be much relieved if after parliament has appropriated moneys and before they are used to the extent that may be desired by some branches of the defence service, the government is satisfied that those expenditures are absolutely necessary.


Robert James Manion: Well, never in my experience have I known of a government that had to have its mind made up for it by someone else as this government has.
Paragraph (a) of subsection (3) of section 4 refers to:
. . . the defence equipment to be purchased, the quantity thereof and specifications therefor . . . the parliamentary appropriation available for such purchase. . . .
"The parliamentary appropriation available for such purchase." This board has nothing to do in regard to telling the government as to the necessities of the Department of National Defence. The department itself, like every other department, makes up its estimates-


William Lyon Mackenzie King: I did not say this board is to advise the government in making up its estimates. I said my experience in dealing with this question when the estimates were being prepared showed the necessity of having some authoritative body that could say whether or not what is recommended and appropriated is absolutely necessary.


Robert James Manion: That is true of every
department. The Minister of Finance in every government has to fight every department, because they all want more money than they get. That is one of the difficulties a government has to deal with. I agree with the Prime Minister that all the departments ask for more than the government feels it can give them, and I understand the Department of National Defence at the present time wanting more than it gets; but it seems to me that is settled irrespective of this board.
This board is not for the purpose of going over the estimates of the Department of National Defence. Once the minister of the department has submitted to the Minister of Finance, or to the government, or to the treasury board if you will, its estimates, and this $63,000,000 has been arrived at without any committee to help them decide, then this defence purchasing board is for the purpose of seeing that the expenditure of that money is carried out in a proper fashion. That is the real duty of this board as I see it. I again suggest to the minister or his colleague or the Prime Minister that one or another of them tell us something as to who is to be on this board. I do not mean the names; but in view of the remarkable statement made by the Prime Minister, will he tell us what kind of men are to be on this board? The Prime Minister's statement gives a new purpose for this board; surely he has something in the back of his head that he is not telling the committee in regard to the type of or

Defence Purchasing Board
the occupations of the men who will constitute a board of this kind. I am going to sit down and let one of the three hon. gentlemen tell us what kind of board it is to be.
Amendment (Mr. Manion) negatived: yeas, 15; nays, 72.


René-Antoine Pelletier: The last clause of subsection 1 of clause 3 reads:
. . . who shall be appointed by the governor in council and who shall hold office during good behaviour for five years.
The usual phraseology employed in a case of this kind simply says "shall hold office during good behaviour" or "during pleasure." There must be a definite reason for using the language used in this clause. Is it because the government contemplates or believes that at the end of five years they will no longer need to purchase munitions? I should like to know just why these words were inserted.


Ian Alistair Mackenzie: I assure my hon. friend that is the phraseology usually employed. The appointment is definite for five years.


René-Antoine Pelletier: There is no provision here to reappoint them after the period of five years expires. Further clauses provide that certain members may be replaced, but what happens at the end of the five years? Would it be necessary to enact new legislation reappointing these people, or in what manner may they be reappointed? I assume the term of five years is taken as a definite commitment, and it would be necessary either to amend the section or to use some other authority to reappoint these people.


Ian Alistair Mackenzie: The point made by my hon. friend has perhaps some force. The words "may be reappointed" might be inserted, but I do not think it is legally necessary. I shall, however, be glad to look into it.
Section 3, subsection 1 agreed to.
Section 3, subsections 2 and 3 agreed to.
On section 3, subsection 4-Chairman to devote whole time.


Thomas Clement (Tommy) Douglas: When this bill was in the resolution stage it was said from all comers of the house that the effectiveness of this piece of legislation would depend very largely upon the integrity and ability of the personnel. If the persons selected for this board are of high calibre they can do some very effective work; if they are not we are wasting our time here this evening. In the investigations carried on after the war in Great Britain, France and the United States, unfortunate conditions were
revealed of men holding positions of similar character who were found to be either directors or shareholders in large armament concerns. I think the government is to be commended for having suggested that the chairman of the board shall not after his appointment be an officer or director of any industrial corporation or company. I wonder, however, if the minister would consider adding to that the words: "nor shall he be a shareholder in any firm engaged in the manufacture of armaments." I do not want to make it too strict. The man selected may be in business, and he should not be expected to drop all his connection with the business world; but the confidence of the Canadian people in such a board and its personnel would be strengthened if they could be absolutely sure that he had no business connection whatsoever with companies that might receive contracts from this board. If he had shares in such companies there is no reason why he could not sell them; it would be simply a matter of asking any man who takes this position to dispose of any shares he holds in any company likely to make application for a contract. And if any company in which he had shares were not making application at the time but later decided to make application, it would be his duty to sell his shares in that company. Only in that way can we give the people of Canada a feeling of confidence in the board that is to be appointed as a result of the legislation we are now considering. I will not move any amendment until the minister has said something about it, but I would suggest that in line 29 of subsection 4 of section 3 the words "nor shall he be a shareholder in any firm engaged in the manufacture of munitions" be added.


Ian Alistair Mackenzie: The point mentioned by my hon. friend was carefully considered before the legislation was brought in. While I have a certain amount of sympathy with the point of view he has expressed, I am very much afraid that, since it is the desire of the government to obtain an outstanding business man for this position, it would be practically impossible to ask any business man not to be a shareholder in any company. I would agree with my hon. friend if he were to say "a shareholder in any company doing business with the board or the government"; then it would be a different matter, but I think it is going rather too far to extend the principle as far as my hon. friend would carry it.


Thomas Clement (Tommy) Douglas: I am afraid
the minister misunderstood me; that was not what I said. I am not suggesting that the word "shareholder" should be inserted after
Defence Purchasing Board

the word "director." That would be unfair. Any man now engaged in business could not be expected to terminate his contact with the business world because he accepted this responsible position. What I am suggesting is that the words "nor shall he be a shareholder in any firm engaged in the manufacture of armaments," be inserted after the word "company" in line 29. That would not touch any other kind of firm, and I think that makes it quite specific. Certainly I would not extend it to every firm.


Karl Kenneth Homuth: What docs the hon. member mean by "armaments"?


Thomas Clement (Tommy) Douglas: I would mean any firm that might be likely to obtain contracts from this board. No matter how fairly it might be done, I think the man himself, if he thought it over, would want to have this provision inserted; because if any firm in which he held shares should receive contracts from this board in any considerable amount he would never be able to remove the suspicion from the minds of the Canadian people that those contracts were granted to that firm primarily because the chairman of the board held shares in it. I would think he would want that provision inserted for his own protection. I know any man I have in mind who might be considered likely to be appointed to this position would, for his own protection, sell any shares he held in any armament manufacturing concern.


Charles Gavan Power: Personally I would be inclined to urge the minister to accept the amendment suggested by my hon. friend, but I am not quite sure whether the word "armaments," as has been pointed out by the hon. member for Waterloo South, would cover it. For instance, as has been already pointed out in this house, munitions might mean wheat, feed, fodder, and a thousand and one things. Perhaps by reference to section 2, paragraph (b) (i), we might find some better expression; I see there the words "defensive equipment." I am not quite sure what term I would feel like recommending, but in principle I would be quite prepared to recommend the adoption of the suggestion of my hon. friend, if we could agree upon the proper phraseology.


Abraham Albert Heaps: It might be allowed to stand.


Ian Alistair Mackenzie: Yes.


John Ritchie MacNicol: Has it been decided that an industrialist is to be chairman of the board?


Ian Alistair Mackenzie: Not necessarily.


John Ritchie MacNicol: Then the amendment would be entirely out of order, because it refers to an industrialist.


Some hon. MEMBERS:: No.


John Ritchie MacNicol: Just wait until I have finished, please. The last line contains these words:	[DOT]
[DOT] .* .be an officer, or a director, of any industrial corporation or company.
Why does it not go further and say a member of any legal firm or any other firm?


Charles Gavan Power: He might be a lawyer and an industrialist.


Ian Alistair Mackenzie: I shall be glad to give consideration to the point raised by my hon. friend.
Subsection 4 stands.
On section 3, subsection 5-Salary of chairman.


Abraham Albert Heaps: Could the minister give us any idea what salary it is intended the chairman of this board should receive?


Ian Alistair Mackenzie: The government has given no consideration at all to that point.


Robert James Manion: I should like it very much if the government, which the Prime Minister says has been considering this question for so long, would give the committee something in the way of a general idea as to what they think of the board, as to what kind of board they are going to appoint. I do not think we should be asked to pass this bill without being given some information along those lines. A day or two ago the Prime Minister said the government had been giving consideration to this matter long before the Bren gun contract. Well, the Bren gun contract was given a year and a half ago, so the Prime Minister and the government have had a great deal of time to think over this matter.


William Lyon Mackenzie King: I did not say before the Bren gun contract was given; I said before there was any suggestion of an inquiry into the Bren gun contract.


Robert James Manion: Well, even that takes us
back to last October, or earlier than that.


Ian Alistair Mackenzie: September.


Robert James Manion: That is six months ago
now. Surely the government can give us some idea as to what they have in mind. I am asking this for information, not to embarrass the government. It seems to me they

Defence Purchasing Board
must have some idea in regard to the type of people who are to make up this board. Someone asks if the chairman is going to be an industrialist, and it strikes me that he almost has to be an industrialist. He must be someone of that sort, or a corporation lawyer who has been dealing with contracts. It seems to me he is more likely to be an industrialist, with wide experience in manufacturing. Then, in regard to the other three members of the board, surely we should have some information before this section carries.


Karl Kenneth Homuth: If this bill is a direct
result of the recommendation of Mr. Justice Davis, or if that recommendation had something to do with this bill having been brought in, I would remind the minister that Mr. Justice Davis made in his report a specific recommendation that the board should include a corporation lawyer, a representative of labour, and so on. Would the government say that they are thinking of carrying out this recommendation?


Ian Alistair Mackenzie: My hon. friend will find that the type of committee recommended by Mr. Justice Davis is entirely different from the purchasing board suggested in this recommendation. If the hon. member will read the report, at page 51 he will find that Mr. Justice Davis recommended a purely advisory committee, whereas this board has definite executive authority. So in that regard the two proposals are quite different.
With reference to the question of the leader of the opposition, I can only repeat that it will be the desire of the government to have some very prominent Canadian citizen, some industrialist or business man, someone with definite experience along the lines of purchasing, at the head of this organization. Who he is to be I do not know, any more than anyone else knows. But I would suggest that the whole success of this purchasing board will depend upon the personality, ability and integrity of its chairman. In regard to the other three members, as I said before no occupational qualification has been laid down, although something was said along this line in the report. I think the others mentioned in the report were a commercial lawyer, an accountant and perhaps a representative of labour, to assist the chairman. However, as yet no definite decision has been made with regard to these occupational qualifications.


Robert James Manion: May I point out, Mr. Chairman, that I was not so far wrong when I said the Prime Minister spoke of a body such as this having been considered by the
government before the Bren gun contract inquiry. I will quote what the right hon. gentleman said on March 10, in reply to myself:
Let me say to my hon. friend that before the commission under Mr. Justice Davis was appointed, the government had decided to bring in a bill along the lines of that being brought in to-day.
Let me say further that during the last two years my hon. friend the Minister of National Defence and I have had frequent talks together about this very difficult and complicated matter in relation to existing situations of how far it was wise to go in the opening up of arsenals, the letting of war contracts by tender, and with respect to other matters connected with his department; and repeatedly the Minister of National Defence himself has pointed out that he would welcome having some body independent of the Department of National Defence altogether review the contracts of that department so as to ensure that there would be no opportunity for any kind of profiteering or improper dealing with respect to any of them. It was at the instance of the minister and as a result of the talks he had with me as Prime Minister that in the first instance I appointed the Skelton committee-
The Prime Minister goes back two years, so I was not very far wrong when I said the right hon. gentleman certainly implied that this step had been under consideration by the government since long before the Bren gun contract was let. Of course the Prime Minister has left the back-door open; there is a little bit of doubt as to whether or not he was talking about this board. But, as a matter of fact, that is pretty clear. I thought I met it when I made the remark that the Prime Minister certainly implied to this house four days ago that for two years at any rate they have been discussing this very board.


William Lyon Mackenzie King: May I say to my hon. friend I cannot understand the smallness of his arguments in some of these matters. He seems more concerned in seeking to find a meaning for words which had never been given to them, or intended, than he does to discuss legislation intelligently. If he thinks his last remark with reference to what I said bears out the truth of anything he has said before, he is perfectly welcome so to construe it. But I can assure him that any impartial reader of Hansard will see that what I have said was quite correct.


Robert James Manion: It is a matter of opinion, and I would suggest to the Prime Minister that he be a little less personal in some of his remarks to me. I was quoting the right hon. gentleman's words, his actual words, right there, and I was putting the interpretation I think any intelligent person would put upon them. I do not need a lesson from him in regard to using intelligence in connection with this question.
Defence Purchasing Board

The right hon. gentleman has three or four times recently in this house made personal remarks about me, and I say to him now that he must just stop it. I can say things just as personal as he can. I can put my record up against his, dealing with the war, or anything else, now or any time-any time he likes-


Some hon. MEMBERS:: Shame.


Robert James Manion: And a lot of howling from his followers, his rubber stamps, men who simply act as rubber stamps-


Thomas Vien: Mr. Chairman, I rise to a point of order. The leader of the opposition has no right to call an hon. member of this house a rubber stamp.


An hon. MEMBER:: Why not?


Thomas Vien: And I ask that he withdraw it.


Robert James Manion: Mr. Chairman, I will withdraw " rubber stamp," but neither have my hon. friends the right to attempt to howl me down when I am arguing legitimately with the Prime Minister. I am interrupted in this house I venture to say more than any other member who speaks in this chamber, and I take the interruptions without argument. I have been complimented by my hon. friends opposite upon that. I do not mind interruptions, and I will accept them, but I do not intend to be howled down by a group of men, no matter who they are.


Thomas Vien: When the leader of the opposition tries to set up his war record against that of the Prime Minister, I think it is unseemly on behalf of the leader of the opposition to do so, because we could also tell him some points that he may have forgotten. For instance, he left his post at the front and became a Liberal candidate in the election of 1917-I am talking about the war record that the hon. member has just mentioned-and when he landed at Quebec he became a Unionist candidate. I say that we do not want-


Mr. LANDERYOU:: On a point of order.


Thomas Vien: I say that we do not want-


Frederick George Sanderson: Order. The hon. member is out of order.


Robert James Manion: Mr. Chairman, in view of the remarks the hon. member has made, I think I have a right to reply. I was not comparing war records. I did not mention my war record at all. I simply said that I was willing to stack my record up against that of the Prime Minister.
So far as leaving the front is concerned, the hon. member has made a statement which 's absolutely false. He said I left the front to

run as a candidate. I left the front because I was ordered out by the doctors, and I was operated on as a result of my service at the front. I wish to point out to the hon. member that I did not stay at home, in uniform, as he did. I went to the front.


Thomas Vien: Mr. Chairman-


William Lyon Mackenzie King: In regard to personal attacks and criticisms, although I may be mistaken I thought I had tried to be particularly careful not to be personal in my remarks.


Robert James Manion: My right hon. friend has
been particularly careful to be personal three or four times in the house, and I object to it.


William Lyon Mackenzie King: I had not intended to be personal. I am afraid my hon. friend has read into what I have said a meaning which was not there. I am afraid he does that on occasions.


Robert James Manion: Before changing Hansard the right hon. gentleman had better see what he said.


William Lyon Mackenzie King: I have not changed Hansard. But in looking over Hansard to-day I notice where my hon. friend had changed Hansard with respect to a statement he made the other day in regard to the question of the trade agreement being a matter of importance. When he spoke in the house he said it was not a matter of great consideration. But when I come to look at that Hansard to-day, I noticed it had been altered to read that the trade treaty was one of the most important of all things. When my hon. friend insinuates that I am changing Hansard-


Robert James Manion: I had not insinuated it, either. But I made no change in Hansard. As a matter of fact, I do not see it; my secretary does that.


William Lyon Mackenzie King: Well, if my hon. friend leaves Hansard to be revised by his secretary he must take the responsibility for what his secretary does. I revise Hansard myself, and I take the responsibility. However, what I wish to say is this: I have no desire to be personal. If at any time I am personal and my hon. friend will direct my attention to it, I shall be glad to withdraw whatever is personal in my language.


Robert James Manion: What right has the Prime Minister to suggest as he did a few minutes ago-or to say that if I would use intelligence-


William Lyon Mackenzie King: I do not think I used any such expression.

Mr. R. S. White


Robert James Manion: My right hon. friend will find it when he looks it up.


Mr. MACKENZIE  ICING@: It may be so, but I did not think I had used any such expression. I have every desire to have the debates in the house carried on as free from personalities as they can be.


Karl Kenneth Homuth: It is high time.


William Lyon Mackenzie King: Perhaps my hon. friend would just-


Karl Kenneth Homuth: I have reason to know about it.


William Lyon Mackenzie King: What is the reason?


Karl Kenneth Homuth: I have reason to know that debates should be carried on on a high plane.


William Lyon Mackenzie King: Well, I am very glad my hon. friend and I agree on that. However, I think perhaps it is important on all occasions to endeavour to avoid personalities. I shall be very glad to do what I can, to help see that such a course is followed.
May I say this, in regard to war records. My hon. friend has referred to this matter. Since the war I have been before the Canadian people in five general elections, and on four occasions out of five I have been returned as Prime Minister of this country. That is the answer.


Thomas Vien: I rise to a question of privilege. The leader of the opposition has spread on the record the statement that I had remained at home and had refused to enlist.


Robert James Manion: I did not say the hon. member refused to enlist.


Thomas Vien: The hon. member said, at any rate, that I had remained at home while he was at war. On a question of privilege I wish to say that on August 4, 1914, with the regiment to which I belong, I was summoned to take the field at Fort La Martiniere, where we were - in service until December, 1914. Since then for three times I enlisted in the Canadian expeditionary force. The regiments in which I was were disbanded, were sent as drafts, and we were left behind. The only question that arises is that I was not jin London, as so many others, who for months and months were waiting for appointments to the front, and were returned to Canada. My record can be compared with that of any other.


Frederick George Sanderson: Order.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Wednesday, March 15, 1939