1939-05-22

THE ROYAL ASSENT

[Stage Direction]
A message from His Majesty the King was delivered by Major A. R. Thompson, Gentleman Usher of the Black Rod, the house standing:
Mr. Speaker, the King commands this honourable house to attend His Majesty immediately in the chamber of the honourable the Senate.
Accordingly Mr. Speaker, with the house, went up to the senate chamber to attend His Maj esty.
And being returned:
Mr. Speaker reported that when the house did attend His Majesty the King in the senate chamber, His Majesty was graciously pleased to give his royal assent to the following bills:
An Act respecting a certain Trade Agreement between Canada and the United States of America.
An Act to carry into effect the provisions of the Convention of the 15th September, 1938, providing for emergency regulation of the level of Rainy Lake and of the level of other boundary waters in the Rainy Lake watershed.
An Act to Encourage the Co-operative Marketing of Wheat.
An Act to Assist and Encourage Co-operative Marketing of Agricultural Products.
An Act to provide for the supervision and regulation of Trading in Grain Futures.
An Act to amend the Pension Act.
An Act to amend the Criminal Code.
An Act to provide for the Training of Young People to fit them for Gainful Employment.
To these bills the royal assent was pronounced by the Clerk of the Senate in the following words:
His Majesty the King doth assent to these bills.

Then the honourable the Speaker of the House of Commons addressed His Majesty the King as follows:
May it please Your Majesty:
The Commons of Canada have voted supplies required to enable the government to defray certain expenses of the public service.
In the name of the Commons I present to Your Majesty the following bill:
"An act for granting to His Majesty certain sums of money for the public service of the financial years ending the 31st March, 1939, and the 31st March, 1940, respectively."
To which bill I humbly request Your Majesty's assent.
To this bill the Clerk of the Senate, by command of His Majesty the King, did thereupon say:
His Majesty the King thanks his loyal subjects, accepts their benevolence, and assents to this bill.
After which His Majesty was pleased to make a most gracious speech from the throne to both houses of parliament, as followeth:

[Stage Direction]
Honourable Members of the Senate:
Members of the House of Commons:
I thank you sincerely for your addresses received on my arrival at Quebec. The queen and I deeply appreciate your loyal and affectionate messages.
I am very happy that my visit to Canada affords me the opportunity of meeting, in parliament assembled, the members of both houses. No ceremony could more completely symbolize the free and equal association of the nations of our commonwealth. As my father said, on the occasion of his silver jubilee, the unity of the British empire is no longer expressed by the supremacy of the time-honoured parliament that sits at Westminster. It finds expression to-day in the free association of nations enjoying common principles of government, a common attachment to ideals of peace and freedom, and bound together by a common allegiance to the crown.
The queen and I have been deeply touched by the warmth of the welcome accorded us since our arrival in Canada. We are greatly looking forward to visiting each of the provinces, and, before our return, to paying a brief visit to the United States.
It is my earnest hope that my present visit may give my Canadian people a deeper conception of their unity as a nation. I hope also that my visit to the United States will help to maintain the very friendly relations existing between that great country and the nations of the commonwealth.
These visits, like the one recently made by the queen and myself to the continent of Europe, will, w'e trust, be viewed as an expression of the spirit of our peoples which seek

His Majesty's Speech
ardently for closer friendship and better relations not only with our kith and kin but with the peoples of all nations and races.
Honourable Members of the Senate:
Members of the House of Commons:
May the blessing of Divine Providence rest upon your labours and upon my realm of Canada.
On motion of Mr. Lapointe (Quebec East), the house adjourned at 3.45 p.m.
Monday, May 22, 1939


[Stage Direction]
Hon. C. G. POWER (Minister of Pensions and National Health) moved that the house go into committee at the next sitting to consider the following proposed resolution:
That it is expedient to amend the Dominion Elections Act to provide a limitation on candidates' expenses, with provision for the necessary returns and proceedings for the enforcement of such limitations and appropriate penalties for violations thereof; with provision also for payment out of the consolidated revenue fund of necessary expenses in connection therewith.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. H. J. BARBER (Fraser Valley):: Mr. Speaker, I should like to direct attention to a matter which concerns the Minister of Agriculture (Mr. Gardiner), who is not present, and the Minister of National Revenue (Mr. Ilsley). I have received a wire from British Columbia stating that foreign strawberries are flooding the market and that British Columbia berries are almost ready for shipment. It is urged that the government take into immediate consideration the application of the in-season duty.


Hon. J. L. ILSLEY (Minister of National Revenue):: The appropriate action has already been taken.


Harry James Barber: Has the date been set?


James Lorimer Ilsley: On Friday of last week this application became effective.



CIVIL SERVICE


[Stage Direction]
On the orders of the day:
Mr. A. W. NEILL (Comox-Alberni):: I
should like to direct a question to the acting leader of the government. On May 5, the report of the committee dealing with civil service superannuation was laid on the table. When will the motion for concurrence be moved, or other action taken dealing with this matter?


Right Hon. ERNEST LAPOINTE (Minister of Justice):: I shall inquire into the
matter.



POSTAL SERVICE


[Stage Direction]
On the orders of the day:
Mr. C. E. JOHNSTON (Bow River):: I should like to direct the attention of the Postmaster General (Mr. McLarty) to a letter which I received from the people of Midland-vale, Alberta, with regard to a post office-


Some hon. MEMBERS:: Order.


Ernest Lapointe: My hon. friend should send his letter to the Postmaster General (Mr. McLarty).


Mr. SPEAKER:: I think this is a question that ought to be placed on the order paper rather than asked on the orders of the day.


Charles Edward Johnston: I shall
place it on the order paper.



WAYS AND MEANS


[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Finance) moved that the house go into committee of ways and means.
Alan Webster Neill: Mr. Speaker, I should like to ask the Minister of Finance (Mr. Dunning) a question which I should be prohibited from asking when we are in committee because there is no item which refers specifically to it. In his budget speech the minister intimated that there would be taxes of various descriptions placed upon vegetable oil contained in shortening and soap,
Income War Tax Act

but that this was contingent on obtaining the acquiescence of the British government. May I ask if that has been obtained, or if it is not obtained in time will it be possible to deal with this later by order in council?
Hon. CHARLES A. DUNNING (Minister of Finance): I believe I am debarred from answering a question on a motion of this kind, but I may tell my hon. friend that I expect to make a statement in due course.
Motion agreed to and the house went into committee, Mr. Sanderson in the chair.



INCOME WAR TAX ACT

[Stage Direction]
Resolved, That it is expedient to amend the Income War Tax Act and to provide:-
1. That a taxpayer (other than a company deriving income from a metalliferous mine to which section 89 of the act applies) shall be entitled to deduct from the tax that would otherwise be payable under the act amounts not exceeding in the aggregate ten per cent of capital costs actually incurred and paid in the period beginning May 1, 1939, and ending April 30, 1940, in respect of the construction, installation, betterment, replacement or extension of plant, machinery or fixed equipment during the same period, by deducting, in each of the first three fiscal years of the taxpayer after April 30, 1940, in which the taxpayer has taxable income, an amount not exceeding one-third of the aggregate amount of the deductions authorized.
Mr. MANION:: As this resolution deals with the sales tax, I wish to discuss one point very briefly.


Mr. DUNNING:: No, this resolution deals with the income tax, but go ahead anyway.


Robert James Manion: I wish to put on record a suggestion which I have already made to the Minister of Finance. A company makes a sale on time, say three months, to a dealer and pays the sales tax on the goods sold. Then the dealer to whom the sale was made goes bankrupt and does not pay for the goods. It seems unfair that the company should lose not only the price of the goods which they would normally have received, but also the sales tax which they have paid. It has been a troublesome question, I believe, for a long time, but as we make refunds of various kinds through the Department of National Revenue-rebates of customs duties paid, for example-I think that in such cases the company should be refunded the sales tax which it has paid. It seems a reasonable request, and I am sure some way could be worked out of making the refund. I am making no criticism because I know the question has arisen under various governments ever 
since the sales tax was introduced, but I trust that the minister will give the matter his attention with a view to working out some method of making a refund in cases of this kind.


James Lorimer Ilsley: I may be in a position to say something about the matter when the amendments to the Special War Revenue Act are under consideration. All I can say at the moment is that the question is a very old one which has been up frequently during the last few years, and no government has ever considered that it should adopt the, suggestion which is now being made. The sales tax is really a tax on the person who makes the first sale. The ground usually advanced for remitting taxes on commodities is that the manufacturer is merely a collector of the tax from the first person to whom he sells the goods, and it is repeatedly urged that where he is not able to collect the tax he should not be obliged to pay it to the government.


Robert James Manion: But the tax is a tax on the sale of goods. A manufacturer, for example, sells one hundred dollars' worth of goods to a firm that goes bankrupt, and he pays a sales tax of eight dollars. But while technically he has sold the goods, actually there has never been a sale, because he gets paid nothing for them, and he loses not only the one hundred dollars he would have normally received but the eight dollars that he paid in sales tax. In other words he is paying sales tax on a transaction that was never completed. I do not think the justice of his claim for refund can be disputed. The company that writes me is a London company, and they claim that this occurs repeatedly where companies go into insolvency, as many have done during recent years. I do not think there can be any question as to the justice of their claim for a refund. The problem is to work out a method by which the refund can be made. I think that is the difficulty, because I do not imagine any government would question the right of a company to be remitted the sales tax on a sale that never took place.


Charles Avery Dunning: I can remember this
question arising ten years ago. One must bear in mind that the principle of the tax is that it applies on the first sale. Many subsequent sales of the same article may take place, and the question arises as to bankruptcy, and how far along the line one should proceed. It becomes very complicated. If the manufacturer who pays the tax collects from the person to whom the first sale was

Income War Tax Act
made, then since the tax becomes a part of the secondary sale price, should the second seller of the article come in, if such an adjustment is to be made?


Robert James Manion: The second seller collects
his money, or he would have a claim also.


Charles Avery Dunning: But when he does not?


Robert James Manion: If he does not, and he had paid the tax, I would say that any man who paid the tax and who was unable to collect it in a subsequent sale should not be called upon to pay it.


Charles Avery Dunning: It is practically impossible to follow it through.


Robert James Manion: I admit at once that there are technical difficulties. But I believe that manufacturing compafiies making a sale in the circumstances I have described and losing the price of the goods because the sale was not completed, should not have to lose the sales tax also. In justice to manufacturers or dealers who get into this position, an attempt should be made to remedy the situation.


Mr. HARRIS:: I have two short questions
to ask on this resolution, which has to do with betterments and replacements. The minister the other day, as an illustration, said that the cost of a new baking oven would be considered capital expenditure entitling the owner to benefit by this resolution when making up his income tax at the end of the financial year. I have in mind steam boilers, in fact all factory equipment where the units of equipment are anywhere from one to a dozen, the manufacturer having in mind in the first instance that if one particular unit breaks down he will have in reserve other units which can readily be cut in. If one bake oven, for instance, breaks down, another will be ready for service. When it comes to replacing these pieces of equipment, whether it be steam boilers, bake ovens, lathes or what not, the employees in the particular factory concerned know more about the installation of the equipment than any outside contractor. When a firm-I am thinking now of a plant with a plant repair crew of some forty men-resolves to take out a unit of equipment, it will invariably use its own plant repair and maintenance gang, so-called- electricians, steam fitters, millwrights, engineers and chief engineers who are constantly replacing worn out or broken down equipment. The major item of cost in replacing a big oven or boiler is in the taking out of the old unit and getting ready to receive the
new one; and subsequently there is the cost of bringing in and finishing up the new unit. As the act stands, when a firm divides its plant maintenance and repair organization into two gangs, one of which is charged with the responsibility of renewing equipment, and capitalizes the wages earned by this section of the plant maintenance gang, the department requires it to pay sales tax on that portion of the expenditure for labour which is capitalized under the item of new equipment. In future, will that portion of the wages used in the installation of new plant be subject to sales tax?
My second question is this. In rebuilding, we will say, the same boiler, it is often necessary to bring in welders, bricklayers, and men trained in trades which are not represented in the plant's personnel. Will the sales tax have to be paid on their wages if their wages are capitalized, as they quite properly could be?


Charles Avery Dunning: I must avoid, if I can, giving administrative rulings on the floor in respect to particular cases. That will be understood. One can make a general answer, however, to the type of question asked by my hon. friend. The test will be, is this a capital expenditure? If it is, everything in connection with it will be eligible under the resolution now under discussion. But it must be remembered that if labour cost otherwise chargeable as an expense against the ordinary income of the industry is used in connection with a capital expense to qualify under this section of the law, obviously these wages cannot be allowed over again as an expense. That is to say, the wages must appear either as wages with respect to the capital expenditure or as expense wages in connection with ordinary operation; they cannot appear twice.
The sales tax question does not arise on this resolution, and I shall have to leave it to my colleague the Minister of National Revenue when we reach the excise tax provisions.


Joseph Henry Harris: I quite appreciate the answer, and I recognize that I could not expect an immediate ruling; but this is a convenient opportunity to get the representations on record.
Another question I should like to ask has to do with installation of new equipment. In almost fifty per cent of the cases a large part of the cost is made up in the incorporation of second-hand materials into the rebuilding of the unit. Where second-hand material, much of it purchased outside the factory in question, is used, will the minister give
Income War Tax Act

consideration, when he comes to deal with the administration of the act, to allowing such material to come under the heading of a capital cost chargeable to the capital section of a firm's balance sheet, and to having the statute applied in that regard in the same manner as it applies to new material?


Charles Avery Dunning: With regard to secondhand machinery, when we come to the terms of the bill to be based upon this resolution, it will be found that second-hand machinery is barred from the benefits of the measure, the reason being, of course, that the purchase of second-hand machinery does not create employment.


Joseph Henry Harris: I was referring not to second-hand machinery but to second-hand construction materials-I-beams, angles, and so on.


Charles Avery Dunning: The same principle would apply, I am afraid. However, we will consider that between now and the time the bill comes down.


Mr. MacINNIS:: I stated my opposition to this resolution when I spoke on the budget debate. I wish to do it again, though I shall do so very briefly. When speaking on the budget I said that in my opinion the Minister of Finance, in his attempt to stimulate production and consumption as well, was beginning at the wrong end. I hold that opinion because I feel that if anything has been made abundantly clear during the last ten years it is that our capacity to produce has far outgrown our capacity to consume. That being so, I cannot see how we are going to overcome the evil- if you like to call it so-of over-production by increasing or facilitating the means of further production without at the same time broadening the basis of consumption.
Speaking in the budget debate I pointed out that, according to the Canadian Bank of Commerce index of production, Canada's productive capacity operated at only 69 per cent during March. In April the production level rose somewhat, but very slightly; it is now up to 70. That indicates that industry is still operating away below capacity. When he spoke on this resolution last Thursday the Minister of Finance said that he had assurance from manufacturers that the additions and improvements made to plants would not reduce employment, because modernized machinery

this is the reason which was given- would put them in a competitive position in markets in which they cannot now compete, and hence there would be greater production.
I do not believe I ever heard a greater fallacy. 
I have no doubt that the manufacturers who spoke to the Minister of Finance were quite sincere, but we should not take these assertions merely at their face value; we should examine them in the light of what we are doing and what has happened in- the past when productive capacity has increased. In a competitive trade, other things being equal, the product that can be sold the cheapest is the product that is being produced the cheapest, and the product that is produced the cheapest is, other things being equal, the product that is produced with the lowest labour cost. If a plant has been improved and1 modernized under this scheme and can successfully compete where it could not compete before, it is doing so because its costs of production have been reduced in consequence of the efficiency of its machinery. Generally speaking, production costs are reduced when the same number of workers are producing a larger quantity of goods, or a smaller number of workers the same quantity of goods. Whichever way it happens, it is clear that this result can be brought about only by the distribution of less purchasing power to the workers employed in relation to the quantity of goods produced, It follows, then, that no matter how the improvement is effected, the industry can compete successfully only by the elimination of competitors and by the production of goods for the market more cheaply than competitors can produce them. That is done in the main by the reduction of production costs-and, as I say, these costs are, generally speaking, the costs paid out to labour. While there may be a slight increase in the number of those employed, when the industry gets into production, workers will be displaced and -unemployment increased.
Another fact that should be clear by this time is that under the present methods of production and distribution the system cannot be kept going unless there is an ever-increasing stream of the values produced in industry going into new capital. That increase in capital was possible until within recent times, but it is no longer possible, and it makes no difference how hard we try to facilitate the investment of new capital in industry, we cannot do it unless we increase the consumption of the goods produced. The purpose to-day in every capital investment or in every improvement in the mechanism of production is to reduce production costs to the lowest point so as to get the largest amount of profit possible. As we increase the productivity of the machine and make its operations more and more automatic, we displace labour that could consume the products of the machine. The machines do not buy goods.

Income War Tax Act
There is something else that follows, and possibly what I have just stated is another way of saying it: Under our capitalist system we can keep industry going only by continually investing new capital. In other words, while capitalism can finance production, capitalism cannot finance consumption; because the purpose of the system itself is not to produce goods and services for the community but to produce profits for those who own the capital. That is why to-day, with a capital structure such as the world has never known before, distress and want and misery are on every hand.
At the peak of our productive capacity on this continent in 1929, in one hectic day in October of that year, some $14,000,000,000 were lost on the New York stock exchange, and in a relatively short time that loss had increased to the stupendous sum of $75,000,000,000. This loss took place and the world, the United States particularly, felt much poorer because of that loss. In reality, however, what was lost? Was any real material thing lost? Was not the capital itself, that is, the productive capacity of the mills, the factories and the mines of the United States, just as great after this eventful day in October, 1929, as it was on the day before? Of course it was. Neither productive capacity nor any material thing; neither food, clothing, shelter, nor any part of the means of production was less than it was before. The skill of the workers was the same; their capacity and willingness were the same. Well, what was lost? What was lost was something that had really never been there. It was merely fictitious value-value supposed to be there, by people who had thought there was no end to the amount of profits to be made out of the productive capital of the country.
What we are up against under the social system under which we live is the result of our habit of thinking of our capital structure not in terms of the quantity of goods and services that can be produced for the community, but in terms of the profits that can accrue to the owners of that capital. May I refer to something the Minister of Finance said on Thursday? It was in fact the only hopeful thing he said-the implication that he was not very sure of his ground. He said this resolution was an experiment.


Charles Avery Dunning: Oh, no.


Angus MacInnis: Does my hon. friend now say that he is sure of his ground?


Charles Avery Dunning: I wish my hon. friend would quote me instead of interpreting me; it would be better. It is always better to quote than to interpret.


Angus MacInnis: Quite so. Well, let me quote what the minister said at page 4305 of Hansard:
The measure before us at the moment is designed to encourage those people to put their money to work. I am a firm believer that idle dollars mean idle men, and in doing everything we can to encourage investment in permanent industry to overtake the obsolescence of the last ten depression years.
I admit at once that this provision is experimental-


Charles Avery Dunning: Quite.


Angus MacInnis: Does my hon. friend say that when anything is in the experimental stage the person experimenting is certain of the results?


Charles Avery Dunning: Read on.


Angus MacInnis: It only makes it worse.


Charles Avery Dunning: Read on more. It is
rather good, I think.


Angus MacInnis: It is good; I liked it myself.


An hon. MEMBER:: It is a good thing
there is something the hon. member likes.


Angus MacInnis: There are many things I like, but there are things I do not like. To continue:
I say to industry: I think I know the Canadian parliament well enough to believe this, that if during the year industry large and small across Canada takes hold and demonstrates that employment can be and is being created by virtue of this tax credit, the Canadian parliament, no matter what its political complexion may be at the time, will give fair consideration to the results from the point of view of extending the term of operation of this provision if national benefit continues to result. I simply ask the committee to give this provision a chance for a year.
To me that indicates that the minister is not quite sure of his ground, but is willing to take a chance. But I maintain, as I have stated in these few remarks, that the evidence during the past ten years is proof positive that the minister's scheme in this instance will not work. We should begin to increase purchasing power so that consumers can buy the products of their labour. We should do that by removing every restriction on consumption, and one of those restrictions that should be removed is the sales tax. The minister showed by removing the sales tax on building material last year that he realizes that by removing that obstacle to consumption, consumption will be increased. It is only by removing these restrictions on the purchasing capacity of low paid workers that we can continue to make use of the capital structure that we have already built up.

Income War Tax Act


Charles Avery Dunning: I shall not attempt to follow my hon. friend in detail through his interesting exposition of the socialist point of view with respect to capital and industry, except to say, with respect to his first mentioned objection to the measure now under discussion, in which he took the ground very strongly that any improvement in the efficiency of productive plant and machinery necessarily does harm rather than good-


Angus MacInnis: No; I said unless it were followed by increase in consumption.


Charles Avery Dunning: Unless it were followed by increase in consumption; may I say that those arguments ring very familiar in my ears. They were the arguments which led to the Lancashire riots against the cotton gin nearly one hundred years ago. Yet the increase in consumption of cotton goods resulting from the improvement in cotton fabricating machinery undoubtedly provided very greatly enlarged employment as the years went on. The same thing can be said of the objection which followed the introduction of the linotype machine in the printing trades: we were told about the number of hand compositors who should lose their employment and their living as a result of it. But we all know that following the invention and extensive use of the linotype machine the consumption, if one may so express it, of the printed word grew to such an extent that the printing trades employed far more men than in the days of typesetting by hand. One might multiply such illustrations. However, suffice it to say that the government believe that there are industries which by modernizing, and so overcoming the handicaps of which I spoke the other day-in one case of a plant where the machinery was secondhand twenty-five years ago-can put themselves in a position to become effective competitors in certain foreign markets in which to-day they find it difficult to compete because of the more up-to-date equipment of their competitors in other countries exporting to the same market. I could give illustration after illustration of that sort. I assure my hon. friend that I have enough confidence in the business ability both of employers and of employees in industry to believe that unless industry sees that by making these improvements there will be additional opportunities of progress and prosperity for the industry, the improvements will not be made.


Angus MacInnis: What does the minister mean by-


Charles Avery Dunning: I let my hon. friend speak without interruption. I do not agree at all that an industry in Canada which is already

capable of efficiently producing more than it can find a market for, is likely to take advantage of this provision. Of course it is not for such cases. But my hon. friends in the corner always generalize; they speak as if a condition were general when in fact the situation can be clearly understood only when one is aware of particular conditions in a particular industry. I am sure there comes to the mind of every hon. member industries which could not profit by this measure because there is no opportunity for them to expand. An industry may be over-expanded already. But I am equally sure that nearly every hon. member can think of industries in respect of which this measure will stimulate a development which will be of advantage both to the industry concerned and to its workers. We cannot generalize and draw a particular conclusion from such generalities. This measure is broad enough to enable those who can see an advantage for Canadian industry and their own industry to do something worth while. Unless the opportunity is there to do something worth while, they will not embrace it; that is all.


Mr. DEACHMAN:: With the notable skill which is characteristic of the Minister of Finance he selected an excellent illustration of the fact that improvements in machinery can bring about an increased volume of employment. I refer to the example of the linotype. That extension in printing machinery brought a new condition in the printing world, because a reduction in price followed; the price did not remain at its former level as in other industries, therefore we had a vast expansion of employment such as did not follow in some other industries, or at any rate did not follow to the same extent. In passing I might mention two other good illustrations of the same thing, the telephone and the automobile. Three large automobile companies, competing without monopoly, continued to lower prices and expand the use and sale of cars because one genius at the head of a large concern in the industry regarded that as the best way for the development to take place. The others followed, partly because they found that there was a new path to tread, and partly because they saw that perhaps, in the long run, more money was to be made by giving a better service at a lower price.
I desire to quote from a book which has been already cited by the Minister of Finance, namely the report of the employment commission. I rather like this volume, because it is one which seems to fit the mind and temper of anyone who chooses to quote from it. On almost any page you can get what you

want to serve your purpose. The figures T shall quote give equal support to the contention I propose to make and to the arguments the minister used to support his own contention. At page 110 I find that the income of the farmers of Canada was $1,088,000,000 in 1926. If that condition had continued during the seven years of the depression the total farm income would have been $7,616,000,000. Actually it was $4,304,000,000, a decline of $3,312,000,000 or an annual average of $473,000,000 during the depression as compared with the normal level of 1926. This was five times greater than the loss of the Canadian manufacturers, whom we are now about to support by means of a reduction in taxes; that I shall proceed to prove. In 1926, after paying for raw materials and wages, Canadian manufacturers had $837,800,000 left out of which to pay general overhead, profits, interest on bonded indebtedness and so on. In the five years of the depression, 1931, 1932, 1933, 1934 and 1935, they had an average of $746,355,000 remaining. During this period there would also be a sharp reduction in overhead charges, so that they would not have to pay out as much as formerly. The reduction below the 1926 norm was only $91,500,000, whereas the loss to agriculture was $473,000,000.
I appeal to the government, in regard to this situation, to restore the prosperity of the farmer and thus give increased purchasing power to the people of Canada, because on the prosperity of the farm depends the prosperity of the nation. We have almost five million people directly or indirectly employed in agriculture. If we could diffuse that purchasing power and pass it down to them, would it not have a profound influence? I quote from the speech of the minister last Thursday, referring to some statements I had made, in which he said:
I have no criticism to make of his theory______
I alone discuss theory; all the others discuss practice.


Charles Avery Dunning: I did not say that, Mr. Chairman.


Robert John Deachman: reserve of $266,552, a mere trifle; a depreciation reserve of $11,659,233 and a contingency reserve of $150,000, or total reserves of $12,075,785.
Now I desire to ask the minister a question.
I have here the record of the sugar industry in Canada, and I find that earnings during the years of prosperity from 1926 to 1930 were less than during the years of depression. The government in power during the depression years, my hon. friends to the left, by means of a dumping duty managed to provide that the sugar companies could have larger profits in hard times than they had in good times.
I took the five years from 1931 to 1935 and compared them with the five years from 1926 to 1930, and I find that during the five years of the depression, in each ease after paying salaries, wages, fuel, electricity, materials and so on, the balance remaining to this industry was $8,717,000 more than it had been during the period of our greatest prosperity. As I read the announcement of the change we are discussing to-day I wondered if this new legislation would apply to this industry and if these men who had been so generously treated in the past would be enabled to secure their machinery at a lower cost and to make replacements without paying as much by way of taxes as they formerly paid.
Then I come to another matter, the other side to the story I have told1. This is a quotation from a speech by Hon. D. G. McKenzie, who is well known to many in this house, including the Minister of Finance. He says:
Because of lack of purchasing power, the farmers of Canada were unable to buy their normal machinery requirements to the extent of $200,000,000. Now, in order to reestablish the normal equipment on the farms of Canada, the machinery companies would have to sell the normal requirement of $51,700,000 a year,
I do not think they are selling that.
-plus sufficient to catch up in the next five years the $200,000,000 worth now in arrears.
I appeal to the minister. When that situation exists on the farm, is it not possible that we can do more for the farmer? I admit frankly that we have done much, and I admit that the government are trying to do more. H they were not trying to do more, then I would oppose it. I admit they have been trying to do what they thought was possible, but in this I ask for a little experimentation. I think the minister himself has admitted that he was not quite sure of the results in connection with the measure which he has proposed. At least, he was not positive of the results. He has something to guide him in the lowering of the sales tax. On his own judgment last year he decided to reduce the

sales tax on building materials. I admit that this was done in an unfortunate year when conditions in the dominion were not as good as they might have been, but I do not think the minister would want to repeal that action this year. I think he feels it has been a benefit to Canada, and I think this other experiment would be worth while, at least to the extent of one per cent. There is an aroused public opinion in Canada. The people are beginning to realize that at least a substantial part of the difference between the conditions which existed between 1926 and 1930 and those which exist to-day is due to the change in the burden of taxation. They realize that this levy of eight per cent, carried through as it is until it finally reaches the consumer at a level of somewhere around twelve per cent, is one of the major factors in the conditions we have to-day. I ask only for a careful examination of this situation so far as the government is concerned. I do not ask that the proposal now made be abandoned. I consider it an experiment and I should welcome more experiments. We cannot remain as we are; we must improve the fundamental position of agriculture or take the consequences of lowered employment.


Charles Avery Dunning: With respect to my hon. friend's statement that I had put words into his mouth-


Robert John Deachman: I think it might be taken as that.


Charles Avery Dunning: On page 4303 of Hansard of May 18, my hon. friend is reported as follows:
If the sales tax could be removed and the sum now absorbed by that tax were used in the purchases of commodities, this would increase the demand for commodities by the amount of the sales tax, which, as I recall it, is $126,000,000.
My hon. friend then proceeded to develop an argument which I took to be an argument for the abolition of the sales tax. When I subsequently made the remark that it would be a bold Minister of Finance who would at this time contemplate the loss of that much revenue, it was to that that I had reference. My reference to theory was in no sense intended to be derogatory to my hon. friend. We all theorize at times, and no one enjoys it more than I.
At this stage in the discussion I wonder if I may be pardoned if I remind the committee that after all this is not a budget debate. This is a debate on the desirability of making a tax exemption with a particular objective. I do not say this in criticism of my hon, friend, but I think the debate should

Income War Tax Act
be confined to the desirability or otherwise of doing the specific thing which is here contemplated.


Mr. STEVENS:: Could the minister indicate what information or suggestions of results have been before him which induced him to consider this as a useful and practical measure?
I have been cogitating about it. Speaking of theory, it seems to have some appeal, but one wonders what is the assurance of results, if any.


Charles Avery Dunning: The assurance of results
has come largely since the measure was first proposed. As to the basis of the proposal, it will be remembered that among other things the employment commission gave_ considerable attention to the manner in which investment in durable and capital goods might bo increased. The employment commission pointed forcefully to the extent of unemployment in the durable and capital goods industries, resulting, as they put it, from a low level of investment. I have not the report before me, but, speaking from memory, they referred to the tremendous wastage which had occurred during the depression years as a result of obsolescence as distinguished from depreciation. This is the very matter to which I know the hon. member for Kootenay East (Mr. Stevens) has given considerable study.
The suggestion was made by the employment commission that some incentive should be provided to bring about increased investment in durable goods, particularly in the construction industry. Every high level of prosperity in Canada has been coincident with a high level of activity in our durable goods and construction industries. There has been a long break since the depression started in 1929 down to the present time, but there are signs of improvement. The legislation with respect to housing has brought about a tremendous improvement in residential construction, which construction is now far and away ahead of other types of construction. But residential construction is not all-important, although it contributes to the solution. It is an effort to meet that demand, which has been present in the United States as well as here, to give to industry some encouragement in overcoming the effects of obsolescence, and in expanding capital construction.
One was compelled to theorize in arriving at a decision as to what to do, because there was no practical precedent before us. We have had applications from industries for the remission of taxation with respect to capital improvement they were contemplating making. Of course the government could not see how that could be done fairly, how you could say to one particular industry. "We will remit
the taxation on your capital improvements." This is an effort to evolve an incentive which will be applicable wherever anyone, either an individual or a corporation, undertakes the type of expenditure which will tend, first of all, to expand employment in the capital goods industry, and later, with intelligence displayed in the manner in which investment is made, to create expansion in employment in industries producing consumer goods.


Mr. LOCKHART:: I am glad to return
with the minister from theory to practice. As to what the hon. member for Danforth (Mr. Harris) has said, I do not think the ministers appreciate the application that this might have to smaller industries. I recall the minister saying that he was most anxious to help the smaller industries and that already communications had come to him indicating the activities which might result from this legislation. When a small industry contemplates expansion, the materials which constitute part of the old plant are important factors. The minister will probably recall another remark he made a few days ago, in connection with the extension and improvement of industries. A small industry, wishing to expand slightly, takes in a little more ground, a piece of property which may have lain dormant over a period of years. They have to drain it, grade it, fence it and make other necessary improvements. I know several such cases. I am thinking not of landscape work, but of grading, draining, building a road, and making other necessary improvements. Would they be included under this legislation? I am anxious to get the general views of the minister, not necessarily a final interpretation.


Charles Avery Dunning: Again without giving
definite administrative rulings, I can definitely say that the cost of the land would not qualify because it would not represent any investment in employment. With respect to improvements on the land, it would depend entirely upon whether they were actual capital expenditures and could be so demonstrated to the commissioner of income tax. Obviously, as I said to the hon. member for Danforth a little while ago, if wages were paid with respect to work on the land, building roads, grading or something of the kind, they could not at once be an expense against the business and a credit from a capital point of view against income tax. My hon. friend will see you could not have it both ways. The question to be kept in mind and fought out with the commissioner of income tax is whether this is a bona fide capital expenditure involving work.
Income War Tax Act


Mr. WOOD:: I am inclined to support
to a certain degree the hon. member for Huron North (Mr. Deachman) in his appeal for a reduction in the sales tax. True, the responsibility of the Minister of Finance is very great, and it is difficult to legislate to benefit all elements of society.
The resolution before us has met with the approval of industry, and in reply to the remarks of the hon. member for Kootenay East (Mr. Stevens) I shall quote from a circular published by one of the great industrial concerns in Hamilton. It calls this legislation of the Minister of Finance "A practical move to create more jobs for Canadians." That is what the Dominion Foundries and Steel Company of Hamilton says, and it has proven itself to be a very capable industrial firm. The statement which I have quoted from its circular, which was republished in the Financial Post over a week ago, is a pretty fair assurance, I think, that this legislation is going to bring results. The hon. member might accept the opinion of this company as fairly authoritative as to the effects to be expected from this legislation.
I must admit that my experience in life has been that many of the results I hoped for from certain things have not been realized, and perhaps that will be the experience of the hon. member for Vancouver East (Mr. Mac-Innis) in the things he hopes for from his school of political thought. These utopian ideals are splendid in theory, and we all must have ideals to work to, but many of the things I have looked forward to I found very disappointing when accomplished. The hon. member claims that our present system has been a dismal failure. He spoke of the crash in New York and said that the eighty billion dollars was really not a loss; it seemed to be a sort of state of mind in matters of finance. His particular political theories may be more or less a state of mind. I have seen people who had plenty of money and plenty of purchasing power, something which I have never enjoyed; but just the same there have been many other things for me to enjoy. I appreciated the things I did have, and I would rather commend that view to the hon. member- that he try to develop a state of mind which will enable him to see and enjoy the beauties around him, instead of always finding fault with conditions and trampling under foot so many of the blessings we enjoy in this country. The sun still shines and we still have rain. And if we would only give a little encouragement sometimes to the Minister of Finance, who is trying-


Angus MacInnis: He does not look discouraged at all.


Mr.   V OOD@: I cannot see the minister's face; I am looking at the hon. member opposite, and by his looks he is very much discouraged.


Angus MacInnis: The Minister of Finance looks happy.


George Ernest Wood: I should like to say a few words in support of the hon. member for Huron North, who argued for the abolition of the sales tax.


The CHAIRMAN:: I do not like to interrupt the hon. member but we are on the income tax, not on the sales tax. The committee will agree that wide latitude has so far been allowed in this discussion ,and I must ask hon. members to confine their remarks to the resolution before the committee.


George Ernest Wood: Nothing would give me more pain, Mr. Chairman, than to disregard your ruling; I shall confine my remarks to the resolution before the committee. But what I was going to say is, I believe, pertinent to the resolution which is to help industry. If industry is to flourish, customers are required for the products of industry. I represent the industry of agriculture, with its 780,000 farms across this dominion. When one sees the equipment in some of those farm homes he realizes the great need for the products of industry, which this resolution is designed to stimulate. If a reduction in income tax will help industry, would it not be a good thing to reduce the tax on consumption so that our farmers could purchase the house equipment they badly need?


Charles Avery Dunning: Will my hon. friend name one item which the farmer, as distinct from another citizen, uses directly in the production of his product and which now pays sales tax? I am getting out of order myself, Mr. Chairman.


George Ernest Wood: I quite agree with the minister, and the only point on which I disagree with him is that in practice the farmers have not been able to purchase their requirements.


Charles Avery Dunning: Taking the sales tax off would not help them-not when it is already off.


George Ernest Wood: Gasoline for agriculturists is exempt from tax.


Charles Avery Dunning: That is not a federal tax.


George Ernest Wood: No-true. But the hydroelectric commission of Ontario will give a rebate on the purchase of certain electrical

Income War Tax Act
equipment for use in kitchens; and also there is what amounts to a subsidy in connection with some farm	equipment-they	will
subsidize the construction of rural lines to stimulate the purchase and installation of such equipment. There is no reason why the federal government should not make some contribution to the elevation of the standard of living of farm homes. If that were done,
I believe that the hon. member who sits in the opposite corner would not have the opportunity to wax eloquent about the poverty, degradation and distress of people who live in the cities. High standards of living in the city have been a magnetic attraction to young men and women on the farms, inducing them to go to the urban areas where living is easier and one can enjoy the fruits of science, industry and invention.


Frederick George Sanderson: Order.


George Ernest Wood: I am sorry, Mr. Chairman.
I did not want to get away from the subject, but after all there should be some way of discussing this phase of the matter a little more fully. If this move for the assistance of industry is a success, possibly in another year's time there will be an extension of some of its principles to agriculture. To exempt farmers from income tax would be a paradox, because no farmer has an income large enough to qualify him for income tax. He should be exempted from sales tax: thus he would be enabled to share in the benefits accorded to other classes of society.


Robert John Deachman: I desire to correct a statement made by the Minister of Finance. It was, I know, quite inadvertent. In my speech the other day I said this:
Would it not be better to lower the sales tax and increase demand?
That does not mean, to abolish it.
If the sales tax could be removed and the sum now absorbed by that tax were used in the purchases of commodities, this would increase the demand for commodities.
That is, I was suggesting what would result from the complete removal of the sales tax.


Charles Avery Dunning: That is what I replied to.


Robert John Deachman: But my hon. friend did not quote the qualifying sentence which followed that. I simply presented a broad outline of what would happen economically from the removal of the sales tax, and I naturally implied that my hon. friend, who is a greater expert in figures than perhaps any other man in the house-


Charles Avery Dunning: Oh, no.


Robert John Deachman: -would be able to divide the total of the loss, that is, divide 126 by 8, and thereby obtain the effect of a one per cent reduction, and apply it. I went on to say this:
I fancy that the answer of the Minister of Finance . . . will be, quite clearly and reasonably, that we need the revenue. That is obvious; but at least a start could be made.
That is all. My hon. friend gave this as coming from me:
I have no criticism to make of his theory, but it would be a bold Minister of Finance who would to-day propose the abolition of $120,000,000 to $130,000,000 of revenue in the belief that, filtering through in some way, some of it would come back.
I did not make that suggestion, and the minister should not have quoted me to that effect.


Mr. ESLING:: I think the minister's predominant purpose is to emphasize the face that the object of this resolution is the relief of unemployment. But it seems to me that there are going to be complications entering into one's income tax return, particularly in so far as it relates to real estate, or rather to buildings, because in making his income tax return one must differentiate between repairs and capital expenditure. The department is emphatic in that regard. For instance, if one repairs a roof, that goes into "repairs", but if he finds that the building needs a new roof, it is capital expenditure; likewise with regard to the laying of a concrete floor. Does the minister not think there will be a lot of complications in connection with real estate? Because, in relation to these expenditures, the man who has his investment in a building is not far removed from the man who makes his investment in a small industry.


Charles Avery Dunning: No distinction in that
regard is being made which does not now exist. In making up the income tax return to-day, there must be a distinction between capital and repairs and betterments. The same distinction will have to be made, but there will be no difference in that regard at all. Of course only those expenditures which are of a capital character can qualify under this legislation. But there will be no additional complication in the income tax return itself.


William Kemble Esling: To-day a new floor, for instance, is considered as capital expenditure; if you merely patch the floor, that is a repair. The inspectors going through the country have been emphatic on this point. The collectors have also disallowed deductions for
Income War Tax Act

anything called a repair if it is the laying of a completely new floor or the putting on of a new roof. In future, we take it, for purposes of the income tax return, every expenditure on a building will be classed as "repairs". Would not that follow?


Charles Avery Dunning: As a result of this legislation there may be a greater effort on the part of the taxpayer to get his repairs classified as capital. At the present time of course the taxpayer endeavours to get everything classified as a repair expense, because that constitutes an expense deduction as against the income. But there is no intention to make any difference in the departmental rulings in that regard. The difference may be in tendency on the part of the taxpayer himself: he is always trying to get the most favourable construction of whatever he does. That, I believe, has been said, by a very high authority in the privy council, to be his right. But the administration will be exactly the same as before.


William Kemble Esling: But is it not of far more advantage to the taxpayer to put all such expenditure under the heading of repairs, when he is allowed a deduction? He has his allowance for that, but he has no allowance for capital expenditure.


Charles Avery Dunning: Well, under this legislation he gets an allowance for capital expenditure; that is introduced for the first time. But the administration in respect of what will be regarded as repairs will be exactly the same in the future as it has been in the past.


Angus MacInnis: I do not wish to take up much of the time of the committee in trying to get either the Minister of Finance or the hon. member for Brant to see my point of view. It is quite impossible to put a whole philosophy into a few remarks at a time like this.


Charles Avery Dunning: Particularly-and keep in order at the same time.


Angus MacInnis: Yes. I should like to say to the hon. member for Brant that if on occasions I do look sad, it is largely because of the impossibility of making intelligent or seemingly intelligent people see the obvious.
I am not expressing a theory; I am pointing out a definite fact.
I did not say, as the minister suggested I said, that every improvement in industry led to unemployment-that is, not directly; I said that under our system it does after a time.


Charles Avery Dunning: I do not agree.
TMr. Esling.J


Angus MacInnis: If the minister does not agree, how does he account for there being some 20,000,000 unemployed in the United States, some 500,000 in Canada, some 2,000,000 in Great Britain? Is it because our machinery of production is not productive enough? No; it is because it is too productive. Everyone knows that. The hon. member could not take a worse example than the cotton industry in Great Britain. The point of view I am expressing to-day is a long way from the point of view which about seventy-five years ago led the Manchester workers to smash the machines. What prompted them to smash the machines at that time we now see almost every day. Take a street railway in any big city. Suppose it were decided to eliminate that form of transportation and to substitute buses. What would happen? You would soon find those with capital invested in the street railway getting their lawyers on the job. They would not go out and smash the buses; they have a far more polite and more efficient technique than that.
But what really happened in Great Britain in the cotton industry was this. Great Britain began manufacturing cotton with machinery when she was the only country in the world doing so. You have a situation something like this: Company A manufacturing cotton goods, company B manufacturing cotton goods-producing machinery, engines, looms, spinning jennys and so on. When company B has supplied all the machinery that can be absorbed by A in Great Britain, it is faced with one of two courses. It can either close its plants until obsolescence or depreciation calls for new machinery or it can look for markets abroad. Company B adopted the second course; it exported abroad. Well, the moment the British manufacturers of cotton machinery began to ship their machinery abroad they began to destroy the markets for British cottons. In the period between 1914 and 1925, whole cotton manufacturing plants were shipped from Great Britain to the orient. And not only the plants, but men skilled in the operation of the machines were sent to show the Chinese and the Japanese how to run the plants. The result was that in a very few years British shipments of cotton to China were cut in half, and Britain's market is only a very small part to-day of what it once was. Indeed, a board has been set up in Great Britain to advise on the scrapping of surplus cotton manufacturing machinery. The number of spindles and plants for the manufacturing of cotton has been substantially reduced.

Income War Tax Act
I do not wish to say any more on this matter, but the point I put forward is not a theory but a self-evident fact that stares us in the face every day.


Mr. QUELCH:: In our opinion this measure is working from the wrong end. We can at all times trust industry to expand its operations when necessary in order to cope with effective demand. I agree with the Minister of Finance, and we have always agreed, that the prosperity of the people under the present system depends to a large degree upon the volume of capital goods produced. Just as recently as the debate on the $750,000,000, I emphasized the fact that it was necessary to maintain a sufficient volume of capital goods production so that the salaries and wages paid in the capital goods industries would be equal to the deficiency of the purchasing power paid out in the consumer goods industries. But what is the use of increasing capital equipment unless you have an effective demand for the goods produced? And we have not effective demand for goods produced even by obsolete equipment.
On various occasions we have stressed the monetary action which we thought was necessary to increase consumer demand against goods that can be produced. At the present time we should not merely abolish the sales tax in order to increase the demand for goods, but I suggest that we should even go so far as to give a price discount in place of the present tariff. Suppose we reduced the tariff by 10 per cent and gave a discount of 10 per cent on Canadian goods; then we should have a decrease in the price instead of an increase. In other words, I advocate that we take steps similar to those taken in Alberta where a three per cent discount is allowed on goods produced in the province.


Frederick George Sanderson: I do not like to interrupt the hon. gentleman, but I would ask him to confine his remarks to the resolution, which has to do with income tax.


Victor Quelch: I was only suggesting that we could reach the minister's objective more efficiently by increasing effective demand directly through an increase in consumption instead of by trying to reduce costs of capital equipment.


Mr. HEAPS:: The minister referred to the fact that labour in years gone by had shown hostility to improvements in machinery.


Charles Avery Dunning: I did not say labour; I said those who objected at that time.


Abraham Albert Heaps: Well, the working people.


Charles Avery Dunning: There were many others.


Abraham Albert Heaps: The working people in those days did show signs of hostility to the introduction of modern equipment into industry. In a general way we do not object to technological improvements even to-day, but we do object to the fact that all the benefits of such improvement accrue to very few people and not to the masses of the population who have a right to expect some advantage from our progress in the technique of production. That is where the real complaint lies so far as labour is concerned. It is not a matter of objecting to the mechanization of industry and the introduction of more up-to-date methods. What we object to emphatically is that the few owners of the equipment receive the whole advantage from modern technique.
The minister declared that one of the advantages of the motion before the committee will be the replacement of obsolete equipment with more modem machinery, thereby giving these industrialists a chance to compete on better terms either in the home market or in the markets of the world. I submit that it is not the duty of the government to assist any wealthy industry in acquiring more up-to-date equipment. I should not be surprised if the minister had in mind the textile industry.


Charles Avery Dunning: Nothing was further from my mind. I was thinking of a number of small industries which have communicated with me in that sense.


Abraham Albert Heaps: Information has come to me that the textile industry has a certain amount of obsolete equipment.


Charles Avery Dunning: I do not know about that.


Abraham Albert Heaps: I was so informed on good authority in the last few days.


Charles Avery Dunning: I should be glad to get the information. I had not heard of it.


Abraham Albert Heaps: I am willing to give the minister the source of that information if he wishes to have it. These industries, who we have been told are running on an efficient basis, are wealthy organizations who can well afford to put in improvements without government aid. If my information is correct, and I believe it is, these large industrial corporations in Canada, who are in a position to do these things for themselves, ought not to be given a rebate of income tax simply because they are going to modernize their equipment. If they modernize their plants, they do it for their own benefit. My objection is that we are giving rebates on income tax to people who can well do without

Income War Tax Act

them. I would rather, if benefits are to be given to taxpayers, give it to those who really need the benefit of reduced taxation.
Paragraph as amended agreed to.
2.	That any metalliferous mine that comes into production after the 31st day of December, 1939, and prior to the 1st day of January, 1943, shall be exempt from income tax for the first three fiscal periods following the commencement of production.


Mr. SENN:: A few days ago the minister brought down supplementary ways and means resolutions which I think are additional amendments to the Customs Act. But as far as I can learn there were no additional resolutions brought down to amend the Special War Revenue Act.


Charles Avery Dunning: If my memory serves me aright, there are none applying to the Special War Revenue Act.


Mark Cecil Senn: Is there any chance of further resolutions being brought down? The particular item I have reference to is that which has to do with vegetable oils. When the minister was making his budget address he stated that the government had already made application to the British government for the privilege of putting into effect the recommendations of the tariff board. The tariff board recommends, in regard to vegetable oils, that those taxes could be imposed by inserting in schedule II to section SO of the Special War Revenue Act-


Frederick George Sanderson: Order. I regret to interrupt the hon. member, but he is referring to the Special War Revenue Act. We are dealing with the Income War Tax Act. We have adopted the amendment and passed the first paragraph of the resolution. We are now on the second paragraph.


[Stage Direction]
Paragraph agreed to.
3.	That dividends paid by a metalliferous mine to a Canadian company during the period that such metalliferous mine is exempt from taxation under section eighty-nine of the act shall be exempt in the hands of such Canadian company.
Mrs. BLACK:: I wish particularly to say
to the minister what a relief it was to many in my own territory to learn that this exemption from taxation included not only lode mining but placer mining as well. Men who have gone into that country-raising from friends and families perhaps SI ,000 or $1,500 to last them for the year that they might prospect-who have brushed out trails five and ten miles, and perhaps at the end of the summer have made only $1,000 or perhaps nothing at all, now find that they can go

on with their work, and repay what they have borrowed without having to pay income tax. Our people are very much pleased with that.


[Stage Direction]
Paragraph agreed to.
4.	That the tax imposed at the source on payment by Canadian debtors to non-residents in respect of films, whether copyrighted or not, be increased to 5 per centum on the total amount of such payments.
Paragraph agreed to.
5.	That salaries, bonuses, directors' fees, or other like remunerations, paid by Canadian companies to a non-resident, in excess of $14,000, shall not be allowed as an expense of such Canadian company.
Mr. MacNICOL:: How is the amount of
$14,000 arrived at?


Charles Avery Dunning: It is the same figure as
is used to determine the dividing line between investment income and earned income in our general income tax law.


[Stage Direction]
Paragraph agreed to.
6.	That general overhead expenses of companies shall be rateably apportioned between the taxable and the non-taxable income of such companies.
Abraham Albert Heaps: Is there any change in
this?


Charles Avery Dunning: There is a change, the
object being to ensure that expenses charged to income shall be fairly charged. It is a technical administrative change which will enable expenses properly chargeable to investment income to be charged against investment income and not against operating income.


Abraham Albert Heaps: Is there likely to be any
confusion, unless some special method is prescribed as to how it shall be done?


James Lorimer Ilsley: There may be some difficulty, as there is about many other taxes, but I think we shall be able to work it out satisfactorily.	.
This resolution I think should be amended. The word "rateably" carries the idea of proportionately. Therefore I move:
That paragraph 6 of the Income War Tax Act resolutions be amended by striking out the word "rateably" so that the said resolution as amended will read as follows:
"6. That general overhead expenses of companies shall be apportioned between the taxable and the non-taxable income of such companies."


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

Special War Revenue Act
7.	That where any estate or trust is taxable under the act it shall not receive a personal exemption of one thousand dollars.
Mr. TAYLOR (Nanaimo):: How does this apply?


James Lorimer Ilsley: It makes it clear that the $1,000 exemption which ordinarily applies to single individuals does not apply to trusts and associations.


James Samuel Taylor: What about the estate of a deceased person?


James Lorimer Ilsley: It does not apply now to estates of deceased persons.


[Stage Direction]
Paragraph agreed to.
8.	The dividends paid by a personal corporation out of capital gains after all the income of such corporation has been taxed against and received by its shareholders shall be exempt from taxation.
Abraham Albert Heaps: Is there any change here?


James Lorimer Ilsley: It is to permit the dividends paid out of capital of personal corporations to go tax free; otherwise it would be a tax on capital instead of a tax on income. The income is all taxable still.


Abraham Albert Heaps: Is it any change from what has been the custom in previous years?


James Lorimer Ilsley: No, there is no change in the practice of previous years.


Charles Avery Dunning: It is to clarify.


[Stage Direction]
Paragraph agreed to.
9.	That the resolutions numbered 3, 5, 6, 7 and 8 shall be applicable to the incomes of 1938 and fiscal periods ending therein. Resolution numbered 4 shall be applicable on April twenty-sixth, one thousand nine hundred and thirty-nine. Resolutions numbered 1 and 2 shall come into force as indicated therein.
Paragraph agreed to.
Resolution agreed to.

[Stage Direction]
Resolved, That it is expedient to introduce a measure to amend The Special War Revenue Act, and amendments thereto and to provide:
1. That section 88 of the said act be struck out and the following substituted therefor:
"88. (1) In addition to any duty or tax that may be payable under this part, or any other statute, there shall be imposed, levied and collected a special excise tax of three per cent on the duty paid value of all goods imported into Canada subject to entry under the general tariff payable by the importer or transferee who takes the goods out of bond for consumption at the time when the goods are imported or taken out of warehouse for consumption: Provided that when raw furs imported into Canada are exported therefrom, a drawback of the tax paid may be granted under regulations to be made by the minister.
(2) The tax imposed by this section shall not apply to:
(a)	The articles enumerated in schedule 'V to this act.
(b)	Goods, the duty paid value of which does not exceed twenty-five dollars, when imported by mail or express, or by the owner thereof when entering Canada unless more than one entry of such goods be made by one importer during one day from one country, in which case the tax shall be applicable."
Mark Cecil Senn: A few moments ago I asked the minister if he expected to have any reply from the United Kingdom government as to the request made for permission to implement the recommendations of the tariff board in regard to vegetable oils.


Charles Avery Dunning: As I intimated this morning in reply to the hon. member for Comox-Alberni, I expect to be able to make a statement later. I am not in a position to do so at the present time, because certain communications in this regard are still in process of transmission between the United Kingdom government and ourselves. But I can promise the committee that I will make a statement just as soon as I can. My hon. friend is no more anxious to hear it than I am to make it.


Mark Cecil Senn: I confess I am anxious to hear such a statement. Before these amendments to the Special War Revenue Act are finally passed we should very much like to hear it. Would it be possible for the minister to hold this over until t)he statement is made?


Charles Avery Dunning: I have the mechanics of the matter pretty well in mind. I can assure my hon. friend that as a result of that message there will be no mechanical difficulty in doing what the committee may want to do.


Joseph Henry Harris: The mechanics, I imagine, will not come under this Special War Revenue Act, unless the minister introduces another ways and means resolution similar to the last one, inasmuch as the tariff board report distinctly says that these taxes could be imposed by inserting in schedule II to section 80 of the Special War Revenue Act, chapter 179, revised statutes of Canada, 1927, the following:
(4)	Vegetable shortening and lard compound; on the vegetable oil content thereof, by weight, 3 cents per pound.
(5)	Soaps of all kinds: on the vegetable oil content thereof, by weight, 2 cents per pound.
After this resolution passes we on this side of the house will have no opportunity, except on the orders of the day, again to introduce the matter. We have the assurance of the minister that he has in mind the mechanics of how it is to be done, and I do not think it would be good form for us even to ask what
Special War Revenue Act

those mechanics are. We on this side of the houise are anxious that the business be dispatched as quickly as possible, but at the same time we must exercise our rights as best we know how. I am satisfied with the assurance of the minister in regard to the mechanics of operation, and if he would rather not divulge any information on that subject we shall be quite content.


Charles Avery Dunning: I have no objection to making a .statement. At the moment we are in the awkward position that my hon. friends find difficulty in discussing a matter which is not included in the present resolutions. That is obviously their difficulty, and it is one in which at the moment I cannot help them. I hope later to make a statement with regard to the matter, but it is doubtful whether a discussion will be in order at that time except upon anything that may follow in the way of a specific resolution; and I do not want to anticipate anything. I should not like my hon. friend's face to light up with hope and later have that hope completely dissipated. Nothing bothers me more than to see the hon. member for Danforth gloomy; it is not his natural habit. I prefer to see his expansive smile rather than the gloomy look which might come over his face if what I have to say later should not be pleasant. All I can say is that when we have the matter before us we can discuss it if that is in accord with the rules of the house, and that if it is not we cannot. The rules are for me as well as for all other hon. members. There is no discussion in order at the moment, in any event.


John Ritchie MacNicol: I should like an explanation of paragraph (b) in section 2.


James Lorimer Ilsley: Is my hon. friend referring to goods the duty paid value of which does not exceed $25?


John Ritchie MacNicol: Yes.


James Lorimer Ilsley: That provision has always been there; it is not new.


John Ritchie MacNicol: There is no change?


James Lorimer Ilsley: No.


[Stage Direction]
Paragraph agreed to.
2. That any enactment founded on this resolution shall be deemed to have come into force on the twenty-sixth day of April one thousand nine hundred and thirty-nine, and to have applied to all goods imported or taken out of warehouse for consumption on and after that day and to have applied to goods previously imported for which no entry for consumption was made before that date.
Paragraph agreed to.
Resolution agreed to.

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend The Excise Act, 1934, and amendments thereto and to provide:
1. That the schedule to the said act which sets out the excise duties to be imposed, levied and collected on spirits distilled in Canada be amended by striking out subsection (c) of section 1 of the said schedule and substituting therefor the following:
"(c) On every gallon of the strength of proof used in any bonded manufactory in the production of vinegar, sixty cents, and so in proportion for any greater or less strength than the strength of proof and for any less quantity than a gallon;"
Abraham Albert Heaps: I suppose this change is being made in order to give Canadian producers of apple cider an opportunty to manufacture more of that product. I understand this will have the effect of increasing the cost of vinegar to a fairly large extent. Can the minister give us some idea of what that increase to the domestic consumer really will amount to?


Charles Avery Dunning: I am unable to say that the cost of vinegar to the consumer will be increased. What we expect is that there will be a much larger market than now exists for cider vinegar manufactured from low grade apples. The latest figures I have from the bureau of statistics in regard to the production of vinegar in Canada are for 1937, but they will give some indication of the situation. During that year the production of spirit vinegar amounted to 3,718,000 gallons; of cider vinegar to 1,166,000 gallons and of malt vinegar to 221,000 gallons. The object of this amendment of course is to create a larger market for apples of the type that can be used for the production of cider for the manufacture of vinegar.


Mark Cecil Senn: Just how did the minister
arrive at this figure of 60 cents? I understand that the original brief of the horticultural council asked for $1.15, and here that figure has been practically cut in two. Does the minister consider this will be sufficient to stimulate the production of cider vinegar to the extent he hopes it will be stimulated?


Charles Avery Dunning: It is true that the request of the horticultural council, representing the apple producers of the dominion, was for $1.15 per gallon. When people come to governments asking for what amounts to protection they are never modest in their requests, and certainly they have no idea of mercy toward a possible competitor in that field. I can assure my hon. friend that after working at the matter for some time with the officials of the department the figure of 60

Excise Act
cents was arrived at. Since the budget came down there has been time for those concerned all over the country to estimate the possible effects of this legislation in creating a market for low grade apples, and I have received nothing but commendation from apple producers and organizations of producers all the way across Canada. So I am inclined to the view that the figure at which we have arrived will fairly represent the object which it is sought to attain.


Mr. STIRLING:: I should like to offer a
word of commendation and gratitude to the minister for having at last given us this assistance. The apple growers-and I speak principally for those in British Columbia-for years have endeavoured to secure this assistance in order to follow the advice which has been given by departments of agriculture for many years that they endeavour to deal with their low priced fruit and get it off the ripe market. The difficulty for some time has been that wholesalers and retailers have been sold on the desirability of spirit vinegar, but in more recent years certain producers of pickles and so on have actually desired cider vinegar as a softer vinegar, and they do not dislike the slight flavour which remains. I had a bottle of this latest cider vinegar in my hands a couple of days ago. It is absolutely clear; it looks exactly like water, and is a perfect product. Just now an hon. member referred to the cost. The extra cost of manufacturing spirit vinegar is not expected to exceed 4 cents a gallon. By the time that reaches the consumer, if it ever does, it will have very little effect on what he has to pay.
At one o'clock the committee took recess.
The committee resumed at three o'clock.


Frederick George Sanderson: We were on paragraph 1 of the resolution dealing with the amendment to the Excise Act.


Mr. GLADSTONE:: Several members are
interested in this resolution, coming as they do from localities where old established manufacturers of vinegar, pickles, tomato sauces, ketchup and other such products are located. I understand that representations have been made on behalf of these manufacturers. I should like to speak on behalf of an industry which is located at Guelph, and also for the hon. member for St. John-Albert (Mr. Mc-Avity), who is absent to-day. As I understand it, these manufacturers were not made aware of the proposed changes and did not
have any opportunity of making representations. They claim that this tax will have the effect of increasing the cost to the consumer of spirit vinegar, not only in Ontario but in the prairie provinces, Quebec and northern Ontario, where cider vinegar is not acceptable or desired by the consumer. There will be an increased cost of manufactured products in which vinegar is an important component part, and in the cost of articles in which only spirit vinegar can be used. Cider vinegar is not satisfactory in many cases, because it changes the whole character of the product. This additional tax will mean that the total tax on alcohol will be 60 cents per proof gallon as against a basic alcohol cost of 38 cents per proof gallon. The tax will be far in excess of the cost of the alcohol, which in the opinion of these manufacturers is not reasonable. Another manufacturer states as follows:
The passing of such legislation indicates to us complete lack of understanding on the part of those responsible for such legislation of the basic and fundamental differences between spirit and cider vinegar. Cider vinegar is a fermented vinegar made by natural alcoholic fermentation of sweet cider into hard cider, followed by the generation of this alcohol into acetic acid. Properly manufactured, the resulting vinegar is a very satisfactory table vinegar, the acidity of which is controlled by the amount of sugar which appears to be available in the apples used. Because of the method of manufacture, the vinegar naturally contains a certain amount of organic substance other than acetic acid which does not detract from the vinegar as a table vinegar but which very definitely detracts from this vinegar if it is used for pickling or preserving purposes.
We are very large manufacturers of cider vinegar in the states but because of the above never recommended cider vinegar for pickling purposes but have always stressed the advantage of using distilled or spirit vinegar. In our own manufacturing operations, we confine ourselves to distilled and spirit vinegar in the manufacture of ketchup, pickles, etc., because it is the very best vinegar possible to use for this purpose and for this reason we would not be influenced to use cider vinegar regardless of what excise taxes or extra costs might be put on distilled vinegar.
For pickling purposes, the two vinegars are not interchangeable but are two distinct products. Placing a penalty tax on the one only tends to increase the cost of the finished products and will have no effect on the volume of this product because the other vinegar cannot be substituted for a spirit vinegar.
Spirit vinegar is made very much as whiskey is made in its preliminary steps in that a mash of grains is malted and then fermented to produce alcohol which is distilled off from the mash in the form of spirits. These spirits are properly generated into distilled vinegar by passing through large generators filled with beech wood shavings with the result that all the alcohol contained in the spirit is converted into acetic acid. Such a vinegar contains nothing but the acetic acid plus the volatile esters
Excise Act

which gives a boquet and aroma to the product. Because of the distillation process through which the vinegar is passed, all organic matter other than acetic acid is eliminated from the product which makes this vinegar an _ ideal vinegar for preserving purposes. This vinegar has a boquet and aroma of its own that is distinct from the flavour of cider vinegar and as this distilled vinegar has been used for generations for the purpose of pickling and preserving, it is not possible to substitute cider vinegar in its place without upsetting the flavour of the products in which it is used as well as interfering with the keeping qualities of the products in which cider vinegar might be used.
This increase in the tax on vinegar from 27 cents to 60 cents per gallon has come unexpectedly, and the result is that the vinegar and pickle manufacturers stand to suffer a great loss on contracts already entered into. If the government considers that from the point of view of the apple industry it is necessary and advisable that this change be made, perhaps it might be postponed until October 1, when the manufacturers begin to manufacture spirit vinegar for 1940. If this postponement were made, the manufacturers could complete their contracts without loss and would then have warning of the increase in tax which would apply for the next preserving year.


Mr. CLARK (Essex South):: There is just a question or two I should like to ask the Minister of Finance. I believe it has been suggested that cider vinegar should be distilled and used by certain manufacturers. Would it not then come under this sixty cent tax? The Department of Agriculture prepared a memorandum, with which I believe the minister is familiar, in which it was suggested that distilled cider vinegar might be used by certain manufacturers who would not use ordinary cider vinegar. I do not .believe there are many manufacturers who use cider vinegar in their products. The minister is no doubt familiar with this report, which explains a certain commercial process in the making of cider vinegar. I believe that it will come under the sixty cent tax as well.


James Lorimer Ilsley: It is news to me that spirits are made from apple juice; I do not think they are. Only the spirits used in vinegar are taxable at the higher rate, not the cider.


[Stage Direction]
Paragraph agreed to.
2. That any enactment founded on this resolution shall be deemed to have come into force on the twenty-sixth day of April one thousand nine hundred and thirty-nine.
Paragraph agreed to.
Resolution agreed to.
[Mr. Gladstone.)

[Stage Direction]
1. Resolved, that schedule A to the Customs Tariff, being chapter forty-four of the Revised Statutes of Canada, 1927, as amended by chapter seventeen of the acts of 1928, chapter thirty-nine of the acts of 1929, chapter thirteen of the acts of 1930 (first session), chapter three of the acts of 1930 (second session), chapter thirty of the acts of 1931, chapter forty-one of the acts of 1932, chapters six and thirty-seven of the acts of 1932-33, chapters thirty-two and forty-nine of the acts of 1934, chapter twenty-eight of the acts of 1935, chapter thirty-one of the acts of 1936, and chapter twenty-six of the acts of 1937, be further amended by striking thereout tariff items 39, 39a, 39c, 39d, 53, 54, 54a, 55, 63a, 77a, 87 (n), 98, 98a, 117, 170, 171a, 172, 172a, 173, 174. 175. 176, 177, 178b, 183, 184, 203, 208g, 208h, 210b. 220(a) and (b), 241, 241a, 255, 265b, 289. 326f, 343, 346a, 386(c), 390c, 409(e) (ii), 417, 422a, 427b, 427e, 427h, 435, 438e(3), 445d, 446g, 448, 454, 462b, 466. 476(i) and (ii), 537c, 549e, 569e, 571a, 587b, 597a, 616, 618c, 652, 657b, 663c. 664b, 682a, 696, 804, 810, 814, 816, 818, 825, and orders in council P.C. 1414 and P.C. 2736, the several enumerations of goods respectively and the several rates of duties of customs, if any, set opposite each of the said items, and by inserting the following items, enumerations and rates of duty in said schedule A:
Items 39, 39a, 39c, 39d and1 39e agreed to.
Customs tariff-53. Cornmeal: British preferential tariff, free; intermediate tariff, 50 cents per barrel; general tariff, 60 cents per barrel.
John Ritchie MacNicol: Is there not an advance in these duties?


Charles Avery Dunning: Has my hon. friend before him the document containing the ways and means resolutions, showing the comparative rates? I think the answer to his question is there. There is a small change, yes.


Mr. COLDWELL:: I think the hon. member wanted to know why the increase was made. That question is not answered in the document.


Charles Avery Dunning: I did not get that question. This increase is incidental to the revision of the whole corn tariff, the items of which have just been passed. The increase is to equalize things for the processors because of the additional duty they will have to pay as a result of what has gone before.


[Stage Direction]
Item agreed to.
Item 55 agreed to.
Customs tariff-77a. Cocoa beans, not roasted, crushed or ground: British preferential tariff, free; intermediate tariff, $1.50 per one hundred pounds; general tariff, $3 per one hundred pounds.
Major James William Coldwell: There is quite an increase under the general tariff.


Charles Avery Dunning: Frankly, without mentioning any particular country, this increase under

Customs Tariff
the general tariff is to facilitate the making of trade treaties with some countries which are at present on the general tariff. By entering into a trade treaty with us they will- get the advantage of the intermediate rate, which is unchanged.


[Stage Direction]
Item agreed to.
Customs tariff-87 (n). Tomatoes: British preferential tariff, free; intermediate tariff, 274 per cent, hut not less than two cents per pound; general tariff, 30 per cent, but not less than three cents per pound.
Grote Stirling: The tomato growers have been travelling a pretty difficult road for the last year or two and they will appreciate this assistance in so far as it affects that flood of cheap tomatoes coming in from Mexico, where they are grown by peon labour. It would have no effect on the tomatoes which come in from the various states of the union; that is covered by the new agreement, and there is no value for duty on tomatoes. Can the minister assure the producers that their suggestions as to dates on which the values for duties are to be proclaimed will be listened to? I should be addressing perhaps the Minister of National Revenue.


James Lorimer Ilsley: That does not apply to tomatoes.


Grote Stirling: It does not apply to tomatoes, but I should like on this item, if I may, to ask the more general question, whether the minister can assure me that the views of the producers will be given due weight before he sets the dates in the various parts of Canada to which the duties will be applicable.


James Lorimer Ilsley: Oh, yes, their views are always respectfully considered. The dates are not always fixed as requested, but their views are always given due weight.


Mr. McNIVEN:: There are two and a half million people on the prairies who have cultivated a taste for tomatoes, and this rate practically doubles the duty on tomatoes. This morning the minister mentioned having put into effect dumping duties on strawberries. There are two and a half million people in the prairie provinces who have not tasted strawberries this year and who would like to have the opportunity of doing so without having to pay double or more. Tomatoes and strawberries are fine foods, scarce on the prairies, and very much to be desired there.


James Lorimer Ilsley: The item of strawberries is not under consideration. I think the hon. member for Yale had perhaps strawberries in mind when he asked whether the representations of the growers would be considered.
Here we have an instance of the conflict of interest between producers and consumers. It is true that the valuation on strawberries was not fixed as early as was requested by one of the British Columbia organizations, perhaps the main organization. But their representations were carefully considered by the Department of National Revenue, and it was because of the considerations just now urged by the member for Regina that we did not feel we could apply the duty as early as desired by the British Columbia interests. All that the department can do is to weigh as carefully as possible both sets of representations and both sets of interests, and do the best it can under all the circumstances.
With regard to tomatoes I would point out to the hon. member for Regina that this is just an increase in the general tariff. It does not affect the intermediate tariff against the United States, which is the main source of supply for the prairies.


Donald Alexander McNiven: It is nearly double.


James Lorimer Ilsley: Not against the United
States.


Major James William Coldwell: The specific duty is fifty per cent higher.


Charles Avery Dunning: My hon. friends are misunderstanding the situation. The United States agreement is the ruling rate with respect to intermediate tariff countries. The only change made here is with respect to countries coming under the general tariff. The United States agreement rate is ten per cent but not less than 14 cents per pound. That is the governing rate for all intermediate tariff countries, and I am quite sure that the hon. member for Regina will be able to buy his tomatoes to-morrow morning just as cheaply, because the principal foreign source of supply for the prairies is the United States.


Grote Stirling: We growers from British Columbia fully apreciate the difficulty the minister has in setting the date. A great improvement took place when Canada was zoned and different dates were applied to the three different zones. We fully appreciate that it is a difficult matter to decide. All I wanted was an assurance that the producers' request will be given due weight. May I just say to the hon. member for Regina that if the consumer will be just a little patient he will get far better fruit and vegetables from the Canadian production, and they will have some flavour.


Mr. LANDERYOU:: There has been an increase in the general tarff rate on tomatoes.
Customs Tariff


Charles Avery Dunning: In the general tariff only, yes.


John Charles Landeryou: An increase of one cent per pound. What countries from which we are getting tomatoes in large quantities come under the general tariff? Mexico?


Charles Avery Dunning: Well, the country principally affected by this change will be Mexico. So far as our existing sources of supply are concerned, the only country under a general tariff is Mexico.


John Charles Landeryou: What quantity of
tomatoes came in last year from Mexico under the old rate?


Charles Avery Dunning: Eighteen million pounds.


Mr. BLACKMORE:: Were they imported all through the summer, or was there a dumping provision when our tomatoes came in?


Grote Stirling: No-no dumping duty on tomatoes.


Charles Avery Dunning: It is seasonal, of course. There is a small importation over eight months or thereabouts, but it is a large factor only during a small part of that time. We get tomatoes from the United States, Mexico, the British West Indies, Bermuda, Cuba and Jamaica. The principal sources of supply are the United States, Mexico and the West Indies.


John Horne Blackmore: Do we have any canned tomatoes coming in-


Charles Avery Dunning: This does not deal with canned tomatoes at all-just fresh tomatoes.


[Stage Direction]
Item agreed to.
Customs tariff-98. Bananas, per stem or bunch: British preferential tariff, free; intermediate tariff, 50 cents per stem or bunch; general tariff, $1 per stem or bunch.
Mr. MUTCH:: Will the minister indicate the effect of this resolution on the distribution of imports of bananas?


Charles Avery Dunning: This change is wholly confined to the general tariff, and, quite frankly, is intended to make some of the exporting countries rather more willing and anxious to enter into a trade agreement with us than is now the case. But it does not affect our major importations.


John Charles Landeryou: What countries are affected under the general tariff increase?


Charles Avery Dunning: I am a little diffident, when I give a general explanation of our desire to promote trade through the concessions which are made when a country enters into a trade agreement with us, about singling out particular countries any more than I

have to. My hon. friend can understand that it is a matter of negotiation. Our principal source of supply of bananas is Jamaica-by far the largest source of supply-and the other British West Indies in large volume, some from Ecuador, some from Fiji, and a few from Trinidad and Tobago at the present time.


John Charles Landeryou: What are the countries shipping under the general tariff schedule which will be affected by this increase of the rate?


Charles Avery Dunning: That is rather a difficult question to answer under the circumstances. We have given notice of termination of the British West Indies agreement, not with the idea that it will be terminated, but that, pending the time of expiry, we may be able to negotiate a new agreement with the West Indies. I need not point out, therefore, how important the subject of bananas becomes, in relation not only to the West Indies but also to other countries which are affected by the negotiations with the West Indian colonies.


Leslie Alexander Mutch: What is the main source of supply for the middle western provinces?


Charles Avery Dunning: Jamaica.


Leslie Alexander Mutch: Jamaica bananas come in under the preference?


Charles Avery Dunning: Oh yes, they are free.


Leslie Alexander Mutch: It has been represented to me that a large percentage of the bananas consumed on the prairies are obtained from these other countries which are affected by the tariff change. I wanted to make sure whether the minister had any information as to the correctness of that suggestion.


Charles Avery Dunning: I doubt it very much. The figures themselves tend to disprove it. Out of the total importation last year of
3.600.000	stems, 2,600,000 came from Jamaica,
436.000	from the United States, and 325,000 from the other British West Indian islands; so that my hon. friend can see that the westerners must have eaten British empire bananas last year.


Joseph Henry Harris: The minister mentioned the West Indies trade agreement and the termination notice which has been sent. Has he in mind a colonial treaty covering all the colonies?


Charles Avery Dunning: I think my hon. friend knows that it is never out of my mind, and if it should go out of my mind for twenty-four hours I can trust my hon. friend to remind me of it.


[Stage Direction]
Item agreed to.
Items 117 and 170 agreed to.

Customs tariff-Item 172. Books, pamphlets and charts, printed or published by any government abroad; official financial and business reports and statements issued by companies or associations abroad; books, pamphlets and reports, for the promotion of religion, medicine and surgery, the fine arts, law, science, technical training, and the study of languages, not including dictionaries. Scripture and prayer cards, and religious pictures and mottoes, not to include frames; books, bound or unbound, which have been actually printed and manufactured more than twelve years; manuscripts; insurance maps; freight rates, passenger rates and timetables issued by transportation companies abroad and relating to transportation outside of Canada, in book or in pamphlet form: Bntisff preferential tariff, free; intermediate tariff, free; general tariff, free.
John Ritchie MacNicol: There are half a dozen or more items here, from 170 down to 184, all having to do with the printing business.


An hon. MEMBER:: Carried.


John Ritchie MacNicol: Yes; when I get through it may be carried, but an hon. member interrupting will not help it carry. The printers in Toronto I am associated with, not in a business way, but whom I know^ very well, all complain of the contraction in business. I do not know whether these tariff items will injure them any more. Perhaps the minister will tell me what, if anything, will be the effect on the printing trade of these items?


Charles Avery Dunning: Almost all the items in question are free now. The changes here made are, practically altogether, changes in wording suggested by the customs administration for greater facility of administration. The actual tariff changes involved are practically negligible. On technical and professional books there is a reduction of the tariff by virtue of the United States agreement.


[Stage Direction]
Item agreed to.
Items 173, 178b, 183 and 184 agreed to.
Customs tariff-197e. Electric cable insulating paper, -0045 inch or less m thickness, and condenser tissue paper: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 25 per cent.
John Ritchie MacNicol: Is that manufactured in
Canada?


Charles Avery Dunning: It is not now manufactured in Canada.


[Stage Direction]
Item agreed to.
Customs tariff-203. Non-edible seeds, beans, nuts, berries, plants, weeds, barks, and woods in a crude state or chipped or ground, and extracts and preparations thereof, all of the foregoing when adapted for dyeing or tanning; turmeric, nutgalls and extracts thereof ; indigo, indigo paste and extracts of; aniline oil, crude; aniline salts, alizarin and artificial alizarin,
Customs Tariff
annatto, liquid or solid; iron liquor, being solution of acetate or nitrate of iron adapted for dyeing and calico printing; red liquor, being a crude acetate of aluminum prepared from pyroligneous acid and adapted for dyeing and calico printing: British preferential tariff free; intermediate tariff, free; general tariff, free.
Robert James Manion: I note that there is no
change. Is that merely a split-up of an item? Has a former item been divided into two?


Charles Avery Dunning: There is the insertion of the words, "all of the foregoing when adapted for dyeing or tanning." Free entry has been applied to these materials ever since 1906.
It was amended as to wording in 1932. At that time the limiting phrase which had previously been in the item was dropped. It is now proposed to reinsert it in order to conform to present administrative practice. The Department of National Revenue has continued to administer the item as if the words previously dropped had been retained.


[Stage Direction]
Item agreed to.
Items 206b and 208g agreed to.
Customs tariff-208h. Ethvlene glycol, when imported by manufacturers for use exclusively in the manufacture of anti-freezing compounds or of explosives, in their own factories: British preferential tariff, free; intermediate tariff, free; general tariff, free.
John Ritchie MacNicol: Are these regulations
merely for. the purpose of clarification?


Charles Avery Dunning: This is carried straight
out of the United States agreement into the tariff.


John Charles Landeryou: What were the total
imports and from which countries?


Charles Avery Dunning: The total imports of
ethylene glycol in 1938 for the manufacture of anti-freeze were 7,880,000 pounds, and for the manufacture of explosives, 1,510,000 pounds, in both cases from the United States.


[Stage Direction]
Item agreed to.
Customs tariff-208V. Methyl ethyl ketone; isopropyl acetate; butyl alcohol: British preferential tariff, free; intermediate tariff, 25 per cent; general tariff, 25 per cent.
Charles Avery Dunning: In the votes and proceedings of May 11 I gave notice of a few changes. I will ask my colleague (Mr. Ilsley) to move the amendment to this item, which will now read:
Customs tariff-208v. Methyl ethyl ketone and isopropyl acetate:	British preferential
tariff, free; intermediate tariff, 25 per cent, general tariff, 25 per cent.
This does not involve any change in rate, but the chemicals were formerly classified
Customs Tariff

under item 711. The item is included in schedule I of the Canada-United States trade agreement with a rate bound at 25 per cent. It is now inserted in the tariff proper to distinguish it from the rest of the item, on which the duty was reduced by the recent agreement.


James Lorimer Ilsley: I move the amendment.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-209b.	Nicotine; salts of
nicotine; preparations containing nicotine in a free or combined state, for dipping, spraying or fumigating, n.o.p.: British preferential tariff, free; intermediate tariff, free; general tariff 10 per cent.
due consideration, although not able to go the whole distance, I felt that a reduction was justified in respect to soda ash as distinct from sal soda. It is a very small reduction.
Mr. MAYHEW:: The duty has been removed entirely from pulp and considerably reduced on paper. Soda ash is used extensively in that industry, and I do not think it is getting full justice. Further consideration should be given it than it is now receiving. The same is true of item 39c. It is impossible for the Canadian manufacturers of pulp and paper to hold the market if they have to pay a duty on their raw material and sell on an even market with the manufacturers of the United States.


Charles Avery Dunning: This item appears in the votes and proceedings of May 11. It is simply a rewording of the existing item, which covers nicotine sulphate only, known as Black Leaf 40. For many years this item has provided for the free entry of nicotine sulphate, but recent developments have made available several compounds of nicotine which promise to be of considerable importance to the agricultural and horticultural industries. There is no change in principle, but simply a rewording of the item to keep up with technological improvements and to give agriculturists what was intended by the original item with regard to nicotine.


Harry James Barber: Is there much production in Canada?


[Stage Direction]
Item agreed to.
Customs tariff 220. All medicinal, chemical and pharmaceutical preparations, compounded of more than one substance, including patent and proprietary preparations, tinctures, pills, powders, troches, lozenges, filled gelatine capsules, tablets, syrups, cordials, bitters, anodynes, tonics, plasters, liniments, salves, ointments, pastes, drops, waters, essences and oils, n.o.p.: (a) When dry; British preferential tariff, 174 per cent; intermediate tariff, 20 per cent-general tariff, 25 per cent.
(b) Liquid, when containing not more than two and one-half per centum of proof spirit: Untish preferential tariff, 20 per cent; intermediate tariff, 274 per cent; general tariff, 40 per cent.
Harry James Barber: What is the amendment to item 220?


Charles Avery Dunning: None, so far as I can Mr- DUNNING: It is eliminating 220 ascertain.	altogether.


James Lorimer Ilsley: I move that the existing tariff item 209b be amended accordingly.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-210b.	(i) Barilla or soda
ash per one hundred pounds: British preferential tariff, 15 cents; intermediate tariff 25 cents; general tariff, 30 cents.
Ui.) Sal soda, per one hundred pounds: British preferential tariff, 20 cents; intermediate tariff, 30 cents; general tariff, 30 cents.
John Ritchie MacNicol: Why has the duty been reduced? Practically all this line of material manufactured in Canada is produced by the Brunner-Mond company of Amherstburg, Ontario. What was the reason for the reduction from 30 cents to 25 and from 25 to 15 cents?


Charles Avery Dunning: I received strong representations from the users of soda ash that their interests as consumers were not being fairly treated by the tariff as it stood. After
CMr. Dunning.]


[Stage Direction]
Item agreed to.
Items 241 and 241a agreed to.
Customs tariff-265b. Cod liver oil, crude or refined: British preferential tariff, free-intermediate tariff, 15 per cent; general tariff, 224 per cent.
John Ritchie MacNicol: What is the duty on cod liver oil entering the United States from Canada?


Charles Avery Dunning: It is free.


John Ritchie MacNicol: Then what is the reason for cutting this from 20 to 15 per cent? It gives that much more advantage to our competitors in our market.


Charles Avery Dunning: This item is not particularly in the interests of the United States. Canada has a very favourable balance of trade with Norway: ten to one. For a number of years Norway has been requesting some little consideration, particularly on this item, and after studying it over the past three

Customs Tariff
years I came to the conclusion that this was a concession which we might well make to a very good customer.


John Ritchie MacNicol: Will it have any injurious effect on our trade with Newfoundland?


Charles Avery Dunning: No, Newfoundland is free.


Alan Webster Neill: I think this item was discussed by the tariff board. I wonder whether by some process of analogous reasoning I could ask the question concerning this which I did on the orders of the day concerning vegetable oils.


Charles Avery Dunning: My hon. friend was not here this morning when the hon. member for Danforth (Mr. Harris) was also curious in that regard. I can only answer as I answered him- that I hope to be in a position to make a statement, and shall do so as soon as I can. At present I am not free to do so.


Joseph Henry Harris: Would it help the minister in his "mechanics" if this item were allowed to stand, since it is part and parcel of the tariff board report?


Charles Avery Dunning: This is not a tariff board item at all. It has nothing to do with vegetable oils.


Joseph Henry Harris: But it was considered in the report presented by the board.


Charles Avery Dunning: No, not in regard to that matter. It is entirely a budget item.


Joseph Henry Harris: Items 265a and 265b were considered by the tariff board at a hearing held on December 10, 1936, and representations were made. No recommendation in regard to any change of duty on 265b was made. I mention the possibility of that item standing in order to give the minister an opportunity to make a statement on application No. 99, referred to this morning. The minister was kind enough to say that he thought he had the mechanics worked out in his own mind as to how the statement would be made, but he qualified that by saying that he doubted very much whether when the statement was made there would be any opportunity for discussion or any further observations. In other words when we close this session we shall get a statement on the last day, and that will be the last word. I do not think the minister is anxious to shut off discussion. I merely mention this as being a small item which was considered and reported on in that report and left as it stands. The first half of item 265a is definitely in the schedule and 265b is not. .Perhaps it would help him over this difficulty -that when he makes his statement there
will be no opportunity for reply-to let this item stand until he is ready to make his statement and table his reply from Great Britain. He would of course feel much better if those who are interested in the report could make a statement. However, I am not anxious to press the point.


Charles Avery Dunning: If any hon. member desires a tariff item held, I am in no position to object. But I can assure the hon. member for Danforth that the holding of this item will not facilitate the matter, inasmuch as this is a tariff item, and the matter to which the statement will refer is under the Special War Revenue Act amendment. I can assure my hon. friend that I cannot conceive of circumstances which would prevent discussion of any statement which I have to make. I sincerely hope that I shall not be forced to make the statement on the last day of the session, or anywhere near it. However, that is not wholly in my hands.


Joseph Henry Harris: Mr. Chairman, I withdraw the request.


[Stage Direction]
Item agreed to.
Items 289 and 326f agreed to.
Customs tariff-Item 343. Tin, in blocks, pigs or bars: British preferential tariff, free; intermediate tariff, 5 per cent; general tariff,
5 per cent.
John Ritchie MacNicol: For what reason has the intermediate tariff been changed from three to five per cent?


Charles Avery Dunning: There never was a three per cent tariff. As my hon. friend is aware, under the intermediate tariff tin was free, but the three per cent special excise rate operated in effect as a tariff. It is felt that since tin has come in through Canadian ports and provided business for our Canadian railways, there would be no hardship on anyone if a duty of five per cent were put on, in view of the fact that the three per cent special excise tax is off. No one will need to pay it, in fact, because imports can continue to be made via Canadian ports and thus obtain free entry.


John Ritchie MacNicol: It will come in free by Canadian ports?


Charles Avery Dunning: Yes.


[Stage Direction]
Item agreed to.
Items 344 and 346a agreed to.
Customs tariff-Item 349a. Alloys of copper, n.o.p., containing 50 per centum or more by weight of copper, viz.: sheets, plates, strips, bars, rods and tubes: British preferential tariff, 74 per cent; intermediate tariff, 15 per cent; general tariff, 25 per cent.
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Charles Avery Dunning: This is an amendment. Two alloys are dealt with. We are trying to bring our tariff up to date with respect to scientific developments regarding certain alloys, in order to give our industries, particularly the aeroplane industry, an opportunity to use these alloys, which are not produced in Canada, on the most favourable terms. Item 349a, which the Minister of National Revenue will move for me, is a new item to provide a tariff classification for copper alloys in the forms in which they are now widely used. While copper itself is rolled in Canada into most flat forms as well as bars and rods, there is little if any Canadian production of copper alloys, in spite of the fact that the use of the alloy form is constantly growing. Owing to the fact that there has been no tariff classification for copper alloys such as we have covered by the proposed item, the customs authorities have ruled in the past that importations of these alloys are dutiable under the unenumerated item 711, which bears higher rates of duty. The proposal therefore is to make the rates proposed here applicable to these forms of copper alloys.


James Lorimer Ilsley: I so move.


Robert James Manion: Then I will state the facts in a sentence or two. I spoke to the minister about the barrel manufacturers, who are up against most unfair competition from the southern United States. Cast-off barrels are being dumped into Canada at a price that puts these manufacturers in an impossible position. If they could have the duty on hoop steel reduced or removed, it would give them at least a better chance of competing with the United States product. I believe the manufacturers approached the Minister of National Revenue in regard to the dumping of these barrels, but I admit that it is a very difficult case. At the same time these people are up against this very unfair competition; in the London area I believe they have some hundreds of employees, and they find it almost impossible to carry on. I wish to urge upon the minister as strongly as possible, as I have done already verbally and by letter, that some action be taken, and I should appreciate it if he would give the matter further consideration to see if something cannot be done for these people, who I believe honestly and fairly deserve consideration in this matter.


[Stage Direction]
Item agreed to.
Customs tariff-Item 349b. Alloys of mag nesium, viz.: ingots, pigs, sheets, plates, strips bars, rods and tubes: British preferential tariff 5 per cent; intermediate tariff, 124 per cent; general tariff, 25 per cent.
Charles Avery Dunning: This is a similar item, but with respect to alloys of magnesium, and the explanation I gave with respect to copper alloys applies


James Lorimer Ilsley: I so move. Item agreed to.
Item 351c agreed to.
Customs tariff-386.	(c) Sheets, plates, hoop,
band or strip, hot rolled, being mould boards, shares, cultivator or shoe shapes, plough plates, land sides or disc circles, when such rectangles, circles or sketches are cut to shape but not moulded, punched, polished or otherwise manufactured, when imported by manufacturers of agricultural implements for use exclusively in the manufacture of agricultural implements, in their own factories: British preferential tariff, free; intermediate tariff, free; general tariff, free.


Robert James Manion: Would this include anything in the way of hoop steel? I was speaking to the minister in regard to barrel hooping. Is that included in this item, or is it touched at all?


Charles Avery Dunning: It is not touched at all this year. I have forgotten for the moment the point my hon. friend raised.


Charles Avery Dunning: The matter comes back to my mind now after the explanation of the hon. gentleman. It was found impossible to do anything to assist in regard to the duty on hoop steel, because, while the steel they normally use in the manufacture of barrels is free from Great Britain, so that they cannot get any reduction there, this is also one of the items on which the margin was bound in the 1932 agreement.


Robert James Manion: But none is imported.


Charles Avery Dunning: I understand that very
little is imported, but we should have to get the permission of the United Kingdom government to reduce the intermediate duty of 12i per cent, and from experience I know how difficult that is in connection with the steel items. My own investigation of the barrel matter led me to believe that probably the only effective assistance might be given on health grounds. I mentioned the matter to the Minister of National Health, who intended to look into it, but I have heard no further word. As a matter of fact, from what I understand of the prices at which these secondhand barrels are brought into the country- 25 cents each or thereabouts-it would be quite impossible for assistance to be given by any tariff action in regard to the materials used by Canadian mnaufacturers in order to offset that sort of thing. I have spoken to the Minister of Pensions and National Health

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regarding the matter, and I will speak with him further. I am not at all certain that there are any health grounds for excluding these barrels, though I can well imagine some.


Robert James Manion: Perhaps the minister would give consideration to approaching the United Kingdom government, because my information is that there have been no importations from the United Kingdom. While they have a preference on hoop steel, the preference is of no use to them unless we import that commodity. If the preference is merely interfering with a fair deal to these barrel manufacturers, the United Kingdom government ought to be willing to consider releasing this item, because the United Kingdom gets no advantage under it.


Charles Avery Dunning: 
Mr. HOMUTH:: May I ask the Minister
of National Revenue if it would not be possible for his department, under the act, to put some value on these barrels for duty purposes? A very large firm in Waterloo county is seriously menaced by this practice. The difficulty might be overcome as I have suggested.


James Lorimer Ilsley: The matter has been gone into very carefully by the Department of National Revenue. Assuming that it would be a proper thing to fix a value of say $4 or $5 on barrels which can be bought for 25 cents; assuming that would be a proper exercise of the powers of the government and of the minister under the act, it still could be evaded. A very large proportion of the importations is made by companies in Canada who import used whisky barrels from companies in the United States with which they are affiliated, and it would be merely a matter of invoicing them. The parent or subsidiary company in the United States could invoice the barrels at our value of $4 or $5 and thereby avoid the payment of any dumping duty. It is true that some small importers would be affected, but for the most part any such regulation could be evaded, assuming that would be a proper thing to do. But the objection to fixing a value of $3, $4 or $5 on barrels that can be purchased for 25 cents stands out pretty distinctly. As a matter of fact the conclusion I reached was that the only way by which the importation could be effectively prevented would be by an embargo on some such ground as that mentioned by the Minister of Finance. The matter was carefully considered by the department. I must say that I have a great deal of sympathy for
the manufacturers in the city and county represented by my hon. friends in the difficulty in which they find themselves, but it did not appear to me that anything short of an embargo would meet the difficulty, because the situation was so extreme.


John Ritchie MacNicol: Has the minister at hand the value of the material imported under item 386c?


Charles Avery Dunning: Our imports in 1938 were $262,000, entirely from the United States. The only change proposed is the insertion of the words "cultivator or shoe shapes," which was done under the United States agreement in any case.


[Stage Direction]
Item agreed to.
Customs tariff-390c. Piston ring castings of iron or steel, in the rough as from the moulds. British preferential tariff, free; intermediate tariff, free; general tariff, 27i per cent.
John Ritchie MacNicol: Does the same thing apply here?


Charles Avery Dunning: Exactly the same thing. Item agreed to.
Customs tariff-403.	(f) Wire, of rust or
acid resisting steel, twisted or stranded, for use exclusively in commercial fishing operations. British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 25 per cent.


Charles Avery Dunning: The same thing here.


[Stage Direction]
Item agreed to.
Items 409e, 417, 422a, 427b, 427e, 427h and 435 agreed to.
Customs tariff-438e.	(3) Parts, n.o.p., of
iron or steel, not electro-plated, whether finished or not. British preferential tariff, free; intermediate tariff, 25 per cent; general tariff, 40 per cent.
(4) Parts, n.o.p., other than of iron or steel, not electro-plated, whether finished or not. British preferential tariff, free; intermediate tariff, 30 per cent; general tariff, 40 per cent.
Charles Avery Dunning: There is an amendment to this item which I will ask my colleague to move. It is a change in wording, requested for administrative purposes only.


James Lorimer Ilsley: I move that the item be amended to read:
Customs tariff-438e.	(3) Parts, n.o.p., not
electro-plated, whether finished or not. British preferential tariff, free; intermediate tariff, 30 per cent; general tariff, 40 per cent. _ Provided that parts in chief value of iron or steel which were classified for duty purposes under tariff items 427 or 446a, .as of January 1, 1936, shall be dutiable at: British preferential tariff, free; intermediate tariff, 25 per cent; general tariff, 40 per cent.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Supply-M ines-Coal
[Stage Direction]
Customs tariff-442d. Materials, including all parts, wholly or in chief part of metal, of a class or kind not made in Canada, when imported by manufacturers of goods entitled to entry under tariff items 410g, 4101, 410n, 410o, 410p, 410q, 410u, 410w, 410z, 411, 411a, 411b, 427b, 428c, 428e, 440k and 447a, for use in the manufacture of such goods in their own factories, under such regulations as the minister may prescribe. British preferential tariff free; intermediate tariff, 10 per cent; general tariff, 10 per cent,
Provided, that materials and parts which are entitled to free entry or to a lower rate of duty than is specified in this item shall not be dutiable under this item.
John Ritchie MacNicol: How is it determined just what machines can be classified as not being of a class or kind made in Canada? A number of plants in Canada are anxious to manufacture any type of machine from a drawing, and they could do it just as cheaply as it is done in the United States. When such machines are brought in, either free or on the payment of ten per cent, these factories have no opportunity to make them.


[Stage Direction]
Item agreed to.
Item 443a agreed to.
Customs tariff-445d. Electric wireless or radio apparatus and complete parts thereof, n.o.p.: British preferential tariff, free; intermediate tariff, 25 per cent; general tariff, 30 per cent.
Abraham Albert Heaps: What are the importations under this item?


Charles Avery Dunning: Radio tubes, 1230,000, of which 8221,000 came from the United States; radio and wireless apparatus, n.o.p., $2,674,000, of which 82,482,000 came from the United States. Exports from Canada under the same item amounted to 8206,000.


Abraham Albert Heaps: What was the production in Canada?


Charles Avery Dunning: In 1937, the last complete year which I have, the total production of radio receiving sets was valued at $11,696,000; of radio tubes, $1,760,000 and of radio parts, $1,528,000.


Angus MacInnis: I have received a number of protests from radio dealers in Vancouver, and no doubt the minister has received similar communications. These dealers complain of the provision which enables individuals to bring radio sets in from the United States without the sets being subject to the general provision that electrical apparatus must be approved by the Hydro-Electric Power Commission of Ontario. I have one letter here which is along the general lines of other letters received. It reads:
Under the present set-up, our Canadian citizens are permitted to go into the United States, where they can take their cash, and 
buy radio sets at a low price, bring them into Canada, and use them in their homes. We are not permitted to sell this class of merchandise, and yet our customers can fill their needs for radios and electrical appliances, while our merchandise can stay and rot on the shelves, and we vainly endeavour to use every available method to entice our Canadian people to purchase our radios which must be sold at a higher price.
My informant maintains that the cost of production in Canada is higher because tihe radios must be approved by the hydro-electric commission. He goes on to say:
There is _ one of two things that must be done at once, either amend the statute of all merchandise having to be approved by the hydro electric power commission of Ontario, so that we can sell these radios legally, or stop the entry and use of them. We may point out also at this time, that some stringent action should be taken in regard to car radios, as there is not one per cent of said radios purchased in Canada.
The writer then goes on to give a list of eleven radio dealers in Vancouver who had to go out of business during the last year or two.


Charles Avery Dunning: The letter which the hon. member has just read deals with a matter of provincial law. A province has the right to set up standards for electrical equipment, and it may be possible that these radios are not legally operated in the province. But they do come in as far as our tariff laws are concerned.
I think this is more a matter of enforcing provincial law with respect to electrical standards. I have had similar complaints and have had to reply that provincial rights are sacred, that we could not possibly consider enacting legislation which would avoid the necessity of provincial approval of anything which is within the jurisdiction of the province.


Angus MacInnis: I quite agree that the matter of standards is within the power of the province. But if, under federal legislation, individuals are allowed to bring in these radios free of duty, why should this item still be maintained in the tariff? If the rate of duty were reduced, the dealers might have some chance of competing with the United States dealers.


Abraham Albert Heaps: There is too great a discrepancy between the prices of radios in Canada and in the United States. I was under the impression that the last budget provided for some reduction in duty on radio tubes. I think it is admitted that the prices of radio sets in this country are out of all proportion. If the tariff is too high, there should be a reduction. If the tariff is not too high, there is no excuse for this discrepancy.

Customs Tariff
Personally I have never been able to understand why there should be this great difference in price.


Charles Avery Dunning: I think my hon. friend will find the answer in the next two items.


John Charles Landeryou: Is it not a fact that our patent laws enter into the matter? Certain patent rights are controlled by Thermionics Limited, and this company has taken advantage of its rights under our patent laws to hold up the prices.


Charles Avery Dunning: My hon. friend will
remember the reference in the budget speech to the report of the tariff board in that connection. Of course the patent aspect of the matter is separated entirely from the application of the tariff laws, and I cannot here deal with that. Obviously our patent laws have international aspects of very wide implications, and the Secretary of State (Mr. Rinfret), who is in charge of patent matters, is now giving serious consideration to the report of the tariff board. Under items 445o and 445p we go to the extent of giving complete free listing to parts involved in the manufacture of tubes. This is done in order to create a competitive condition so far as the tariff can do so.


William Kemble Esling: These tariff changes resulted from the reference to the tariff board, but It is evident from the report of the tariff board that there are no provincial regulations which affect the price of radios to any great extent. The report of the tariff board shows that the application of the Electrical Energy Act results in adding only 41 cents to the cost of a radio, and the difference in cycles between Ontario and other portions of the dominion amounts to 31 cents. So that 72 cents represents what the manufacturers claim to be the reason for the greatly increased cost of Canadian radios.
The report also shows that as between thirty-six radios of similar make in Canada and the United States the price in Canada is between 28 and 81 per cent higher. It is not so much a question of the tariff. A radio dealer told me in conversation the other day that all the tariff changes brought down in the budget represented not more than five dollars altogether in the construction of a $60 radio set. Moreover, the radio duties are helpful only so far as repairs are concerned; the radio repair man will benefit. This man told me that the reductions are wholly for the benefit of the manufacturer, because the parts factories in the United States are largely controlled by the big manufacturing concerns. So that this reduction really does not amount to very much.
It has been stated by an hon. member that the whole trouble lies in the Patent Act. The question was referred to the tariff board in February of last year, and the board reports that a combine does exist in the radio manufacturing business. There is no question about that. No one can put any other constructor on the report of the board or on the evidence presented. A combine does exist. What better evidence could be given of a combine than that these radio manufacturers tell you that if you bring in a radio from the United States they will exercise their right to demand its surrender for destruction?
The Patent Act applies not to radios alone but to any kind of electrical equipment, and the government would be justified in taking action under the Patent Act or under the combines act, when it is so evident that radio manufacturers by means of patents and royalties have been taking advantage of the Canadian radio purchaser to make him pay from 28 to 81 per cent more than the consumer on the other side of the line has to pay.	_
Last year radios were brought in from the United States, under the $100 exemption to the amount of about $640,000. It is only natural that a Canadian would cross the line to buy a radio when he can buy it for half the price over there. But that could be overcome and the benefit of giving employment to Canadians restored if the Canadian manufacturers would bring their prices down to a reasonable level and get away from paying royalties. We know by the report of the tariff board that three or four large manufacturers hold major control of the patents, and some are paying bigger royalties than others. But, I repeat, the whole trouble lies in the Patent Act. My contention is that the government itself should take the matter in hand and exercise control either through the Patent Act or through the combines act.


Mr. McDONALD (Souris):: Is not this an instance of a Canadian industry which enjoys high protection losing work for Canadian workmen and business for Canadian dealers? In our part of the country the radio dealers were enjoying a fine business, but they are nearly out of business to-day because people living from fifty to a hundred miles away from the United States border will go over there to buy a radio.


Mr. REID:: Do you blame them when they can buy them there for half the price?


George William McDonald: No, you cannot blame them. I have a letter from a constituent who says that looking through a
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Sears Roebuck catalogue he saw a No. 32 radio tube, guaranteed for one year, selling for 71 cents, and in our little town that same tube would cost him $2.60. Can you blame a Canadian for buying in the United States? This man told me that these tubes were made by the same manufacturer, but when I tried to get proof I found that was not so. But the United States tube is guaranteed for one year while the Canadian tube is guaranteed for only three months, and I venture to say that the United States tube will last as long as the Canadian tube. We are losing the business in Canada, and our Canadian workmen are losing the work. Why do we continue this sort of thing? People are not foolish enough to go on, buying radios and tubes in Canada when they can get them so much more cheaply in the United States.


John Charles Landeryou: An application was
made by a radio dealer in the city of Calgary for a complete inquiry into the radio industry under the combines act, but his application was refused. I was pleased to hear the minister say that the whole question is being attended to by the government; for something surely should be done. After reading the evidence taken at the inquiry in Alberta into the radio tube and radio manufacturing industry, and the report of the tariff board and the evidence presented to it, I feel that the government should take immediate action.
I had a radio tube given to me some time ago. It was manufactured in the United States by a United States firm, imported into Canada, put into a carton by the Canadian General Electric Company, and on the carton outside were the Words "Made in Canada," although the tube itself was made in the United States. The same tube put into a Canadian carton sells at from fifty to seventy-five per cent higher than the price at which the same tube can be purchased in the United States. It is things like this which call for government action. I do not blame Canadians for going across to the United States and buying radio tubes when they can get them there at such a greatly reduced price; otherwise they would simply be paying an enhanced price to some combine in Canada. It is the same tube, but the combine in this country charges them from fifty to seventy-five per cent more.


Charles Avery Dunning: I should like to say to hon. members who are quite properly calling attention to this matter that- the report in question on tariff board reference No. 104 was received by the government just prior to the introduction of the budget. I think I can

say there was no more complicated report before us than the one referring to radios and radio tubes, for the reason that the scope of the report not only included tariff matters, with which the tariff board is primarily engaged, but they also found it necessary to call our attention to the fact that the real difficulty arises, as has been pointed out by speakers this afternoon, through the operation of the patent law.
In connection with the tariff, the board say at page 145 of their report:
The board recommends that this item be inserted in the customs tariff-
That is the item now under discussion.
-with _ the express understanding that such economies in production costs as will be effected

That is, in the manufacture of tubes, -must immediately toe reflected in the published selling price of the Canadian tube manufacturers, and that further, the basis for establishing prices to which reference has already been made, namely United States prices plus all charges, will be adopted as the yardstick by which Canadian selling prices of tubes to said manufacturers ,and dealers should be set in Canada.
Following that, the first action of the government, as soon as the budget was down and the items were provided for as recommended by the board, was that the Minister of Finance instructed the tariff board to regard the reference on radio as a continuing reference in order that there might be machinery for establishing from time to time the extent to which the passing-on process expected by the board was really being carried out. I have received assurances since then that such has been the case-since that date. I am not prepared to say that it is true with respect to every manufacturer of tubes. That, of course, is in process of investigation in the comparatively short time which has lapsed.
There are two other sides of the matter. One, of course, is the patent law side, which is under investigation by the Secretary of State at the present time. The hon. member for Souris raised the question of a combine, as did the hon. member for Calgary East. That also is now under investigation by the Minister of Labour, having regard to the aspects of the tariff board report which might indicate the desirability of some move in that connection. I am not aware of the case quoted by the hon. member for Calgary East of an investigation under the Combines Investigation Act having been refused. However, his remarks in that connection will be duly noted. The government is anxious to take all proper steps to see to it that the price of radios in Canada properly reflects Canadian

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conditions and does not involve profiteering such as caused my reference to the tariff board in the first place. I believe we are making progress. Certainly, if I can believe the assurances of manufacturers, written since the budget came down, they are anxious to improve matters. My object in making operative the continuous reference to the tariff board was to ensure that we would have on record not merely their letters, undertakings and so forth, but also an adequate means of seeing what their performance really amounts to. That is the situation of the matter at the present time, and I am sure I can say for the government that we intend to continue pursuing this course.


Henry Herbert Stevens: Is the report which the minister has in his hand available to hon. members?


Charles Avery Dunning: Oh, yes, it has been tabled.


Henry Herbert Stevens: It has not been printed and distributed among them?


Charles Avery Dunning: No. Up to now we have not printed the reports of the tariff board. Some of them are quite voluminous. The report, of course, is available to all hon. members.


Robert John Deachman: Some years ago,
shortly after I came into the house, a local dealer in my constituency bought two or three dozen tubes in the United States. An inspector from the company holding the patent came round and bought one of those tubes. Shortly after that, a writ was issued against the dealer for S10,000. What I wonder is, how does it happen that when a man buys a few tubes in that way, there are such tight restrictions in regard to patents that he is liable to an action of that kind in a Canadian court. Surely when he bought the tubes in the United States he had paid for the patent rights on them there; and after buying them in so small a quantity, he could sell them on the local market in Canada at one-half the price at which he would have to sell a Canadian tube. In order to give my hon. friends the Minister of Finance and the Minister of National Revenue an ocular demonstration of these things, I have here two tubes. The minister may see the tubes and keep them as souvenirs of the occasion; perhaps it may induce action before the next year.


Charles Avery Dunning: Is my hon. friend up to date, or is he speaking of a condition two or three years old?


Robert John Deachman: Well, it does not
affect conditions since the minister's recent
legislation, but it shows conditions which existed at that time which were atrocious. I brought over a couple of tubes so-


Charles Avery Dunning: Will they be of use in my radio?


Robert John Deachman: Possibly they may be. I want one to be given to the Minister of Finance and one to the Minister of National Revenue.


Charles Avery Dunning: Just a minute. Am I going to be liable to an action under the Patent Act?


Robert John Deachman: I do not think so. If the Minister of Finance gives one to the Minister of National Revenue, he can take a chance and be able to quiet any action which may arise.


Grote Stirling: Lay them on the table.


An hon. MEMBER:: What about us?


Robert John Deachman: The importer, who is a competent radio man, made the statement that the United States tube was a better tube than the Canadian one, yet he could sell the United States tube at half the price.


Mr. LANDER  YOU@: I noticed in the
evidence given at an inquiry in the United States that a radio expert claimed these tubes can be manufactured so that they will have a life of 50,000 hours; but it is also claimed that in Canada there has been an attempt to reduce the life of these tubes, and that in their life being so reduced they have developed some faults which are costly to the dealer. I think an examination should be made into the question of the life of these radio tubes.


Charles Avery Dunning: Evidently my hon. friend has not read the board's report. That was one question referred to them, and their report in that connection states:
The board's engineer examined the relative quality of Canadian and United States tubes and found no basis for the allegation that tubes produced in Canada over a period of years are inferior in quality to tubes produced in the United States. It is true, however, that when Canadian manufacturers commenced production of metal tubes the percentage of defective tubes was higher in Canada than in the United States.
At the present time there is no basis for the allegation that tubes produced in Canada are inferior to those produced in the United States. Of course there may have been evidence of the type to which my hon. friend refers. That was the reason why our own board in Canada had an investigation made by a competent engineer in order to verify or otherwise, for our information, the facts.
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Mr. NEEDHAM:: Could the minister give me information as to the authority upon which dealers or patent right holders or others may threaten suit against a person who goes over to the United States, buys a radio and brings it to this side? They ask him to sign an affidavit that he will not use or sell that radio, or action will be taken. Under what authority can they do these things?


Charles Avery Dunning: The Patent Act.


Abraham Albert Heaps: How do they get the information as to who brings the radios into this country?


Joseph Needham: I will give the committee an instance. Two years ago, on my way back from the United States, I bought a radio. After a while I got a letter from a firm in Bay street, Toronto, informing me that I had brought in a Silver Tone radio and must sign an affidavit that I would not use or dispose of that radio. I wrote back through a local lawyer asking for information as to what I had done wrong or in what respect I had infringed patent rights; stating that I had bought this radio from a reliable firm in the United States, that I considered I had paid, when I bought it, all the royalties which were involved, and that I had brought it into Canada according to Canadian law under the $100 exemption provision. They would not say what right I had infringed; they wrote back, " Sign that paper, or action will be taken immediately." I did not sign the paper. I wrote again, and I did not hear from them until, when I was coming to the session last year, I called at the office. I told them who I was, and that I wanted to know what I had done wrong-they had threatened me with a suit-and then they told me to forget all about it. They said, "You will not hear any more about the matter." What I want to know is, by what right do these people place the citizens of Canada in such a position? Surely one can appeal somewhere.


Abraham Albert Heaps: How does information leak out as to who brings in radios? The hon. member says that he was threatened with a suit. How did they get any information?


Charles Avery Dunning: The repair man generally gets to know.


Joseph Needham: That machine was never in a repair shop.


John Ritchie MacNicol: I hope that when the government pursues its inquiry into the radio tube business it will make an effort to retain the manufacture of tubes in Canada. I am informed on reliable authority that a certain tube manufacturer is reducing his staff. The

company here is only a branch of an organization in the United States manufacturing perhaps a thousand times as many radios, tubes and other radio parts. Naturally they can manufacture at a lower cost than can the company in Canada. I am told that this Canadian company has reduced its staff from 400 to less than 300 and is gradually letting out its employees in the expectation that in a year or two, without fuss, the Canadian plant will be closed.


Charles Avery Dunning: What reason could there be for that action in view of the fact that we are giving them free parts in this very budget and not reducing rates generally?


John Ritchie MacNicol: I am giving the information as I got it, and it is said to be true.


Charles Avery Dunning: There must be some other reason.


John Ritchie MacNicol: I have no doubt the department could easily ascertain what companies have been reducing their staffs. All I ask is that an effort be made to keep men employed in Canada.


Charles Avery Dunning: All I can say is that an effort is being made in these items before us to give these people, who my hon. friend says are reducing their staff, free parts, which we describe in great detail to ensure that the manufacturers will have every advantage in production in Canada. The only thing we say is that they must pass along the advantage to the consumer. Surely that is not unfair.


John Ritchie MacNicol: I have not a word to say about the tariff rates. I rose simply to request that an effort be made to keep men employed in Canada in the manufacture of tubes.


Mr. COLD WELL:: Surely some common sense should be exercised in that regard. There may be a good argument for keeping men employed in certain industries, but if the Canadian people are paying many times the wages of individuals employed in additional charges that are levied by such organizations as the radio tube manufacturers, then I say the people of Canada ought to have some consideration rather than the company or a comparatively small number of employees. The question, however, is this: By what right do these people threaten any citizen? If the article is imported from the United States a royalty has already been paid to the parent organization of which the Canadian patentees are a subsidiary part, and I cannot understand why Canadians should be subjected to this treatment. I have been puzzled to know how these people get to know that a radio is

Customs Tariff
brought into the country. I remember asking the Minister of National Revenue the same question two years ago. I have been puzzled because on one or two occasions I have been told that no one knew that a radio had been brought in.


Charles Avery Dunning: It is hard to conceal the presence of a radio.


Major James William Coldwell: I am thinking of the case I mentioned two years ago. A certain person had brought in two radios.


Charles Avery Dunning: The nearby dealer would not be long in finding out.


Major James William Coldwell: I do not know how he could find out that the radio was in someone's home.


James Lorimer Ilsley: After the hon. gentleman asked me the question in the house, some of the radio people sent me word or came to see me and told me that they had got the information from the dealers. The dealers in that community knew that United States radios were installed and they said that was how they managed to find out.


Major James William Coldwell: I accept that explanation because, knowing a number of people in the civil service, I never thought that the leak could be there. But I have been often puzzled as to how the information had got out. I understand, too, that one of the reasons why we are paying high prices for radios and tubes is that a large number of models are being turned out in Canada.


Charles Avery Dunning: That is dealt with in the report.


Major James William Coldwell: Therefore one of the ways in which probably we can cut down our costs is to demand fewer models and to take something more standard. Anything that the government can do to reduce costs and to bring them more into line with costs on the other side will be appreciated by the. Canadian people.


[Stage Direction]
Item agreed to.
Customs tariff-445o. Acidffree capacitor tissue and paper, plain and gummed; aluminium cans, extruded; automatic record changers and parts for pickups; bias cells; diaphragms with or without spider and voice coil frames, yokes, brackets and housings to be used in the assembly of speakers with mounting not exceeding 6J inches in width; glass dial crystals and scales; high frequency circuit switches; high frequency iron cores; magnets; motors and gears for automatic tuning; radio frequency ceramics; sheets and punchings of low loss mica; tube shields; vibrators; vulcanized fibre in sheets, rods, strips and tubing: for use in the manufacture or the repair of the goods enumerated
in tariff items 445d or 597a, or for use in the manufacture of parts therefor: British preferential tariff, free; intermediate tariff, free; general tariff, 30 per cent.
Charles Avery Dunning: The tariff board, in
going over their own wordings after the reports were submitted, found that some of these queerly named items ought to be included from a technical point of view. There is an amending item as follows:
Customs tariff-445o. Acid-free capacitor tissue and paper, plain and gummed; aluminum cans, extruded; automatic record changers and parts for pickups; bias cells; diaphragms with or without spiders and voice coils; frames, yokes, brackets and housings to be used in the assembly of speakers with mounting diameter not exceeding 6J inches; glass dial crystals and scales; high frequency circuit switches; high frequency iron cores; magnets; motors and gears for automatic tuning; radio frequency ceramics; sheets and punchings of low loss mica; tube shields; vibrators; vulcanized fibre in sheets, rods, strips and tubing; for use in the manufacture or the repair of the goods enumerated in tariff items 445d or 597a, or for use in the manufacture of parts therefor: British preferential tariff, free; intermediate tariff, free; general tariff, 30 per cent.


James Lorimer Ilsley: I move accordingly.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-445p. Ceramic spacers and insulators; copper alloys for welding; getter and getter assemblies; glass bulbs and glass tubing; metal bulbs; mica parts and wire snubbers; molybdenum and molybdenum alloy wire; nickel and nickel alloy tubing, wire, ribbon, screen and strip, coated or not, carbonized or not; wire of tungsten or zinc; all the foregoing when imported by manufacturers of radio tubes for use exclusively in the manufacture of radio tubes, in their own factories: British preferential tariff, free; intermediate tariff, free; general tariff, 30 per cent.
Charles Avery Dunning: There is an amending item as follows:
Customs tariff-445p. Ceramic spacers and insulators; copper alloys for welding; getter and getter assemblies; glass bulbs and glass tubing; lead wires and welds; metal bulbs; mica parts and wire snubbers; molybdenum and molybdenum alloy wire; nickel and nickel alloy tubing, wire, ribbon, screen and strip, coated or not, carbonized or not; wire of tungsten or zinc; all the foregoing when imported by manufacturers of radio tubes and parts therefor, for use exclusively in the manufacture of such articles, in their own factories:	British preferential
tariff, free; intermediate tariff, free; general tariff, 30 per cent.


James Lorimer Ilsley: I move accordingly.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs Tariff
[Stage Direction]
Customs tariff-446g. Electric or gas apparatus designed for welding or cutting and parts thereof, not including motors: British preferential tariff, 5 iper cent; intermediate tariff, 20 per cent; general tariff, 30 per cent.
John Ritchie MacNicol: I wish that many other items in the tariff carried those last three words "not including motors," because a great quantity of machinery comes into the country including motors. If those three words were in all machinery items, a good many more motors would be made in Canada.


[Stage Direction]
Item agreed to.
Customs tariff-448. Steel balls and rollers for use only in ball or roller bearings: British preferential tariff, free; intermediate tariff, 74 per cent; general tariff, 10 per cent.
John Ritchie MacNicol: Is the duty on the casings for holding the balls and rollers the same?


Charles Avery Dunning: The duty on the casings of the ball bearings is 174 per cent under item 427b. The only change here is a change in the wording, at the request of the customs, for administrative purposes.


John Ritchie MacNicol: Could the full bearing be brought in at this rate?


Charles Avery Dunning: No, this is only the balls or rollers.


John Ritchie MacNicol: The casings are higher.


Charles Avery Dunning: Yes, 174 per cent.


John Ritchie MacNicol: They are made in Canada, I think.


[Stage Direction]
Item agreed to.
Items 454, 462b, 466, 476 and 507e agreed to.
Customs tariff-537c. Rovings, yarns and warps wholly of vegetable fibres other than cotton or jute, not to include materials for sewing, stitching or packaging purposes, imported by manufacturers for use exclusively in their own factories: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 15 per cent.
Charles Avery Dunning: Customs report some difficulty in the wording of this item, and therefore it is proposed to change it slightly. Just the insertion of the words "for weaving or braiding." The customs desire that for purely administrative reasons.


James Lorimer Ilsley: I move the amendment.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Item 549e agreed to.
Customs tariff-551d. Yarns and warps composed wholly of wool or in part of wool or hair, imported by manufacturers for use in their own factories in the manufacture of woven

fabrics in chief part by weight of wool or hair and not exceeding six ounces to the square yard when in the gray or unfinished condition, under such regulations as may he prescribed by the minister: British preferential tariff, free; intermediate tariff, 174 per cent and 15 cents per pound; general tariff, 20 per cent and 174 cents per pound.
James Lorimer Ilsley: I move the following amendment, of which notice has been given in the votes and proceedings:
Customs tariff-551d. Yams and warps, spun on the worsted system, composed wholly of wool or in part of wool or hair, imported by manufacturers for use in their own factories in the manufacture of woven fabrics in chief part by weight of wool or hair and not exceeding six ounces to the square yard when in the gray or unfinished condition, under such regulations as may be prescribed by the Minister: British preferential tariff, free; intermediate tariff, 174 per cent and 15 cents per pound; general tariff, 20 per cent and 174 cents per pound.


Thomas Reid: I want to make another appeal to the Minister of National Revenue regarding the entry of kilts into this country. He has received many representations. A short time ago I made an appeal to him. I draw his attention to the fact, that these cannot be classified under the heading of uniforms, they come distinctly under the heading of dress. The duty of 374 per cent-I understand it works out at some 374 per cent-cannot have been placed there to protect any industry in this country. There is no industry making kilts in sufficient number in Canada, nor will there be for many years to come. They are all imported from the old country. This year those who desired to have them found it very difficult indeed, being faced with a duty of $40 on an outfit costing $100. I should like to know the reason why kilts cannot be imported without being subject to this high duty.
We did get some consideration from the last government, because when Mr. Rhodes was Minister of Finance, the national instrument known as the bagpipes was allowed to enter Canada free. But this is a high tariff. I should like to know the real reason why those of Scottish race are not allowed to bring in the kilt without paying this high duty.


John Ritchie MacNicol: It is a warning.


Charles Avery Dunning: I must repudiate my
hon. friend's suggestion that this is a high tariff government with respect to kilts. As a matter of fact the first reduction in duty on kilts that ever took place within my memory came as a result of the United Kingdom agreement of 1936. There has been considerable interest in the item, and some of my hon. friend's compatriots in his own

Customs Tariff
province have corresponded with me about it, violently disagreeing with the suggestions made by him and pointing out that there is now established in Vancouver-I think it is Vancouver-a promising little industry manufacturing these kilts. I felt specially encouraged by the thought that the industry was so close to my hon. friend. But without greatly complicating the customs administration it would be very difficult indeed to single out a kilt of tartan material-


John Ritchie MacNicol: Kilts are in a class by
themselves.


Charles Avery Dunning: -from all similar manufactured goods. It is my sincere hope that the industry in Vancouver will flourish so that it will be able to supply kilts to all the people in Canada who desire to wear them.


Thomas Reid: I am not surprised at the
ignorance of the minister regarding this, but may I enlighten him a little. I have before me a book showing the colours, and I may tell him that there are 114 different tartans.
I ask him how long it will be before a little industry in Vancouver will be able to manufacture 114 different tartans. It just cannot be done. The old established manufacturers in Scotland are practically the only ones in the world who can supply them. For instance, if he were a McKinnon like his officer in front of him he would not want a Cameron or a Campbell tartan. It will be a long time before that little industry will be able to to supply 114 different tartans. We should be allowed to import them free of charge, because it would not interfere with the building up of an industry.


Charles Avery Dunning: I can only say most apologetically that the very book which my hon. friend has before him illustrates the difficulty that the department of the Minister of National Revenue would have in trying to administer an item which differentiated cloth which would be identical with all other cloths except in one respect, that it had as a design one of those 114 different tartans. There is a large proportion of Scotsmen in the customs service; I am inclined to think that to police the matter adequately would require at least three representatives of every clan at every customs port, because all Scotsmen are not familiar with the tartans of all others. I know my hon. friend is a specialist in the matter and has given a great deal of study to it, but the average man does not know these things, and I am afraid that from an administrative point of view-and here I am going outside my field; it is my colleague the
Minister of National Revenue who would have the difficulty-I think that very book illustrates more plainly than anything I could say how difficult, if not utterly impossible, it would be to administer a distinction of that kind.


Thomas Reid: A tartan is something distinct in itself, it is distinct from all other cloths. Speaking about Scottish officials, we had an experience in 1934 when the bagpipes were coming in, it was a French customs officer who allowed them in free and a Scotsman who held them up.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Item 569e agreed to.
Customs tariff-571a.	(i) Mats with cut pile,
of cocoa fibre, per square foot. British preferential tariff, 3 cents; intermediate tariff, 4 cents; general tariff, 5 cents.
(ii) Mats, n.o.p., rugs, carpeting and matting of cocoa fibre, per square yard: British preferential tariff, 7J cents; intermediate tariff, 9 cents; general tariff, 10 cents.
John Ritchie MacNicol: Does this make any difference in the rate? The new rate is to be 3 cents per square foot while the old rate was 30 per cent. Is that higher or lower?


Charles Avery Dunning: It is higher. This is the result of a tariff board report which was filed after the budget, following an- investigation. It is an increase in duty.


[Stage Direction]
Item agreed to.
Items 587b and 597a agreed to.
Customs tariff-598a. Brass band instruments, of a class or kind not made in Canada; bagpipes and complete parts thereof: British preferential tariff, free; intermediate tariff, 25 per cent; general tariff, 25 per cent.
Charles Avery Dunning: This is a reduction in duty on brass band instruments coming from France, of a class or kind not made in Canada.


[Stage Direction]
Item agreed to.
Items 616, 618c, 652, 657b, 663c, 663g, 682a, 696, 810, 814 and 818 agreed to.
Customs tariff-825. Woven cord tire fabric, wholly or in chief part by weight of artificial silk or similar synthetic fibres, not to contain silk nor wool, coated with a rubber composition, when imported by manufacturers of rubber, to be incorporated by them in pneumatic tires, in their own factories:	British preferential
tariff, free; intermediate tariff, 15 per cent; general tariff, 25 per cent.
Charles Avery Dunning: There is an amendment to this item, of which I should give an explanation to the house. As it stands in the

Customs Tariff
tariff at the present time, this item provides rates of free, 15 per cent and 25 per cent on such fabric until July 1 next. Under the budget resolutions the time limit was deleted. Representations having been received since budget day to the effect that at least one large company in Canada is now definitely interested in the production of such fabric, and further that some of the tire manufacturers themselves may in the near future see their way clear to weave this particular fabric from rayon yarns either produced in Canada or imported, it has been decided to ask the house to extend the present item for a further year from July 1 next. Originally it was hoped that commercial production would get under way by July 1 of this year. That has failed, but sufficient progress has been made to justify us in the belief that commercial production will commence within another year.
4.1 ,Resoh'ed>
fhat any enactment founded upon the foregoing resolutions to amend the customs tariff or schedules thereto shall be deemed to nave come into force on the twenty-sixth day of April, one thousand nine hundred and thirty-nine and to have applied to all goods mentioned in the foregoing resolutions imported or taken out of warehouse for consumption on and after that date, and to have applied to goods previously imported for which no entry tor consumption was made before that date.


[Stage Direction]
Resolution agreed to.
Resolutions reported, read the second time and concurred in.

[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Finance) moved for leave to introduce Bill No. 141, to amend the Customs Tariff.
Motion agreed to and bill read the first time.
Mr. ROSS (Moose Jaw):: What is the effect of it?


Charles Avery Dunning: It is a low rate on this tire fabric until that date.


James Lorimer Ilsley: I move that the item be amended by inserting the words "prior to July 1,	1940," after the words "when
imported."


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

[Stage Direction]
Hon. J. L. ILSLEY (Minister of National Revenue) moved for leave to introduce Bill No. 142, to amend the Income War Tax Act.
Motion agreed to and bill read the first time.

[Stage Direction]
Hon. J. L. ILSLEY (Minister of National Revenue) moved for leave to introduce Bill No. 143, to amend the Excise Act.
Resolution agreed to.
2. Resolved, that schedule B to the customs tariff be amended by striking thereout tariff item 1049, the enumeration of goods and the rate of drawback of customs duties set opposite thereto, and by inserting the following item, enumerations and rates of drawback of customs duties in said schedule B:
Drawback 1049. Bituminous coal, imported on or after March 23, 1935.
(a) When converted into coke to be sold, 50 per cent.
(b) When converted into coke to be sold; provided that _ not less than thirty-five per centum, by weight, of the bituminous coal so used, as covered by each drawback claim, was mined m Canada, 99 per cent.
Provided that drawback payable under this item is m lieu of drawback payable under any other item.
Motion agreed to and bill read the first time.

[Stage Direction]
Hon. J. L. ILSLEY (Minister of National Revenue) moved for leave to introduce Bill No. 144, to amend the Special War Revenue Act.
Motion agreed to and bill read the first time.

[Stage Direction]
The house in committee of supply, Mr. Sanderson in the chair.
Mr. MacNIlCOL: Does this alter the present protection on soft coal?
Charles Avery Dunning: No. It just follows a tariff board report in connection with a technical rewording of the item.


[Stage Direction]
Item agreed to.
Resolution agreed to.
(Mr. Dunning.]
Mines and geology branch.
12Jf. Geological surveys, $302,000.
John Charles Landeryou: The minister was to give some information as to what has been spent on surveys of oil structures in Alberta.


Hon. T. A. CRERAR (Minister of Mines and Resources):: In 1938, $16,762 was spent, and it is proposed to spend $35,550 in 1939!

Supply-M ines-C oal


Mr. PELLETIER:: How are these geological survey parties made up, and how are they chosen?


Thomas Alexander Crerar: The parties are headed
by experienced geologists. In each party there are usually two or three university students who are taking courses in mining engineering or geology-the other evening I explained the manner in which these students are selected-and there is a canoe man or two, a cook, and any other help necessary to fill out the party.


René-Antoine Pelletier: Is there any notice
given that these parties are to go out?


Thomas Alexander Crerar: Application forms are sent to the universities, and the students interested make out their applications, which are rated by the civil service commission on information supplied by their professors.


Donald Elmer Black: For a number of years
geological survey parties led by Doctor Bostock have been coming into the Yukon. They have prepared voluminous reports which have proved to be of great help. I have met these parties many times; I know what their camps are like and how they live. Occasionally I have been at these camps when they have been fortunate in getting a little fresh meat. The miners and prospectors of the north, who look for the arrival of these parties and are keenly interested in the work, realize that they furnish first-hand and correct information to the public.


Robert James Manion: Is this figure of $302,000
practically the same as has been voted for some years?


Thomas Alexander Crerar: I think it was about the same last year.


Robert James Manion: My recollection is that it has been the same in previous years.


Thomas Alexander Crerar: I am advised that this is similar to the maximum yearly amounts voted before the heavy program undertaken in 1935, when $1,000,000 was appropriated for surveys. A great mass of data was obtained as a result of that program, and I am advised that the preparation for publication is just about completed. If the field work carried on in any one year is too extensive, the mines and geology branch fall behind in coordinating and preparing the various reports.


Robert James Manion: I thought the figure was about the same for a number of past years, with the exception of 1935.


Thomas Alexander Crerar: It goes along at about the same figure.


[Stage Direction]
Item agreed to.
Mines and geology branch.
128. Dominion fuel board-administration and investigations, $32,000.
Mr. KENNEDY:: What are the duties and powers of the dominion fuel board?


Thomas Alexander Crerar: The dominion fuel board has the responsibility of administering the various orders in council under which subventions are granted to assist in the movement of coal from one part of Canada to another. This, and the gathering of information relating to the movement and marketing of coal, practically sums up the responsibilities of the dominion fuel board.


Orvis A. Kennedy: The work of the board is administrative and investigational, is it not?


Thomas Alexander Crerar: Mainly administrative.


Orvis A. Kennedy: In the details of services, at page 105, there was no allocation for travelling and field studies last year, while $2,400 is estimated for this year. Is an extension of the work of the board planned for this year?


Thomas Alexander Crerar: It is set up a little
differently this year. Travelling expenses were included in sundries last year.


Orvis A. Kennedy: Representations have
been made, I believe, by the fuel association to have the functions of the dominion fuel board enlarged and to have its personnel include representatives of the mining industry, workers and consumers. Would the minister consider enlarging the board as suggested? Has it been considered by the government?


Thomas Alexander Crerar: The functions of the fuel board are to administer the orders in council under which subventions are paid. The association which my hon. friend mentioned did urge that the functions of the fuel board should be enlarged and that it should be charged with the duty of finding and extending markets for coal. I am not prepared at the moment to recommend such an enlargement of its functions; to do so would mean the introduction of an entirely new principle, and the matter should receive serious consideration before any action to that end is taken. Assistance is now being given in the research laboratories of the department as to the best methods of utilizing various fuels, coals included; the information thus obtained is available to all companies selling coal, and the companies are taking advantage of it. I would hesitate to say that the functions of the fuel board should be enlarged to include the marketing of coal for the various companies producing coal; that is essentially the business of the companies themselves. But we give them every assistance we can in analysing their
Supply-Mines-Coal
COMbtuNS
product and finding ways in. which it can be effectively used. Constant improvement is being made in the methods of utilizing coal for domestic heating and power purposes.


Orvis A. Kennedy: I appreciate what is being done already, but there are certain things which the companies themselves cannot do. For instance, some 400,000 tons of coal are provided for families on relief in Canada, and most of that relief coal in central Canada is United States coal. It is a matter of government policy. Canadian coal should be burned in relief homes, thus giving employment to Canadian miners and railway men. There is also the matter of freight rates, with which the companies cannot deal; again it is a matter of government policy. I would urge upon the minister that he strongly recommend that the fuel board approach the railways with a view to securing an adjustment of freight rates so that coal can be moved more economically from the west and the east to central Canada. Relief coal supplied by Canadian governmental bodies should be Canadian coal, not coal mined outside the country.


Thomas Alexander Crerar: With regard to that point, which is an important one, I may say that wherever possible, Canadian coals are used for heating federal public buildings. My hon. friend appears to suggest that we should require the municipalities and provinces to use Canadian coal. We cannot do that, as I think my hon. friend upon reflection will realize. We do, however, suggest that they use Canadian coal. But if we told Alberta, for example, that they must use a certain kind of coal in heating their legislative buildings, they would promptly tell us to mind our own business; and they would be quite right in doing so.


Orvis A. Kennedy: I was referring to coal used in the homes of people on relief. In such circumstances Canadian coal should be used, but in the central part of Canada the coal used in relief homes is United States coal. Last year 400,000 tons of coal were used in relief homes and the bulk of it, in central Canada, was United States coal. We have to make up an annual deficit on our Canadian National Railways and if we used Canadian coal it would help our railways, give employment to railway men in moving the coal from east and west to central Canada, and provide employment for our miners. We could supply a good deal of that 400,000 tons.
I think the government could assist in moving
3,000,000 tons more Canadian coal than is now being used. We are bringing in

15,000,000 tons of coal from the United States every year, when it should be easy to transport Canadian coal to Canadian homes.


[Stage Direction]
Item agreed to.
Mines and geology branch.
129. Payments in connection with the movements of coal under conditions prescribed by the governor in council, $3,500,000.
Abraham Albert Heaps: Why is there an increase of over fifty per cent, from $2,250,000 to $3,-
500,000,	and what effect have the subsidies had over a period of years in increasing the consumption of Canadian coals? What has it cost us in subsidies to assist coal operators in Canada?


Thomas Alexander Crerar: Under an order in council passed on November 8, 1938, additional assistance has been given to the movement of Canadian coal to the markets generally in the central provinces. It arose out of a condition of keen competition between different producing mines in the United States. As a result the price of United States coal declined considerably. It was not a case of dumping United States coal into Canada; they were offering it for sale in the central provinces of Canada upon the same basis as they were selling it in the United States; but the effect was to create a situation, I believe more or less temporary, whereunder United States coal was underselling Canadian coal on the basis of the assistance then being given through these subventions. Consequently the order in council was amended so as to increase the assistance given to Canadian production. Members of the committee will recall, I am sure, that the principle upon which the subvention is based is that Canadian coal shall be as far as possible in a competitive position with United States coal.


Abraham Albert Heaps: Can the government by order in council change these subventions?


Thomas Alexander Crerar: Yes.


Abraham Albert Heaps: They have the legal right to do so?


Thomas Alexander Crerar: There is no question about that. That is the explanation of the increase in this vote. It is quite in accord with the principle upon which subventions were orgin-ally based. If conditions in the United States should change, if their production should become stabilized, probably the amount we shall require in carrying out this policy will be less than the figure stated in the estimates. What was the other point?

Supply-M ines-Coal


Abraham Albert Heaps: What- is the cost per ton of coal by way of subvention?


Thomas Alexander Crerar: The average for the whole of Canada last year was 91 cents a ton, and for Nova Scotia, 93 cents a ton.


Abraham Albert Heaps: It would be slightly less, I assume, for Alberta coal. Can the minister give the other information for which I asked, in reference to the general trend in the production and use of Canadian coal over a period of years? Have these subventions and other forms of assistance given to the industry had the effect of increasing the production of Canadian coal?


Thomas Alexander Crerar: I can give the production in Canada each year from 1928.


Abraham Albert Heaps: From the year we began to give subventions, which, I believe, was about 1928.


Thomas Alexander Crerar: The total production of Canadian coal in the calendar year 1928 was slightly over 17,500,000 tons. In 1929 it was practically the same. In 1930 there was registered a considerable decline, coinciding, I assume, with the decline in general business; and the low point was reached in 1932, when the total production was 11,738,000 tons. Since then it has tended to increase. The preliminary estimate for 1938 is 14,248,000 tons.


Abraham Albert Heaps: Has the minister the figures for 1937 and 1936?


Thomas Alexander Crerar: In 1937 the production was
15,836,000	tons. As my hon. friend knows, there was a decline in business in 1938 as compared with 1937. Another factor which is affecting the consumption of coal is an increasing use of fuel oil, not only in furnishing motor power for vessels, but in many manufacturing establishments and in private homes.


Abraham Albert Heaps: The fact evidently is that from 1928, about the first year we started to assist the coal mining industry in the hope of increasing our production-an object with which I am in hearty sympathy-the effect has not been to increase production. In fact, less Canadian coal is produced now than was produced ten years ago.


Mr. POTTIER:: Had it not been for the subventions the production would have been a great deal less.


Abraham Albert Heaps: I do not know about that.


Vincent-Joseph Pottier: That is the whole point.


Abraham Albert Heaps: My hon. friend may be right as regards this policy of subventions, and personally I should like us to make every 71492-274
effort we can to stimulate the use of Canadian coal. Away back in 1918, long before I dreamed of coming to this house, I went out on a committee to investigate the coal mining industry of Alberta. At that time there was very little use of Alberta lignite in Manitoba; for the most part we were using United States anthracite. I returned from Alberta very much impressed with the quality of the coal produced there, and strongly recommended that we in Manitoba use as much Alberta coal as we could. After a number of years we were able almost entirely to supplant the use of United States coal by the Alberta product. But from the time I first gave some study to this question I could never make out why Canadian coal cost so much at the mine mouth as compared with coal of a similar grade in the United States. I understand that, for instance, coal in Nova Scotia costs somewhere round four dollars a ton at the mine mouth. If I am wrong, I hope some hon. member from that province will correct me, because I am speaking from memory of figures I obtained a number of years ago. Somewhat similar conditions, I believe, prevail in Alberta, where coal is easily mined in at any rate some of the mines. I realize that in some parts of Nova Scotia it is an expensive proposition to mine coal deep in the earth, perhaps under the ocean, and haul it to the surface.


Vincent-Joseph Pottier: On account of the depth.


Abraham Albert Heaps: Yet in the United States, where conditions are comparable with those in this country, coal is produced at a little more than half what it costs to produce it in Canada. I have never been able to ascertain why there should be that great differential, particularly in view of the fact that wages in the United States are rather higher than they are in the dominion.


Mr. McLEAN (Melfort):: Western bituminous coal is produced on a parity cost with United States coal where the situation is somewhat similar. But where you have very deep mines, going under the sea, as in eastern Canada', naturally it costs more to bring out the coal. The organization of those mines was undertaken at a time when not so much was known about development as is known to-day, and it has been more expensive to bring coal to the surface there than in many mines of the United States.	There you can run a
trainload of cars to the mine mouth, load the train, kick the brakes loose and let it go down to the wharf under its own momentum, without power. That situation exists in some of the states of the American union

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south of the Canadian border, but in the western bituminous region coal is produced as cheaply as anywhere else on the continent.


Abraham Albert Heaps: Perhaps I did not make
myself understood. I am speaking of coal mined under similar conditions in both countries. I can understand the cost being very high in the Princess collieries, which run under the ocean bed. But take other mines, say at Stellarton and in Alberta, where they do not go very deep into the mine mouth, perhaps a few yards; they can dig coal from the side of the mountain, and the coal is taken out at once and loaded on the cars.


Malcolm McLean: That is produced cheaply.


Abraham Albert Heaps: But at the mine mouth
the price of even that coal is in excess of the price of the same kind of coal produced in the United States. I am fairly correct in my facts because I have them somewhere on record. We have had the matter before the railway committee; and a satisfactory answer has not been given because it happens that the Canadian National Railways own a number of mines which they had to take over years ago when they acquired that part of the system which is owned in the United States. The officials told us the same thing in regard to the cost of coal. I am not objecting to the subventions or to assistance given the industry, but I should like to see Canadian coal made use of in Canada through some scientific means. Millions upon millions of tons of soft and hard coal are imported into Canada, and I would rather see the coal produced here for use in our homes and factories.


Thomas Alexander Crerar: Production of coal in
Canada has kept fairly constant in the last eight or ten years if allowance is made for variations on account of depression in business conditions in 1938 as against 1937. That has been attributable, I believe, to the assistance given under these subventions. Taking the per capita consumption of coal in Canada, we find that twenty years ago it was roughly 4^ tons. In 1937, which was a good business year, it was 2-65 tons. The decline in the consumption of coal in Canada has been due to several causes. In the first place, there has been a decided improvement in combustion and utilization methods and, consequently, the securing of the maximum amount of heat units.


Mr. STEWART:: Then there is electricity.


Thomas Alexander Crerar: In the second place, there has been a wide extension of the use of electricity and gas, and a third important factor, the most important of all, in fact, has been the great increase in the use of fuel oil not only in industrial establishments, but in the heating of private homes that were formerly heated by coal. If Canadian production had declined in step with the Canadian use of coal per capita, the total production would be very much less than it is at the present time. Undoubtedly, whether the policy is sound or not, the maintenance of production in Canada has been in a large measure on account of the assistance given through the subventions.


Abraham Albert Heaps: What were the corresponding importations in the years for wdiich the minister gave the production?


Thomas Alexander Crerar: In 1918, which was the
year when consumption was 41 tons per capita, the importation from the United States in short tons was 21,674,000 in round figures. The Canadian production in the same year was 13,160,000 tons.


Abraham Albert Heaps: What about 1928?


Thomas Alexander Crerar: In 1928 Canadian production was 16,487,000 tons, and importations from the United States were 15,830,000 tons. In 1937, Canadian production was 15,172,000 tons and importations from the United States,
12.575.000	tons. The only inference that can be drawn from these figures is that while Canadian consumption of coal has declined from 4} tons per capita in 1918 to 2-64 tons per capita in 1937, the decline has taken place in the imports. In other words, the imports have been approximately reduced by the amount of decline in the Canadian per capita consumption, and Canadian production has remained fairly stable. That is as a result of this policy.


Charles Edward Johnston: What were the importations of Welsh coal in the same years?


Thomas Alexander Crerar: If hon. members wish to pursue their studies in this regard they will find the facts in Coal Statistics for Canada, which is a government publication, for the calendar year 1937.
I come back to the importations from Great Britain. In 1918-one figure is blurred, but it looks like 3,761 tons. In 1928 it amounted to 683,000 tons. Then following 1932, I assume it was the effect of the trade agreements, there was a sharp increase. In 1937 total imports from Great Britain were
1.211.000	tons.

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Alan Webster Neill: Just to make sure, the minister has no intention of interfering with or reducing the present subsidies or subventions now being paid for coal mined on Vancouver island, at Cumberland and Nanaimo, has he?


Thomas Alexander Crerar: No. As a matter of fact that question has not arisen, and there is no intention of interfering with them.


John Charles Landeryou: What was the total value of the coal imported in 1937?


Thomas Alexander Crerar: I think I can satisfy the hon. member's thirst for information in that regard, although, as I say, hon. members will find it in this report. I am afraid I spoke too soon; I do not appear to have it, although I have no doubt it will be found somewhere in the publications.


Mr. HANSELL:: I might help the minister a little in answering some questions. On February 27 a return was made, which hon. members will find on page 1328 of Hansard, of the tonnage of coal imported into Canada from various countries of the world.
Last year the minister was asked whether the government would consider making this item a statutory one instead of passing it from year to year. Has any consideration been given to that suggestion? The hon. member for Edmonton East asked the question on the basis that the coal industry of the country was a little reluctant in extending operations for fear there might be some reduction in the subventions in years to come. If the item were made a statutory appropriation they would then have some assurance on which to extend their business. Have the government done anything along that line?


Thomas Alexander Crerar: No. So far as I am aware consideration has not been given to that suggestion. But from my observation, once you get the principle of subventions for assisting in the movement of coal from one part of Canada into another established, it is extremely difficult to get it either changed or modified. I do not think the coal operators in Alberta or anywhere else in Canada are really very much afraid that this policy will be suddenly changed.


Major James William Coldwell: Has the national research council done any work in examining the possibilities for the utilization of Canadian coal in other ways than those in which it is being used at the moment? I have in mind, for example, the work done in Great Britain in endeavouring to obtain naphtha or gasoline from coal, liquefying it. They are doing this in Germany and other countries. Has any attention been given to that by the national research council, which has done such splendid work in so many other fields?
71492-274J


John Ritchie MacNicol: It has been doing it for years.


John Charles Landeryou: Can the minister state the amount and value of soft coal imported into Canada, and from what countries?


Thomas Alexander Crerar: In reply to the hon. member for Rosetown-Biggar (Mr. Coldwell), experimental work is being carried on continuously in the fuel laboratories of the mines branch in relation to the hydrogenation of coal, the possibility of extracting from it oil and other constituents. Undoubtedly Canada could do in that respect what other countries are doing. But so far as my information goes, it is an expensive process; it becomes, after all, a question of economics. Constant experimentation is, however, going on.
The amount of bituminous coal imported for 1937-which would be, I assume, what my hon. friend has in mind when he speaks of soft coal

was 12,339.000 tons. Practically all the coal imported from the United States is bituminous coal.


Mr. COCHRANE:: This increase in the subventions will be of great benefit to the Nova Scotia mines, overcoming the problem of moving coal to points in Ontario. But it appears to me that the big problem is not so much to move the coal as to get the people of Ontario to purchase Canadian coal. For the privilege of using United States coal Canadians are paying nine or ten million dollars a year in duty. I am under the impression that the people of Ontario, where there is a large market, and where coal from the United States is being used extensively, are not Canadian coal conscious.
The minister stated a few minutes ago that representations had been made to him that the work of the fuel board should be either extended or expanded, but that he hesitated to make representation accordingly to the government, because it would be adopting a new principle. It seems to me that in this instance we should either change the principle or forget it. If our Nova Scotia miners-I am speaking of Nova Scotia, but the same thing applies to Canadian coal miners generally- cc.uld get five days' work a week, and when one considers that 75 per cent of all the goods we purchase in Nova Scotia come from Ontario, where the manufacturers talk about their industries not working to full capacity, it would certainly stimulate industry in Ontario if the miners of Nova Scotia had the wages for that work to spend. The people of Ontario will not buy our coal, but pay 75 cents a ton duty on United States coal.


John Ritchie MacNicol: Did the hon. member say that the people of Ontario do not buy Nova Scotia coal?

8 upply-Mines-C oal


Kenneth Judson Cochrane: Not to any great extent. The people of Ontario are importing seven or eight million tons of soft coal from the United States every year.


John Charles Landeryou: Eleven millions.


Kenneth Judson Cochrane: Well, I am safe in saying eight or nine million tons, where they could very well use Canadian coal. If the people of Ontario expect the other provinces to purchase goods from them, surely they in turn should buy Canadian coal. The subventions are not costing the government one cent, because the duty that is being collected on bituminous coal coming into Ontario amounts to about $9,000,000 or $10,000,000 a year.
How much was paid in subventions for the fiscal year ended March 31 last?


Thomas Alexander Crerar: It was between $1,800,000 and $1,900,000.


John Ritchie MacNicol: I should like to say a word in reply to the remarks of the hon. member for Cumberland. Coming from Ontario, I can tell him that on every occasion I have advocated the use of Nova Scotia bituminous coal instead of coal coming from the United States. I can say further that I believe a very large proportion of the bituminous coal shipped out of Nova Scotia is sold in Ontario; and so far as I know, the people are anxious to use Nova Scotia coal. I do not know why so much coal is brought in from the United States. Some of the business men with whom I am acquainted use Nova Scotia coal at all times; the Toronto board of education, in drawing up their specifications either this year or last year, required that most, if not all, of the coal should come from Nova Scotia. Perhaps what is required is a campaign to educate the people to buy Nova Scotia coal, and I am sure such a campaign would have u sympathetic reception. There is no reason in the world why we should not buy our bituminous coal from Nova Scotia.


An hon. MEMBER:: Canadian coal.


John Ritchie MacNicol: My hon. friend keeps talking about Alberta coal. At one time we did buy coal from Alberta; I used it myself. Unfortunately, for some reason or another, when the Alberta coal arrived in Ontario it was no longer coal; much of it was dust, and we were told that the disintegration took place on the way down. I remember that the Ontario government voted $25,000 to assist the initial shipment of Alberta coal to Ontario.


Mr. KUHL:: What mine was that from?
]Mr. MacNicoI.l


John Ritchie MacNicol: I do not know; the Alberta government selected the mine. From my personal experience I can say that the Alberta hard coal was found very satisfactory. It gives splendid heat and has a fine flame; it possesses one remarkable characteristic in that you can slow down your fire for a period of twenty-four hours, and when you turn on your drafts, away it will g.o. I found Alberta coal very satisfactory in the house. Bituminous coal, of course, is used in schools and public buildings throughout Ontario, so both kinds have their purpose. I should like to see Ontario people burning Alberta coal in their houses. I recommended it, and my advocacy resulted in a great many orders for Alberta coal some years ago. Why its use has been discontinued I do not know. Perhaps the Alberta government could overcome the difficulty in regard to the disintegration of the coal on the way down; I believe it would be worth an effort.


Orvis A. Kennedy: This question alwavs comes up when we are talking about coal. Unfortunately a few years ago lignite coal was shipped to Ontario, and when it got here it was slack, because it contains about 40 per cent water. But we have unlimited quantities of bituminous coal in Alberta, and if we could only get the government to bring that coal here and have the manufacturers use it they would find it the best coal in Canada, or, for that matter, in the world. It contains only about 4 per cent water, and it will not slack on the way down. The water came out of the lignite coal that was shipped east a few years ago; and each time the question of coal is brought up, someone rises and says Alberta coal is no good because it slacks on the way down. Eighty per cent of our coal is bituminous, and in Alberta we have 87 per cent of the coal supply of Canada. Stephen Leacock says we have enough coal in Alberta to supply Canadian needs for 36,000 years, so it seems rather a shame that we should bring in 15,000,000 tons from the United States every year.
To get back to the point under discussion, would the minister break down the subsidies paid last year? How much of the coal subvention went to Alberta?


Thomas Alexander Crerar: During the last fiscal year, assistance was given in moving 283,291 tons of Alberta coal at a cost of $284,586.34, or almost exactly a dollar a ton. That was in connection with movement within the western provinces. In addition, there was a movement from Alberta to Ontario of 66,677 tons at a cost of $166.69863, or at a rate of $2.50 a ton. In other words, out of the subvention

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voted by parliament, assistance was given the movement of Alberta coal to Ontario at the rate of S2.50 a ton.
May I say this further word. There could be a fuel policy for Canada that would exclude every ton of foreign coal. I suppose laws could be passed, under which, if they could be enforced, Alberta coal would have to be used everywhere in Ontario. But I may point out to the hon. member for Edmonton West that he would immediately find himself in conflict with our friends from Nova Scotia. A few years ago we had a situation in which we were paying subvention assistance for the movement of Alberta coal to Ontario points and at the same time paying subvention assistance for the movement of Nova Scotia coal to Ontario points, and they passed each other by several hundred miles. It seems to me it is rather absurd to pay subventions to move Nova Scotia coal, for instance, to the head of the lakes, and to pay subventions on Alberta coal to move it to Sudbury or North Bay. The poor taxpayer in Canada has had a pretty heavy burden to carry, and I am afraid will have to continue to carry a heavy burden; but I do not think, in working out a coal policy, we should proceed to absurdities of the kind I have just mentioned.


Charles Edward Johnston: That difficulty could be easily overcome, could it not?


John Ritchie MacNicol: Do I understand that
Nova Scotia coal has gone as far west as Fort William?


Thomas Alexander Crerar: It has gone as far west as Hearst on the transcontinental railway, and it goes to Kapuskasing, to Sudbury and to smelters such as Noranda.


John Horne Blackmore: Surely that could be prevented.


John Charles Landeryou: We are not advocating that only Alberta coal should be used in Ontario and Quebec. We are advocating the use of a greater proportion of Canadian coal, from Alberta, Nova Scotia, British Columbia or any section producing coal, even Saskatchewan. In the past there may have been difficulty such as the minister mentioned, with the shipping of Nova Scotia coal to the head of the lakes and Alberta coal towards the Ottawa district, with the shipments crossing each other, but that is a matter that can be worked out. I am interested in the greater consumption within Canada of coal produced in this country.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Ernest George Hansell: When the committee rose at six o'clock I was about to ask a question. When it comes to the coal industry, there seems to be a little overlapping in the work of the Department of Trade and Commerce and that of the Department of Mines and Resources. I was checking up some of the figures given by the minister, and it seems to me there is some slight difference. This may not be very great, but I am just wondering how closely the two departments work together in connection with coal subventions and the coal industry generally. Questions have been asked as to the amount paid out in coal subventions and the companies to which these subventions are paid. I have in my hand a sessional paper which was brought down a couple of months ago and which contains a table of the subventions paid out in 1938. With the permission of the committee, perhaps this table could be placed on Hansard. I can read it, but we are in a hurry and I think hon. members will be interested in these figures.


Frederick George Sanderson: Only with the unanimous consent of the committee.


Some hon. MEMBERS:: Agreed.


Ernest George Hansell: This table is as follows:
3. (a) Nova Scotia:
Acadia Coal Co. Ltd	$	12,555 72Canadian Import Co	
16,660	77Canadian National Railways.. ..	281.705	65Canadian Pacific Railway Co. . ..	280,075	09Cumberland Ry. & Coal Co. Ltd. .	5,339	00Dominion Coal Co	
438,877	33Essex Terminal Railway	
324	01Maritime Coal Ry. & Power Co. .	1,397	55Sydney & Louisburg Railway.. ..	219,161	38

(b) Alberta:
Canadian National Railways..	..	$	145,981	57Canadian Pacific Railway Co. .	..	213,874	20Northern Alberta Railway Co.	..	78	66

(c) Other Provinces:
Canadian Collieries (Dunsmuir)
Ltd	$ 122,726 79
Canadian National Railways..	..	16,623	11Canadian Pacific Railway Co. .	..	93,858	11Morrissey Fernie & Michel Railway	
[DOT][DOT]	8,591	34

During the course of the discussion on this item the question has been raised as to whether Ontario can burn western coal. As was said a little while ago by an hon. member,
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Abraham Albert Heaps: Is the hon. member not a little out in his figures?


Ernest George Hansell: I have calculated them rapidly on the basis of the report given to the Purvis commission.


Abraham Albert Heaps: If 4,000 men working all the year round produce 300,000 tons of coal, each man would produce only 75 tons of coal a year.


Ernest George Hansell: I did not work it out on that basis. I simply took the figure given and multiplied it by three, which makes it 900,000 tons.


Abraham Albert Heaps: I am wondering if that is the correct figure.


Mr. BERTRAND (Prescott):: My hon.
friend said that to produce 300,000 tons of coal would give work to 4,000 men five days a week the year round.


Ernest George Hansell: Yes.


Elie-Oscar Bertrand: That would mean 1.000,000 wrork days. In other words, it would mean three days work for one man to extract a ton of coal. It would be rather expensive coal. What wages would the men receive?


Ernest George Hansell: I will read a paragraph from the correspondence.


Elie-Oscar Bertrand: I am putting a question based on the figure the hon. member himself gave.


Ernest George Hansell: This is my answer. The statement that was made to the Purvis employment commission in correspondence from the Alberta trade commissioner in Toronto was this:
It is contended that a subvention of $3 per ton from the dominion government instead of $2.50 as at present, on the shipment of coal from Alberta to Ontario, with a freight rate payable to the railways of $7.50 per ton, instead of $8 per ton as at present, will result in the movement inside of the next twelve months of
300,000	tons of Alberta coal, providing 900,000 man days work at a daily wage of slightly less than $4.
My hon. friend can figure it out from that basis.	[DOT]


Elie-Oscar Bertrand: But the hon. member will see, if he figures it out for himself, that it would not give much in wages.


Ernest George Hansell: My hon. friend can speak on the question later if he wishes. I am taking the submission to the Purvis commission made by a capable man, and it is one that has not been controverted in the correspondence.
The hon. member for Winnipeg North must remember that the payment of subventions results in giving work not only to the men who mine the coal but to railway men running the freight trains, even to the men who repair the freight cars, and incidentally to those who help to maintain the railways. All these enter into the calculation of what subventions and the movement of coal from the west to the east mean in terms of employment. Has the

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government any statistics showing what the mining of, let us say, 100,000 tons more coal, or any other quantity, would mean in increased employment for Canadian workmen?


Thomas Alexander Crerar: I do not know that I can completely answer that question; but, generally speaking, each dollar spent in subventions means the expenditure of three dollars in labour, freight and other items. One can only speculate on what might happen if certain theories could be put into practical effect. As I said before six o'clock, it might and probably would be possible to formulate a coal policy in Canada that would exclude all foreign coal and supply the requirements of Canadian householders, industry, and transportation from the production of Canadian coal, but that would entail a very heavy burden on the taxpayers of this country. Speaking generally, I do not think a policy of that kind could be put into effect. The United States ship into Canada at the present time a very considerable quantity of coal, and we have agreed in the recent trade agreement not to increase duties against United States coal during the life of the agreement. If we were to say at the expiration of the agreement that we were going to double or treble the duty against United States coal, that would have an effect on any new trade arrangements we might try to negotiate with the United States. Consequently one cannot consider one commodity alone, because the carrying out of a policy such as the hon. member suggests might work a serious injury to many other industries in Canada, apart altogether from the burden it would impose on the Canadian taxpayer. In framing and giving effect to a policy such as he suggests, one must consider its effect upon the whole trade of the country. Undoubtedly the paying of subventions in both the Alberta and Nova Scotia fields has resulted in a very much higher output of Canadian coal than would otherwise have been possible, and it is a nice question whether one should increase the subventions, at the expense of the Canadian taxpayer, for the purpose of having more Canadian coal produced. It is a matter of opinion, and on the whole I think the policy as applied at present is the one best suited to the needs of this country.


Ernest George Hansell: The minister has gone
quite a way round to answer my question. I realize that the government would have tremendous difficulty in , arriving at an exact estimate of the additional number of men who would gain employment by producing 100,000 tons more of Canadian coal. But what I had in mind was this. The Minister of Labour
has a tremendous problem on his hands, that of finding employment for those who are unemployed to-day. Many of those unemployed in Canada to-day are experienced coal miners. The Minister of Labour wants to know how to get them to work again. What I suggest is that the government should look into this matter to ascertain how many more could be legitimately employed. The coal miner is an experienced workman; he needs the work; Canadian people could use the coal; and through an increase in the coal business thousands of men could be employed. I urge the government to investigate this part of the field; for I could not find in the employment commission's report that they mentioned the matter at all.
The minister suggested that to increase subventions would mean a tremendous expense to the taxpayers. Perhaps it would; but it must be remembered that the extent of the relief problem as we have it to-day involves a huge expense to the taxpayer, and if men can be put to work, even by an increase in subventions, it would save part of the taxes which are now allotted to relief. One hon. member, speaking before recess, mentioned that the Canadian government receives by way of tariffs through the importation of coal some ten million dollars a year. The amount which is paid in subventions is not anything like ten million dollars.


Mr. HARTIGAN:: It is $7,900,000.


Ernest George Hansell: Well, that is quite a substantial ' amount. I should like to point out another thing to the committee. The impression may be abroad that to increase subventions means that more money will go to the coal mining industry. That is not so. Whatever benefit the industry receives from these subventions results only from an increase in business; those who receive the direct benefits are the railways who transport the coal and the workmen who are engaged in mining the additional amount. A good many people do not understand this. They assume that the coal owners obtain the benefits in the form of a good slice of the coal subventions. That is not so; the only benefits they receive through this policy are in an increase in their business.
I do not wish to embarrass the minister, but I should like him to answer a rather delicate question. There is a widespread impression in this country that the reason why so much United States coal is imported is that Canadian capital is invested in the United States coal mining industry.


Some hon. MEMBERS:: No.
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Ernest George Hansell: Hon. members here and
there say "no." Possibly they know more about the matter than I do, but I have given considerable study to this industry, and I am not in a position to say either yes or no. It is very easy for hon. members, because it suits their convenience, to pop up and say "no." Other hon. members might say "yes." That answer might suit their own convenience. But I cannot answer either one way or the other.


An hon. MEMBER:: Why suggest it, if
you do not know?


Ernest George Hansell: I am not suggesting it.
The rumour is abroad throughout the mining areas of Canada. I am confronted with it continually. Men come to me and say, "Do you know that millions of dollars of Canadian capital are invested in the Pennsylvania fields?" They actually mention the names of men in this country who have vested interests in United States coal fields. I am not able to say to them, "You are right." I hope the statement is incorrect. I cannot obtain the information; it is not available. I wonder whether the government has it. I do not ask for an immediate reply, but I think the government should know whether the rumour is or is not in accordance with the facts. In my opinion it is the duty of governments to know exactly these things, and it is the right of the people to know. There is no harm in giving them the facts, and if there is nothing in the rumour let us put the minds of the people at rest.


Thomas Alexander Crerar: I have no definite information as to the number of Canadian individuals or companies who have money invested in United States coal properties. I believe that both the Canadian Pacific and the Canadian National railways have financial interests in United States coal mines which they secured a great many years ago. My information is that the railway companies buy their coal in the open market and that a very small quantity of their supplies has come from the mines which they are reputed to own. There are a few other Canadian industries which own or are interested in coal mines in the United States; but so far as our information goes,
[DOT] there are not more than three or four Canadian concerns-probably not that number- outside the railways that have money invested in coal properties in the United States.


John Charles Landeryou: We have a coal
monopoly, though operating in eastern Canada.


Mr. WOODSWORTH:: I should like to know what amount is paid in the form of subventions or subsidies in the Nova Scotia mining field.


Thomas Alexander Crerar: For the last fiscal year, $1,256,096.50.


Henry Herbert Stevens: How much a ton?


Thomas Alexander Crerar: Ninety-three cents a ton.


James Shaver Woodsworth: To what corporations was this paid? Did the railway companies get any of it?


Thomas Alexander Crerar: The figure I gave a moment ago, being the total payments on Nova Scotia coal, was divided as follows:
Acadia Coal Company Limited. .. $ 12,555 72 Canadian Import Company	16,660	77Canadian National Railways	281,705	65Canadian Pacific Railway	
280,075	09Cumberland Railway and Coal Company Limited	
5,339	00Dominion Coal Company Limited..	438,877	33Essex Terminal Railway	
324	01
Maritime Coal, Railway and Power
Company Limited	
1,397	55Sydney and Louisburg Railway. ..	219,161	38


Mr. DONNELLY:: Could the minister give us this information in relation to the west?


Thomas Alexander Crerar: In Saskatchewan the payments were to the Canadian National Railways and the Canadian Pacific Railway. To the former, $13,603; to the Canadian Pacific, $21,195.


James J. Donnelly: How much a ton?


Thomas Alexander Crerar: That worked out at 23 cents a ton.
Mr. WOODSWrORTH:	Is any inquiry
made with regard to these corporations as to their need of such a subsidy?


Thomas Alexander Crerar: I do not see exactly where the question of need enters into the matter. The purpose of the subvention policy, the principle underlying it, is to put Canadian coal in a competitive position with American. Take the Canadian Pacific Railway. It might be argued that they do not need to take advantage of the subvention policy. They might say, "We will buy our coal where we can get it at the cheapest rate, and for a certain territory we can get it cheaper from the United States than from Nova Scotia." The principle comes in there, enabling Nova Scotia coal to ibe moved to the area in which it is required, and thereby providing work for miners in Nova Scotia.


James Shaver Woodsworth: But is an investigation made to find out whether or not the

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Nova Scotia mines are producing as economically as possible? Is it necessary that they should be given this subsidy?


Vincent-Joseph Pottier: Is the hon. member
objecting?


James Shaver Woodsworth: It is not a question of objecting. I am asking on what principle the government determines whether or not an industry needs a subsidy.


Thomas Alexander Crerar: The principle upon which these payments are made is not the need of a particular company. It is to enable Nova Scotia coal to compete on even terms with foreign coal in certain areas, say in Quebec and Ontario, where the big consuming market is. The fact that a mine may be efficient or inefficient is not the important factor in the carrying out of the policy. I believe there are certain Nova Scotia mines that might be able to make some improvements in their mining methods. I was told, and I believe the information is correct, that in some of the mines the men object to the introduction of what might foe called labour-saving devices, on the theory that it would displace labour. To what extent that may be true I am not prepared to say, but you might have one mine in Nova Scotia more efficiently operated than another. The subvention principle, however, as I understand it, does not necessarily depend upon efficiency of operation. The purpose is to put Canadian coal in a competitive position with imported coal.


James Shaver Woodsworth: I cannot quite understand the minister. The purpose is to put an industry in Nova Scotia in a position to compete with industries in other areas. Unless something is known about conditions in the mining area concerned, how can we know whether or not a particular industry is in a position to compete?


Thomas Alexander Crerar: May I ask my hon. friend how we are to determine that?


James Shaver Woodsworth: That is what I am asking the minister.


Thomas Alexander Crerar: Who is to judge as to efficiency of operation? Take the Dominion Coal company, for instance. So far as my information goes, it is efficiently operated and ably managed, but that company could not ship its coal into Ontario if it were not for the subvention. It could not compete with cheaper coal from the United States. There might be in the United States a mine just as efficiently operated as the Dominion Coal company's mines in Nova Scotia, but because of geographical conditions, Nova Scotia coal, quite as efficiently produced, could not compete with coal from the United States. The purpose of the subvention is to assist in the
freight movement of Nova Scotia coal to the districts in the central provinces and thus enable it to compete with the imported article.


James Shaver Woodsworth: When making large subventions of this kind, does the government lay down any principle under which the coal industry must operate? Is there any condition whatever as to the economy that must be practised or the wages that must be paid?


Thomas Alexander Crerar: No.


James Shaver Woodsworth: None whatever?


Thomas Alexander Crerar: That is a matter which is purely under provincial control. Hours of work, wages and so on are matters for provincial control and legislation.


James Shaver Woodsworth: But if this dominion government proposes to make a certain grant [DOT]-call it a subvention or subsidy or anything else you like-it surely has some control over the conditions that apply in the industry, or it can cease to give the subvention. The minister cannot avoid the issue by simply stating that the dominion government has no control whatever when it makes the grant.


Thomas Alexander Crerar: If I understand the hon. gentleman rightly, he is suggesting that we should attach certain conditions to the payment of the subventions-conditions that will guarantee the workmen certain wages or hours of work, certain conditions of safety and all these other matters that are peculiarly and particularly subject to provincial control.


James Shaver Woodsworth: I disagree entirely with the minister in that. It is not a question of hours of labour being under provincial control; we all recognize that they are. My submission is that when this government undertakes to make a grant, it can stipulate the conditions under which the grant is given. I have in mind particularly not so much wages and hours of labour as the regularity of work, the whole question whether or not some of these mine fields should be kept open and whether a still higher subvention might not keep some others open that should be kept open. Let me read a paragraph or two which will bring the implications of this matter to the attention of the committee. I am reading from the report-


An hon. MEMBER:: The Halifax Herald, I suppose.


James Shaver Woodsworth: If hon. gentlemen care to make a speech they are free to do so, but in the meantime I might be allowed to make my own speech. I am quoting from the Carroll report:
Your commissioners readily admit their inability correctly and accurately to dissect or untangle intricate matters of accounting, but

Supply-M in es-C oal

this at least may be said, that from the year 1925 until the end of 1932 the Acadia company was in a comfortable position financially, and showed a surplus during those years of from $460,219.42 to $1,076,060.99.
And again:
The whole of those transactions clearly indicate that at the end of 1932 Acadia was left without a dollar of *working capital; nothing to take care of renewals or maintenance; nothing to keep the properties anywhere near a proper level of efficiency.
Or still again:
Legality of action, however, is one thing, and preserving and safeguarding the industry and all that that implies is quite another thing. It is therefore the considered view of your commissioners that some legislative action should be taken in regard to the powers of holding companies.
And here we pass into the large problem of how to control great corporations that control subsidiaries. In this instance I am not clear from the statement given by the minister a few minutes ago whether the control is given to the great holding company or to the subsidiary. Apparently it is given to the subsidiary.


David James Hartigan: From the very essence of the subvention method does the hon. member think it is a bonus on the coal or a subvention on production? It is on a tonnage basis that it is paid, therefore it is all to the good for the men. We should have more subventions if it were possible. The men would ask for it, not to retrench.


James Shaver Woodsworth: I am not talking about increasing or decreasing subventions; what I am getting at is the underlying principle. Apparently a subvention might be granted to a company that has no need of it, whose accounts may show a large surplus. But those accounts might be entirely cooked for all we know; so far as this government is concerned it appears to make no difference. On the other hand there are places that have been closed up, like Thorburn. A few months ago this statement was made by the secretary of the trust fund at Thorburn:
Malnutrition is prevalent; the scourge of sickness is working in our midst; children are in need of the necessities of life, clothing, bedding; in need of medicine . . . and other things than the bare necessities as supplied by the relief committee. . . .


Vincent-Joseph Pottier: What is the hon. member reading from?


James Shaver Woodsworth: From a statement made by Richard Cholmondeley, secretary of the trust fund for the relief of Thorburn residents. There are undoubtedly people suffering great distress in the coal mining areas

of Nova Scotia. It may be, as some have said, that there are too many miners; that some of these mines, the less profitable, should be closed. I am not an expert in that matter. But what I suggest is that the policy which apparently has been adopted in this house for some years takes no account of the actual conditions. It may be that we are paying subsidies where no subsidies are needed. It may be that these subsidies are keeping higher cost mines in operation, or if mines are put out of operation, that apparently nothing is done for the miners at those abandoned mines. Let me repeat, I should like to know from the minister whether he has considered the advisability of controlling mining areas where subventions are being paid. I admit that hours and conditions of labour and wages come under provincial jurisdiction. But as soon as the dominion government enters the scene by making grants, surely it has a right to say under what conditions these grants will be made.


Vincent-Joseph Pottier: Suppose the companies do not accept the conditions; the miners would get no benefit.


James Shaver Woodsworth: Well, that is another
matter.


Vincent-Joseph Pottier: That is the whole thing.


James Shaver Woodsworth: But the point is that we have not yet had from the minister any statement as to whether or not there is any examination of the conditions. We do not know whether the subvention policy is working to the advantage of the miners or not. The money may be going simply to a few of these companies. I submit that we ought not merely to continue to make grants of this kind without knowing something of the conditions and the far-reaching effects which may be produced.


Thomas Alexander Crerar: I do not think the argument of the hon. member is sound. There might be a coal company in Nova Scotia that was earning good profits, and we might say:	"Well, your financial statement last
year showed substantial net earnings; you do not need this subvention; we will not pay it to you." What would happen? They would simply say: "Very well, we are not going to sell coal in Montreal or Ontario at a loss; we will not produce the coal." The result would be that the mines would partly shut down and men would be thrown out of work. The subvention assistance is in reality by way of paying a portion of the freight on the movement of that coal. The whole purpose of the subvention when first introduced

Supply-M ines-Coal
was to enable the mines to operate at greater production, give more employment to labour and relieve unemployment. The policy may have been a wise one or a foolish one, but that is the principle upon which it was based.


John Ritchie MacNicol: It was a wise policy.


Thomas Alexander Crerar: It does not matter what
the earnings of the mine may be; the companies would simply say: "We are not going to ship coal to Montreal or Ontario at a loss."


James Shaver Woodsworth: But if I may interrupt, why does the minister take it for granted that they cannot ship without a loss? He has produced no evidence to show that. The minister says he has nothing to do with that.


David James Hartigan: It costs more to bring
that coal to Ontario than United States coal.


John Ritchie MacNicol: Is not the reason for
the subvention the fact that prior to the subvention the coal was not shipped here?


Thomas Alexander Crerar: I was about to make the
same remark. As a matter of fact all the factors are taken into account and studied, and the amount of subvention paid is only such as will put the Nova Scotia coal-to use that as an illustration-in a position to compete with coal from the United States. If the suggestion of my hon. friend were adopted, the result would be a lowering of production in Nova Scotia and greater hardship to the miners.


James Shaver Woodsworth: My suggestion is
that we get the information from the minister.


Thomas Alexander Crerar: I do not know what information my hon. friend wants.


James Shaver Woodsworth: I am asking whether in paying these subventions there is required any statement as to the conditions in the mining industry and as to whether or not such subventions are in the interest of the miners in those areas. Is there any survey of the general effect of the subvention policy?


Thomas Alexander Crerar: The cost of producing coal in these mines is available to the fuel board and is secured by that board. They know the cost of producing coal in each of these mines. But I come back to the point where I think my hon. friend goes astray, that it does not matter whether a mine is operating at a profit or at a loss. It may have a first-class operating result; but if under those conditions, as my hon. friend suggests, we say to such a company: "You have 71492-2754
no need of assistance from the federal government; your financial position is sound;" the company would immediately say: "Very well, we are not going to ship coal to Montreal or Ontario points at a loss." The payment of the subvention, I repeat, enables those mines to ship coal into the central parts of Canada, to give more employment to their men and, incidentally, probably to pay better wages as well. If you shut off the subvention the mines close down and the men are out of work. I am not discussing the wisdom or otherwise of the policy, but that was the purpose when it was first adopted. The vote has been increased this year in order to carry it out as has been done for several years past. Conditions in the United States mines have been such during the past eight to twelve months, so far as our information goes, that they have been producing coal at a loss for the time being. A mine in Pennsylvania or West Virginia would be quite willing to enter into a contract at a low rate to supply an Ontario industrial establishment with coal for twelve months. On the basis of the subventions as they existed under last year's vote, Nova Scotia would have lost the business. We had to step up the amount of assistance in order to enable Nova Scotia mines to retain that business and prevent an increase of unemployment among the miners of that province.


Mr. BROOKS:: It is not my intention to discuss Nova Scotia coal, but I am satisfied that if the subventions should be withdrawn thousands of men in that province would be out of employment.
I want to discuss for a few moments the coal mines of New Brunswick. We have a small area known as the Minto district which has been producing coal for many years. In November of last year the situation there became so bad that, as I think the minister will remember, it was proposed to send a delegation here to meet the minister or the chairman of the fuel board in order to discuss conditions. The chairman of the fuel board at that time recommended that a brief be submitted pointing out the conditions that existed in that area. This was done; a comprehensive brief was prepared, which has been before the fuel board for some time, although I am sorry to say that as yet there has been no result.
The Minto area, while small compared with coal areas in Nova Scotia and perhaps in other parts of Canada, had quite a thriving industry until recently, with about 1,200 miners employed. During the worst days of the depression it was one of the better off sections in New Brunswick, but in recent
Supply-Mines-C oal

years the sale of this coal has dropped to some extent while the cost of production has increased. In 1931, to make a comparison, the producers received S4.08 a ton, while in 1937 they received only $3.38. I do not know what survey has been made in Nova Scotia along the lines suggested by the hon. member for Winnipeg North Centre, but it is known, in this area at least, that it costs more than S3.38 to produce a ton of coal, and the operators of the area have been steadily losing on their production. Their brief is very long; it is before the minister, and I do not intend to weary the committee by reading it. In this brief the operators ask for certain things. In the first place they point out that Nova Scotia receives 32 cents a ton in subventions and other government assistance on the number of tons produced, while New Brunswick receives a total of nine cents in assistance. The Minto coal is sold principally in New Brunswick. It cannot be shipped by water but must be shipped by the two main railways, the Canadian National and the Canadian Pacific. The cost of switching coal to the main lines is very high, and in their brief the operators ask that these switching charges be borne by the government. I think this is a reasonable request under the circumstances as outlined by them. In the second place they ask that they be given some help to enable them to ship coal to the chief consuming points in New Brunswick.	*
Those are the two principal points in the brief, and I sincerely trust that the minister and the fuel board are giving consideration to these matters. In 1938 there was a strike in the Minto area over living conditions, wages and other matters which it is not necessary to mention here. The Minister of Labour, with the assistance of the provincial government, brought about a settlement of the strike and made certain recommendations, one of which was that the operators should set up a central marketing board. I believe that has been done by the thirteen operators in that area. I believe these operators have the best interests of the miners at heart, and also that we have a fine type of miner in New Brunswick. They are of English, Irish, Scotch and French extraction, and relations between the miners and the operators have always been very good. The cost of mining coal, however, reached such heights while the price was so low that it was impossible for the operators to give the miners what they would have liked, although they have done many things. For one thing the miners wanted better school conditions, and one of the finest consolidated schools in the

province was built. The operators have also improved sanitary conditions in the area and have done much to make the living conditions of the miners better. So I would strongly urge the minister and his department to consider very carefully this question of the Minto coal area in order to see if some further assistance cannot be given these people. As I said, a subvention of 32 cents a ton is granted in Nova Scotia, which I do not consider a bit too much. I know conditions in that province; I know the difficulties that have been experienced in the mining areas; I believe ,the subventions are most necessary, and I think if they were lowered there would be increased hardship.
There was one other point I intended to mention. On the front page of the last issue of the Financial Post I noticed the statement that under the. trade treaty with the United States no increase in subventions could be made without the consent of Washington. I should like the minister to say whether the recommendations contained in the brief submitted by the operators of the Minto coal mining area have not been carried out because of the provisions of the United States treaty to that effect.


Thomas Alexander Crerar: The answer to my hon.
friend's last question is in the negative. The United States treaty had and has nothing whatever to do with the situation in New Brunswick. I sympathize fully and completely with the coal industry of New Brunswick, but I think my hon. friend will admit that industry operates under certain natural handicaps.
A delegation of coal operators from New Brunswick waited on the committee of the government last January. This delegation was headed by the premier of New Brunswick, and it was urged strongly that consideration should be given to the requests contained in the brief submitted. Those requests were considered carefully, but so far we have not been able to work out a method by which we can meet them. As I recall at the moment, the chief request was that assistance should be given to the movement of coal from the Minto area to other points in New Brunswick. This request, if it were granted, would lead to many difficulties in administration. Let me remind the committee that when the subvention policy was first adopted, the aim was to put Canadian coal in a fair competitive position with United States coal. That was the chief argument put forward at the time the subvention principle was adopted.

S upply-M i n es-C oal


Robert James Manion: The minister referred to United States coal. Was not the effect of the removal of the excise tax to give assistance to United States coal as against Canadian?


Thomas Alexander Crerar: I am told that amounts to about six cents a ton.


Robert James Manion: They have stated it
amounts to between seventeen and eighteen cents a ton.


Thomas Alexander Crerar: It is about twenty cents on anthracite and about six cents on bituminous. I was about to observe that the New Brunswick request illustrates the difficulty of applying equally and fairly the remedies intended to be provided by this subvention principle. Let me repeat that the original purpose of the introduction of subventions was to put Canadian coal in a competitive position with United States coal. It was not intended that there should be any discrimination or distinction made as between Nova Scotia and New Brunswick coal and none has been made.


David James Hartigan: Only United States coal? Was it not foreign coal?


Thomas Alexander Crerar: The assistance given to New Brunswick coal has been given under precisely the same principle as governs the assistance given to Nova Scotia coal. It was urged by this delegation that assistance should be given to move coal from one point in New Brunswick to another point in the same province. What would have happened if that had been done? It would have meant that the government would be giving assistance to enable coal produced in the Minto district to compete with coal produced by certain mines in Nova Scotia. If this had been adopted, then the request would most likely have come from the operators in the Estevan field in Saskatchewan for assistance in moving their coal to Regina, Moose Jaw or Saskatoon in order that it might compete with coal from Alberta. Similar requests would probably have been received from the Pacific coast.
After full consideration we came to the conclusion that to adopt this principle would land us in a maze of absurdities. That is not to say that I do not sympathize fully with the operators in the Minto district. According to the information we have, and I think it is correct, the cost of mining coal in that district is rather high, and the coal is not of as good a quality as that produced in Nova Scotia. Those are the natural handicaps under which the industry in New Brunswick is operating. I repeat that I sympathize with
their situation, but as to whether or not some method can be found to give assistance which would not lead us into a maze of difficulties, I am not in position to say at the moment.


Robert John Deachman: What progress has been made by the government in its negotiations with the United States government to 'bring about higher prices for coal to the consumers of Ontario. This matter is being discussed in the papers, and I should like to quote from the Financial Post of May 13, as follows:
Negotiations between Canadian and American government officials, which have been proceeding since February, are expected to bear fruit this summer in a minimum price of $5.25 a ton for bituminous coal laid down in Toronto.
As an immediate result of this price agreement, if it is achieved, the Canadian government w-ill be able to lop 75 cents a ton from the subventions paid on shipments of Nova Scotia coal to Ontario.
In other words, the suggestion is that if by negotiation you can induce the Americans to charge 75 cents more per ton, then you will be able to lop off something which you have heretofore been paying for the movement of Nova Scotia coal. The alternative is that they will be able to sell more of their coal here after we have raised the price. I am not so sure of that, and I shall leave it to my hon. friends. The article goes on:
It was all a matter of the point of view, but in the final analysis the aims of the Canadian government and those of the American producer were the same. Whatever its cause the $4.50 price in Ontario last year cost the Canadian taxpayer $1-2 million. If the price is raised to $5.25, it is estimated that it may cut the tax bill by something under $1 million, depending on when this new price becomes effective.
I would point out to my sparkling friends among the manufacturers of Ontario who have been holding the pass so long, that it is to them that the bill will be sent-they will have to pay the 75 cents. I assure my hon. friends that I personally have no regrets. I shall rejoice as I see them realizing the great benefits that come from the extension of protection from one end of this country to the other. In order to bring Nova Scotia coal up here the people of Ontario are to be made to pay a higher price for United States coal.


Charles Edward Johnston: The discussion this evening has been most interesting. We have been shown how one of the greatest industries in Canada has had to struggle for the possession of a market. It has been brought out that about 14,000,000 tons of coal come in from the United States, about 1,000,000 tons from Wales, while Canadian production totals about 12,000,000 tons. Canada with unlimited coal supplies is furnishing only
Supply-Mines-Coal

about half the demands of the home market. This bears out what we in this corner have always maintained, that Canada is our best market. Until such time as we can adequately fill the needs of our own market, there is not much hope of a solution of this problem.
It seems to me that one of the greatest difficulties that face us is in connection with transportation. These subsidies should be given if our railroads cannot transport coal cheaply enough back and forth across this country so that our coal may be available to all sections. I realize the difficult position in which the minister finds himself. These subsidies are paid directly to the railroad companies, but the railroad companies are among the greatest Canadian investors in the Pennsylvania field. How can we expect the railroad companies to lower freight rates when both the Canadian Pacific Railway and the Canadian National Railways have such large investments in the United States fields? It is high time for a national coal policy and an investigation into this whole question to find out who owns the Canadian capital invested in United States coal mines. Then we might hope to get down to a businesslike way of handling the whole coal question. Undoubtedly we have sufficient coal resources in Canada. It is possible, as the hon. member for Macleod suggested1, that it is the railways who are benefiting from these subventions and that the workers are not getting as much as they should.
I was interested in reading a little pamphlet on a national coal policy for Canada. Speaking of the production of coal in Canada, it says at page 14:
Throughout Canada there are coal supplies estimated at twelve hundred million thousands of tons and estimated by Professor Stephen Leaeoek as sufficient to supply the dominion for thirty-six thousand years. These are truly staggering figures, and many millions of tons more than those which have given Britain the prosperity she has enjoyed during the past hundred years.
Here we are with hundreds of thousands of unemployed in Canada, and thousands of expert miners idle in the very constituency in which I live. They are sitting round the tracks with nothing to do. Yet we have millions of tons of coal in this country, and we are at present supplying only half the Canadian market. Why? Because the costs are so great. It cannot be disputed that the greatest cost of all is transportation. We have a virtual coal monopoly existing because of the two railway companies being large shareholders in coal mines in Pennsylvania; and they are the ones who claim that coal cannot be transported at a reasonable cost
[Mr. C. E. Johnston.1
from Nova Scotia or Alberta to central Canada. The conclusion seems obvious. If we suggested that they have no desire to ship Nova Scotia or Alberta coal into centra! Canada because they themselves own coal mines in the United States quite close to this country, it would not seem an unreasonable suggestion. I was indeed surprised to learn that our two railway companies are mine owners in the United States.
This little pamphlet goes on to say:
Had the provinces of Ontario and Quebec during the past thirty years taken a broad view of what was necessary for the prosperity of Canada as a whole, and had those provinces adapted themselves to using Canadian coal, much might have been done to redress the adverse trade balance, but eastern Canada blindly continued to import millions of tons of American coal, for the sake of immediate savings in expense, regardless of the fact that this was bound to make other provinces, sooner or later, unable to pay for the goods they manufactured.
Results, apparent to everyone to-day, might well have been foreseen for a number of years past, had a longer view been taken by the eastern manufacturing and financial interests, by the Canadian railways, and by the various governments from time to time in power.
I think our eastern manufacturers might well take that paragraph to heart. Ever since confederation it has been their policy to buy wherever they could at the cheapest possible price. Yet when they come to sell their manufactured goods in Nova Scotia, New Brunswick, Alberta, Saskatchewan, Manitoba and every other province they must have a protected market. When anyone speaks of raising the tariff on coal, the manufacturers have a great deal to say. Yet they are the very ones w'ho depend on the west for their markets, and I think they would be well advised to remember that the prosperity of western Canada and of the maritimes is a great factor in the prosperity of central Canada.
I was amazed when I learned that $50,000,000 a year goes out of this country to buy coal in the United States. An hon. member across the floor said that the government gets back approximately $10,000,000 in revenue, but at that, $40,000,000 goes out of Canada to buy coal. Not long ago I ran across a statement made by the Minister of Finance. On March 8 last he said that money circulated eighteen times and bank credit twenty-one times a year. If we send out of this country $50,000,000 a year for coal, a mathematician can easily figure how many billions of dollars that would mean in purchasing power if left in Canada. If we supplied our own coal requirements-and	we have ample coal
resources-and could thereby increase the

Supply-M ines-Coal
purchasing power of our people by over one billion dollars a year, surely that is well worthy of consideration. The situation calls loudly for a national fuel policy.
I believe that we should establish a quota system for coal importations, on a tonnage basis. I do not care whether the coal comes from Wales or Pennsylvania, the government would be well advised to establish a quota; and it should be sufficiently low to enable every one of our miners in the west and in the east to be put to work for a minimum of five days a week the whole year round. There is no reason why they should not work five days a week. Then if it were found that the country's full coal requirements could not be met, the deficiency could be made up by the United States. If a definite policy of that kind were adopted, the mining industry would be established on a more stable basis; they would know the requirements from year to year. As the situation is now, the mining industry does not know in what year subventions may be cut off, or in what part of the country they may be increased, thus giving an advantage to one part over another and causing disunity. We should formulate and put on the statute books a definite policy to build up our coal mining industry and give our own miners continuous employment. Then they would know that a definite quantity of coal would be required from Canadian mines each year, possibly 5,000,000 tons, and the industry would know where it stood. At the present time we are importing 15,000,000 tons of coal a year. I do not hesitate to say that our mines can produce just as efficiently as the mines in the United States. But so long as you have the two large railway companies in Canada shareholders in Pennsylvania mines, freight rates in my opinion are not going to come down to the point where it would be economic to transport coal from the east or the west to central Canada.
There is this other question, the cost of relief to the dominion government. I pointed out a moment ago that we send $50,000,000 a year outside this country for coal. Remember the statement of the Minister of Finance that money circulates eighteen times and bank credit twenty-one times a year. If we put that $50,000,000 into circulation in this country, the net result would be about one billion dollars of purchasing power, a great many more people would be put into employment. Relief expenditures would be reduced. We are spending thousands of dollars every year to take care of these people on relief. If it is necessary to give subventions, they should be
given. I believe it might save a great deal of trouble if the government would ascertain how much money the railroads have invested in the Pennsylvania fields.
I was interested in some remarks the minister made about labour-saving devices in use in the mines. I believe we shall always have with us the difficulty occasioned by new devices of this kind, and the minister need not try to dodge the question. If modern machines are introduced into mining or any other industry, labour will be displaced. A good many hon. members have from time to time ridiculed members of my own party who advocate a dividend. Well, the present difficulty is for the minister to solve; it is, ihow is he going to keep these men on relief who are displaced by the machine? We have suggested time and time again a means of doing it, and some hon. members have laughed at our ideas. But now the minister is facing this very question, and he will have to continue to face it until he gets down to business and solves it.


David James Hartigan: I should like the hon. member to tell us how we are going to get money for dividends when we have to bonus our coal to get it upon a competitive basis at all?


Charles Edward Johnston: Let me ask the hon. member this question, and he can consult with the Minister of Mines and Resources before he answers it. Are we going to produce coal more cheaply by hand labour or modern machine methods? I think he will say, by machine methods. Then the minister has this difficulty: When he puts in modern methods to cut down the cost of producing coal so as to compete with the Pennsylvania mines, what is he going to do with the men who are displaced?


David James Hartigan: I will tell the hon.
member what his question amounts to. His question is-


Charles Edward Johnston: The government has a following of 178 out of a total membership of 245; it is their problem, and
it is up to them to solve it.


David James Hartigan: What I want to observe is this, that upon the present basis of giving subventions for coal production you are asking not Nova Scotia or the western provinces, but Ontario and central Canada to pay that dividend.


Charles Edward Johnston: I do not want to get into an argument as to who is going to pay the dividend. If I had brought up the question of social credit I might have
4374	COMMONS
Supply-Pensions and National Health
been ruled out of order. That is not my difficulty just now, because we do not happen to be in power. Maybe after the next election it will be a different proposition. But I say in all sincerity that the Minister of Mines and Resources is up against a difficult problem in connection with the very thing he suggested, that by putting in machinery he is going to displace labour.


David James Hartigan: He did not suggest that.


Charles Edward Johnston: Yes, he did suggest that.


Thomas Alexander Crerar: May I say to the hon. member that I have no power to put in machinery or take machinery out. May I make another observation? I dislike very much to interrupt the hon. gentleman in his speech, but there was an arrangement or an understanding by which the Minister of Pensions and National Health would proceed with his estimates at nine o'clock, and it is now almost half an hour past that time. I suggest, therefore, that this item stand.


David James Hartigan: I want to say a few words.


Charles Edward Johnston: I have not finished yet.
Item stands.
DEPARTMENT OP PENSIONS AND NATIONAL HEALTH Miscellaneous grants.
272. Canadian council on nutrition, $14,000.


Major James William Coldwell: Would the minister give a brief explanation of this particular item?


Hon. C. G. POWER (Minister of Pensions and National Health):: In October and
November, 1937, steps were taken by the Department of Pensions and National Health to form a national council on nutrition. The functions of the council include: to study the nutritional status and food-consuming habits of the urban and rural population in Canada; to outline standard methods of collecting data in surveys of food consumption; to set up a nutritional standard for Canada; to interpret this nutritional standard in terms of specific foods; to determine the nutritional value of Canadian foods; to collect information regarding, and to coordinate study and research pertaining to nutrition carried out in Canada; to assemble information on dietary research carried out in other countries and to investigate the necessity and feasibility of applying the results in Canada; and when sufficient information is available, to conduct educational and publicity campaigns and by 
other means to correct unsatisfactory conditions in the dietary habits of Canadians; to collaborate in the nutrition work of the health secretariat of the League of Nations. Surveys are being carried out throughout the dominion.


Major James William Coldwell: I am quite in favour of making a grant of this description for this purpose, but I wondered just how the department would benefit from this expenditure.


Charles Gavan Power: I do not know that the
department will benefit, but we hope that the people of Canada will.


Major James William Coldwell: That is just what I was hoping to hear, because it seems to me that the question of nutrition, which was discussed recently in this city by an eminent authority is one to which we should be giving attention from several points of view. Representing an agricultural constituency, I should like to see a greater amount of meat, butter and other foods used in this country. It seems to me it is all very well to make a grant of this description, but we must consider ways and means of enabling people to obtain the goods. In other words, we must endeavour to provide work with wages so that people may benefit from councils of this description and their inquiries.


John Charles Landeryou: Have any reports been submitted by this council? Do they put out any literature?


Charles Gavan Power: No report has been made as yet.


John Charles Landeryou: I recommend to the minister and hope that reports will be put out in the future. I am thinking at the moment of the one million people who are on relief throughout Canada and are securing only $6.43 a month for food, clothing and shelter. I hope that some report will be made as to the effect of this income upon the people concerned, the people who are on relief, whether they are getting sufficient food or whether they are suffering from malnutrition, and if so, to what extent and for what reason.


Charles Gavan Power: We cannot do anything of that kind, I would point out, until we get money. This is the first time we have asked parliament for it.


John Charles Landeryou: I am prepared to vote the money; I am merely suggesting that if the money is voted we shall hope to get something for it besides a few jobs for the people who may be hired and who already may have good salaries. I know these things have been done before. I remember that in my own province persons were sent round to teach the people how to cook or to sew, but the

Supply-Pensions and National Health
people did not have the things to cook or the articles to sew. I hope that this is not to be simply another council to tell people what they should eat, to tell them that they should have so much milk for their children, so many ounces of meat and so much bread, and how to balance their diet, without helping them balance their budget. Is this just another group we are to have going round asking questions and poking their noses into people's affairs without giving them any real benefit? I hope not. An investigation into these matters is not sufficient unless we can follow it up by doing something for those people from one end of the country to the other who are suffering from malnutrition.


John Ritchie MacNicol: Is this vote not an infringement on provincial rights?


Charles Gavan Power: The service will be carried out by the universities of Toronto, Alberta and Dalhousie and by the provincial department of health (Laval university, Quebec). Not one cent goes in salaries so far as the department is concerned.


Some hon. MEMBERS:: Carried.


Mr. GRAY:: Carried.


John Ritchie MacNicol: No, it is not carried, and if the government whip would only keep quiet the items would go through faster. We may not get through by Saturday if the government whip keeps saying "carried." Does the minister require the consent of the provincial governments in dealing with these matters?


Charles Gavan Power: The dominion health council, composed of the ministers of health of all the provinces, has requested that this be done by the federal government.


John Ritchie MacNicol: If we had had that answer at the beginning, the item would have carried.


[Stage Direction]
Item agreed to.
Services to veterans and dependents.
21,1. For the continuation or carrying out of projects or schemes commenced or recommended by the veterans' assistance commission and to authorize the employment or continuation in employment by the governor in council of such extra temporary officers, clerks and employees as may be necessary to carry out the purposes of the Veterans' Assistance Commission Act, $150,000.
Major James William Coldwell: I suggest that, as we are going through these items so rapidly, we might allow one to stand over.


Charles Gavan Power: I shall be glad to hold two, if my hon. friend wishes.


Major James William Coldwell: I do not mind how many we hold, but some hon. members who are on the public accounts committee would like to discuss this item.


Charles Gavan Power: I thought that if we held unemployment assistance, which covers the points my hon. friend has in mind, and war veterans' allowances, on the understanding that hon. members would be able to discuss the whole pension situation under those items, we might get the others through.


John Charles Landeryou: With regard to the hospital that is being used in Calgary for ex-service men, I believe it has been pointed out to the minister that its situation is bad. There are other buildings in the city that would more adequately meet hospitalization requirements. I wish the minister would consider the matter. I shall take it up with him privately.


[Stage Direction]
Item agreed to.
Direct payments to veterans and dependents.
2.3a. Hospital and other allowances, $1,075,000.
John Charles Landeryou: Is this for all the hospitals in Canada?


Charles Gavan Power: It is for the allowances to men who are in hospitals-the pay they get in hospitals.


John Charles Landeryou: Under what item does the construction of new hospitals, or the amount paid in rentals, come? I should like to have a statement as to what the government intends to do with the hospital in Calgary?


Charles Gavan Power: If my hon. friend will agree, I shall have the information later.


Mr. MacNEIL:: What is the number of those treated under the new regulations?


Charles Gavan Power: From memory, I believe that about 2,500 have applied since January 7. The new regulations provide for a wide extension of hospitalization services to ex-soldiers. Up to this year the only ex-soldiers who received treatment were those in receipt of a pension. Under the regulations issued in January we have extended the privilege -to those who had meritorious service; in other words, it is given to practically all those who served in any theatre of actual war. They have been treated at the rate of 100 a week since January. The total number of applications since January is 2,636 to date. We have been able to deal with 2,533. Awaiting decision are 103. Total applications fully approved number 1,680. Those rejected because of non-meritorious service are exservice men who were either not in a theatre
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of actual warfare or were in the Pyrenees or the Jura mountains, where they were not undergoing undue hardships. They were largely in forestry corps. A number of applications were conceded for service, but the applicants were not personally qualified by reason of the fact that their income is higher than that which will bring them into the category. If a married man has an income of over $100 a month he does not get free hospitalization; a single man does not if he has over $45 a month.


John Ritchie MacNicol: Must he be in receipt of a pension?


Charles Gavan Power: No. This is a regulation that was introduced in January of this year.


Alfred Johnson Brooks: They received no allowance.


Charles Gavan Power: No. The total number of applications treated by the department were, respectively, 593 medical and 571 dental. There were treated by contract dentists in places where there are no departmental dentists, 28; and awaiting treatment at the present time are 412 medical and 76 dental.


Charles Grant MacNeil: What provisions are made for those living at a distance from departmental institutions?


Charles Gavan Power: For dental treatment, a new order in council was passed about three weeks ago to cover cases where we have no official dental representative. We have had to be careful about this. We now permit dentists in the locality to carry on dental treatment, however remote the district may be, subject to prior approval by the chief dental officer in Ottawa.


Charles Grant MacNeil: What is the situation in regard to disabilities other than dental?
Mr. POW'ER:	With regard to medical
treatment, the matter is not so easy. In so far as we are able to do so we appoint salaried medical officers through the civil service commission after advertising, so that they may be able to treat men in various districts throughout the country. It must be understood, however, that for the moment we cannot absolutely cover the whole country. Soldiers are in the same position as the rural population generally. There are no facilities right at their door, but as fast as we can provide them, we are doing so. For the moment our hospitals are fairly well filled by treating, either dental or medical treatment, about one hundred a week. We shall get round to dealing with them all as expeditiously as possible.


Charles Grant MacNeil: What was the number of
admissions during the last fiscal year for those on pay and allowances under class 1?


Charles Gavan Power: On March 31, 1939, there
were 1,338 in hospital in class 1.


Charles Grant MacNeil: How does that compare
with the previous year?


Charles Gavan Power: That is those on compensation. For the previous year, namely, March 31, 1938, it was 1,397.


Victor Quelch: What is the general form
of procedure to get hospitalization?


Charles Gavan Power: They make application to
the nearest administrative unit.


Donald Alexander McNiven: Does that include supplying glasses?


Charles Gavan Power: Not unless they are pensioners for eye disability.


[Stage Direction]
Item agreed to.
Pensions branch.
231. Pension appeal court, $43,475.
Charles Grant MacNeil: For what does this item
provide?


Charles Gavan Power: For the salaries for one year of the pension appeal court. As my hon. friend knows, the pension appeal court has been abolished as of July 1. But it is proposed that the members shall have compensation, that they shall get eighteen months' salary. This vote, together with a vote which will appear in the supplementaries, will cover a gratuity not to exceed eighteen months' salary for the members of the court.


Alfred Johnson Brooks: Are any of them being
absorbed by the department for other duties?


Charles Gavan Power: No, none of the members
of the court so far as I know.


Alfred Johnson Brooks: On what basis is the department paying eighteen months' salary? Have all the members of the court the same length of service?


Charles Gavan Power: No.


Alfred Johnson Brooks: As I understood it, the
members of this court were appointed for ten years. For what length of time have the members of the court served, and on what basis is the one and a half year's salary paid?


Charles Gavan Power: Mr. Sherwood retires in
September 1940; Mr. Justice Hyndman retires in January, 1941; Mr. Richard retires in September, 1943; Doctor Kee retires in July, 1946.
Compensation was arrived at more or less by hit or miss. It was thought that one and a half year's salary was reasonably good compensation for them. It will not amount to more than eighteen months in any case. Also when the pension tribunal was abolished some

Supply-Pensions and National Health
years ago by the former government, that was approximately the amount which was granted to the members.


Donald Alexander McNiven: Are not two members
of the commission under pension at the present time-Mr. Justice Hyndman and Mr. Sherwood?


Charles Gavan Power: I have no information in
regard to Mr. Sherwood, but Mr. Justice Hyndman is a retired judge of the supreme court of Alberta and is entitled to pension as a judge.


Donald Alexander McNiven: Is Mr. Sherwood Sir Percv Sherwood?


Charles Gavan Power: No.


Donald Alexander McNiven: Surely it is not the intention to pay a year and a half's salary and likewise pension to Mr. Justice Hyndman. I understand his pension will amount to from $6,000 to $9,000 and then his year and a half's gratuity, to $10,000. That seems altogether out of proportion.


Charles Gavan Power: I might say that had the intention, or what appeared to me to be the intent of parliament when Mr. Justice Hyndman was brought down here been carried into effect, he would have obtained a much larger pension than he will draw under the present circumstances. The compensation we are proposing to award him is not anything near as great as would have been awarded had the statute been properly worded.


[Stage Direction]
Item agreed to.
Pensions branch.
230. War veterans' allowance board, $197,715.
Charles Grant MacNeil: What appointments were made to the war veterans' allowance board?


Charles Gavan Power: Two appointments were
made last year-Colonel Melville, formerly of the department, and Mr. Cyril Marsh of Saskatchewan.


[Stage Direction]
Item agreed to.
Pensions branch.
229. Administration expenses, $482,915.
Charles Grant MacNeil: What is the total number of pension commissioners at the present time?


Charles Gavan Power: Nine.


Charles Grant MacNeil: Will that number be
increased to take care of the new appeal board?


Charles Gavan Power: I do not think so necessarily. It may be considered advisable or even necessary to appoint ad hoc commissioners. As my
hon. friend knows, we have authority under the Pension Act to create ad hoc commissioners for periods of from one month to a year, and it may be necessary, when the commission is sitting in certain districts, to appoint ad hoc commissioners for a certain time.


Charles Grant MacNeil: In view of certain rumours I think the committee would appreciate a statement from the minister as to the ratio of administration costs to pensions.


Charles Gavan Power: We have figured and given estimates to the house in the past fifteen or twenty years as to that ratio. I have never satisfied myself that any of them were absolutely accurate, but we say it is about 4 per cent. If an accountant examined it, there might be an error either way. I will not guarantee it.


[Stage Direction]
Item agreed to.
Direct payments to veterans and dependents.
232. European war pensions, $40,750,000.
John Ritchie MacNicol: Has item 228 been carried ?


Charles Gavan Power: Yes. If my hon. friend wants to say anything on this item, I have no objection.


John Ritchie MacNicol: We are passing these items rapidly for a good reason, but I want to say a word to express my appreciation of the chairman of the Canadian pension commission, General McDonald I believe it is. I have heard so many warm commendations of him from all over the country for the splendid way in which he approaches each individual case that comes before him, and he has given such complete satisfaction that I embrace this opportunity to speak in the kindest way I can of such an efficient official.


Some hon. MEMBERS:: Hear, hear.


Mr. LENNARD:: Can the minister explain why, although there has been a decrease oi $150,000 in this item, the pensions branch administration shows an increase?


Charles Gavan Power: Pensions branch administration takes in treatment, hospitalization and every other function. It is the pensions branch as opposed to the health branch.


Charles Grant MacNeil: I do not wish to labour the point. The minister knows my difficulty with regard to those suffering from nervous and mental disorders; it has been brought to his attention on previous occasions. There are some 4,500 in that category. He was good enough to say on a former occasion that some attempt would be made to review the situation to determine whether or not their diflfi-
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Supply-Pensions and National Health
eulties might be alleviated. Would he be good enough to make a statement as to what progress has been made in that respect?


Charles Gavan Power: I am having the statement looked up. I know I asked for a report from the head of the Canadian pension commission on- that matter, and I am under the impression that there is only a small number who might be adversely affected by our present legislation. So it is not perhaps a major question. Then quite frankly there is a feeling among medical men, not only here but in the United States and to a much greater degree in Great Britain and France, that neurological cases should not be given too much attention, that you perhaps make a neurological case worse by catering -to that very disability. I know that in England and France they will not admit a neurological case at all. In the United States they have possibly gone the other way. Here is the report of the head of the Canadian pension commission:
Last October I had this whole question very carefully gone into by the medical branch, to try and find out just what hardship, if any, was being caused. A review was made of the pensioners receiving pension for functional conditions: hysteria, neuroses, psychasthenia, and so on, who saw service in France. There were 2,998 of these receiving pension at 25 per cent or less, and 1,879 above that up to 100 per cent, or a total of 4,877. The form we use to record the results of a medical examination and the rate of assessment, form 865, has two headings:	(a) entire disability, (b) pensionable
disability. In only 129 of the above cases was the pensionable disability recorded as less than the entire disability, unless there was a difference due to an organic condition. That is to say, only this small number of pensioners might possibly-I cannot say would-benefit by some such amendment.
The main source of trouble and complaint in this class of pensioner is not based upon that factor, but upon the factor of assessment. Naturally, their very disability in most eases leads them to be constantly agitating for more money. They invariably believe, or pretend to believe, that they are much more handicapped in the ordinary labour market than they actually are.


Grote Stirling: Does the minister mean [DOT] that cases of this type are not pensioned at all in Great Britain?


Charles Gavan Power: They do not pension neurological cases any more.


Charles Grant MacNeil: The act provides that they * shall receive treatment in neurological centres, and that after treatment they shall be assessed for purposes of pension. Are any of these cases being sent to any special neurological centre for any particular treatment?


Charles Gavan Power: We have two, at AVestminster and St. Ann's, and we have special observation at Christie street.


Charles Grant MacNeil: I may be misinformed, but I understood that these institutions were not equipped to carry out up-to-date neurological treatment, as that term is understood.
Mr. POAA'ER: We believe we have in the employ of the department, either as consultants on schedule of fees or as part or full-time doctors, as good neuropsychiatrists as there are in Canada, As a matter of fact our people do rate very highly in that line. The year before last a survey was made of these cases, as my hon. friend knows, and I think in almost one hundred per cent of the cases brought before the committee the findings of the departmental doctors were confirmed.


Charles Grant MacNeil: Still I would put in a plea for the man who has not only a neurological disorder but at the same time some pathological condition, quite frequently found in combination. The emotional or nervous disturbance accentuates or aggravates the pathological condition. I had a case the other day of a man with definite entitlement for sinusitis and some other disability, but these entitlements were assessed negative. He had some condition described as hysteria, and there was a conflict in the medical opinion as to whether or not that was negligible. The whole case in combination was thrown into the discard, with the net result that the community must look after the man and his family, since he is totally incapacitated. I am urging that the department should give this man neurological treatment, in view of the doubt that exists in the reports of the neuropsychiatrists; and if they cannot cure him then his disability should be assessed according to the ratio established, particularly since he saw meritorious service in a field of war.


Mr. POAATER:: I do not know that we can do any better than we have done. We have sent these cases to Doctor Penfield and to the Toronto psychiatry institute. I am not a medical man, as my hon. friend knows, but I do not think there ever has been a case where we have refused anything like a reasonable demand for treatment either in our hospitals by our own people or by experts outside. But I am sure my hon. friend knows of the very large number of people who just happen to have that mental slant, who are Derfectly normal in every other way but who have a fixed idea, a persecution complex, that they are not getting that to which they are entitled from the pension department, from the government, or from society. It is not only soldiers-


Ernest Lapointe: That is what I was going to say.

Supply-Pensions and National Health


Charles Gavan Power: Frankly I do not know what to do about it, except to send them to people who are specialists in that line. I am not capable of discussing this with my hon. friend or any other member of this house from the technical point of view, because I do not know enough about it.


Charles Grant MacNeil: I do not want to labour the point unduly, 'but- as the minister knows, other disabilities have a certain degree of protection under the act. If a man enlisted and served in France and later was reported to have had a pre-enlistment condition of tuberculosis, we will say, no deduction is made from his pension in respect of that fact, under certain conditions. But if a man is discharged with a neurasthenic condition, or some psychopathic condition, and it is even suspected that he had a pre-enlistment condition, he is denied that protection under the act. I am anxious to ascertain from the minister what has been done to put that man on a parity with the man suffering from another disability. Surely they could be all treated on the same basis. When the chief neuropsychiatrist says there is a constitutional defect, that diagnosis is passed on to the pension commission, and usually the man is completely out of luck so far as the protection that exists in the act is concerned. Cannot something be done to place the man with a neurological condition on the same basis as the man who had tuberculosis or some other pre-enlistment condition for which he gets protection?
I have a great deal of sympathy for many of these cases. Undoubtedly there is something in what the minister says; some men have a persecution complex, but in the majority of the cases with which I come in contact the man has an actual disability to start with. That is, he is suffering from a pathological condition as well as from some emotional or nervous disturbance which adds to his disability. His sufferings are very real; he is not a malingerer in any sense of the word, nor do I think the departmental doctors suggest that. But if he is dealt with harshly by the pension commission, and then treatment or pension is denied, so that he is not given this protection of the act, the case becomes worse and worse, and he rapidly deteriorates as his anxiety becomes greater. So I suggest to the minister that if this situation were dealt with properly and adequately, not in a hard-boiled fashion, we might satisfactorily clear up some of this difficulty. At the present moment this problem exists in almost every community, and it is a problem confronted daily by those in the community who are charged with extending aid to ex-service men in distress.
I should like to have a statement from the minister as to what steps are being taken to place these men on the same basis as those suffering from other disabilities.


Charles Gavan Power: There is not much that I can add to what I have said already. My hon. friend strongly urged upon the committee that we should appoint a commission. Doctor Mathers of Winnipeg, Doctor Boyer of Toronto, and a number of the most prominent men in this profession in Canada, went into the whole question at the request of the department and presented a full and complete report. As I said before, I read the report, and I am satisfied that it was fair. The department has received instructions to continue along the lines laid down in that report. If anyone has any suggestion to make, I should be glad to present- it to the technical officers of the department.


Charles Grant MacNeil: The minister could have introduced an amendment to the act. Was there any specific objection on the part of the commission to the suggestion that was proposed?


Charles Gavan Power: I do not think there were any suggestions made to the committee.


John Horne Blackmore: I should like to
commend the minister for the progressive attitude he has taken toward the suffering returned men of Canada. I think it can safely and honestly be said that the minister is earnestly trying to make better the lot of the returned man.


Charles Gavan Power: After that, I can forget a lot of social credit speeches. I sincerely thank the hon. member for those words.


Charles Grant MacNeil: There have been appeals from the decisions of the pension commission. Will these be held up pending the enactment of the amendment to the act?


Charles Gavan Power: There is not an undue
number of cases. Matters are proceeding in the ordinary course; and if there is a little delay, I do not suppose anyone will object.


[Stage Direction]
Item agreed to.
227. Departmental administration, $112,295.
Mr. DENTON MASSEY (Greenwood):: Mr. Chairman, I should first like to thank the minister for his courtesy in permitting me to speak on this item on a matter^ which I believe strikes to the very foundation upon which our dominion is built. I refer to the matter of public health. I purpose spending such time as I shall take this evening in an endeavour to impress upon the government and hon. members of this committee that the lack of care is costing us annually in
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Supply-Pensions atid National Health
this dominion numberless unnecessary deaths, and that our neglect of public health is placing us in the position of being one of the most backward nations of the world in this regard. In the last month I have been in receipt of hundreds of letters which have proved to be enlightening communications to put it mildly. As a result of the deplorable conditions which these letters indicate, and in view of the public interest that has recently been awakened about this whole question of public health, I make no apologies to the committee for discussing this matter even at this late stage of the session.
May I first remind hon. gentlemen opposite that every statement I make and every figure I use has been gathered from the best possible authority on the subject. For example, I might mention the bureau of statistics, the Canadian welfare council, the Canadian medical association, and numberless other nationally recognized organizations or individuals who are in position to issue authoritative statements.
In 1937 the national income of this country was $4,576,000,000 in round figures or, to reduce it to a figure which we can all comprehend, $411 per capita. According to an article written recently by the Hon. G. M. Weir, provincial secretary and minister of education of British Columbia, out of our national income in 1937 we spent $165,000,000 on doctors, drugs, hospitals, dentists and other health services, or S15 per person.
In recent years medical science has made magnificent strides, and it has been clearly demonstrated that a substantial proportion of this expenditure is waste. We are spending a pound for care while we spend only an ounce for prevention. For example, in Ontario in 1937, of the total expenditure of $6,000,000 in round figures for hospitals, administration, et cetera, approximately $600,000, or 10 per cent, was spent on the prevention of illness through the provincial department of national health. Thus, in my own province in 1937 the provincial government spent 90 per cent for cure and 10 per cent for prevention.
We must realize that an amazingly large proportion of our population cannot afford the cost^ of any medical attention whatsoever An additional substantial percentage cannot possibly face the expenditures of a prolonged or serious illness. To again quote the Hon. G. M. Weir:
The available evidence shows that at least one-third, or more likely one-half, of all Canadians belong to families that have incomes of less than $1,000 a year. Certainly these people can afford little or nothing for medical care. . . . Only the members of our upper income group, say 2 million to 3 million Canadians at the outside, can buy private medical care without serious difficulty.
TMr. Massey.]
True, we may rejoice in the advances made by medical science in recent years and that it is now possible either to cure or to immunize from many of the hitherto supposedly incurable diseases; true, we may be deeply grateful to our doctors and nurses who have given gratuitously of their services to indigent patients; true, further, we may congratulate many of our health departments, municipal centres and philanthropic organizations upon the splendid work they have done, but at the same time we cannot dodge the fact that thousands die each year in this country from preventable disease simply because we have not made these life-saving and life-giving services efficient and practically available to our population. Let me quote once again from the article to which I have referred by the Hon. G. M. Weir as follows:
Cancer killed about 12,000 Canadians in 1937. At least one-sixth of these deaths might have been prevented.
At least 550,000 persons in Canada are suffering from venereal diseases. This, in spite of the fact that syphilis, which is responsible for about 10 per cent of all insanity, and for much heart disease, blindness and infant mortality, can be practically wiped out, as Sweden has proved.
During 1936, 53,000 people were patients at some time in Canadian mental hospitals. Many of them would never have seen the inside of an institution if preventive work in mental hygiene had been adequate.
In 1937, 16.675 infants under one year of age died in Canada, or 76 per 1,000 births. With proper health services the rate need not have been higher than New Zealand's rate of 30. Thus we lost needlessly about 10,000 infant lives per year.
In 1937 more than 1,000 Canadian mothers lost their lives in childbirth. "Need Our Mothers Die?" asked the Canadian Welfare Council in a bulletin published three years ago. The answer is no-that half of our maternal deaths, or 500 a year, are preventable.
Respiratory tuberculosis took a toll of almost 5.500 lives in Canada in 1937, or 49-3 per
100.000	of population-a needless waste of about
3.000	lives, for the tuberculosis death rate can be reduced by 50 per cent at least, as Saskatchewan's rate of only 26-5 per 100,000 in 1937 indicates.
Death rates are higher among unskilled than among professional workers. In 1931 and 1932, labourers, coal miners, metal miners, and workers in mineral-products manufacture had death rates nearly twice as high as were found among certain professional classes better able to purchase adequate medical services.
Children of families on relief showed a 30 per cent greater loss of time from school because of illness than children of middle-class families, according to a recent national health survey in the^ United States. No doubt a very similar condition of affairs exists in Canada.
No greater indictment can be made of our terrible lack of willingness and readiness to safeguard the future than is made by such statements from so eminent an authority as Mr. Weir. We must realize that there is no uniformity throughout Canada in the activi-

Supply-Pensions and National Health
ties of health departments and medical units. To illustrate what I mean, in the city of Hamilton there has been no death from diphtheria since 1932, and yet in the province of Quebec there is an average of three deaths every four days from this same disease. Further, the number of deaths from tuberculosis, and the number of maternal deaths vary widely not only from one municipal centre to another but from one province to another, and this, I fully believe, clearly indicates the unfair handicap that we place upon the low wage-earner or the indigent, and their families, by depriving them of the medical counsel and services so necessary for the maintenance of health and life.
Let it be noted that in 1937 the following number of deaths from tuberculosis per 100,000 of population wras recorded in the nine
provinces:
Quebec	 72-1
Nova Scotia	 69'6
New Brunswick	 68'0
British Columbia	 66-4
Prince Edward Island	 54-8
Manitoba	 46-0
Alberta	 33-9
Ontario	 31'0
Saskatchewan	 26-5
A maximum variation per 100,000 population from province to province of almost 300 per cent! The number of maternal deaths shows an even wider variation. In the city of Saskatoon, for example, the number is 13-9 per 1,000 live births, while in Vancouver it is only 2-9, and Halifax 2-5-a variation of over 500 per cent. The infant deaths per
1,000	live births are, for example, 297 in the city of Three Rivers, as against 73 in Sherbrooke, 68 in Halifax, 38 in Hamilton, 41 in Calgary and 24 in Galt.-a variation of nearly 1,300 per cent! All of which indicates, Mr. Chairman, the lack of uniformity in our methods of dealing with this problem of public health, which is a national problem in effect and in essence. There is no more vital problem.
Let me refer to an article by one of the world's great authorities on nutrition, Sir John Boyd Orr, which appeared a short time ago in The Listener. He concludes the article in these words:
The future of a country depends not so much upon trade or wealth or even armaments, as upon the health and happiness of the people, and the physique and vigour of the race.
It must be obvious to us that twenty years from now, whether we are a vigorous, virile country, or decadent and decaying, depends directly upon the health, the care and the feeding of the expectant mothers, the nursing mothers, and the children of the present. It is appalling that we can be so blind to
this obvious fact, as is evidenced by our failure to tackle the problem in a national way. As I have said, not for a moment do I criticize the efforts, sincere, honest and efficient, that have been and are being put forward by medical health officers, philanthropic organizations, and, above all, by our doctors and nurses. The contribution that they are making is magnificent. Nor do I criticize the relief officers and officials who, in the vast majority of cases, are doing the best they can with the tools at their disposal, and under the handicap of insufficient funds to do the work they realize should and must be done. But why should it be that so large a proportion of our population who cannot afford any form of medical service whatsoever should have to depend upon either the gratuitous services of the physician, or the present limited facilities of the municipality or the province, or upon the philanthropy of well meaning citizens for their vitally necessary services? It is highly to be desired, of course, for us in this house to deal with matters of urgent importance such as unemployment, agricultural distress, defence, and other such national problems. But underneath any such consideration must be the fundamental assumption that we are dealing with a healthy, normal population. If we neglect our national health, then indeed are we paving the way toward the ultimate destruction of this nation, and it then makes little difference how we treat any other national problem.
Prior to the depression, the medical profession gratuitously and gladly served many individuals who were incapable of paying their medical bills, and the amount of free work was not excessive for any one physician. In recent years, since the depression, the need as well as the demand for gratuitous services has risen to such a degree that the majority of physicians are finding it difficult to earn even a modest living. The committee on economics of the Canadian Medical Association report that the volume of medical practice in 1932 was 63-5 per cent of the volume in 1929, and in 1932 the remunerative work was only 50 per cent as against 77-5 per cent in 1929. It is estimated that this situation has grown and is growing steadily worse.
Let it be noted, Mr. Chairman, that the unequal distribution of adequate public health services across Canada is indicated by the fact that death rates from preventable diseases in so many municipalities are much too high, and the authorities which I have consulted agree that at least one-third and maybe more of the deaths from these causes which now occur in Canada could be prevented. Let me illustrate again.
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In 1937 in Canada there were 329 deaths from typhoid fever, which represents a failure to apply our sanitary knowledge; 369 died from diphtheria, which can not only be cured but absolutely prevented; 6,750 died from tuberculosis, a figure that could be at least cut in half with proper medical services and proper nutrition. Infant mortality varied in the five-year period from 1931 to 1935, from 46 per cent per 1,000 live births in British Columbia, to 98 in the province of Quebec. It is shocking also to realize that the infant mortality for Canada per 1,000 live births, increased in 1937 over 1936 by ten-from 66 to 76-while deaths per 1,000 live births in New Brunswick, rose from 77 to 101, and in Quebec from 83 to 100, with an increase in every other province except one.
Then let us note this particularly:	The
shameful wastage as a result of maternal mortality, which, in 1937, was 4-9 per 1,000 living births, represented the death of 1,067 mothers at the average age of 31. If the maternal mortality rate were reduced to three per 1,000 living births, which, according to the Victorian Order of Nurses is an easily obtainable figure for Canada, with adequate public health units established across this country, it would mean that the lives of nearly 600 mothers each year would be preserved to their families. Further, if the infant mortality rate for Canada as a whole were reduced to 55, which was the actual rate for Ontario in 1936, there would be 2,500 fewer deaths of infants, or an actual reduction of 20 per cent. Let me go one step further to illustrate the result of the variations in death rate consequent upon unequal distribution in medical and public health services as well as the lack of an adequate amount of public education in regard to health.
I stated a moment ago that in 1937 there were 6,750 deaths from tuberculosis in Canada, which is at the rate of 61 deaths per 100,000 of population. As the death rate from tuberculosis in Saskatchewan was in that same year 30 per 100,000, and in Ontario, 36, if we assume that the splendid work which is being done in Saskatchewan in regard to tuberculosis were to be extended across the dominion as a whole, the annual death rate from this cause would be reduced to, say 35 per 100,000, which would mean a saving on the basis of the 1937 figure, of 2,903 lives a year.
I have just mentioned the splendid public health work being done in Saskatchewan. In this province there are 78 rural municipalities employing full time municipal physicians, and 60 other municipalities employing physicians on a part-time basis to render medical services, especially to the indigent. Thus prob-
CMr. Massey.]
ably one-fifth of the rural population receives medical service under this scheme. Similar arrangements have been made as a result of the "municipal doctor system" of providing medical services in Manitoba as was discussed by Doctor F. W. Jackson, deputy minister of health and public welfare of Manitoba, in a speech in Washington in April of last year. I quote:
The municipal doctor usually provides a fairly adequate school medical service. Pre-natal care rm- expectant mothers is well looked after. There being no financial barrier between the mother and the physician, she seeks advice and any medical care she may require during the pre-natal period as well as at confinement. As a result maternal deaths in these districts have been negligible during the past four or five years. The^ maternal death rate in the areas organized since 1934 is 1-8 per thousand live births as compared to the provincial figure of 4-3. Another interesting figure is the crude death rate, the average for the last three years being in municipal doctor districts 7-74; whole province 8-43. . . . We have found over a period of five years that the per capita cost to the municipal corporations with municipal doctors for the hospitalization of indigent patients is approximately only one-half of what it is in municipalities where the medical services are supplied in the ordinary manner.
In the past we have boasted of our standard of living in Canada. But if we examine such figures as those I have placed upon Hansard to-night, we should be appalled at the lack of care we are taking of the health of our people and the awful wastage which has resulted and is resulting. Our record in regard to public health is by no means a proud one, to phrase it mildly. For example, in the statistics from twenty-six leading countries of the world in 1936, only four had a higher maternal death rate than had Canada, we being twenty-second in that list! Let me also draw to the attention of this committee that even though the expectation of life has been extended, the number of deaths in 1937 increased over those of 1936 by 6.800, and of this increase 2.200. or approximately one-third, were under one year of age, and 1,600, or approximately one-fourth, were between the age of one year and thirty years. In other words, we must realize that 56 per cent of the increase in deaths between 1936 and 1937 were among our children and young people under thirty years of age. We regarded it, and still do, as a ghastly tragedy that 60,000 young Canadians were killed in battle or died of wounds during the four years of the great war; and yet, in the four years from 1931 to 1934, 70,000 infants under one year of age died in Canada. Let me quote from The Lancet of June 13, 1931, page 1,279, from an article by Professor Blair Bell:
It seems almost incredible that every year one woman in every ten of those who bear children is to be more or less disabled or has

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to endure an operation to cure her injuries. Yet in the absence of exact figures this seems to be a conservative estimate. Besides probably many more bear in silence minor lesions which may prove fatal later.
May I refer now to a publication of the Canadian welfare council in 1935, entitled " Need Our Mothers Die?"
Over a five year average the complete toll of motherhood in Canada in order that 230,000 children may be born is the death of 1,100 to 1,400 mothers annually, the more or less permanent handicapping of another 23,000 mothers, and the impairment of health to a lesser or greater degree of another 22,000. And the stark, unescapable condemnation of the whole unfortunate story is that at least 50 per cent of this cost is unnecessary and preventable by means within our knowledge, control and capacity, if we have but the courage and determination to apply them.
It is shockingly apparent, also, Mr. Chairman, as one reads from medical reports and journals, that at least one-third of the women who bear children receive no pre-natal care, and that upwards of 20 per cent of the pregnant women in Canada are living in circumstances that may be described as very poor.
It is notorious that malnutrition during the pregnancy period has a direct bearing on the susceptibility to septicaemia and to still births, and it therefore may be assumed without question that, as the maternal death rate in areas where concerted efforts have been made to reduce it, has been reduced, where it has remained constant is as a result of pre-natal malnutrition or undernourishment of the mother. L'Assistance Maternelle, which has done such splendid work in the city of Montreal, financed largely from private contributions, reports that:
The great number of women seeking the clinic have never heard of pre-natal care, and come only for registration, but upon explanation of its value, their cooperation for examination and in the procedures laid down has been readily obtained.
Again let me refer to the Canadian welfare council's "Need Our Mothers Die?" where I read the following quotation:
In this group of causes-*
The exceptionally bad housing conditions, together with unemployment, poverty and a low standard of living.

there would fall that percentage of maternal deaths due to impaired health generally, and arising particularly out of conditions of disease and malnourishment of the young mother in her own childhood and adolescence.
I shall quote further from that pamphlet in just a few moments. It is notorious, Mr. Chairman, that in countries such as New Zealand, Scandinavia, and Holland, malnutrition is essentially unknown. And is it not
significant that the maternal death rates in these countries are among the lowest in the world? Surely we cannot ignore the fact that the undernourished female child of today is to be the young mother of to-morrow; and if we fail to provide adequate nourishment for her, we are undermining the very foundation of the nation itself.
May I conclude these remarks with a few comments on nutrition, and then I shall make a suggestion as to the possible way in which the government might deal with this question of public health. I have in my hand an article by one who is regarded by many as the world's leading authority on nutrition, Sir John Boyd Orr. I quote:
There are other factors besides food which affect health. One of the most important of these is worry, and the psychological strain of working conditions in this mechanical age of hustle. Another important factor is bad housing. Bad housing causes both physical and moral deterioration. But there is reason to believe that the most important factor in the health and physique of children is their food.
. . . Recent tests seem to show that feeding is also an important factor in maternal mortality. All the indications are that if a diet fully adequate for health were made available to every mother and child in the country, the health and physique and the length of life of the poor would be brought nearer to the level found among the well-to-do.
In a recent interview in Toronto, Sir John referred1 to the work of Doctor E. W. McHenry, assistant professor of physiological hygiene in the Connaught laboratories of the university of Toronto. Sir John is reported as saying:
He has made a study of families in the low income group, making below $1,500 a year. And he has found that these people are eating only one-third of what they should be eating. They are not sick, but they are undernourished and when they are undernourished, he will tell you that their appetite is only three-quarters of what it should be.
Referring to the United Kingdom, and we have no reason to feel that the situation would] be any different here, Sir John Boyd Orr writes, in this article in The Listener already referred to:
It has been shown that as family income falls, the consumption of the natural foodstuffs of special health value such as fruits and vegetables, eggs, milk, butter and cheese, decreases. They show that the diet of the poorer half of the population is not up to the standard required for health, and the diet of our poorest class is so bad that it is deficient in nearly every respect.
. . . Recent scientific discoveries have revolutionized our ideas on the effect of food on health. ... The new knowledge tells us that in addition to satisfying hunger, food must contain a sufficient amount of a number of substances-about half a dozen vitamines, and about a dozen minerals-to keep the body healthy.
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Sir John goes on:
We now have an authoritative statement on what kind of diet contains a sufficient amount of these substances to maintain health. In 1935 the League of Nations set up an international committee to draw up a statement on food requirements. That statement has been approved by the leading scientific and medical authorities such as the Medical Research Council of Great Britain. . . . We now have a standard we can work to. We have a yardstick to measure diets and tell us how far they are deficient for health.
At once the question arises: As the state has assumed the responsibility of providing food for nearly a million of our citizens, and as there is beyond this number an unknown and extraordinarily large group who are in the low income brackets as a result of irregular or part-time work, should we not give the greatest consideration to such questions as those to which Sir John Boyd Orr draws our attention? If governments accept the responsibility of feeding a proportion of the population, should they not make sure beyond doubt that these wards of the state are supplied with food of a kind, quality and quantity to maintain health?
Let me refer hon. members to a brief prepared by the welfare council of Toronto and district on July 12, 1938, and submitted to the provincial government. It reads in part as follows:
The avoidance of heavy burdens in the future depends directly upon the wise policies, adopted to-day since the results of a faulty policy with respect to the needs of subsistence are likely to be an increasing crop of ailments and diseases, of rickety children, debilitated mothers and adult citizens of all ages defective in health or lacking in resistance to recurrent sickness. . . . The welfare council in Toronto within the past month has made a careful examination of the situation. The results of the comparison may be briefly stated as follows: The city of Toronto's scale of relief falls seriously short of that prescribed by each of the other standards quoted.
That is, those of the Ontario medical association committee on relief diets, the Canadian council on nutrition, and the League of Nations mixed committee on nutrition.
In order to bring the food allowance up to the level of the lowest of the three standards, an increase of 26 per cent in the weekly money grant would be required.
Then there followed a table showing that whereas the Toronto city relief for a family of five provides $6.35 a week, the Ontario medical association recommends $8.38 as a minimum; the Canadian welfare council, $8.09, and the League of Nations, $11.11. In other words, the food allowance in Toronto, which city I use only as illustrative, is about 57 per cent of what- it should be according to one of the most eminent nutritionists in the world, Sir John Boyd Orr, who is, of course, the

motivating spirit behind the League of Nations committee on nutrition. It is no wonder that such a man as Doctor Jean Gregoire, the deputy minister of health of Quebec, spoke as he did before the Canadian welfare council last May. He said in part:
We have a death rate from certain causes which is unworthy of civilized peoples . . . Ill health is costing Canadians in the province of Quebec $100,000 a year ... At least forty of the hundred who died per day in this province could be saved by the application of certain principles of hygiene.
I cannot resist asking here if the Minister of Labour (Mr. Rogers), in the light of the figures which I have placed on Hansard tonight, will still call me "irresponsible" if I state again that "thousands have died from exposure, illness, starvation or lack of care." I wonder if the hon. member for Essex East (Mr. Martin) will still say that the one who makes such a statement is exposing himself to "ridicule." Of course my statement is true, shockingly true, and indicates that through the years there has been "lack of care" of the most priceless national asset that we have- our people.
It was a hundred years ago that a brilliant French-Canadian scientist, Savarin, stated:
The welfare of a nation depends upon the way in which it is nourished.
How true that is to-day. In many places in this dominion, as a result of lack of adequate health services, as a result of inadequate relief allowance for food, we are exposing at least one-third of our population to the perils resulting from malnutrition, preventable disease and curable disease. Surely one does not have to be dead to cease to be of value to one's country. Surely the effects of undernourishment and malnutrition undermine our nationhood as nothing else can. Surely the lack of proper available medical care is paving the way for a decadent nation.
Speaking in Washington last July, Mr. Charles W. Taussig, president of the American Molasses Company, and chairman of the advisory committee of the national youth administration in the United States, said in part:
The Lindleys touch upon this subject-
The health needs of youth.

in their recently published book, A New Deal for Youth. They call attention to what we have found to be a typical case in the youth administration. It is the record of a middle-western, industrial city where 1,800 boys and girls were given a thorough physical examination. Forty-three per cent of them were found to be unemployable by private industry because of their physical condition, but it was estimated that with corrective medical treatment this large portion of youth who were occupa-

Supply-Pensions and National Health
tionally handicapped because of physical defects could be reduced to 8 or 10 per cent.
We know a great deal more about preventing sickness than we do about preventing unemployment. Yet we courageously explore the economic field, of which we know little, and neglect the field that we have at least partially mastered.
. . . The annual toll of preventable illness measured in terms of money runs into billions. Progressive business will regard an adequate health service as a subsidy to industry, not as a burden.
There is no reason to believe that the situation in Canada is relatively much better. Our own dominion statistician, Doctor Coats, informs us that the estimate of the amount lost through illness and accident by all gainfully employed in 1931 was 840,000,000 in this country. This is merely a loss of wages and does not take into consideration the cost of lowered production from the point of view of the employer. The Minister of Labour himself admits that the situation in Canada is far from what might be desired, and I agree with him. But I ask him and I ask hon. members, what will it be in the not too distant future if we continue the wastage both through death and through loss of health, particularly among our youth, our unemployed, and our low income groups?
Speaking in the city of Toronto the other day, the Minister of Pensions and National Health (Mr. Power) is reported in the Toronto Daily Star as follows:
Major Power outlined the achievements of the federal government in health problems. Leprosy, once prevalent in New Brunswick, had been reduced until there are only twelve cases in Canada. The drug traffic has been curbed. The use of marihuana has been kept out of Canada. .	.	. Maternal deaths had been
reduced, he added, and in a comparatively short space of time the maternal death rate in Quebec had been reduced from 200 deaths per 100,000 to 76 per 100,000.
I am sure that all of us in this committee will rest comfortably now that we know that the minister has eliminated leprosy from Canada-


Charles Gavan Power: I did not say I did that at all. I am not responsible for everything. I said that many years ago leprosy was prevalent in Canada.


Denton Massey: I did not mean, of course,
that the minister personally eliminated it.


Charles Gavan Power: There were fourteen cases when I came into office, and there are now twelve, if the hon. member thinks I have done anything.


Denton Massey: I am sure also that we are more comfortable now that we know that marihuana is a drug under the narcotic act. I congratulate the minister upon these achievements.


Charles Gavan Power: I do not want to be congratulated if I have not achieved anything.


Denton Massey: Well, the department of which the minister is now the head.


Charles Gavan Power: I am not taking the credit for the extirpation of leprosy. It has not existed to any extent in Canada for forty years. I was discussing the advancement of science in Canada.


Denton Massey: The report states-I shall read it again:
Major Power outlined the achievements of the federal government in health problems. Leprosy, once prevalent in New Brunswick, had been reduced until there are only twelve cases in Canada. . . .


Ross Wilfred Gray: They are still here.


Denton Massey: I was endeavouring to
compliment the minister; if he does not wish to be complimented, I am sorry.


Charles Gavan Power: I have done so many other things-


Denton Massey: I am sure the minister would not want to tell the committee that public health is a purely provincial problem and must be handled by the provinces and municipalities alone; for by such efforts as have been put forth by the federal government to eliminate leprosy, and toward the reduction of maternal deaths, he admits, and the government admit, that the federal administration has the right to participate with the provinces and the municipalities towards the elimination of preventable disease and the cure of curable disease. By this very admission, therefore, I do not see that any minister can rise in his place and say that what I have been discussing this evening is of no concern of the federal government.
I draw the attention of the minister to the fact that his department asks for only about $1,000,000 to be spent towards the reduction of a national wastage which runs into hundreds of millions of dollars a year. We sit here and are asked to vote for public works large sums running into hundreds of millions. This is regarded by many as an expense which is a palliative, perhaps necessary for the time being but nothing permanent about it. At the same time we are asked to vote only about 8 per cent of the cost of the new Canadian National Railways terminal in Montreal for the maintenance of the health of the people of Canada. Even the Minister of Agriculture (Mr. Gardiner) has no difficulty whatsoever in having passed, for the health of animals, essentially twice or three times the amount we spend federally for public health.


Ross Wilfred Gray: Does the hon. member complain about that?
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Denton Massey: I should like to carry along my argument. I qualified it for the benefit of the chief whip who interrupted by saying that public works such as I cited are, in the main, palliative measures.
True, of recent date a grant of $52,000 has been made by this government for the associated committee on medical research of the national research council. Here is the federal government's contribution towards federal medical research in Canada, a contribution equal to about one day's deficit of the Canadian National Railways!
We have in Canada one of the most outstanding scientists of the age, Sir Frederick Banting, who is chairman of this committee. Why do we not give him full scope for the magnificent work he is capable of doing, instead of restricting him by such a paltry grant?
But the minister will say; "I fully agree as to what we should do, but where do we find the money?" I ask him, what is the cost of medical research compared with the elimination of wastage which it makes possible? I wonder if it costs so much to establish adequate health units from coast to coast and provide uniformity in medical services in all provinces. What sort of policy is it that maintains the standard of relief on a level that endangers health and thus threatens in the Canada of to-morrow the strong, healthy, virile manhood and womanhood of which we in this dominion have in the past 'been able to boast?
I have already drawn the attention of hon. members to the accomplishments of the health units in the prairie provinces, which have been set up at a cost of about 60 cents per capita. The Canadian Medical Association estimates that units could be set up in Canada from coast to coast at a cost of no more than SI per capita; an expenditure of only SI 1,000,000 to preserve the health of the nation and to prevent the ghastly wastage of to-day 1
In conclusion, may I remind hon. members I have not said a word about the humanitarian side of this question, nor do I wish to play upon the sensitiveness of hon. members through such letters as I have received even during the last month, indicating the distress existing from one end of Canada to the other as a result of the failure of those in authority of deal adequately with this great question of public health. Any man who has a heart cannot be insensitive to distress and suffering. We owe a debt to the past, and the only way we can pay it is by putting the future in debt to ourselves. What better way is there for us to accept this responsibility than to (Mr. Gray.]
make sure that our new Canadians are born of healthy parents, and that the children of these children do not have to face the hazards occasioned by the under-nourishment and resulting ill-health of their fathers and mothers in early life. The challenge is clear, the way is clear. Medical science stands ready and willing to do its part. So I ask the government, is it prepared to accept the challenge?


Ross Wilfred Gray: We meet it.


Leslie Gordon Bell: Before this item passes, I do not want to make any lengthy speech, but simply say that I am very glad indeed that the hon. member who has just taken his seat has covered the ground in such an excellent manner. Coming from Saskatchewan, I am glad to know the things he said in praise of the work that has been done there, particularly in connection with tuberculosis. I remember very well when the work started by the anti-tuberculosis league back, I think, in 1911 or 1912 when they built the first sanatorium at Fort Qu'Appelle, and how Doctor Ferguson since that time has built up the institution.
Once upon a time it was the private obligation of the person suffering from the disease to meet the cost of care. Then the cities and urban centres formed a pool, and in that pool they placed a certain amount and sent patients to the sanatorium. Since, then, other sanataria have been built, and to-day tuberculosis treatment is free in Saskatchewan to all those who require it. That seems to me a demonstration of what might be done on a much wider scale. The hon. member who has just spoken showed the necessity for similar care for the same disease in other parts of Canada. He drew attention to the tremendous wastage in human life from other diseases, and from sickness which is very largely preventable. I am not forgetting that much of this disease arises from insanitary conditions in our cities and lack of nutrition in the case of many people in the country. And I think that consideration of economic conditions has to go with consideration of these health measures. I strongly support tie position that this is a national problem, because it deals with our greatest national asset, that of health and human life.
There is one other disease to which I wish to draw the attention of the minister and the committee to-night; that is the dread scourge of cancer. A great deal of work is being done in many provinces in regard to cancer. In Saskatchewan cancer clinics have been established. I was startled when some years

Supply-Pensions and National Health
ago I heard a young doctor, I think Doctor Dragon, a member of the legislature, turn to the members of the legislature-there were then sixty-five of them-and tell them that in all probability thirteen of the sixty-five, if they lived up to the average, would die of cancer. It was a startling statement. That scourge is spreading.
I wish to put in a plea for just one phase of the cancer situation. Many people find it very difficult to avail themselves of the opportunities provided by the clinics, where they exist. It has been suggested to me-it is not original with me-by a woman who is interested in health work, and particularly in cancer cases, that the federal government, if it made no other contribution, might in some manner provide that people who desire to avail themselves of treatment at these cancer clinics should be provided through the federal department with free transportation to these clinics. In Saskatchewan, where distances are great and where there is a great deal of poverty at the present time, transportation is a barrier. I make this plea to the minister because it would be at least a small contribution to the splendid work that is being done in these provinces.


Malcolm McLean: Is it not a fact that people who require cancer treatment at these clinics and have not the means to pay for their transportation are assisted in that way also? Are they not supplied with transportation now, to a great extent?


Major James William Coldwell: I understood not.


Malcolm McLean: I think they are.


Major James William Coldwell: If that is so, it has been adopted more or less recently, for it was not the case some little time ago. I have not checked up on it lately; I have been awaiting an item of this kind, and perhaps I should have made a little further investigation. However, that does not alter the suggestion that this is a contribution which might be made by the federal government. All I wish to say is that I thoroughly endorse the position taken by the hon. member for Greenwood, and I hope that as time goes on we may see in Canada a health service for our people aimed at preventing disease, just as free and as available as education is for the children of our country.


Charles Gavan Power: I want to say just one word to thank the hon. member for Greenwood for having so eloquently placed on Hansard the result of his researches into this health question. It is a very large question. The matter of responsibility particularly is one on which it is extremely difficult to get full
agreement throughout the country. There has been no doubt at all in my mind, particularly since I have had an opportunity to give health matters that study which I have been enabled to give them since taking over this department, that the state has as much responsibility to look after the health of its citizens as it has to protect them against burglary or any other social calamity. But which particular branch of the state in Canada should do that is something not yet decided. We cannot say all at once that we are going to take over all the health services of the provinces. I am sure that if I were to decide to take over the health units in my own province we would have a kind of revolution on our hands. We would be infringing on provincial rights. The banner provincial autonomy would be raised. If other province! would follow the example of Quebec and Saskatchewan and develop their own health units it would be for the greater good of Canada.
That is the ease all along the line. There is room for cooperation. There is room for coordination of effort. There is a crying demand for some kind of conference so that we may trace, as between municipality, province and dominion, just what are our responsibilities and how we may be able to carry them out to the best of our ability in order to assist the entire population. In any event I thank the hon. member for Greenwood and the hon. member for Rosetown-Biggar for their observations. I assure them that so far as I am concerned I am always glad to hear members, on whatever side of the house they may be, urge on the government and on the country that we spend more on our national health, provided that we can spend it usefully.


Mr. MARTIN:: The minister missed the whole point of the speech of the hon. member for Greenwood.


John Horne Blackmore: I should like to associate myself with the observations of the two hon. gentlemen who spoke from this side of the house. At the same time I should like to point out that all pious wishes such as these probably will remain pious wishes until we find a way of getting the necessary money without added taxation or borrowing.


[Stage Direction]
Item agreed to.
Charles Gavan Power: There were three other items in the supplementaries which the committee might allow me to put through, always holding back the two items which I suggested would be held back.
Pensions branch.
629. Pension appeal court-further amount required to provide, in the event of the abolition
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of the pension appeal court, for gratuities not to exceed in any case the equivalent of eighteen months' salary, $43,500.


Charles Gavan Power: This is the supplementary item I mentioned a moment ago, in order to provide compensation to the members of the pension appeal court which is being abolished.


Mr. GREEN:: How are these payments to be divided?


Charles Gavan Power: I have already explained that, but I know my hon. friend was busy elsewhere. It is proposed to pay to the members of the pension appeal court, which will be defunct after July 1, eighteen months' salary by way of compensation.


Howard Charles Green: Are all the members of the appeal court in the same position? I understand some of them have only a year and a half of their terms still to run, while others have a far longer time. It may be that the payment of eighteen months' salary to those whose terms expire in a year and a half is quite proper, but it does seem that some better provision should be made for those whose terms have several years to run. After all, these men have given up their other occupations to come here, and are now faced with the necessity of starting over again, so I think some consideration should be given to the length of time their terms have to run.


Charles Gavan Power: My hon. friend would have been quite willing for me to abolish this court out of hand about this time last year without allowing any compensation at all.


Howard Charles Green: I did not say that. The minister is going too far in making a statement of that kind. I thought the court should be done away with, but I made no personal attack of any kind on the members of the court.


Charles Gavan Power: I did not hear a good word for this court spoken by anyone in this house. The reason why I would not abolish it last year, and I so declared, was that I wanted to find some way of providing compensation for these men before turning them out on the street. Hardly a member of this house who spoke on the matter did not have something to say about me because I would not immediately, without regard to the consequences, abolish this court. They did not care what I did in the way of giving these people justice.
With respect to the one man to whom my hon. friend refers, there are two ways of looking at this question. Are we to give higher compensation to the man who served the longer time or to the man who has a longer time to serve? Frankly I do not know

whether the man who has served five years and who receives eighteen months' salary by way of compensation is any more entitled to that than the man who has served eight and a half years and who gets the same compensation. Usually we consider that the longer the term of service the greater should be the reward, and it would appear to me that in this, as in every other normal case, salary for a year and a half, amounting to approximately $10,000, is a fairly reasonable amount to pay to those who are being retired. I do not think I could be reasonably asked, or the country could be asked, to pay any more.


Leslie Alexander Mutch: Personally I certainly have not recanted the position I have taken in the committee for the last three years. With regard to how much they should be given, if it were possible to make it fifty cents, still it would be an over-payment.


Howard Charles Green: I wish to dissociate myself entirely from remarks such as those just made by the last speaker, which I do not think are fair in any sense of the word. I believe the minister is looking at the matter from the wrong point of view. These men were appointed for a certain term of years; they came here on the understanding that they would be retained in employment for a certain length of time. I think that should be borne in mind when compensation is being granted. The same thing would apply if a firm hired a man for a set period of time. He would have a claim against the company if he were dismissed before that time expired. I suggest to the minister that the matter should be looked at from that point of view.


Charles Gavan Power: We have an excellent precedent in the abolition of the pension tribunal by the former government, which allotted about this amount, or probably a little less than a year and a half salary.


Howard Charles Green: Did the terms of the members of that tribunal all expire at the same time?


Charles Gavan Power: I think approximately at the same time.


Howard Charles Green: That is not this case.


Charles Gavan Power: What difference does it make if a year and a half salary is reasonable? Does it make any difference when the term expires? Does my hon. friend want me to pay to the man whom he has in mind, to the friend whom he has in mind, five years' salary which would amount to $35,000?


Howard Charles Green: The minister should be fair. I am not referring to any friend of mine;
I am simply asking that the matter be dealt

Central Mortgage Bank
with in a fair way. It is not a question of friendship or anything of that type.


Charles Gavan Power: There are four men. One man, Mr. Sherwood, is being paid his salary up to the end of his term. Another man, Mr. Justice Hyndman, is being paid his salary up to the end of his term. The third man is a civil servant; he is receiving a year and a half salary and will obtain superannuation. The fourth man, whom my hon. friend has in mind, has four to five years more to run.


Howard Charles Green: I had in mind the third and fourth men.


Charles Gavan Power: That is the situation.


[Stage Direction]
Item agreed to.
Some hon. MEMBERS:: Go on.


James Shaver Woodsworth: I submit that we must either obey the rules or else know the reason why.


Major James William Coldwell: We started at eleven o'clock this morning.


Charles Gavan Power: I am not insisting on proceeding. I think the committee has done remarkably well as far as I am concerned.
Progress reported.
On motion of Mr. Lapointe (Quebec East), the house adjourned at 11.05 p.m.
Tuesday, May 23, 1939