1941-06-03

[Stage Direction]
On the orders of the day:
Mr. H. R. JACKMAN (Rosedale):: I should like to direct a question to the Minister of Finance (Mr. Ilsley). I have received a telegram from Toronto reading as follows:	'
Prospective investors are asking what proportion of the new war loan is to be used by the government for war purposes. To clarify this [Mr. MacNicol.l
point would you please ask Mr. Ilsley for a definite answer so that the facts will reach the public through the press.


Mr. CRERAR:: Whom is it from?
Air. JACKA1AN:	From a gentleman in
Toronto. If the hon. gentleman wishes his name, I can give it.


Thomas Alexander Crerar: I think my hon. friend
should give the name.
Some lion. MEA1BERS: Name.


Harry Rutherford Jackman: The wire is sent by
Gordon Perry.


Hon. J. L. ILSLEY (Minister of Finance):: My hon. friend gave me notice yesterday of this question, and in reply I may assure him that the total cash proceeds of the new victory loan will be used for war purposes. For the fiscal year ending March 31, 1942, the ordinary expenditures of the government of the Dominion of Canada are estimated at $468,000,000, including $35,000,000 for wheat acreage reductions. The total ordinary revenue is estimated to amount to SI,400,000,000, which means that Canada is raising from current taxation about three times the government's ordinary expenditures.
We are spending more than this great taxation surplus over ordinary expenditures on the war effort; in fact we are spending on direct war effort a total of at least $1,300,000,000. Total expenditures on behalf of Canada are thus at least $1,768,000,000. In addition we are sending vitally needed supplies from Canada to Great Britain, which Great Britain is unable for the time being to pay for with Canadian dollars. This will add approximately $800,000,000 to our burden after deducting the amount of our own exchange deficit with the United States. Our government must provide the Canadian dollars with which to pay our workmen, fanners, miners, transport workers, et cetera, for the cost of producing these supplies which are so urgently needed. Or to put it another way by expressing it in percentages.
Canada's total expenditures, including aid to Great Britain, for the year ending Alarch 31, 1942
Per cent
Ordinary expenditures	 18
War expenditures, including vital supplies to Great	Britain	 82
Total ordinary and war expenditures, including vital supplies to Great Britain	 loo
Where the money comes from
Taxation	 54
Victory loan, war savings certificates, et cetera	 46

Income War Tax Act
If we do not include the net figure of $800,000,000 for vital supplies to Great Britain, then Canada is financing both its ordinary and its war-time expenditures by current taxation to the extent of 79 per cent.


Mr. HANSON (York-Sunbury):: That is,
the two combined make up 79 per cent? Seventy-nine per cent of the combined war and ordinary expenditure is made up from taxation. That should be clear.


James Lorimer Ilsley: We are meeting out of
revenues our total ordinary peace-time expenditures, plus our war-time expenditures, but not including assistance to Great Britain, to the extent of 79 per cent. It must thus be obvious to all that as Canada is raising in taxes three times its ordinary expenditures, every dollar raised through the victory loan is a dollar which will be directly devoted to war puxposes.
In what I have just said I have been speaking of the cash portion of the victory loan. As the house knows, we are also making a conversion offer to holders of dominion 5 per cent national service loan bonds which mature on November 15, 1941.



CITY OF TORONTO


[Stage Direction]
On the orders of the day:
Mr. T. L. CHURCH (Broadview):: I
would like to ask the Prime Minister (Mr. Mackenzie King) if he will be kind enough to give consideration to the following. From the business and commercial standpoint, the city of Toronto at present has no direct representation in the cabinet. This may not be a matter which a private member should bring up, but the Prime Minister's family have had a very long and close association with the public affairs of that city, his grandfather having been its first mayor. The city is the commercial and industrial metropolis of Canada, a leader in war work, recruiting, patriotic activities of all kinds, and a large subscriber to war loans. True, the hon. Postmaster General (Mr. Mulock) was born and bred there and his distinguished grandfather has done a great deal for the city, but the Postmaster General does not represent a Toronto seat directly, and in the past we have at times had two or three ministers in the cabinet representing the city. Will the Prime Minister give consideration in the contemplated cabinet changes to giving our city increased representation in addition to our present representative?


Right Hon. W. L. MACKENZIE KING (Prime Minister):: I thank my hon. friend for
his kind personal references, and I shall be only too pleased to consider what he has said. But his remarks call to mind something I once heard Sir Wilfrid Laurier say when representations were made to him from Ontario, and particularly from the city of Toronto, respecting the cabinet. Sir Wilfrid Laurier replied. "You good people from Toronto want me to have a cabinet of angels, but you do not send me angels to make a cabinet of."



RED DEER POST OFFICE


[Stage Direction]
On the orders of the day:
Mr. F. D. SHAW (Red Deer):: Mr. Speaker, some weeks ago the house passed a motion which I moved for the tabling of correspondence relative to the Red Deer post office. With the permission of the house I ask leave to withdraw that motion.



INCOME WAR TAX ACT

[Stage Direction]
The house resumed from Monday, June 2, consideration in committee of Bill No. 87, to amend the Income War Tax Act-Mr. Ilsley- Mr. Vien in the chair.
Sections 1 to 4 agreed to.
On section 5-Repeal of paragraph (c) of section 3.
Richard Burpee Hanson: Wait a minute, Mr. Chairman. I was in conversation with the Minister of Finance over an important matter when the Chairman was calling the sections, and I desired to have something to say on section 1. But first may I be permitted to make some interroga-.tories of the minister with regard to the subject matters to which I alluded yesterday on the second reading. If the minister is not able to give the information now, or if he prefers to deal with the matter at a later stage, it will be satisfactory to me. __
At no stage of the proceedings has the Minister of Finance placed on the record a statement of the net amount which would be payable to each of the provinces under alternatives (a) and (b) of his proposals to the provinces if they vacate the income tax fields. The minister must have some calculations based on the fiscal year ended March 31, 1941, or, if these are not complete, at least estimates based upon provincial financing for the fiscal year ended March 3', 1940. The house and the country should have this information.
In his budget speech the minister stated that the net increase to the dominion from the changes proposed in the personal income
Income War Tax Act

and corporation taxes after making required payments to the provinces would be approximately $90,000,000. I think that is a correct statement of the position. The committee should also have information as to what the gross increase would be before the payments to the provinces are made, and an estimate of the amount which it is anticipated will be paid to each of the provinces. If the minister will give that information at a later stage, I shall be grateful to him.
What sections did you call, Mr. Chairman?


The CHAIRMAN:: We are on section 5 now. I called the other sections and members called "carried".


Richard Burpee Hanson: Oh, no. I ask the committee to revert to section 1.


Thomas Vien: Is it the pleasure of the committee to revert to section 1?


Richard Burpee Hanson: There are certain matters that ought to be discussed. We cannot rush this bill through as quickly as that.


Thomas Vien: Order, please. I must as chairman of this committee resent the expression "rushing the bill through". I have been very careful not to rush any bill through. I am trying my best to give every member of this committee the opportunity to speak, but it is my duty as Chairman to expedite the work of the committee to the best of my ability and in conformity with the rules of the house. I have already had occasion to draw the attention of the hon. leader of the opposition to the fact that implications of this kind are out of order. I have called each individual section. Hon. members of the committee have called "carried". Nobody objected, and we are now on section 5. If it is the pleasure of the committee to revert to section 1, then of course I am in its hands. I am the servant of the committee. But I do not believe it is fair to imply that we are rushing the work of the house, in the way the leader of the opposition has suggested.


Richard Burpee Hanson: Well, after that interlude, and-


Thomas Vien: Again I object; it is not an interlude, it is a ruling. That was an improper remark on the part of the leader of the opposition.


James Lorimer Ilsley: I suggest that with the consent of the committee we go back to section 1. I am not criticizing your ruling, Mr. Chairman, because it is desirable to get ahead with these sections as rapidly as possible. Perhaps, however, I was to blame in occupying the attention of the leader of the opposition while the sections were being called. I did not 
realize I was doing so, but certainly I should not want anyone to think that the sections were being carried without full opportunity for discussion.


Thomas Vien: Mr. Usley moves that the committee revert to section 1. Is it the pleasure of the committee to adopt the motion?


[Stage Direction]
Motion agreed to.
On section 1-Rates applicable to all individuals.
Richard Burpee Hanson: Mr. Chairman, I regret that occasion arose for you to speak to me in the way you did. I had no intention of course of reflecting upon the Chair. But the Minister of Finance did come over to see me on a matter of some importance, and while the work of the committee was proceeding we were engaged in a discussion.
1	did not personally realize that sections of the bill were being called. Otherwise I would have been discourteous enough to the minister to rise immediately and make my observations. Let us start over again. I have no objection at all to the passage of sections 1,
2	and 3, but I do wish briefly to discuss section 4.


Thomas Langton Church: I have a point in mind
which has reference to sections 1 and 2. I refer to the commitments which have been undertaken by some of the smaller groups who are subject to income tax, and I object to the increases in schedule A as they apply to these groups. Since the budget of 1940, and the taxes enumerated in the schedule appended thereto, many people have made commitments to build houses. I strongly dissent from the opinion expressed yesterday by the hon. member for Parkdale respecting housing in Toronto. As to slums in Toronto we have few now. The public utilities, the civic transportation facilities and good roads have made possible the building of small houses in Toronto and district at small cost.
In my opinion reconsideration should be given to schedule A, for the benefit of workers who have already made contracts for building or buying houses. It is a grave mistake to make jumps in taxes such as are here indicated, and which affect small wage-earners. Their commitments on mortgages and insurance premiums are already burdensome, to say nothing of heavy taxation. We have now in progress a campaign for victory loan subscriptions-and what it will cost, I have no idea. But about 70 per cent of the people in greater Toronto cannot subscribe to it, because of the heavy load I have mentioned, although they are anxious to do their part and subscribe in a small way.

Income War Tax Act
Many of the persons affected are soldiers. If there were a postponement of the payment of mortgage commitments and insurance premiums where they have been regularly paid for years, at the same rate as the victory loan instead of 7 per cent, then they would subscribe. They are anxious to do so, because some of them are serving on victory loan committees. We hope this loan will go over the top, but we also hope that the revenue collected from people in receipt of the smaller incomes will be commensurate with the commitments they have made. I should like to have a reply from the minister, because at times he has not been unfriendly to the people I have mentioned, the small wage earners.


James Lorimer Ilsley: This matter was fully debated when the resolution was before the committee, and also in the debate on the budget. I have no further observations to make now.


[Stage Direction]
Section agreed to.
Sections 2 and 3 agreed to.
On section 4-Earned income.
Richard Burpee Hanson: Paragraph (m) defines "earned income," and included in the paragraph is the expression "indemnities or other remuneration paid to members of dominion, provincial or territorial legislative bodies or municipal councils." By express direction the indemnities paid to members of parliament are included in the category of salaries and wages. I dissent from that principle. I do not wish it to be understood that I am arguing for exemption from national taxation, either with regard to income tax or national defence tax, as they apply to the indemnities paid to members of parliament. That is not so at all. I say that from the very beginning, from away back in 1917, members of parliament have been glad to pay the imposts levied upon their indemnities. My objection is that the paragraph is based on an improper and unconstitutional theory. Indemnities are not wages paid to members of parliament. They are, in fact, indemnities, as indicated in the act under which they are paid. Therefore I say it is wrong in principle to tax, as salaries or wages either for income or national defence tax purposes, the indemnities of members of parliament. But in order to keep the position absolutely straight I suggest the ministry should follow the principle enunciated when salary deductions were made in 1931. At that time members of parliament were the first people in the public service to take the deduction of 10 per cent on their indemnities. It was done on the theory that the crown would be authorized so to do by the people's elected representatives, who are not employees of the crown;
they voluntarily relinquished 10 per cent of their indemnities for the good of the country.
I suggest therefore that the minister should correct the position indicated in this paragraph. He should maintain the constitutional position of members of parliament, and should take the authority, which will be given with the greatest good-will by members of the House of Commons, and, I am sure, of the other place, to put into effect what I conceive to be the correct constitutional principle. If part of these indemnities is to be allocated to the service of the state, then I suggest that it be done by way of a bill to deduct from the indemnities of members of parliament the income and national defence taxes applicable. But the indemnities ought not to be taxed on the theory that members of parliament are employees of the crown.
I expressly repudiate the suggestion contained in the Income War Tax Act that we are in any sense the employees of the crown. If one were to carry that a little farther he would reach the logical conclusion that we are also employees of the present government, and I expressly dissent from that idea. I am satisfied that if any private member thinks the matter through, and studies the constitutional aspect of the question he will agree that we are the representatives of the people under the constitution, and we are not here as employees of any government, no matter what its political stripe may be. This is a question of principle. It is not a matter of great consequence from the point of view of dollars and cents; that is not the point at all. But to say that we are employees of the crown is a false doctrine and we should not for a moment tolerate it in any legislation on the statute books.
I suggest to the minister that even if it is late in the session he consider adopting the principle that the taxation of members of parliament should be on the theory, not that we are employees of the government or of the crown, but that we are the elected representatives of the people and that we voluntarily submit to a deduction from that indemnity which parliament in days gone by saw fit to grant to us. That is the principle I am contending for. Simply by putting a clause in an act of parliament you cannot make me an employee of the crown. That is not the principle of democratic government. That is hoisting yourself by your boot-straps; it is saying that black is white.
We all agree that we should be taxed. No one for a moment has offered the suggestion that we should not be taxed as other people are. In fact we desire to set an example to the rest of the public in bearing our fair share of taxation, but let us put it on the
Income War Tax Act

proper principle and not on a theory that is false in fact and false under the constitution of the country.
Mr. O'BRIEN: In view of the fact that I raised this question when the matter was in the resolution stage, I am pleased that the leader of the opposition has presented the same view to the committee and has substantiated my remarks. Therefore I have nothing more to say except to ask the minister to see that the anomaly is corrected, as the leader of the opposition has urged. Parliament had the power to legislate as it did in regard to this matter, but when parliament did so it committed constitutional suicide, and I submit that we should now take our position once more on firm ground.


Thomas Langton Church: Earned income, as defined by section 4, is not earned income at all; in some cases not half of what can be classed as income is ever received by the earner when you allow for deductions that have to be made by the person earning it. The new income tax principle is very unfair. One of the main provisions is section 4 which gives the definition according to the officials. While I have great admiration for these officials, I submit that it is the function and the duty of parliament to revise these clauses. Under the law to-day, all that we can do is to perform a postmortem, because we cannot change one word of Bill No. 87. Not one word can be altered by the representatives of the people, who are responsible to them for this bill. In Washington it is different. There they discussed income tax and revenues for months before the budget of the secretary of the treasury, Mr. Morgenthau, was adopted; they can make any changes they like. If we cannot make any changes we may as well pass the bill holus bolus and take the definition of earned income given us, which means salaries, wages, fees, bonuses, pensions, superannuation allowances, retiring allowances, gratuities, honoraria, and the income from any office or employment of profit held by any person, and so on. In some cases under this section as much as fifty per cent of the earnings from these sources has been taken away, and the earner does not get it at all, yet he has to pay on the full sum, not the net. Our system of taxation is most unfair. It is robbing Peter to pay Paul. I am in favour of income tax and always have been, but I believe the principle of this section giving the definition of earned income is unfair. The same is true of the section with regard to investment income. Certainly some part of it should be allowed for deductions now not considered in the matter.


Mr. NEILL:: Now that this matter has
been introduced I would call the attention of the committee to another aspect of it. With very few exceptions, I believe, we all agree that income tax is a fair tax. Provided I get an income I am willing to pay a tax on it, whether that tax be large or small; but I do object, and I believe other members will share my view, to being taxed on income which is not received. Many years ago the then minister of finance put an amendment into the act-I have not got it before me now-expressly stating in so many words that if a person is away from home in the pursuit of his business and incurs any expense in connection with travelling, or board and lodging, he is entitled to deduct that sum from the gross profits of his business, in the same way that you are allowed to deduct the wages of people you employ. But when it comes to members of parliament that principle is not employed. We are taxed on the full amount of $4,000. Does any member suggest that he gets $4,000 net indemnity? The idea is ridiculous. I employ a stenographer at home solely in connection with political work, and I have other expenses while travelling in the district. If I were running a store I would be allowed to deduct those expenditures, but because I am a member of parliament they are not allowed.
The language used is "business or occupation''. A number of years ago I took this up with the proper official and he said I was not eligible to deduct anything whatever because my status was neither that of a business nor that of an occupation. I asked him if he would tell me what it was if it were neither of these, and he said it was an honour. But you cannot live on an honour. The province of British Columbia does allow a certain amount to be taken off. It used to be $2,000. One was allowed to deduct that, just as a man running a blacksmith's shop is allowed to take off expenses. Later on the province reduced that allowance. It was a flat rate and did not go into details; it simply said $2,000. Since then they have reduced it to $1,000. That is an admission of the principle of the thing. We are no longer able to obtain that reduction there because income tax has been surrendered in that province.
I would not have brought this matter up because it might look as if we were trying to get something for ourselves. Now that it has been brought up, however, it is only right, to point out to the Minister of Finance that we should be allowed either a flat rate or such an amount as we can substantiate without anj' shadow of doubt as expenses incurred in discharging our duties.

Income War Tax Act
as members of parliament. It is not only the amount of indemnity that is involved, but if you have private means added to the indemnity that puts the rate into higher brackets, which increases the tax paid. Tax us all you like on a percentage basis, but do not tax us on something we never get or see. Tax us on our net income from being a member of parliament the same as you would tax us on the net income from being a storekeeper or anything else.
I concur in the view taken by the leader of the opposition, but that is on a somewhat different line. I suggest that we should be allowed either a flat rate in consideration of expenses incurred in obtaining this income, or else a certain amount by vouchers submitted.


James Lorimer Ilsley: The leader of the opposition objects to having indemnities classed as earnings of an employee. I do not think they are so taxed. The section before the committee, 4(m), contains an exhaustive definition of "earned income"; it enumerates various varieties of earned income or what the act shall consider as earned income. It does not purport to bring them all under the heading of income of employees. The first few lines seem to relate to salaries, wages, fees, bonuses and so on, but it contains such words as "pensions, superannuation allowances, retiring allowances, gratuities, honoraria", and so forth. The middle part of the section is still farther away from any idea of wages or income of an employee, because it deals with the earnings which a person derives from the exercise of his trade, vocation or calling, and then finally the latter part of the section makes it clear that the definition extends to "indemnities or other remuneration paid to members of the dominion, provincial or territorial legislative bodies or municipal councils". I am unable, therefore, to appreciate the argument that in some way the indemnities are being branded as wages or salaries paid by the government to employees of the crown. I do not think that is so. They are simply swept within the definition of earned income, but without any legislative expression of opinion as to whether they are in the nature of wages of employees or not. There is no implication that they are that I can read into this section.
With respect to the argument of the hon. member for Comox-Alberni, there is much to be said for it. It is very hard to know just where to draw the line between living expenses which can be allowed as deductions from gross income for income tax purposes and living expenses that should not be so allowed. Parliament, in its wisdom or otherwise, has decided that the travelling expenses, inch ling
meals and lodging of persons travelling in connection with their trade or business-


An hon. MEMBER:: Or occupation.


James Lorimer Ilsley: -while away from home in pursuit of a trade or business, shall be permitted as deductions. But of course it is a principle that should not apply generally. It could not, for example, be applied to a person who is working at home. He has lodging and living expenses, but it would never do to permit him to deduct those from income for income tax purposes, because the income tax is upon the income which he receives for the purpose, among other things, of meeting his living expenses. As I say, it is hard to know where to draw the line. It has always been the law since the inception of the income war tax act that sessional indemnities are income and taxable as income, and that no deduction is allowed for the cost of meals and room in Ottawa any more than deduction in respect of living expenses is allowed for the great mass of the population of the country.


Alan Webster Neill: And what about travelling?


James Lorimer Ilsley: Travelling expenses are pretty well provided for by statute. The statute provides a fairly generous allowance for travelling expenses, at least for one trip here and one trip back.
Whatever the abstract or theoretical rights in the controversy may be, it would be thoroughly impracticable for us and undesirable to make any change of this kind at the present time or under existing conditions.


Mr. OBRIEN:: I should like to refer to a paragraph of a letter I received from an official of the national revenue department dated July 29, 1940, when I asked a question last year for information. He says:
As the elected representative of the people in the constituency of Northumberland, New Brunswick, you receive an "indemnity" which is paid by the dominion government. Under the definition of "employee" referred to above you are therefore an employee of the dominion government and as such you personally should file two copies of form N.D.T.l with the representative of the treasury, House of Commons, Ottawa, so that the proper amount of national defence tax may be deducted from the moneys payable to you.
Therefore there seems to be a difference of opinion between the Minister of Finance and the Department of National Revenue.


James Lorimer Ilsley: From whom did the letter
come? Is it the local office?


Joseph Leonard O'Brien: No.
-Mr. ILSLEY: The dominion office?


Joseph Leonard O'Brien: Yes.
Income War Tax Act


Alan Webster Neill: The Minister of Finance has taken a very narrow view of the argument I used, in confining it to meals and hotel. There are other expenses such as I enumerated, the cost of a stenographer and so forth; and as regards travelling he has surely forgotten the days before he was a cabinet minister when he talks about the expenses being fully or even reasonably met by the allowance to come to Ottawa once a year. I suppose my travelling expenses in covering my district throughout the year will reach $300 or $400, apart from coming to Ottawa, and surely he would not say that is amply provided for. That is hardly the position.
As regards all other income, you pay on your net income, not the gross. You are allowed to take off the cost of obtaining the income, and part of the cost of obtaining this income, or wage if you choose to put it on that low plane, is what I have spoken of.
Running all through the argument of the Minister of Finance on these bills, and apparently a prominent consideration in the minds of his advisers seems to be the trouble of administration. If it is easy to administer, slam it on; if it involves a little trouble, avoid it.	.
British Columbia finds a way of dealing with this. For many years they put a flat rate on; they used to allow us $2,000 a year in recognition of the cost of being a member of the dominion parliament, and then we paid income tax in the province on the remaining $2,000. They have since reduced that to $1,000, and now it will disappear altogether. A flat rate is a simple way of doing it, and it would be a recognition of the situation. I remember hearing Mr. Bennett say in this house that he paid his income tax gladly. I would hardly go so far as that. I pay it willingly, but I do not like paying income tax on something which is not income. I believe we should pay on net instead of on gross remuneration.


Richard Burpee Hanson: I can
hardly go as far as the hon. member for Comox-Alberni. I do not think I should ask the government to allow a deduction for the food I eat; but certainly there is a principle involved in connection with the indemnity of a member of parliament. Certainly he has to incur out of pocket expenditures that he would not incur if he were not a member of parliament. I am not going to labour the point; the hon. member has made out a good case and the minister has recognized that there is something in it, so that perhaps before another session something may be done.
fMr O'Brien.]
At the risk of incurring the indignation of hon. members who want to get this bill through I want to return for a moment to the other point. I object to being classed as an employee. It is true that under a technical construction of this act we are not declared expressly to be employees and therefore with earned income, but we are put in the same category, and that is not the theory of representative government in Canada. I suggest to the minister that we let it go for this year, but that between now and next session he give consideration to a recognition of the true position of a member of parliament, that he is here as a representative of the people under constitutional authority. He gets an indemnity against the loss that he sustains by coming here, and for other things of the kind; and we might be taxed by way of deduction from that indemnity just the same as the judges were taxed in 1931. Some of them, though not many, took the view that there was a contract in connection with their appointment and that therefore they should not be required to pay income tax. Parliament said, "All right; we will recognize the principle of that position, but we are going to deduct from the salary paid you by the crown 10 per cent as a contribution to the state." That was in a time of economic warfare. I am not sure just what the position is with respect to judges to-day; I have not looked it up, but I think there is some tax on them.


James Lorimer Ilsley: They are subject to the payment of income tax.


Richard Burpee Hanson: On the theory that it is a salary to an employee?


James Lorimer Ilsley: The difficulty in connection with judges, under Mr. Bennett, was this. Mr. Bennett objected to reducing their salaries because he felt they should not be subject to reduction, and he held the same view with regard to the salaries of officers and men in the armed forces. There was much to be said for that view, but on the other hand it appeared unfair to reduce the salaries of civil servants and the indemnities of members of parliament by 10 per cent, as was done, and at the same time leave the judges and those in the armed forces untouched. The constitutional position, or something akin to it, was preserved by another plan. A tax of 10 per cent was imposed on the salaries of judges and those in the armed forces, so that it could be said that their salaries having been given them for life, and the independence of the judiciary being extremely important, their salaries had not been reduced, but they were being asked to pay a tax.

Income War Tax Act


Alan Webster Neill: In view of the statement of the minister that he cannot see his way clear to consider the point I have raised, I would ask whether he would be in favour of withdrawing the allowance of $2,000 a year given each cabinet minister in lieu of an automobile?


James Lorimer Ilsley: I do not think that is relevant to this discussion.


Alan Webster Neill: I think it is highly relevant and clearly a case in point, involving your car versus my car.


Richard Burpee Hanson: It may not be quite relevant, but this matter crops up from time to time and we might as well face the situation first as last. What was the position? Prior to the institution of this grant of $2,000 a year to cabinet ministers and the leader of the opposition, ministers of the crown were supplied free of charge with luxurious motor cars, and all kinds of expenses were incurred until it was felt that the cost to the country was exorbitant. The hon. member for Comox-Alberni says it was a scandal. Perhaps that is too broad a term to use generally, but I do think perhaps it approximates the position in certain instances.
Because of that fact it was determined to set up a new position. It was recognized that cabinet ministers and the leader of the opposition of the day-my right hon. friend the Prime Minister occupying that position at the time-should not be supplied at the public expense with a new motor car every year or every second year, with chauffeurs paid by the government, gasoline and oil bought by the government and all that sort of thing, but that they should be given a lump sum in lieu of the amount which had been expended in this way prior to that time. That was done, and I am satisfied that a decided saving to the treasury resulted.


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: I am sure there was a decided saving to the treasury, and the minister agrees with me.


James Lorimer Ilsley: I have always understood there was a saving.


Richard Burpee Hanson: I have no doubt about it. It would take quite a lot of trouble to demonstrate it mathematically, but I am quite sure it could be done. I recall the instance of a Speaker of this house who got practically a new car by way of repairs, and it was charged up to the government. I am not going to go beyond that, but that sort of thing did develop in isolated cases. I would not have anyone think I believe it was general, but in some instances it did develop into something approaching a scandal.
What is the position to-day? Cabinet ministers and the leader of the opposition are voted by statute the sum of $166.66 per month in lieu of a motor car. What does that mean? If you have not a motor car it means that you absorb it into your general income, which I do not think is right. But if you have a motor car; if you keep a chauffeur; if, as in my position, you have to rent a garage or garage space, you have nothing left. I have kept an account of this thing, and I know that I am distinctly out of pocket. If I did not receive this allowance I would not maintain a car in Ottawa, and I think I would be better off. Then when I went home I would drive my own car, as other people do. Let us be fair about this thing. This is intended to expedite the business of cabinet ministers and the leader of the opposition, and to do away with a position which to say the least was not satisfactory. If it is the desire of the House of Commons in war time that this allowance should not be made, I should be very glad to hear it. Then I would at once dispense with the services of my chauffeur and send my car home.


James Lorimer Ilsley: That is the way I feel about it.


Richard Burpee Hanson: But if it is the will of parliament that the Prime Minister of this country should have a motor car at the expense of the country-and I believe he should, or that he should have an allowance in lieu thereof-or that the Minister of National Defence, who has to travel a great deal, should have a car, or any of the other ministers, then I think this is a fair way of doing it. The Leader of the Opposition also has a position that requires him to travel a good deal, and in these cases I do not think it unfair to ask the country to make the contribution. If you pay a chauffeur $25 a week; if you pay your garage rent; if you pay the ordinary cost of maintenance, repairs and so on, you find that $2,000 does not begin to cover the expense, and you have nothing left for the depreciation of your car.
I think I have made a fair statement of the matter, and I hope hon. members will understand my position. So far as I am concerned, I am in the hands of the house.


Mr. FRASER (Peterborough West):: Annuities should come under this section, because these are generally made up of part income and part capital. A man may work for a company or organization which does not provide a superannuation or a pension, and he may pay for an annuity out of his earnings over the years.


James Lorimer Ilsley: It should be in unless it is
included in the other, because it is not regarded as investment. I shall have a look at it.
Income War Tax Act

Mr. MoCANN:	If one is to take at face
value the observations which one hears from members of parliament, I think it can be said that there is not a single member of this house who does not object to his full indemnity being taxed. I am surprised that more objection has not been voiced at this time. I have no objection to any member of the government having a car allowance to the extent of 82,000, although frankly I do not think it costs $2,000 a year to operate a car. It may cost that if one has to have a chauffeur, but surely if a man can drive his own car in Fredericton he ought to be able to drive it in Ottawa. There is gross discrimination between the allowance made to members of the government and the lack of allowance made to members of parliament. An allowance of $2,000 will cover the operating expenses and depreciation of a car, and in addition there are generous expense accounts for members of the government which are passed without question. I received an indemnity in 1940 upon which I willingly paid an income tax. I received that indemnity by virtue of the fact that I had spent a considerable amount of money in March, 1940, by way of legitimate expenses, in order to become a member of this house. If I had wanted to become a slave of some vested interest I could have obtained contributions to cover my election expenses, but in order to be free and independent, as I am, I paid my own expenses. I submit that I should be allowed to make a deduction for the legitimate expenses of printing, advertising, the hiring of halls and so on. I do not like to be classed as an employee of the crown; I am not an employee of the crown, I am a servant of the crown. If as a servant of the crown I choose to say that I am content that a deduction should be made on my indemnity, all well and good, but to give it to you with one hand and take it back with the other is neither fair nor honest. This is a matter upon which members of parliament should express their opinions freely. As I say, if you take at full face value the views that are expiessed to you privately, it would seem that there is not a single member who does not believe that some deductions should be allowed.


Gordon Knapman Fraser: Will the minister put in annuities, at least to the extent of $1,200?


James Lorimer Ilsley: I agreed that that should
be done a few minutes ago, but I should like to reconsider it. I am' not just sure whether some annuities are not in the nature of investment income. Perhaps the section could stand and we will give some consideration to that this afternoon.


Mr. CRUICKSHANK:: I think the reason
so many hon. members do not like to say anything-I have never been bothered that way particularly myself, although perhaps I would be better off if I were-is that they do not like to talk about their own indemnities. As the hon. member who spoke previously said, we hear these things around the corridors and in the cafeteria, but for some reason or other hon. members do not like to have their criticism appear in Hansard. I delight having mine in Hansard, and I should like to have it in big letters, because this strikes me as being particularly unreasonable. The leader of the opposition has stated that, he needs a chauffeur to drive him up to the Chateau Laurier. I do not agree with him. I think it would be cheaper if we gave him a taxicab.


Richard Burpee Hanson: I did not say that. I said I needed a chauffeur in Ottawa and I am going to have one.


George Alexander Cruickshank: I doubt very much whether it costs the leader of the opposition as much to operate his car in New Brunswick as it costs the member for Fraser Valley or the hon. member for Cariboo. His whole province is not as large as one of our ridings. I am prepared to produce my accounts to show what it costs me to run my car while at home, and there would be no charge for a chauffeur. I do not get any $1,400 or $1,500 with which to do it.


Harry Rutherford Jackman: You do not have the
same responsibilities.


George Alexander Cruickshank: I am not depreciating the responsibilities of the leader of the opposition.


Thomas Vien: Order.


George Alexander Cruickshank: I do not mind him at all, Mr. Chairman. I realize that the leader of the opposition has a responsible position, but I have to go back to my constituency and travel all over to speak at recruiting meetings, and in many other types of campaigns. I will have to get up and explain to the people of my riding that it costs approximately $101,000 to operate private cars, as well as $2,000 a year for each of the ministers.


Mr. MacNICOL:: Have they all cars?


George Alexander Cruickshank: They get $2,000 a year whether they have cars or not. With all due respect to them, I do not think some of them can drive a car. I have to explain to my people this expenditure of $101,000 for private cars as well as $2,000 a year for automobiles. And there is supposed to be a war on. How can I explain that when I am

Income War Tax Act
asking the people to subscribe to the victory loan? It does not make sense. I realize that no member likes to talk about these things because he would appear to be talking about his own indemnity, but surely we have nerve enough to get up and ask that every one of the cabinet ministers, with the exception of the Prime Minister and the Leader of the Opposition, serve for two months as a private member and pay his own expenses.


Richard Burpee Hanson: We have all done that.


George Alexander Cruickshank: I gave a fair hearing to the leader of the opposition, and I think he could benefit by listening to British Columbia. We have had to make four trips to that province in one year. British Columbia happens to be on the Pacific coast, and for the benefit of 80 per cent of the members who have not been west I will say that it costs a little to get out there. You have to travel about your riding. It is not a s^Jary that we receive, it is an indemnity. I have no doubt it is more money than many hon. members ever made in their lives, including myself. I am not a lawyer, I am a farmer. But I can take you to my room and show you forty applications for donations from different organizations. Every hon. member gets these; it is part of the game of being a member. Yet we are taxed down to $40 with which to go from here to British Columbia. This is supposed to cover our travelling expenses. We have heard from the organizer of the Conservative party of how many cow days it takes to buy a suit of clothes, or how many cow days it takes to buy a mower; I have not heard of how many cow days it takes to pay a lawyer's bill, but I can tell you.
Section stands.
Section 5 agreed to.
On section 6-Deductions for superannuation or pension fund.


Harry Rutherford Jackman: Has this been amended since last year, when, as I recall it, $300 was allowed and there was not the 5 per cent limitation?


James Lorimer Ilsley: Three hundred dollars was the limit of the amount allowed to the employee as a deduction from his income for taxation purposes. This relates to the employer, not the employee.


Harry Rutherford Jackman: The employee can still deduct $300?


James Lorimer Ilsley: Yes.


Harry Rutherford Jackman: I think we shquld be
generous to the employee, because with old age pensions at $20 a month, starting at the
age of 70

we hope it will be reduced to 65 when possible-a person with a very small income would feel it hardly worth saving to provide for his own old age unless there was some incentive. Five per cent on SI,200 a year would be $60 a year, which in forty years would amount to $2,400, plus accumulated interest, and the income on that sum would be less than the old age pension. People should be encouraged to save and provide for their own old age. I had the problem presented by a member of my staff whether it was worth while saving for an annuity because after a certain period of years the amount received would be hardly more than the old age pension.


[Stage Direction]
Section agreed to.
On section 7-Donations to charitable organizations by taxpayers other than corporations.
Mr. NICHOLSON:: Can the minister give any information as to the amount of the deductions made last year as a result of this provision?


James Lorimer Ilsley: I am informed that these figures are no longer kept. For years they were kept but they are not available for last year.


[Stage Direction]
Section agreed to.
Sections 8 to 10 inclusive agreed to.
On section 11-Residence of dependents.
James Lorimer Ilsley: It is proposed to amend
this section by inserting after the word "act" in line 23 of the bill the words "or under subsection seven of section twenty-seven of this act."


Mr. GIBSON:: I move accordingly, Mr. Chairman.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 12 agreed to.
On section 13-Proviso.
Richard Burpee Hanson: The explanatory note says that sections 13 and 14 are to prevent double taxation. I thought the minister did not object to the principle of double taxation. He told me once there was no .objection to it.


James Lorimer Ilsley: This is to prevent a tax on the same income both here and in another country.


Richard Burpee Hanson: It is all right to tax twice in Canada, but not here and elsewhere?


[Stage Direction]
Section agreed to.
Section J4 agreed to.
Income War Tax Act
[Stage Direction]
On section 15-Proviso.
Richard Burpee Hanson: What is the effect of this?


James Lorimer Ilsley: It is a pretty important
section and I am apt to get tangled up when I start to explain it.


Richard Burpee Hanson: I do not understand it myself.


James Lorimer Ilsley: I hope the hon. gentleman will understand it when I am through, but I am not optimistic.


Richard Burpee Hanson: First of all we might have subsection 1 of subsection 9B of the act of 1940 read to get it on the record.


James Lorimer Ilsley: I think perhaps I can explain it. There is some bond interest which is payable either in Canadian or in foreign funds. The provision first was that if a resident of Canada elected to take his interest in a foreign currency which was at a premium he would be subject to a 5 per cent tax. Certain debtors evaded that provision.


Richard Burpee Hanson: How?


James Lorimer Ilsley: Suppose the foreign currency was at a 10 per cent premium, for example. If the bond interest was payable in United States or Canadian currency at the option of the holder, and he elected to be paid in United States currency, he would have the right to be paid the equivalent of $110 Canadian dollars although the coupon was for only $100. Certain debtors worked out this technique. They said to their creditors, "Do not exercise your option and require payment in United States funds but ask us instead for $104.50 in Canadian funds and we will pay that to you".


Richard Burpee Hanson: That was the approach from the debtor company to the coupon holder?


James Lorimer Ilsley: That is right. Municipalities did it largely. The result was that the creditor was just as well off, the debtor was about $5.50 better off on the coupon, and the dominion government was out its tax.


Richard Burpee Hanson: I understand the position. How does this correct it?


James Lorimer Ilsley: A year or two ago we made a change in the section which was as I have described it, and the amendment provided that if the debtor had the right to require payment at his option in a currency which was at a premium, then the tax attached.


Richard Burpee Hanson: Even if the option was not exercised?


James Lorimer Ilsley: Yes. That was ample protection for the crown, but it was interfering in cases where the debtors had defaulted in whole or in part. So that this is our third attempt at legislation on the subject.


Richard Burpee Hanson: It is a
system of trial and error.


James Lorimer Ilsley: Yes. The proviso in the bill
states:
Provided, however, that no tax hereunder shall be payable if no part of the premium is paid by the Canadian debtor to the creditor.
If the creditor does not get any advantage, if he does not get even $101 for his $100 coupon, then no tax is collectable from him. Otherwise we would be collecting taxation in cases where he got $50 for a $100 coupon.


Richard Burpee Hanson: Does that correct the whole difficulty?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: Just wait and see.


James Lorimer Ilsley: I believe it does.


Harry Rutherford Jackman: I suggest for the consideration of the minister a change in the wording. Would it not be better to say in line 17, "if no part of any premium" is paid, because in fact it is not "the premium." It may be called a premium, if we like, but I believe we need a more inclusive word than the word "the." "The premium" refers to the exchange premium. What the minister is driving at is any premium or bonus.


James Lorimer Ilsley: The hon. member is arguing that it is an amount paid by reason of the existence of an exchange premium?


Harry Rutherford Jackman: Yes.


James Lorimer Ilsley: But, strictly speaking, it is not "the exchange premium" itself which is being paid; it is an amount which is being paid or called by reason of the existence of a premium. Is that the argument?


Harry Rutherford Jackman: It might be argued that the bonus had no relation to the premium which, in the act, must refer to the exchange premium. They just say, "If you will not insist upon your right to United States funds, we will give you so much." If no bonus is paid by the Canadian debtor, I think that would almost cover the point.


James Lorimer Ilsley: I do not agree, although I may be wrong. I do not think there can be any ambiguity. The situation is this: I am the holder of bonds which are payable, as to interest, in either United States or Canadian funds. The United States funds are at "a

Income War Tax Act
premium." The words "a premium" are used in the earlier sections. This tax applies in certain circumstances, but only if part of the premium is paid to me by the Canadian debtor. Certainly if I get more than $100 in Canadian funds, part of the premium is being paid to me.


Harry Rutherford Jackman: Well, it is for the lawyers
to decide.


James Lorimer Ilsley: I am obliged for the suggestion, but I believe the section is safe enough as it is.


[Stage Direction]
Section agreed to.
James Lorimer Ilsley: I would ask that sections
16 and 17 stand.
Sections 16 and 17 stand.
On section 18-Income capitalized, how taxed.


Richard Burpee Hanson: Was this point discussed in the resolution stage?


James Lorimer Ilsley: No.


Richard Burpee Hanson: This is new, is it not?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: What is the intention?


James Lorimer Ilsley: It is declaratory, I am advised by my officers. There are certain circumstances under which estates are subject to income tax. This would have reference to trustees, executors, and so on. This section appears in the bill to make it clear that these persons are taxed as single persons, and not as corporations or married persons. They are entitled to the exemptions indicated in the paragraphs mentioned.


Richard Burpee Hanson: Has that not always been the law with respect to the income of estates before distribution? They never received exemption?


James Lorimer Ilsley: That is correct; I should have said they are not entitled to exemption. They do not receive and are not entitled to the $750 exemption.


Richard Burpee Hanson: Or to
dependents' exemption.


James Lorimer Ilsley: That is correct.


Richard Burpee Hanson: But the explanatory note would seem to indicate that this section is aimed only at estates which capitalize accumulated income; is that so? Estates which are not distributed but which under the statute are liable to income tax are not entitled to exemption. Here is a case of
capitalization of accumulated income. One would never understand the inference, from the wording of the section, without going back to all these references. I do not understand why this section appears.


James Lorimer Ilsley: Well, the present provisions of subsection 4 as appearing at section 19 of the statutes of 1940 are as follows:
4. (a) Income received by an estate or trust and capitalized shall be taxable in the hands of the executors or trustees, or other like persons acting in a fiduciary capacity.
(b) Income earned during the life of any person shall, when received after the death of such person by his executors, trustees or other like persons acting in a fiduciary capacity, be taxable in the hands of such fiduciary.


Richard Burpee Hanson: That has always been the law.


James Lorimer Ilsley: Yes, following some recent amendments.


Richard Burpee Hanson: Of the immediate past.


James Lorimer Ilsley: Yes. Section 18 of the bill states that income taxable under subsections 4 (a) and 4 (b) shall be taxed as if such income were the income of a person other than a corporation, provided that no deduction shall be allowed in respect of the exemptions provided by paragraphs (c), (d), (e), (ee) and (i) of subsection 1 of section 5 of the act.


Richard Burpee Hanson: Is this just a tightening up? Have these exemptions ever been allowed?


James Lorimer Ilsley: No, they have not been allowed; it is simply declaratory of the practice, and brings the procedure into harmony with subsection 2 of section 11 of the Income War Tax Act, which relates to trusts for unascertained persons, and to income accumulating and in trust for the benefit of unascertained persons, and provides that that income shall be taxable in the hands of the trustee or other like person acting in a fiduciary capacity. Then it provides:
-as if such income were the income of a person other than a corporation, provided that he shall not be entitled to the exemptions provided by paragraphs (c) (d)	(e) and (i)
of subsection 1 of section 5 of this act.
So that this amendment brings subsection 4, as it appears in the 1940 statutes, into conformity with subsection 2 of the Income War Tax Act.


Richard Burpee Hanson: And into
conformity with the practice of the past.


James Lorimer Ilsley: Yes, that has been the practice.
Income War Tax Act


Richard Burpee Hanson: I should
think it must frequently happen that a married man subject to income tax dies, in the middle of a taxation period, leaving a widow and dependents. Suppose he dies on the first of July. The estate takes over the investments, we will say, and the income goes into the estate. For that year, before the estate is distributed, is any allowance made for the wife and dependent children? If not, it seems to me to be very narrow.


James Lorimer Ilsley: It depends on the terms of
the will.


Richard Burpee Hanson: No; it
is not a question of the terms of the will. Suppose he distributes one-third to the wife and two-thirds to the children; they do not get it in the six months, as a rule. Very often provision has to be made for their maintenance. In justice and equity in the administration of the act, for the tax payable in respect of 1940, let us say, where the death occurs in the middle of a period, should there not be in 1941 a full allowance of $750 or whatever it may be for the wife and so much for the dependent child? Or is it split up, fifty-fifty? According to this, there would be no allowance at all.


James Lorimer Ilsley: This does not apply to such a case. In the ease the hon. gentleman has put, the deceased pays income tax up to the date of his death.


Harry Rutherford Jackman: And allowance is given
accordingly.


James Lorimer Ilsley: He gets the exemptions.


Richard Burpee Hanson: Does he
get the full year's exemption for his wife?


James Lorimer Ilsley: Yes, I am advised that he
does.


[Stage Direction]
Section agreed to.
Section 19 agreed to.
On section 20-Application.
Richard Burpee Hanson: This brings it into conformity with the amendment the minister moved?


James Lorimer Ilsley: Yes.


[Stage Direction]
Section agreed to.
On section 21-Tax on non-residents.
Richard Burpee Hanson: This is the gross rental question we discussed?


James Lorimer Ilsley: The provision the hon. gentleman has in mind is in section 22.


[Stage Direction]
Section agreed to.

On section 22-Rentals from real estate taxed on net income basis.
Richard Burpee Hanson: This gives full effect to the minister's amendment?


James Lorimer Ilsley: Yes.


[Stage Direction]
Section agreed to.
On section 23-Annual returns.
Richard Burpee Hanson: I do not wish to delay the committee, but since we had the discussion and the minister was good enough to make the change with respect to businesses, leaving the individual returns to be made on March 31, I have received a great many letters on this subject to the effect that the experience of business men in filing their returns is that there is a difficulty on account of the lack of chartered accountants, just as there is a difficulty for the unincorporated company which has to employ chartered accountants. There is a great deal to be said in that regard. For years the public has been used to April 30 and has made plans accordingly. Now a month has been taken off and a protest is made on behalf of certain individuals. I therefore promised to bring the matter up again at this stage.
I am not sure that the minister made it clear why the department desired this change in the first instance. Was it to get the money in early? I do not think that is really a sound reason. Was it because of the great increase in the number of returns to be filed? I do not think that can be a reason, because there are twelve months in the year and just so many hours in the day to do the work. What was the reason for moving it forward a montn in the first instance?


James Lorimer Ilsley: It was considered that three months would give ample time normally for a person to compute his income for the preceding year and make his return. We have provided for four months for businesses, whether incorporated or unincorporated. It brings the money in earlier, yes. That was a consideration. Then we are proposing a scheme for payment by instalments, and this is about the middle of the period.


Richard Burpee Hanson: For this year, but you have seven months if you start under the new scheme.


James Lorimer Ilsley: There are six months
altogether. The first payment is made in September, but the interval between the first payment and March 31 is six months- October to March, both inclusive. In consideration of the taxpayer paying in advance, which would be equivalent to paying half of the income tax three months in advance, he

Income War Tax Act
is allowed to go on paying by instalments for six months after March without interest for the months from April to September inclusive.


Richard Burpee Hanson: Those of us who have adopted the present system of eight payments beginning in January will have concluded our payments, we hope, by the end of August. That will leave four months out of this calendar year, but we are confronted with the tax on this year's income payable next year, and we are given the option of four payments this year, September, October, November and December. We have three months in which to file the returns under this proposal, so that we must reckon our tax, if we are to take advantage of the scheme, as soon as possible after the end of the year and then pay a fraction of the tax as we estimate it ourselves. I think the minister has given the correct reason; I do not think the question of getting the money in is so important. It is just this-I use the word without being offensive-this bureaucracy has decided that it wants the returns filed one month sooner, without regard to the convenience of the taxpayers. That is the bald, naked truth. I do not think parliament should do this just because the officials of the department say they want it. The minister has to give us a better reason than that. Three months may be sufficient for the simple tax return; three months in a given case may not be time enough. I know that if a man makes a pro forma return and a substantial payment he is given consideration, and many a man is grateful for that; I know of cases. And that just has to be; sometimes it is not humanly possible to make the return.
I am not yet convinced that we should make this change. The minister receded in the one case; I ask him to recede in the other and to leave the date April 30. I do not think it will at all affect his programme of partial payments of 1941 income tax payable in 1942.


Mr. McCANN:: In making an income tax return for 1941 under the present set-up it is taken for granted one can anticipate in September, October, November and December what his income will be in the last quarter of the year. In starting to make payments in September one does the government a favour by giving it the use of that money six or seven months prior to the time he is obligated to pay it. In recompense for the favour that the taxpayer does the country the government does him the disfavour of cutting the time down one month, saying "You must pay it thirty days ahead because you never did a favour for us before in that particular regard." I do not know whether
the end of the fiscal year being at the end of March has anything to do with the government's desire to have the return made at the end of March. It may have. But the Easter holidays come along usually in April, and there are plenty of people who take advantage perhaps of a few days off at that time to make out their income tax return.
I do not think the advantage that will accrue to the government by having the return made by March 30 outweighs the disadvantage that there will be to the taxpayer, and after all the taxpayer should be given some consideration. Let us not get into the state of mind that we can say, just because the government runs the business of this country and wants this, we are going to be regimented to the extent that the taxpayer has no more rights. That would be a bad state of things for this country to get into. People pay their income tax willingly, they want to make honest returns and within the prescribed time, but the government is doing no great favour to them in giving them a little latitude in the matter of the date of filing the return.


Mr. ISNOR:: As one who associated himself with the thought expressed by the leader of the opposition in reference to the shortening of the time for filing the return, particularly as applying to unincorporated business firms, I can see that there are advantages as well as disadvantages in connection with it. I am wondering whether the minister had in mind in providing for returns from certain types of income tax payers by March 31 that he was doing the individual a favour. The larger firms, incorporated as well as unincorporated, are able to procure the services of auditors to prepare their accounts, and their time would be taken up to a large extent in the month of April. Anyone's experience in trying to procure their services is that we all wait until the last month to prepare our income tax returns or to check them. We have made a tentative balance sheet and it is then that we find it difficult to obtain the services of auditors. It is just possible that the minister had in mind that thought- greater efficiency so far as the department is concerned, and also making it easier for the individual to procure the professional help he must sometimes have in order to make a correct return.


James Lorimer Ilsley: The leader of the opposition says this is what the bureaucracy want.


Richard Burpee Hanson: That is the reason the minister gave.
Income War Tax Act


James Lorimer Ilsley: Oh no; that was not the reason at all. This term "bureaucracy" is used good-naturedly, but I think it is a shame to be using it too much, because it builds up the idea that there is a group of public enemies here in Ottawa setting their hands and faces against the people of this country.


Richard Burpee Hanson: Oh, well; I think I qualified it sufficiently. I do not mean that at all. I will withdraw the term if it is offensive; I certainly had no such idea in mind. I shall say, then, the "permanent officials" want this done. That is the correct description. And I suggest that that is not a good enough reason.


James Lorimer Ilsley: That is not the reason I gave, and moreover they do not all want it done either, if that is any satisfaction to the committee. However, I have to take responsibility for these measures, and the tendency to go back and say that this is what some bureaucrats of some kind want may be all very well occasionally, but I do not want the impression to be given that there is a group of civil servants who do not care anything about the convenience or interests of the people. They are doing a very important job and doing it well. I have often heard hon. gentlemen say that myself.
Our present system of instalments ceases in August. That is the plan that is under way now.


Richard Burpee Hanson: That is last year's plan?


James Lorimer Ilsley: The eight-months plan. Now it is desirable to get the new system operating in September, and it is more desirable to have the date of payment approximately in the middle of that period than pretty well to the end, especially as there is no reason why it should not be. We are talking about individuals now. My income tax returns are not difficult to make, but I can make them just as well in January as in February or March; I do not need to wait until April, and I think that is true of the overwhelming majority of personal income tax payers.
The hon. member for Renfrew South says we are asking those who are paying on the new instalment plan to estimate their income for the present year. That is not the scheme. The scheme is that they pay on the basis of their last year's income for the months of September to December.


James Joseph McCann: That is estimating.


James Lorimer Ilsley: No, they know what their
last year's income was.


James Joseph McCann: But you are estimating it for this year.


Richard Burpee Hanson: What the hon. member said was true of last year; you had to estimate it before the end of the fiscal year.


James Lorimer Ilsley: Last year, under the scheme for payment in eight instalments, there was very little difficulty because an estimate could be made in January. An estimate cannot be made in September, nor do we ask anyone to do that. We are asking taxpayers to pay for September, October, November and December, on the basis of the income for the previous year.


James Joseph McCann: Anticipating that the
income will not be lower in the succeeding year?


James Lorimer Ilsley: No; there is no such theory at all. It is in January that the matter is adjusted and spread over the next eight months on such a basis that the whole of the income tax will be paid at the end of the twelve months period. No one is expected to proceed on the assumption that the income for 1941 will be the same as it was for 1940, or for that matter that the income tax will be the same. The one difficulty about changing this date to April 30 is that all our estimates have been based upon this amount coming into the treasury in March, and I do not think it would be worth while to upset everything by giving an extension for that one month. I do not think there is any real inconvenience here.


Richard Burpee Hanson: In individual cases I believe there would be some inconvenience, but I would be inclined to think that such cases would be in the minority, as the minister has indicated. The consideration to which he has just alluded, namely, that it is intended to get in this money in this fiscal year, would be a factor; and I am sorry that this argument was not advanced at an earlier stage in order that we might see what were its implications. It would have the effect of bringing into this fiscal year a very large sum of money, but of course that would flatten out in succeeding years.


James Lorimer Ilsley: Oh, yes.


Richard Burpee Hanson: However, I am not going to press the matter any further. I have stated the objection on behalf of those interested; the minister will not accept the suggestion, and so far as I am concerned that is the end of it.

Income War Tax Act


Thomas Langton Church: I think this change in date, which has been recommended by the departmental officials, is most unfortunate, because the people will not have finished paying their coal bills by the time all these documents must be again prepared and signed. In the recess the minister should endeavour to see if some arrangement cannot be worked out under which all the papers and documents in connection -with municipal and provincial taxation would not be made at the same date, and returns would not come due in the very same month to be filled out and returned just when that has also to be done in connection with federal taxation. Such timing all at once is bad. It is unfortunate also that the timing has not been better arranged in connection with other matters, notably the victory loan now under way. I do not think that should have been brought on while this matter of heavier income taxes was being discussed. The timing is all wrong, and it injures the work of the department generally.


James Lorimer Ilsley: With the consent of the committee I should like to make a statement about an income tax matter, perhaps not a very large one, that is not strictly relevant to this resolution. I wish the hon. member for Fraser Valley (Mr. Cruickshank) were here, but since I am not going to say anything unfavourable to him perhaps his absence does not make very much difference.
Some days ago the hon. member made the statement in the house that some dollnr-a-year man, I think he said in British Columbia, had been making certain expenditures, and he asked me if those expenditures would be allowed as deductions for income tax and excess profits tax purposes. Shortly after that Mr. H. R. MacMillan wired me as follows:
While absent here in connection with shipbuilding I observe in yesterday's papers reports ot discussions in the House of Commons yesterday indicating that an unnamed dollar a year lumberman from British Columbia has built extravagant office building as a means of evading excess profits taxes. It is generally believed here that this discussion in the House of Commons refers to me and to the British Columbia Plywoods Limited a manufacturing company of which I am president. The building referred to was completed in May nineteen thirty-eight. It cost eleven thousand dollars which was charged to capital expenditure. Therefore it not only antedated excess profits taxation but it also in no way evaded any taxation. The circulation in such a prominent manner of such innuendoes undermines confidence in people and in institutions and adversely affects the public morale. Therefore I respectfully ask that you make these facts public.
After I received this telegram I made inquiries and found that it would be strictly
out of order for any hon. member to make an explanation of this sort on the orders of the day, so I left the matter until in committee of the whole I might be able to read the telegram. I did not have any idea of the identity of the person referred to in this house; it may be that the hon. member for Fraser Valley did not refer to Mr. MacMillan, but apparently the newspapers in British Columbia identified Mr. MacMillan as the person referred to, and since he is a valued employee of the government at the present time, and also because of considerations of justice, I thought it desirable to read his telegram.


Richard Burpee Hanson: I concur
in what the minister has done. I think it was quite apparent to those of us who heard the statement that the hon. member for Fraser Valley did refer to Mr. H. R. MacMillan. If the facts are as stated in Mr. MacMillan's telegram, which I do not doubt for a moment, then of course this is just another illustration of gossip being enlarged as it is repeated time and again. You can never catch up with a story like that; there always will be people who will think that what was alleged actually took place. I think the minister has done nothing more than justice to Mr. MacMillan in making this statement.


[Stage Direction]
Section agreed to.
At one o'clock the committee took recess.
The committee resumed at three o'clock.
Sections 24 to 28 inclusive agreed to.
On section 29-Machinery or equipment.
Richard Burpee Hanson: What is the implication of this section?


James Lorimer Ilsley: Two or three years ago we provided an income tax credit for capital expenditures made by taxpayers.


Richard Burpee Hanson: What was the theory? That was before the war?


James Lorimer Ilsley: Yes. It was done to stimulate employment. Questions have arisen as to what expenditures should come within the meaning of the section. Specifically I mention rolling stock, buses, trucks and certain items of plant not affixed to the soil. It was claimed that these should qualify for the benefit of the section. The section itself is not clear on that and it may be that the courts would hold one way or the other. The memoranda which have been issued made the matter quite clear and this is for the purpose of making it clear in the legislation that machinery or equipment referred to in the
Income War Tax Act

section shall mean only such machinery or equipment as it required to be and is affixed for a permanency within the said period to the business premises of the taxpayer.


Richard Burpee Hanson: That is
covered by section 90, part XIV.


James Lorimer Ilsley: Yes. That is a brief
explanation.


Richard Burpee Hanson: This
crystallizes into legislation the practice of the department so that it will defeat any attempt to make claims which it was not intended should be made?


James Lorimer Ilsley: Yes, that is correct. It never was intended by the department, but it is always questionable what parliament did intend and that is for the courts to say.


Richard Burpee Hanson: Capital
costs were not specifically limited to machinery and fixtures?


James Lorimer Ilsley: That is arguable. The
section reads:
The capital costs on which the ten per centum shall be calculated are those costs incurred and paid by the taxpayer in the period beginning the first day of May, 1939, and ending the thirtieth day of April, 1940, in respect of work actually done in Canada during the said period, on the construction, manufacture, installation, betterment, replacement, or extension of buildings, machinery or equipment in the said period from the first day of May, 1939, to the thirtieth day of April, 1940, provided such buildings, machinery or equipment are to be used in the earning of the income of the taxpayer.
I believe the intention of the minister and of the department was that these should be permanent installations. The object of the section was to make work, it was to do away with unemployment. A typical case would be where a 'factory owner added an extension to his factory and brought in and fixed machinery to the premises and proceeded to employ help. The work expended on the extension of the plant and so on was what was contemplated by this provision.


Richard Burpee Hanson: It was
aever intended to apply to a new motor.


James Lorimer Ilsley: That would be an extreme case. Some machinery would have to be imported because one could not draw a distinction between that and machinery bought in Canada. However, it was always felt that it was going too far to extend this to movables and so on that were bought.


Mr. POULIOT:: Sometimes a piece of
heavy machinery gives employment to many men, but at other times it is not necessary to have a large piece of machinery in order to

provide employment. In my county is a man who carries on an interesting trade, the roasting of peanuts and the frying of chips. The only machinery suitable for this work is made in the United States. He has gone to considerable trouble, and I do not know if he has succeeded in getting the foreign exchange control board to permit him to spend $25 in order to buy two machines which will give work to three or four more people during the summer season. This may be considered an unimportant matter, but nothing is unimportant which gives work to people, and from.that point of view even the smallest thing should not be overlooked. In this particular case $25 of Canadian money sent to the United States would have enabled a machine to be imported which is not made here and would have given work to three or four people during the whole summer season. It should not be necessaiy to write several letters in regard to such a matter. Actually four people are employed, but the machine would mean eight people employed, which would mean more salaries and wages.
I would ask the minister to give definite instructions to the foreign exchange control board not to split hairs but to be reasonable when proper requests are made to them. Even if they do not understand the question that is submitted to them they should accept in good faith what is said by those who know more than they ever did in these matters.


John Ritchie MacNicol: Not having the statute before me I would ask the minister what is 'the significance of this addition to subsection 2 of section 90, and what is the significance of the words, "said period" in the second last line of the clause to be added?


James Lorimer Ilsley: The period referred to is
the twelve-months period beginning May 1, 1939, and ending April 30, 1940. Section 90 provides that a certain proportion of certain capital expenditures may during that period be deducted from the income tax payable for that period.


Richard Burpee Hanson: The period has not been extended?


James Lorimer Ilsley: No.


Richard Burpee Hanson: And it is taken care of over a period of time?


James Lorimer Ilsley: Yes, income tax credits are given over three years, if I remember correctly.


Richard Burpee Hanson: One-third of the 10 per cent each year.


[Stage Direction]
Section agreed to.

Income War Tax Act
On section 30-To whom applicable.
Mr. O'BRIEN:	On May 15 when this
legislation was in the resolution stage I asked the minister whether he could define the position of piece-workers as against wage-earners. I will quote from Hansard in order to present the matter in sequence:
Mr. O'Brien:	Before six o'clock I spoke
privately to the minister, asking him to clarify the situation with respect to the tax as it affects the piece-worker. In the lumbering industry of New Brunswick, and I have no doubt in other provinces we have men working by the month on piece-work.
That sentence should as a matter of fact read "we have men working by the month and/or on piece-work." I continue the quotation :
They are paid by the cord. No doubt men in munitions and other plants are paid on a similar piece-work basis. Will the minister tell us if the tax should be deducted by the employer, or are such men treated as contractors?
Mr. Usley: If the piece-worker is an employee, the tax should be deducted. If he is an independent contractor, it should not. In that event he should make a return.
Mr. O'Brien: How would we know whether he is or is not? Does the law give any definition?
Mr. Usley:	Yes. It is just one of those
things which must be decided by the employer himself. It is a very mild legal question, but not one about which it would be necessary to consult a solicitor.
Since the matter is of the utmost importance in the province and in the particular constituency from which I come, as also across Canada, I thought that a more exact definition would be possible and so I wrote to the Department of National Revenue. I quote one paragraph from their letter addressed to me in reply, dated Ottawa, May 19, 1941:
Replying to your letter of the 16th instant you are advised that as piece-workers are regarded as employees for purposes of national defence tax a deduction for such tax is required to be made at the source in all instances where the employee's remuneration exceeds the amounts stipulated in ruling 48 on page 15 of the enclosed brochure.
I wished to have that put on Hansard so that it will be on record and the members of the house and the country generally will understand what tax is to be deducted.
Richard Burpee Hanson: In the
case of piece-workers where the relationship of master and servant does not subsist, there is not an employer within the meaning of the statute. But if there is a power of dismissal as distinguished from the power of cancellation of a contract, there would be an employee. I should like to have that distinction 14873-216
made clear. In certain places in New Brunswick in the lumbering business a contract is given to a man to fell logs and yard them at so much per thousand feet, we will say. The man and his family may do all the work, and he is paid at the rate of so much per thousand feet. But there is always retained the power to cancel the contract if he is not proceeding satisfactorily. In most cases he cannot be dismissed, and there the relationship of master and servant does not subsist. I think that must be the test, and I think the department should take that stand. If a man may be dismissed and his service terminated the tax would be exigible. If there is no power of dismissal but only power to cancel the contract-there is a clear distinction-the tax would not be exigible. Most of these cases are of the kind I suggest, namely, piece-work at so much a piece for pit-props or so much a cord for pulpwood. The man is not hired in the ordinary sense of master and servant, but the right of cancellation is retained if the man's work is not satisfactory or is not being done according to specifications. In that case I do not think the tax is exigible, and I take the risk of so advising. I think it ought to be laid down by the department that where the relationship of master and servant subsists, the tax is exigible. That would settle the question. It is a practical one in New Brunswick.


James Lorimer Ilsley: I think that would be
correct. Section 91, subsection 16, may have some bearing on the question. I am not sure whether the definition covers what the hon. gentleman has said, but it should be taken into account in deciding the question.


Richard Burpee Hanson: It would
have to be decided in the light of that definition, but on a hurried reading the definition does not seem to lessen the force of my suggestion that if there was not the right of dismissal but merely the right of cancellation he would not be an employee within the meaning of the act. It says, "Any salary, wage, remuneration, compensation," and so forth. Of course, consideration for a contract may be termed compensation-and yet it is not true compensation.


Gordon Knapman Fraser: Subsection 5 of section 91 states that every employer at the time of payment of earnings to an employee shall deduct and collect the tax imposed, if the earnings are in excess of the stated amount. Does the employer have to make a return if the earnings are under that amount? If an employer knows, as a fact, that earnings are under the stated amount, must he make a return? For

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instance, would a man who has working for him, at his summer place, a person receiving only $600 a year, have to make a return?


James Lorimer Ilsley: The employer goes by the rate at the time. If the rate is such that if continued for twelve months the annual earnings would be above the minimum, then such employer must make the deduction. If not, the employer does not have to deduct.


Gordon Knapman Fraser: He does not have to make any return?


James Lorimer Ilsley: No.


Thomas Langton Church: Subsection 5 does not give the employer a reasonable number of days, namely the time between June 2 and July 1, to take care of his pay sheets. This national defence tax is one of the most iniquitous taxes possible. When the government imposes the heavy burden indicated under schedule A, and then tacks on this alditional burden, it is going beyond the powers it should exercise in respect of the small wage-earners. Large departmental stores and many other employers of labour will not, between now and July 1, have sufficient time to make out the schedules in conformity with the statute. The time is too short. I suggest it should be August 1.


Alexander Malcolm Nicholson: When the resolution was before the committee I made inquiry with regard to regulations applying to farmers. My understanding was that a farmer was given the privilege of employing casual help for a definite period before he was required to make a return. According to subsection 6, if the daily rate is $3 a day the farmer would be required to send in a return, even if he had casual labour for only two days. Would the minister make some concession in this connection, so that a man would have to hire casual labour for a week or two weeks before being required to make a return? The actual incomes of many casual workers who receive $3 a day for stooking or threshing operations in western Canada would fall far below the figures set out in the act.
When the resolution was under discussion I raised the question as to the number of farmers across Canada who made returns last year. Many farmers had no idea that the act affected them, and consequently did not make returns. Has the minister any information as to the number of farmers across Canada who made returns last year?


James Lorimer Ilsley: No, I have no information available as to the number.


Alexander Malcolm Nicholson: Would consideration be given to the extension of the period during

which casual labourers may work before the employer becomes liable for prosecution upon failing to make returns?


Richard Burpee Hanson: I have in mind the circumstances of employment of a part-time gardener. He may tend half a dozen gardens. For instance, there is a man who puts in my garden and looks after it all summer. He goes and comes when he pleases, keeps his own time and puts in his bill at the end of the month. But he may be doing that work for six other people. I pay no attention to what he does when he leaves my place. I am not going to chase up and down to see whom the man is working for, and I have not done it. I have not felt guilty, nor do I believe I have defrauded the government of any revenue. But there ought to be some provision in the law with respect to that kind of employment. Any attempt to drive employers into making a return in circumstances of that kind is unworkable.


James Lorimer Ilsley: Replying to the hon. member for Mackenzie, I do not believe we should make any change in the law. As it now stands, if a person is receiving wages at more than the minimum rate the deduction must be made. I do not know where we would start if we attempted to prescribe periods. At any rate that has not been done.
There is no difficulty in respect of most employees. They are on the big payrolls, where substantial numbers of men and women are employed. There are many of these odd cases which present extreme difficulties. As the leader of the opposition has said, in some instances employers will not pay much attention, because they realize the revenues would not amount to anything. In other cases they do amount to something, and I cannot take the position that the law should not be obeyed and observed.


Richard Burpee Hanson: No, but what action does the department take to learn whether or not there are evasions? Is it just one of those cases where a check cannot be made, and nothing is done? Does the department check the returns which come in, and leave it at that?


James Lorimer Ilsley: Investigations are made at the place where the employee works.


John Ritchie MacNicol: I learned of two incidents lately which may be of interest to the minister. The owner of a property asked a carpenter what it would cost to erect a fence between his property and that of his neighbour, and was quoted a price of $24. Having submitted a price, I suppose the carpenter would be in the category of a contractor.

Income War Tax Act
The owner of the property in question felt it unnecessary to make any deduction. Another owner of property sent for a carpenter to repair his verandah. He did not ask for a price, but when the carpenter had finished the work he handed the owner a bill for $18. In that instance the owner must make provision for the tax. I am sure there must be countless thousands of cases where the government receives no revenue at all.


Mr. GILLIS:: In all instances the deductions for national defence tax are made by corporations, business concerns and so on. In the event of the national defence tax being deducted by a corporation from the pay of an employee, and in the further event of its being ascertained at the end of the year that earnings sufficient to bring the employee under the tax have not been earned, who applies for the return of what has been paid? Is the responsibility with the employee or the employer?
I have in mind the fact that deductions are taken weekly from the pay of employees who might not come under the tax. Many employees are not familiar with the regulations- in fact many hon. members sitting in this chamber are not as familiar with them as they should be-and as a result many who would be entitled to a refund do not understand the procedure necessary to secure a refund. If an employer is making a deduction he should be compelled to keep records, and if deductions are made from the pay of an employee who, it is found, has not come under the act, such employer should be responsible for applications for refunds. Is it right to assume that the individual must make application for a return of funds collected, if he does not come under the act?


James Lorimer Ilsley: Yes. The employee is the one who makes application. If, however, he wishes to make arrangements with his employer to apply on his behalf, or on behalf of all the employees, well and good; in fact such an arrangement would add greatly to the convenience of the department.


Clarence Gillis: That arrangement could be made with employees where they have an organization? An understanding could be arrived at?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: I have
no doubt that on a large number of contracts of employment no tax at all is paid. It must be so in the very nature of things. The honest employer will do everything the statute says, but the casual employer may not. The only 14873-2164
way to get this tax checked and collected is to pass a regulation requiring every man who hires out his services to carry a pass book, in which should be entered every dollar he earns, initialed by his employer and accessible to the government, so that the whole thing may be checked. Otherwise there will be evasions. There must be a better system than the present. It is all right in the case of permanent employers, big corporations with large payrolls and a large number of employees. They will do it in order to protect themselves, but in the smaller cases it will be ignored.


Mr. CASTLEDEN:: There must be a considerable number of people who do not have to pay the tax, their annual income not amounting to $660, or $1,200 in the case of married men, but who will not receive a refund of the money they have paid in. It would involve a great deal of bureaucracy, considerable bookkeeping, to keep track of every employee and employer. Would it not be more efficient to require persons who receive over $660 or $1,200 to make a return, as in the case of income tax? The employee might be asked to send in his returns and they could be checked over with the returns filed by those employing him. Has the minister anything to say with regard to such a system, whereby the whole procedure might be clarified and made more efficient?


James Lorimer Ilsley: The whole principle is
deduction at the source. In many cases returns will be made by these taxpayers, but in other cases the returns will not be made because the deductions will take place through the year. This provides a means of collecting the tax evenly over the year, and in any event it was felt, at the time the tax was introduced, that instead of waiting until the end of the year and then asking employees to make a return the deduction should be made throughout the period. I am sure a considerably larger proportion of the tax payable will be collected by the government under this method, because there will be quite a number who would spend it otherwise and to whom the payment of a lump sum at the end of the year would be extremely difficult, although they would not mind it so much if they had it deducted in this way.


George Hugh Castleden: I am thinking of the person who does not have to pay the tax directly but from whom it is deducted. Many of these people do not know that there is a refund coming to them for the reason that their income does not come up to the specified amount. I believe the change to $660 is from the 1st of January, 1941?
Income War Tax Act


James Lorimer Ilsley: It is $660 from the 1st of July, 1941, not from the 1st of January.
Mr. O'BRIEN: I do not like to delay the committee but I wish to revert to the subject I was discussing a little while ago. I refer to the definition of piece worker or employee. I may have a quaint idea of my position in this house, but I believe I am here to help to make these laws that we are passing, in conjunction with 244 other members. If that is so, I do not know why the minister should tell me that I ought to consult a lawyer to find out the meaning of any law in the making of which I am supposed to be helping.


James Lorimer Ilsley: I said not to.
Mr. O'BRIEN: I asked for some information and the minister said: "This is a very mild legal question, but not one about which it would be necessary to consult a solicitor."


James Lorimer Ilsley: That is right.
Mr. O'BRIEN: If it is a legal question and I do not need to consult a solicitor, then I shall have to go to a crystal gazer because I do not know where to get the information. In this house we are entitled to information. If members cannot obtain information we can readily understand the confusion that must exist in the country.
I believe the word "bureaucracy" has been used, and earlier in the day the minister said we should not allow the impression to leave this house that we are trying to establish anything of the sort. Perhaps not; but if on a simple question like this members of parliament cannot find out what the law means, a law which they are making, how in the world can people who are doing business in the country possibly expect to cope, not only with these techncial regulations but with the mass of information that is demanded by every department in the federal government and in the provinces? Why, one department wanted to know how much sawdust we were burning in our saw mill. Sawdust is a nuisance, and they said to use a 2,000-pound ton, just in case one might be using one of 2,240 pounds. That sort of information is voluminous, and yet in the maritime provinces, while there are several large companies, there are other concerns in the owner-managed category. There are hundreds of small companies whose business records can be carried in one's vest pocket, so that the information will not be obtained by the government until the officials in the department have some actual knowledge of what does happen from the time a man is hired until he gets his pay cheque and the goods that are produced are sold. An efficiency expert has been described 
as a man who knows more and more about less and less until he knows everything about nothing. It seems to me we are rapidly approaching that point in our economic life, and it is getting to the stage where all the discussion in this house seems to be concerned with the rich individual or the big corporation. But all this taxation, at any rate a great deal of it, is coming out of the owner-managed type of business, and unless that type of business is sustained and the government recognizes it as worth while in the- economic set-up, then it will vanish and the owner-managed type of business will eventually be a museum piece.
It is all very well for these regulations to be exacted from large corporations, because they can continue adding clerks to their organization until of course the business can no longer stand the strain. Then, as so often happens, these corporations go through the wringer-corporations never die. All the money that is put into them by the public is squeezed out. But the individual has to face his own responsibility; he cannot dodge the issue. If we are to go on employing people in this country with some degree of stability, that type of thing should be safeguarded, and that I am afraid is what we are beginning to call bureaucracy. I think the people are getting a little afraid of Ottawa and the regulations coming therefrom. I believe the provinces are afraid of Ottawa. Perhaps that is one reason why the Sirois commission report was not accepted. When we down in the mari-times have something happen within our own provincial jurisdiction under the British North America Act, we believe we are reasonably close to the government and the government is reasonably close to the people; but with a national issue in Ottawa that situation does not prevail. I believe that the people are of the opinion that a bureaucracy has been built up, and if the minister fears that opinion is going abroad in the land then he as a member of the government should see that more, shall I say, common sense business principles, are applied to the Department of Finance so that what I might call this pseudo-efficiency may vanish.


Mr. MacINNIS:: I was not present in the chamber this morning when the minister evidently cautioned hon. members in regard to the danger of giving the impression that bureaucracy was increasing in this country. Possibly the minister was wise in cautioning hon. members in that regard, because it is very easy to give the impression that there is bureaucracy in government. But we can have a bureaucracy that is not in government. And it is the people in Canada who insist on

Income War Tax Act
being bureaucratic in their business who object to bureaucracy in government. If we are to have bureaucracy in Canada I would certainly rather have a bureaucracy over which the people have some control than one over which the people have no control at all. It is merely a choice of which kind of bureaucracy we are going to have. We can have a managed bureaucracy in Canada or a bureaucracy imposed on the people by a plutocracy. That is what you are going to have. So that there is not much choice. I am all for the bureaucracy that we can control so far as it may be controlled through parliament. There are other things that could be said in connection with that.
I am not going to take up time suggesting that this defence tax be reduced. We have already done that. But there are certain considerations involved. First, there is the consideration that those who are liable to payment of the tax because of the wages or salaries that they receive should not evade payment. I do not know whether the minister is satisfied that he is getting all the tax that should be collected in that way or not. On the other hand there is the consideration that those who are not liable for the tax, because they do not receive a wage that brings them within the act, should not be compelled to pay and then those deductions not be returned to them. I think the minister stated last year that the intention was that tax payments made should not bring the wage or salary below the minimum figure. Take a person receiving a salary of almost $1,200, say $1,190. That person, if he were making out an income tax report to the department himself, would not pay any tax at all. But this tax is deducted at the source. Unless he makes application-and I imagine that the application has to be supported in some way that is satisfactory to the minister or the department -he will have paid approximately $60, a month's wage, which he should not pay and on which he will be unable to get a refund.
There is considerable merit in the proposal of the leader of the opposition that every employee should carry a book in which would be entered by his employer the amount of wages received and the amount of tax deducted. Then at the end of the year all that employee would have tj do would be to return his book to the Department of National Revenue and they could see what he had received in wages and whether there was any refund coming to him.
These, I insist, are important considerations, and some way should be found of working them out. We should be sure that those who are liable to the tax should pay their share, but those who are not liable because they do
not receive a wage which is sufficient to bring them under the tax, should not have to pay it, and if it is deducted from their wages a refund should be made.


Mr. PERLEY:: The minister should give us something more definite. The suggestion made by the leader of the opposition is a pretty good one. I employ quite a variety of labour, some on my farm, some in town in the garden; I have a large block on which at times I have painting and decorating done, and taking off the storm windows generally takes a day or so. I should like to know why the minister could not have a book or something of the sort that could be entered up. In making my annual return there is not room on the forms for me to put in the number of labourers and what I pay and so on, so that I always send in a separate statement with respect to the labour I employ, the hours they work, wages paid and so forth. I want to make an honest return. As I see it I shall have to deduct from every one of these labourers a certain percentage. What would the minister do if he were in my position? I employ a painter for a few days, or a decorator, and I supply the material; or there is the labourer in the garden. What would the minister do if he were in my position, assuming the act to be as it is now?


James Lorimer Ilsley: I would make the deduction, I think, if the rate at which the employee was working was more than the minimum rate.


Ernest Edward Perley: Most of this work is paid by the hour, and the rate will certainly go over $600 a year for a single man. One man I have now, a sort of jack of all trades, usually gets 60 cents an hour, sometimes 75, so that it would soon run over the $600 a year rate. Is it the understanding that I have to make a deduction every time he works for me for a few hours?


James Lorimer Ilsley: Yes, I would think so. I do not know about a few hours, but for every period of a day or more I think the deduction should be made. The man is probably earning more than $660 a year, therefore he is taxable, and if he does not earn that much he can get a refund. The hon. member is doing what most employers do; he sends to the department a list of his employees and what he pays them, so that the situation can be checked up at the end of the year.


Mr. HOMUTH:: Have there been many applications for refund so far?


James Lorimer Ilsley: Not very many.
Income War Tax Act

Mr. MaoNICOL: They do not know about doing it. It is "found money" for the government.


George Hugh Castleden: What was the amount collected under this tax in the past year?


James Lorimer Ilsley: This tax came into force on July 1, and for the period ending March 31, 1941, the amount collected was $27,672,017.87. That was for nine months. If that is multiplied by twelve-ninths it will give the approximate amount for the first full year.


George Hugh Castleden: It would amount to about $36,000,000?


James Lorimer Ilsley: Yes.


George Hugh Castleden: Have you the refunds to date?


James Lorimer Ilsley: There have been no refunds up to date.


Harry Rutherford Jackman: In regard to these refunds, does the employee have to set out how many days he worked, how much he received and how much was deducted, or could he make a blanket claim just pointing out that he did not receive sufficient to bring him under the act, and ask the department to return the money deducted?


James Lorimer Ilsley: He has to make his claim on the prescribed form. He has to show how much he has earned, where, from whom and how much has been deducted.


Harry Rutherford Jackman: I suppose it would not be possible for the department to do the bookkeeping for him if he put in a claim, knowing that he was under the minimum? It is obvious that most of these men cannot keep continuous records themselves. The government, on the other hand, will have the records of the employers, and I presume they must have a system under which they have an entry for each individual. It should be fairly simple in that case for the government to make the calculation for the man. Otherwise we cannot expect working men doing transient work to keep complete records; and I do not suppose the government wants to collect money from anyone who earns less than the minimum.


James Lorimer Ilsley: That might be possible if he worked the whole year for one employer.


Harry Rutherford Jackman: Of course it would be very simple in that case, but if he had a number of jobs he would not know how many days he actually worked. Perhaps he just made enough to get along, and earned less than the minimum. Would not the government have the figures in regard to that

individual? If it has, surely when that man files a claim the government could tell him what was his income and how much should be returned to him.


James Lorimer Ilsley: He would have to tell the department who were his employers, otherwise the department would not be able to trace the deductions. If there were periods during which apparently he was out of work he would have to say so; otherwise he might have been working and the government would not know the name of his employer. He has to give the government some information about how long he worked, for whom, for how much, and how much was deducted; otherwise the department would have no way of knowing whether its conclusions were correct.


Alexander Malcolm Nicholson: Have there been many prosecutions as a result of employers making deductions and failing to remit the money?


Colin William George Gibson: There have been no
prosecutions.


Alexander Malcolm Nicholson: I imagine there are
in Canada employers who have made the deductions but have failed to report them, though I do not know of any myself. What machinery has the government to check up on whether or not all the money collected from employees is finding its way to the treasury? What machinery have you to find out whether the people who are collecting the money are making all the returns?


James Lorimer Ilsley: The income tax inspectors in the various districts would have a pretty good idea whether any employers were holding back. If the inspectors were not getting returns from people whom they knew to be in business, presumably they would look into that. I have no reason for thinking that any employers at all have made the deductions and put the money into their own pockets. That would be theft, a criminal offence and a very serious offence under present conditions. I think if they deduct the money they remit it. There may be cases of delay; I do not know about that.


Mr. TUSTIN:: In supplementary form T4, which has to be filed by an employer, will it be necessary for the employer to give the name of every person to whom he pays wages at the rate of over $600 a year and from whom he deducts the national defence tax? I know that must be done in connection with those more or less permanently employed, but what about temporary employees who work for only a day or two?

Income War Tax Act


Colin William George Gibson: Those names have to be filed also, because if an application for refund is made we have to refer to the employers' returns in order to find out whether the tax has been deducted.


Gordon Knapman Fraser: Will there be a limit on the time within which these refunds will be made? Will that be six months after the end of the year, or what? I should think you would require a limit; otherwise you would not be able to balance your books very well.


Colin William George Gibson: The application for refund has to be filed within one year. That is the time limit.


Mr. WRIGHT:: And what is the time limit within which the employer must make his return to the government?


Colin William George Gibson: He makes his return every month.
Mr. O'NEILL: It has been said repeatedly that many people who are paid at more than the minimum rate required before this taxation is imposed, do not work enough during the year to become liable to the tax, but the employers have collected that tax from month to month. Now the contention is made that these employees never have that money refunded. I should like to know if the minister has any figures that would show how many applications have been made for refunds or how much money has been refunded. That would give us some information with which to meet the contention that many employees pay a tax which they should not pay, and then never have the money refunded.


Colin William George Gibson: No refunds have been made as yet. The application forms are just ready to go out now, on which people may apply for refunds, but no claims have been received as yet.


[Stage Direction]
Section agreed to.
Mr. ABBOTT:: With the permission of the committee I should like to revert for a moment to section 29, which I came in just a little too late to discuss.
On section 29-Machinery or equipment.


Douglas Charles Abbott: It seems to me there is serious objection to the possible retroactive effect of this section. Section 90 as originally enacted in 1939 provided that certain deductions might be made in connection with moneys expended prior to April 30 for work actually
done in Canada during the said period on the construction, manufacture, installation, betterment, replacement or extension of buildings, machinery or equipment. In one instance a taxpayer expended a considerable sum of money, running into many thousands of dollars, for machinery and equipment to be permanently installed in connection with his industry. For one reason or another the installation was not actually completed prior to May 1, 1940, though the work was done, the machinery was manufactured in other Canadian plants, and it had been paid for. If this amendment is put through it will mean that this taxpayer will not be able to avail himself of what I believe to be a sound claim for tax deduction under section 90 as it now stands. In other words, the section has a retroactive effect; it says that machinery or equipment manufactured and paid for in Canada during the period must have been installed. I suggest to the minister that the difficulty can be obviated by striking out the words "and is" and the words "within the said period," so that the sentence would read, "machinery or equipment affixed for a permanency." Where a taxpayer relying upon the law has made expenditures of this kind, it is not equitable that an amendment should be brought in later to deprive him of the benefit of the tax deduction which he believed he was entitled to make.


James Lorimer Ilsley: The situation outlined by the hon. member is new to me and this section was not intended to cure anything like that. If I understand correctly the construction put upon the section by the hon. member, it covers the case where a taxpayer has ordered machinery and-


Douglas Charles Abbott: And paid for it.


Richard Burpee Hanson: Within the
period.


James Lorimer Ilsley: He has ordered it within the period and the machinery has been manufactured within the period by someone else. The hon. gentleman argues that that comes within the terms of the section. The idea I always had was that the work had to be done on the premises of the taxpayer, or that costs had to be incurred and paid by the taxpayer during that period in respect of work actually done in Canada, during the said period, on the construction, manufacture, installation, betterment, replacement, or extension of buildings, machinery or equipment in the said period from the first day of May, 1939, to the thirtieth day of April, 1940, provided that such buildings, machinery or equipment are to be used in the earnings of
Income War Tax Act

the income of the taxpayer. I think the hon. gentleman's point is well taken. Perhaps we bad better let the section stand.
Section stands.
On section 30-To whom applicable.


Richard Burpee Hanson: Some time ago the government adopted order in council P.C. 7440, having to do with cost of living bonuses. If a conciliation board should decide that a cost of living bonus is necessary to maintain a reasonable standard of living for workingmen, will the government impose the national defence tax upon such bonus?


James Lorimer Ilsley: It is taxable.


Richard Burpee Hanson: It is a vicious spiral.


[Stage Direction]
Section agreed to.
Sections 31 to 35 inclusive agreed to.
On section 36-Interpretation.
James Lorimer Ilsley: This refers to section 29 which has been allowed to stand, at the suggestion of the hon. member for St. Antoine-Westmount (Mr. Abbott). If we drop that section, we shall have to drop this one.
Section stands.
Section 37 agreed to.
Progress reported.



PRIVATE BILLS


[Stage Direction]
The house having reverted to the order for motions:
Mr. T. F. DONNELLY (Wood Mountain) presented the third report of the standing committee on miscellaneous private bills and moved that the report be concurred in.
Motion agreed to.


[Stage Direction]
Hon. J. G. GARDINER (Minister of Agriculture) moved that the house go into committee to consider the following resolution:
That it is expedient to introduce a bill to amend the Prairie Farm Rehabilitation Act by empowering the minister, subject to the advice and representations of the advisory committees, to undertake certain minor rehabilitation projects and schemes and enter into agreements with respect thereto, provided that if the total amount to be expended under any such single project or scheme exceeds five

thousand dollars in any fiscal year the approval of the governor in council shall be required; also to authorize the minister to pay administrative expenses and travelling and living expenses of officials and employees.
Richard Burpee Hanson: Will the minister make his statement at this stage, or would he prefer to make it after we go into committee?


Mr. GARDINER:: I prefer to do it in the committee stage.
Motion agreed to and the house went into committee, Mr. Vien in the chair.


James Garfield Gardiner: Mr. Chairman, under the bill as now drafted provision is made under section 12, for example, for the purchase of machinery by the minister up to an amount of $5,000, and there is provision for selling machinery not to exceed $500. Section 10 as it is now in the bill is the section under which provision is made for entering into agreements with provinces, municipalities and persons for doing certain things, such as taking over of lands which are to be placed in community pastures, or to be irrigated, or to be taken out of cultivation and perhaps seeded down to grass. But other works are undertaken such as the building of small dams, which probably cost $175, and small dug-outs on farms, which probably cost from $50 to $100. These have always been passed by the minister since the act was first set up. Other acts do make provision that expenditures up to $5,000 can be made by the minister and that anything over $5,000 requires an order in council. That is true, for example, with respect to public works.
It has been assumed ever since this act was passed in 1935 that expenditures up to $5,000 could properly be made under the general practice in the departments, but the auditor general questions the possibility of continuing the practice without special provision being made therefor in the legislation. It is therefore proposed that the act be amended by repealing section 10 and making it possible for the minister to pass upon these smaller projects. As it now stands, minor schemes and undertakings of the kind could not, according to the opinion given by the auditor general, properly be dealt with without the approval of council, and it is thought to be inadvisable that the smaller projects should be taken to council.


Richard Burpee Hanson: Was there a legal opinion as to the legality of the former practice, or is it that the auditor general of his own motion has questioned the procedure?

Prairie Farm Rehabilitation


James Garfield Gardiner: I do not think a legal opinion has been asked for or given, unless it was obtained through the auditor general's branch, but last summer they were disputing the right of payment under the legislation as it now stands. Up until that time, speaking from memory, I do not think they had disputed it at all.


Jean-François Pouliot: There is one thing I do not understand about this legislation. In the first place the idea of it was to help farmers who were suffering from the drought and did not expect a harvest or who had suffered from poor crops in previous years. The purpose of the legislation was, of course, to increase production, to permit those who had had a succession of bad crops to harvest more wheat. But since then there has been a great change. There has been the policy of the curtailment of the production of wheat, and some farmers are to be paid now not to grow wheat. But here in this legislation we are starting out again to give to those who have been unable to get very much wheat from their lands the opportunity to produce more wheat. It seems contradictory from beginning to end. I am strongly opposed to it. I think it is absurd. In the first place you say: cultivate more; in the second place, cultivate less; in the third place, cultivate more and cultivate lessl I do not understand it at all.
If we had such legislation in the province of Quebec all the prairie members would be on their feet protesting against it. But we cannot get anything from the Department of Agriculture for the province of Quebec. I remember the time when the older provinces could get anything because they were able to say they were not bankrupt. But in the west the farmer said to the municipality that he was bankrupt. Then the municipality said to the province that the municipality was bankrupt. Then the province said to Ottawa that the province was bankrupt. And then everything was given to them and we had to empty our pockets for them. A queer idea, surely, of preaching unity in this country. I cannot understand it. And now they are coming here again with this legislation. I am opposed to it. I find it nonsensical.
I remember the time, Mr. Chairman, when Mr. Dunning and Mr. Rogers were on the stand and I asked them if the western provinces had paid their interest. I remember I was told that Manitoba was doing fairly well, and Alberta was doing fairly well, but Saskatchewan had not paid its interest or very little. Mr. Dunning admitted that, and Mr. Rogers admitted it. The other provinces now
have less revenue. Hon. members will remember my stand on the succession duties act, and here we are being asked to pay more to encourage this sort of thing. If it is sensible to pay farmers not to produce grain, how can we, on the other hand, spend money to give them the opportunity to produce more grain?
I would like to have an answer to satisfy my mind.


Ernest Edward Perley: Perhaps the minister is
not going to answer at the moment. I would judge from the remarks of the hon. member for Temiscouata that the minister is not depending on him to get this amendment through.


Jean-François Pouliot: I am not the only one who thinks like that.


Ernest Edward Perley: The minister referred to
the fact that this legislation came into force in 1935. At that time an advisory committee was set up and for a year or two it played an important part in the work which was done in that regard. This rehabilitation legislation, under the minister, has on the whole served a useful purpose in the west in the matter of conservation of water, the seeding of certain areas to grass, and the establishment of community pastures. But I have a grievance in relation to the way in which the act has been administered-I was going to say particularly as regards the machinery set up to administer the act in the last two years. I should like the minister to state to what extent this advisory committee has made representations to the minister, say, in the last year, and to what extent its recommendations have been accepted and acted upon.
The minister indicated that under this amendment he proposes to proceed with certain small projects, and among others he mentioned dams. I would ask him to give the committee some indication as to the number of projects he has in mind. Does he propose to go ahead with the scheme outlined last year in respect of dams, and in connection with which some preparatory work was done by way of the surveying of ravines leading into the Qu'Appelle river? Several sites were surveyed and set out at which dams would be constructed, and it was the intention, I believe, to proceed in the very near future. Does the minister propose to go ahead with that work?-because I might say here and now that I am not very much in favour of the scheme. We should have a definite statement from the minister.
I have a grievance in respect of the work carried on last year, more particularly in connection with dug-outs, and I shall state



Prairie Farm Rehabilitation
the grievance now. The dug-out scheme was inaugurated to give relief to farmers so that they could help themselves. The farmers made application to the proper authorities and received approval of their schemes, and they were supposed to do the work themselves, receiving about $150 for their labour. It was purely a relief measure. The idea was to give the farmer $150 to do the work, helping him by placing in his possession that amount of money, and also providing a water supply for his operations. There has been started what I consider to be a real racket with respect to the installation of these dug-outs. Certain contractors who had the machinery to do the work-the drag lines and ditch machinery-proceeded to make agreements with different farmers to do the work for them, and to collect the $150 in each instance from the department. This procedure was approved by the department. The contractors were in a position to put in hundreds of these dug-outs-a great many more than would otherwise have been possible.
I was invited to attend a certain meeting at which one of these contractors was to appear. I did not attend, may I say, but I learned after the meeting that the contractor had signed up many of the farmers for the installation of dug-outs on their farms. The contractor had the farmer sign an agreement in which it was stated that the contractor would do the work and receive power of attorney from the farmer to collect the money. My grievance is that while the face of the agreement bears the signature of a witness to the farmer's signature, no witness was present. I have in my hand one of the agreements purporting to have been signed by a witness. That witness was not at the meeting, and did not see the farmer sign. In fact the farmer who signed did not really know that this was the form he had signed. I have also a copy of a power of attorney taken from the farmer by the contractor. This too is signed by the witness, who was not present at the time the power of attorney was given.
I went to the contractor and asked him for the copy of the agreement I have in my hand. He gave it to me. I asked him for the power of attorney, and he gave me that also. When he opened his briefcase I saw that he had at least fifty of these documents already signed by the witness-and I have his name here. Those documents were all ready to be used wherever he went to secure a farmer's signature. The signatures, therefore were not witnessed at all.
There is one further point with respect to dug-outs. A number of farmers contracted for two, and some for three. A contractor who was building a dug-out on a man's farm

suggested to the farmer, "Why not put in another one, while I have the machinery here?" The farmer replied, "Well, that would be all right with me, if I could do it." "Well," said the contractor, "the inspector will be here to-day. We will have him approve your application, and in that way I can do the job while I am here, and it will not be necessary to come back to do the work later." The inspector came and the application was made up. When it became necessary to have a witness to the second agreement he had made, and to the power of attorney the contractor was taking for the construction of the second dug-out, the question was asked, "How about a witness?" The inspector replied, "Well, your wife may witness this." When the farmer's wife took the pen to affix her signature the inspector said, "Just a minute, Mrs. So-and-So, you had better sign your maiden name; it would look better in the department, and it would be easier to have it approved."
I know of other cases of the kind-and all this happens in connection with the spending of public money. The farmer about whom I have been speaking did not want a second dug-out; he did not want even the first one. But he had attended a meeting where all the farmers were signing agreements for dug-outs, and he said, "Well, I will get in the swim."
I do not believe that was the intention, even of the minister. I appeal to him to see that that sort of thing is stopped. I am not accusing the minister, nor am I suggesting that he knows what was going on. But I have evidence before me showing that agreements were witnessed before they were signed. I do not believe the minister is the kind of man who wrould like to have that going on. I have brought the facts to his attention.
As I have said on other occasions, much useful work has been done under this act. At the present time however I believe there is a limit to which the development can be carried. The act has served its purpose. I do not believe there is much necessity for further developments. I suggest the minister ought not to proceed this summer with a general programme involving the building of large numbers of dams, as I understand is the intention in respect of the tributaries of and the ravines leading into the Qu'Appelle river.
I would ask the minister to make a statement respecting these matters. I appeal to him to have these practices stopped to which I especially referred.

Prairie Farm Rehabilitation


James Garfield Gardiner: Perhaps I should deal first with the observations of the hon. member for Temiscouata. He suggests that these dams were built for the purpose of assisting in graingrowing operations. That of course was not the intention. The intention in 1935 when the procedure was first adopted, under a previous government, was the very opposite. I believe it was the intention to provide water for live stock in some sections which are comparatively dry. The water is put into small dams and dug-outs for the purpose of encouraging the raising of live stock on farms which previously had been largely given over to grain growing.
At that time there was some question, and there is still some question, as to whether grain farms on their past basis should be continued. At the same time it was provided that some of these lands should be re-grassed, or that some system should be followed which would embrace the possibility of stopping soil drift by sowing rye grass, or something of the kind, thereby taking it out of cultivation. That part of the work is still going on. It is apparent therefore that the objective behind the construction of dug-outs and building of small dams was not that of growing more grain. So far as I am aware, a number of dams have been built for the purpose of encouraging irrigation. That irrigation is on a small scale, when compared with the irrigation projects in the larger areas of Alberta. Again however the intention was to make it possible for people to get away from grain growing and to operate their farms in conjunction with pasture lands suitable for live stock rather than depending upon grain growing for their livelihood. I make these observations only to indicate that the intention was not that of producing more wheat, any more than is the present policy one of producing more wheat.
I agree with the last remarks of the hon. member for Qu'Appelle. If what he has described as having taken place in one or two instances has, in fact, taken place, then of course I should like to be provided with definite information. I should like to have the names of the persons concerned, including the name of the inspector who took the action indicated: because it is not the intention of any officials in the department or of myself that business should be conducted in that way.
When the hon. member states that the installation of dug-outs "last year" became a racket, I believe he was referring to 1939 rather than 1940. A practice had been growing up of making applications for dug-outs 14873-2171
in much greater numbers than could properly be installed in any one year. That was true right from 1935 on. In 1935, possibly four or five times as many applications were made as there were dug-outs constructed or even started; those applications were carried on into the succeeding year, and even in 1936 the number of dug-outs constructed was comparatively small. At that time the amount which was allowed in payment for moving earth was three cents a cubic yard. As most members know, earth cannot be moved at three cents a cubic yard with any kind of equipment. It was, however, intended that this would pay possibly a third of the cost of the dug-out. The farmer would take his own team and do the excavating, and this cash would provide him, while he was constructing the dug-out, with something to pay for a pump and any other necessities which he might have to buy for cash. It was not intended at the beginning that this payment should be so much a relief matter, because three cents a cubic yard could not have given him any considerable amount of relief.
In 1936, or 1937-1 am speaking from memory-the three cents a cubic yard was increased to four and a half cents, the idea being that the farmers at that time had to buy their feed and were not able to construct dug-outs unless they purchased grain, and they thought they needed more money with which to make a start. For two years the scheme was operated on a basis of four and a half cents a cubic yard. During that time comparatively few dug-outs were constructed.
In southern Manitoba there had developed a practice under which the municipalities secured drag-lines and excavated these dug-outs for the farmers in the community. Provision was made by the municipality for taking care of the amount which had to be paid over and above what was paid to each farmer. The money was paid to the municipality, and it was finally agreed, that we would accept the assignments made by the farmers to the municipal council for the amount that was payable to them. That developed into the plan which has been referred to by the hon. member for Qu'Appelle.
On every occasion when any change was made in policy it was submitted to this advisory committee that has been mentioned, and they argued for these particular changes ini amounts and in, the different methods of undertaking the construction. The strongest argument that prevailed was to the effect that during the drought period, when farmers were unable to provide even hay or grain, it was impossible to have horses in condition to go to the bottom of a thirteen-foot hole and bring
Prairie Farm Rehabilitation

earth up. They did make provision at first to dig the first four and a half feet by means of horses and to complete the last six or seven feet in the bottom with draglines, the horses taking off the top four and a half feet in the first twenty-four hours and the draglines coming and cleaning up the job. They were digging about one a day.
Variations of the -methods were submitted to the committee. In 1938, I believe it was, the amount was raised to six cents a cubic yard, again on the advice of the committee, the idea being that they were not able at that time to get farmers, on account of lack of crops and so forth, to construct dug-outs, and they wanted the dug-outs there when they got moisture. We consented to six cents. I must admit that during the time the scheme was operated on the basis of six cents there did develop some conditions that could not be adhered to for any great length of time. I attended the meeting of the committee in the spring of 1939 and objected to the six-cent rate for dugouts constructed by dragline, and I had to argue against most of the committee. I finally stated that I would reduce the rate to four and a half cents that fall whether -they liked it or not, and- it was finally reduced.
During 1939 there were a great many dug-outs constructed on the -basis of the six-cent rate, and, as hon. members know, the amount of money which was voted by this house for the purpose was exceeded. That is, there was an accumulation of applications over the whole previous three or four years during which the plan had been in operation. No method had been set up that would prevent farmers from going ahead and digging those which had been authorized in previous years; and on the accumulation, and with the operation of the drag-lines just prior to the outbreak of the war, when contractors had very little to do and used their draglines for this purpose, many more dug-outs were constructed than anyone had anticipiated in any one year, with the result that these payments had to be made last year.
I can understand why some of my friends have said-they have said it on previous occasions-that there were certain reasons for that; but I would recall once more that in the spring of 1939, in the month of May I believe-the records are all there-this whole matter was discussed in the advisory committee. I think every member of the committee will agree that it was the minister who argued for a reduction to four and a half cents and insisted upon it. As a matter of fact, in the fall of 1939 I personally stopped the further construction of dug-outs because they had exceeded the expenditure, and hon.

members, partcularly those from the west, will remember that there was a great deal of criticism all through the fall of 1939, through the winter of 1939-40 and well into the summer of 1940 as a result of the action which was then taken. With the payments finally cleared up, the regulations under which we are operating now, the instructions under which the organization is carrying on, will not permit of their going beyond the amount of money actually voted. Therefore this year we are operating on the four and a half-cent rate per cubic yard, and operating under conditions where the amount of money voted will not be exceeded.
In referring to the matter of the Qu'Appelle valley, I can only say that engineering groups have been investigating the possibilities of irrigation development both north and south of Qu'Appelle valley and the streams running into Qu'Appelle, and in the Qu'Appelle valley itself. The information is not sufficiently complete at present to enable one to say whether the plan will be proceeded with or otherwise. My view at the moment would be probably the amount of irrigation which can be carried on in these areas will be quite limited, largely on account of the amount of water which will be available for irrigation purposes. There are other works which were put in many years ago, back about 1904, or somewhere about that time, on the Qu'Appelle west, in the vicinity of Long lake. Some of these are giving some difficulty now, as I am sure the hon. member for Lake Centre will agree. They are causing difficulty in connection with the level of the water in Long lake. There is some discussion going on with the committee concerned with summer resorts above Long lake regarding that, but until we have a complete report from the engineers with regard to the whole matter, I would not be prepared to say what will be done in connection with this development.


Alexander Malcolm Nicholson: I always listen with a great deal of interest to the hon. member for Temiscouata. This afternoon, however, I could not accept the views he expressed. I have not visited the hon. member's constituency, but from what I have seen of the beautiful province of Quebec, the probability of shortage of water would not be very real in many areas of that province.
In Saskatchewan and the prairies, however, large areas have been settled with a view to engaging in extensive wheat farming. Those areas were settled when it was taken for granted that there would be a sufficient supply of moisture to ensure a profitable industry. Through no fault of the farmers many of those areas have not received sufficient moisture.

Prairie Farm Rehabilitation
The work carried on under this legislation has meant a great deal to many people, and therefore I hope the hon. member for Temis-couata will not object too seriously to the carrying on of this important work.
What I rose to say was to express thanks to the minister for extending the work into northeastern Saskatchewan. Many hon. members have suggested that mixed farming might be developed much more extensively in western Canada. But where people have to haul water three or four miles, the raising of live stock presents a real problem. Through the work carried on under this administration, a great many farmers have been able to construct dug-outs and have adequate water for the entire year, and the money appropriated has been money very well spent.
In my constituency there has been some discussion in connection with the providing of a dam on the Assiniboine river north of Preeceville. I understand that this dam, if completed, would benefit the town of Kam-sack to a considerable extent. Would the minister give some indication whether the policy is to provide dams of that sort? I understand that the money required would be sufficient to construct a great many dug-outs for individual farmers. If there were plenty of money available to carry on both types of work, there might be some argument for putting in the larger dams, but in the meantime I think all the money available should be used to provide dams for individual farmers so that they might be self-supporting to a greater extent than they have been. Would the minister make some statement in this connection?


James Garfield Gardiner: I shall be in a much better position to discuss the financial features of the programme when my estimates are before the committee, whether to-night or at some later time. I have not the books before me at the moment. I believe the estimates will be before the committee to-night, and I could discuss these items better at that time if hon. members will permit.


Jean-François Pouliot: I take the opportunity to say through the Chair to my friend the hon. member for Mackenzie, who is very popular in this house and whose speeches are always appreciated by every hon. member, that he does not understand my point of view at all. I hope that situation will be changed in a few minutes.
In the first place, my constituency is one in which are to be found mixed farming, settlers and so forth. They are people who are accustomed to live by themselves, and they ask nothing unless they see people in
the same circumstances in other parts of the country receiving something. Then they say, "How is it that those people get so much and we in this part of the country do not?" It is just as if they had smallpox or diphtheria or some "other contagious disease and were put in quarantine. Nobody complained so long as they were accorded the same opportunities as our friends in the west received, but when some farmers in the west are given privileges and the east is discriminated against, then the complaints start. My hon. friend will understand why that is so.
I do not discuss the usefulness of this programme. I am not in a position to do so because I am not an agricultural expert. If I were I would be in a better position than the hon. member or any agricultural representative of the west who is an expert, because I would not be biased and would not have to rely on the votes of the people concerned to form my opinion. Now, however, I am not biased when I speak of my people because they get nothing. I make the statement that they get nothing. I make the further statement that the Department of Agriculture as now constituted is not a dominion department; it is a prairie department, and the eastern, provinces cannot get anything out of it. That is the reason why I suggest the abolition of the dominion Department of Agriculture, and that the cost of it be distributed in proportion to the rural population of each province, so that everyone will be on the same footing. What good does it do the eastern farmer to be always reading in the papers that the western fanner gets a little more, a little more to-day and a little more to-morrow; that the day after to-morrow there will be something for him, and that next week he will have something more, a nice little toy to play with, while the other gets nothing in his stocking? The western farmer has always something new, a life-saver, good for the throat, a little dessert, and the other gets nothing. I find it unfair.


Ernest Edward Perley: How about the cheese
bonus?


Jean-François Pouliot: And the more the western farmer gets the more he complains.


An hon. MEMBER:: What about apples?


An hon. MEMBER:: What about the growing of fibre flax?


Jean-François Pouliot: If everything that is given to the east is summed up and compared with everything that has been given to the west, no one will see through what was given to the
Prairie Farm Rehabilitation

west. I mean by that that the west has received so much that it is impossible to see through what has been given.


An hon. MEMBER:: What about the
St. Lawrence waterway?	.


Jean-François Pouliot: That will not give five
cents to the eastern farmer.


George Alexander Cruickshank: Will it give anything to British Columbia?


Thomas Vien: Order. At the end of each session it has been customary to allow great leeway to hon. members, but a line must be drawn somewhere. The resolution before the committee purports to enable the minister to deal with small projects not exceeding $5,000 without the formality of an order in council, and provides for the necessity of an order in council for such projects as exceed $5,000. We shall not make much headway or observe the rules by comparing the amounts appropriated for the western provinces with those for the eastern provinces. I would draw the attention of hon. members to the resolution that is before them.


Jean-François Pouliot: Yes, sir. I will now
describe it as I visualize it. There is a little stream, and a little dam will be built. It cannot be a big dam, but it will be left to the discretion of the minister. And there is some sand. But the little dam will be built, and then there will be a little pond. The little pond will help to fertilize a little ground on both sides of the little stream. Then part of that water will be used for mixed farming; but since hogs are fed grain, the remainder of the water will be used for the production of grain. Therefore it is only because some pasture is required for the hogs, and the hogs will produce bacon for the allies, that this can be called a war project.


Some hon. MEMBERS:: Oh, oh.


Jean-François Pouliot: Hon. members laugh, but this is the only possible explanation for calling the scheme a war project. I am sorry, but that is the only way I can see it as having anything to do with patriotism or serving the cause of the allies.


Mr. DIEFENBAKER:: I should like to read the pertinent part of this resolution before commenting upon it:
. . . that it is expedient to introduce a bill to amend the Prairie Farm Rehabilitation Act by empowering the minister, subject to the advice and representations of the advisory committees, to undertake certain minor rehabilitation projects and schemes and enter into agreements with respect thereto, provided that if the total amount to be expended under any such single project or scheme exceeds five

thousand dollars in any fiscal year the approval of the governor in council shall be required; also to authorize the minister to pay administrative expenses and travelling and living expenses of officials and employees.
I am not arguing against the principle of the Prairie Farm Rehabilitation Act, or against the necessity for the expenditures that have 'been made under that act, or against the benefits that have accrued to the people of western Canada, giving them an opportunity to rehabilitate themselves. But, Mr. Chairman, if I may use the expression, I am inclined to be slightly suspicious as to the reasons that actuate the minister in introducing this amendment which on its face appears to be so innocuous. In the estimates for the current year, 1941-42, an amount of $2,500,000 is provided to be expended in connection with projects under that act. The system in vogue under the statute is for the minister to appoint an advisory committee, which advises the minister. As the minister admitted- although he said some of us were rather suspicious of the coincidence that it was the year before an election-in 1939 there were overexpenditures. That situation was dealt with in the auditor general's report, to which the minister made reference, and I should like to quote that report in reference to this matter. At page 61 I find the following:
Commitments of approximately $1,315,575.20 were incurred in excess of the amount appropriated without certificates of the comptroller of the treasury being secured in the manner provided for by sections 26 and 29 of the Consolidated Revenue and Audit Act, 1931. These overcommitments, by group classifications, are made up of: land utilization, $22,036.47; water development, small projects, $909,553, large projects, $384,185.73.
I pause here to point out that under the statute authority was provided for the minister to make certain expenditures; yet in 1939 he exceeded the amount he was permitted to expend by over $1,300,000. Then the auditor general's report goes on to say:
By an amendment to the Prairie Farm Rehabilitation Act .	.	. the minister may,
subject to the approval of the governor in council, enter into agreements with provinces, cities, towns, persons, etc., for projects or schemes for the conservation of water. Payments during the year were made in several cases on ministerial authority only, examples being payments to W. B. Ramsay, Regina, for construction in connection with the Magrath irrigation canal, $1,858.12 and to W. Y. McKinnon, Saskatoon, re the Castle river test hole, $2,755.58. Similarly, payments for stockwatering dams and community projects where the total cost did not exceed $5,000 were paid without the approval of the governor in council.
In consequence of the auditor general having drawn to the attention of this house and the country the overexpenditure made by the minister on his own authority, there was

Prairie Farm Rehabilitation
a considerable amount of criticism. The minister now asks the house to amend the act as it now stands, and the amendment means this. Take a year when the minister might consider it necessary or advisable to overexpend the amount voted by this parliament and, in addition, to pay those who do the work, without the authority of this parliament. Apparently that is the reason for the introduction of this amendment. What does that mean? It means that parliament is asked to give the Minister of Agriculture the power, apart from any control by parliament, to expend any amount he chooses for such schemes as in his discretion he deems necessary, provided that the expenditure on any one project is less than $5,000 in any fiscal year.


Mr. McNIVEN:: And subject to the
advice and representations of the advisory committees.


John George Diefenbaker: Yes, subject to the advice of the advisory committee which-I make no criticism in this connection-no doubt is appointed upon the recommendation of the minister himself. In this connection I noticed that when the hon. member for Qu'Appelle asked' the minister whether he was bound by the representations of these committees, or whether he followed those representations in all instances, the minister made no reply. Therefore the stituation as it now stands, is that if parliament gives the minister the power he seeks in this amendment, he can expend any sum of money he may choose; he can spend that money where he chooses and when he chooses without any control on the part of this parliament over that expenditure, provided that in no single project is an amount of over $5,000 expended. If he wishes to develop larger projects and expend greater sums of money, he does not require the consent of this parliament, the consent of the representatives of the people, all he needs is the authority of an order in council.
I listened with interest to his explanation of the purposes of and the reasons behind this legislation, and I again make the protest which I have raised before with regard to other similar legislation, that parliament has a duty, and that duty is to control the expenditure of money. Expenditures should not be made without the authorization of parliament. In war time it is necessary that the .executive should have wide powers, but that does not justify this amendment. There has been a trend within this parliament in the last year to abdicate our rights to the governor in council to an ever increasing degree. The excuse may be given that we are at war.
This would apply to war measures, but it does not excuse the minister being given carte blanche to expend money as he sees fit on domestic matters not related to the war.
Those who now sit on the government benches were loud in their criticism of the former government of Mr. Bennett for passing orders in council, but there has been no greater offender in the history of Canada than the present government. Fourteen thousand orders in council have been passed since the outbreak of war, 4,908 since the present session of parliament began, 2,898 of which were passed while parliament was actually in session. Statutes have been amended and suspended in their operation, and in one instance access to the king's courts has been denied. This resolution is a continuation of the trend against which I protested at the time the minister introduced the summer-fallow vote.
In connection with non-war measures this parliament is being asked to place in the hands of the minister power to expend money without the control of parliament, subject only to the whim of the minister. I protest against this tendency. I approve the principle of the act, but I do not see why this committee should be asked to approve a course of conduct which has been condemned by the auditor general and which is contrary to the principles of representative government. We should not be asked to place in the hands of any one man, however estimable he may be, power to expend money without the necessity of authorization by parliament.


Mr. QUELCH:: What is the programme for this year with regard to the construction of small dams and dug-outs?


James Garfield Gardiner: I do not think the hon member was in the chamber a few moments ago when I replied to the hon. member for Mackenzie (Mr. Nicholson). I expect that my estimates will be up to-night, and a better opportunity will be accorded to discuss these matters. As a matter of fact, the Chairman has ruled that we are discussing the possibility of making payments up to $5,000, rather than questions of reconstruction and other matters like that.


Richard Burpee Hanson: The principle contended for by the hon. member for Lake Centre (Mr. Diefenbaker) is an important one, and so far I have heard no defence of its breach by the minister. My recollection is that because of the drought conditions that existed in 1934 and 1935, the technical officers of the government suggested this form of rehabilitation and amelioration in certain parts of Canada. Notwithstanding what the hon.
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member for Temiscouata (Mr. Pouliot) has said, I think there is a good deal of merit in this measure. I object, however, to this resolution having the appearance of a blank cheque, within certain limitations, in connection with new enterprises. There is no knowing to what extent the government may be committed under the principle of this resolution as it now stands. We should know exactly what is contemplated and what burden is to be placed upon the country.
By no stretch of the imagination can it be said that this. is a war measure. It is simply a continuation of a rehabilitation measure which was approved by parliament in days gone by. Experience has shown that this whole thing has run away with itself in so far as overexpenditures are concerned. There has been no real check on that aspect of the matter, which has called forth remonstrances from the auditor general. In 1931 we passed the Consolidated Revenue and Audit Act, the intention of which was clear. The intention was not only to discourage but absolutely to prohibit overexpenditure by departments in any field of enterprise that they might undertake. So far as I can see, the minister has taken to himself powers which at least the audit department does not consider he ought to possess. I am aware that there has been a different interpretation in connection with the matter, and this should be clarified by an opinion from the Department of Justice.


James Garfield Gardiner: I was not certain that there had been an option, but it has been sent to me.


Richard Burpee Hanson: Will the minister read that before he finishes? I had an idea that an opinion had been given, but I was not quite certain as to the legal position and power of the minister, according to existing legislation. According to the wording of the legislation, there is no limitation upon the gross amount that may be expended by the minister; that is left to him to decide, provided that the expenditure does not go beyond $5,000 on any one project. Of course that is a negation of parliamentary government. If the minister had been here in 1931 and 1932, I have no doubt he would have joined in the chorus of condemnation against the theory of giving blank cheques to the government. I am looking at the member for Vancouver Centre (Mr. Mackenzie) at the moment, and he is shaking with laughter because he appreciates the allusion I am making. If the theory was bad then it is bad now, and it may be worse now because the country is at war and we should [Mr. R. B. Hanson.J
be more careful about these peace-time expenditures. As a matter of fact, I do not think the minister has made out a case for continuing these expenditures at the present time. I say that with great deference because I have not personal information. Of one thing, however, I am certain, namely, that the way this resolution is worded it is absolutely bad in principle, and the minister should not ask us to pass the resolution in its present terms.


James Garfield Gardiner: What is really being asked for appears in the bill itself which will be brought down later, and which conforms with the principle in many other acts and has been the principle adopted in connection with public works, I think, since confederation. I shall, however, deal with that in a moment.
For the time being I wish to refer to the fact already mentioned by others, that the first act dealing with this matter was passed in the spring of 1935. The date of the act is April 17, 1935. It is a very short act covering two sides of one sheet, and provides, first, for an advisory committee. It states, not the persons who are to constitute that committee, but the organizations whose officials shall constitute the committee. Then it goes on to provide that the committee shall consider and advise the minister as to the best methods to be adopted, in much the same terms as are used in the act with regard to the advisory committees that are there now. Then it provides:
No member of the committee shall receive any payment or emolument for his services.
Another section provides:
The minister may appoint such temporary technical, professional and other officers and employees as he may deem necessary and expedient for carrying out the provisions of this act and the salaries and expenses of such officers shall be fixed by the governor in council.
That is exactly the same section as is contained in the present act.
Another section provides:
The governor in council may make such regulations as may be necessary or expedient for the effectual execution and working of this act and the attainment of the intention and objects thereof.
That is, everything that was provided for in that act is contained in those few sections. The advisory committee is there which advises the government; and, as was said by the hon. member for Lake Centre, the principle has been in the act from the beginning, that the minister or those administering the act may take the advice of the committee. That is the meaning of "advisory". They may proceed otherwise or just as they choose after having had the benefit of the advice of the committee. To an extent, that is true and

Prairie Farm Rehabilitation
has been true all the way through. Before we came into office-I am speaking from memory-there was only one meeting of that committee, and that was held very early in the setting up of the organization. There has been quite a number of meetings of the committee since.
The act of 1935 limited the amount of money that was to be expended. It provided:
For the purposes of this act the sum of seven hundred and fifty thousand dollars shall be appropriated and paid out of the consolidated revenue fund of Canada during the fiscal year 1935-36 and for each fiscal year for a further period of four years a sum not exceeding one million dollars per annum as may be necessary to continue and extend the work undertaken under this act.
Then section 9 provides:
The minister shall annually lay before parliament a report of all proceedings under this act for the preceding fiscal year.
That is the whole act, and1 I would point out that unlimited authority is given there under order in council and within the amount of money which was voted by parliament, which in the first year was $750,000 and in each succeeding year, $1,000,000. In the first year the present government was in office the act was amended to remove the limitation on the amount and to make it the amount which was voted by parliament. From that year down to the present, only in one year has that amount been exceeded, namely, in 1939, and for the reasons I gave to the committee earlier in the discussion. I am sorry that the hon. member for Lake Centre was not in the chamber when I first explained the matter. I referred to the fact that this provision with respect to amounts under $5,000 is in the Public Works Act and that the same principle is followed by every department of the government in expenditures on public works.
The hon. member for Lake Centre quoted from the auditor general's report. I will again quote the same passage showing what the auditor general had to say:
Commitments of approximately $1,315,575.20 were incurred in excess of the amount appropriated without certificates of the comptroller of the treasury being secured in the manner provided for	by sections 26	and 29	of	the
Consolidated Revenue and Audit Act, 1931. These overcommitments, by group classifications, are made up of: land utilization, $22,036.47; water development, small projects, $909,553, large projects, $384,185.73.
The first thing I wish to say with regard to that is to reply to the suggestion made by the hon.	member	for Lake Centre	thatthis was an	election	year.	It was	not ofnecessity an	election	year,	and I	do	not
know that anyone had any idea that it was
going to be an election year. Furthermore, it did not turn out to be an election year. I do not think anyone had any idea, until within perhaps forty-eight hours of the time the election was declared, that there was going to be an election even in the year in which it was held. I suppose my statement to that effect will be used against me after I make my next statement. It is this, that if I paid half as much attention to politics as my hon. friends think I do and had been half as much the politician as some of them think I am I would not in September and October, 1939, have stopped expenditures upon small dug-outs, dams and structures of every kind in connection with these water undertakings, simply because, under the programme as it was then being carried on, these works were exceeding the expenditures. It is true that some works could not be cut off immediately. If they had all been cut off immediately, it is true that there would have been an overexpenditure when I discovered it in September and October when I was in western Canada.


Richard Burpee Hanson: It was
the minister's duty to cut them off.


James Garfield Gardiner: And he did cut them
off, but there was an overexpenditure for the reasons I have stated, and some of the criticisms which have been made by the hon. member for Qu'Appelle are justified by the facts as they then existed. If they had not been justified, the expenditures would probably not have been) stopped in the manner in which they were. But they were stopped' and stopped within three or four months of the time the election was called.
Again I repeat what every member from western Canada knows, that I, in common with every member who contested a constituency on behalf of the government of Canada, had to meet criticisms to the effect not only that these expenditures were cut off but that the farmers were told and contractors were told that they could not receive payment even for works which had been done until the whole matter had been placed before the House of Commons and the money voted in order to meet the payments.


Ernest Edward Perley: Did the minister not
allow contractors to continue to take new contracts knowing that they were not going to get the money for another year?


James Garfield Gardiner: I do not know of any contracts that were let on that basis, but I know that some contractors said that they were going to go on and complete their contracts, believing that the government of Canada, whatever government was in power
Prairie Farm Rehabilitation

and whether or not an election was held, would recognize the liability of the government to pay for those contracts. Tenders had been properly called for and contracts let; under these circumstances some contractors said that they were prepared to proceed and complete their contracts, and they did.


Ernest Edward Perley: I told one contractor that he was taking chances and he said, "I am willing to take chances".


James Garfield Gardiner: I think it has been the general practice of governments to permit contractors to take those chances. As a matter of fact, it has been the custom here, ever since I have been in the house, and I think it has been the custom since confederation, that moneys are voted for public works, contracts are let, and certain moneys are expended in one year while certain moneys are spent in another year. When money is not sufficient, then further money is voted in supplementary estimates in another year in order to take care of the work. The contractor goes on with the operations, and the money as finally voted is paid. That has been done, and I believe it has been the general practice. The dredging of the St. Lawrence river is in exactly the same classification. Many other works in connection with which that practice is followed could be mentioned to the committee.
In any event, however, there was an overexpenditure of money; I admit there was a much larger overexpenditure of money than should be allowed under any act of this kind. Immediately I found there was to be an overexpenditure, I put a stop to it, and cancelled the authorization. I cancelled any contracts which could be cancelled at that time.


John George Diefenbaker: What control is there on the part of the minister to ascertain at any time how much has been expended? [DOT]


James Garfield Gardiner: The control that exists in connection with all works of this kind, whether provincial or federal, is the control of the amount of money voted for'a particular purpose. The amount of money voted in this particular instance was $2,500,000. That will appear in the estimates, as they will be brought before the committee-probably to-night. That is the limitation as to the amount of money which may be expended.
The limitation in the department, under the present provision, is that we divide that money, and we say, "We intend to spend so much on dug-outs, so much on small dams, so much on large projects, so much on grass, and so much on other things." The comptroller has insisted that this be done, and we

have done it. If we do want to make an expenditure in one line in excess of what we had intended in the beginning, we can make it only if we have not expended all our money in some other section, and we have the expenditure of that money authorized by transferring it to the first referred to activity. Therefore I suggest that in respect of this $2,500,000, there is complete control, which did not obtain in connection with these transactions in 1939.


John George Diefenbaker: What were the
controls in 1939?


James Garfield Gardiner: There was not sufficient control. That is, the operations had been going on from 1935, with applications coming in from year to year. I explained all this to the committee this afternoon, before the hon. member entered the chamber. The applications came in for so many hundreds of operations in 1935, and as I remember it, only about one-quarter of them were completed. The others were carried into 1936. So many applications were received in 1936, and only part of them completed; the remainder were carried into 1937, and so on, until 1938 and 1939. Then in 1938 and 1939, because we partly were paying six cents a cubic yard, and because contractors found they could make money at that rate, particularly if the farmers gave them $25 in addition, the contractors constructed large numbers of dug-outs. The result was that before we discovered that we were likely to have an overexpenditure, the amounts had run into the figures indicated in the auditor general's report.


Richard Burpee Hanson: In other words, the thing got out of hand.


James Garfield Gardiner: That is the position. As soon as it did get out of hand, we stopped the procedure, and placed in effect regulations which are now in control and which, I am quite certain, will prevent a repetition from now on.
With regard to land utilization, and just by way of explanation of what the auditor general says, I would point out that the treasury office now reports an error in its calculations of the overcommitment in land utilization, upon which the auditor general presumably based his notes. The amount, instead of being $22,036.47, is $3,797.80.


John George Diefenbaker: From what is the minister reading?


James Garfield Gardiner: From some comments I have prepared.


John George Diefenbaker: The minister is not quoting from the auditor general's report?

Prairie Farm Rehabilitation


James Garfield Gardiner: No; I have already read the statement to which reference was made by the hon. member for Lake Centre. I shall not read it again.
Council was asked to authorize land purchases to this amount in excess of the available fund, in order that the legal procedure in connection	with	effecting	the transfers,requiring some months to complete, might be commenced. That is, there is nothing irregular or unusual in this. Certain lands were required in connection	with	certain	projects.	The
council was asked to authorize expenditures of money to secure those lands. Instead, however, of the overcommitment being $22,086, it was $3,797.
I believe I	have	already	explained	thesituation with	regard	to small projects.	My
note is just in clarification of what I have already said. The same comment applies to large projects. In the case of small and large projects all construction authorized and to be completed to the end of the fiscal year 1940-41 has been paid for in full out of the funds made available by parliament.
The next section which was read by the hon. member is as follows:
By an amendment to the Prairie Farm Rehabilitation Act, chapter 7, assented to April 5, 1939, the minister may, subject to the approval of the governor in council, enter into agreements with provinces, cities, towns, persons, etc., for projects or schemes for the conservation of water.
That is the section with which we are now dealing, and which is, I believe, to become section 10 in the act. The quotation continues:
Payments during the year were made in several cases on ministerial authority only, examples being payments to W. B. Ramsay, Regina, for construction in connection with the Magrath irrigation canal, $1,858.12 and to W. V. McKinnon, Saskatoon, re the Castle river test hole, $2,755.58. Similarly, payments for stock-watering dams and community projects, where the total cost did not exceed $5,000, were paid without the approval of the governor in council.
From the beginning of the operations of the Prairie Farm Rehabilitation Act, that is from April, 1935, the minister in charge- and there have been only two, namely Mr. Weir, who was the minister under an earlier government, and myself-has, under authority of section 36 o.f the Public Works Construction Act, entered into contracts not involving expenditures of more than $5,000. This authority was confirmed by the treasury office on February 6, 1937.
That is, someone raised the question about it at that time. It was referred to the treasury office, and there was the confirmation that under the Public Works Construction Act we had authority to make payments up to $5,000.
That was always considered to be so, both by the previous minister and by the department and, since I have been in charge, by myself and by the department.


Richard Burpee Hanson: Then, if
that is so, why is this measure necessary?


James Garfield Gardiner: I shall come to that.
This authority was confirmed by the treasury office on February 6, 1937. It was not considered that this authority was removed by the addition to the act of the present section 10, providing for a wide variety of agreements with provinces, municipalities and others. That is the point to which reference has been made. In other words, it was not intended either by council, by the minister who brought in the legislation or by the officials of the department who drafted it, that this authority was removed by the addition to the act of section 10 as introduced into the house providing for a wide variety of agreements with provinces, municipalities and others.
As for community projects, which are small projects built for the use of a number of individuals instead of one, and the average cost of which is less than $1,000, it was considered that order in council P.C. 71 of January 11, 1939, which gave the minister authority to "enter into leases or other agreements in connection with the use of land, buildings and equipment," covered the agreements with the municipalities relating to these projects, and the expenditures thereunder.
At the time this matter was brought up, the question of payment up to $1,000 was settled by order in council, under the power which is given in the act to make regulations. In other words, I do not believe it was necessary for me to bring this legislation to the house. I think it would have been possible to have taken an order to council under the powers given under the act to make regulations, and to have had a regulation drawn up empowering me to spend money up to $5,000, just as I was empowered under the order in council of January 11, 1939, to spend money.
But I took this position, and I take it here now, that in view of the fact that criticisms had been made, not upon the basis of what the auditor general intended to be taken from the remarks which he had made, but upon the basis of the auditor general's remarks as they stood-criticisms which had appeared in magazines and newspapers with regard to these expenditures-the matter should be taken care of by the house, and that if $5,000 is to be expended under the act, as under similar acts and in connection with similar works, and if the minister is going to be able to pass upon them, the matter should be provided for in the act itself. That is why the act is before the house.
Prairie Farm Rehabilitation


John George Diefenbaker: Why does the
minister ask for a resolution authorizing him to pay administration, travelling and living expenses of officials and employees?


James Garfield Gardiner: We shall come to that.


John George Diefenbaker: Why ask for that?


James Garfield Gardiner: It is all dealt with here. As a matter of fact, to discuss it shortly, there is no act that is properly drawn, having to do with any matter such as this, that does not give that authority. What this act, as now set up, does is to empower the minister to appoint persons, of course with the consent of council. It does not, however, provide for his paying their expenses, and naturally they will not operate unless expenses are paid. But expenses have been paid and passed by the auditor general, and passed by everyone concerned, right down to the present time, and we oonsidered that the authority should be in the act.


Ernest Edward Perley: Will the minister admit,
with respect to the criticism made of. himself and the department, that no other interpretation could be put upon the auditor general's language? Surely he would not criticize anyone for having made criticism after reading that language.


James Garfield Gardiner: I am not going to
criticize those who made criticism on the basis of the auditor general's report. In view of the criticism, however, I think it is wise to have the act clarified and have it brought here rather than allow the matter to bo handled by way of regulation.
Let me complete the statement. As for community projects, which are small projects built for the use of a number of individuals instead of one, and the average cost of which is less than $1,000, it was considered, that order in council P.C. 71, of January 11, 1939, which gave the minister authority to "enter into leases or other agreements in connection with the use of land, buildings, and equipment," covered the agreements with the municipalities relating to these projects and the expenditures thereunder.
Then on January 21, the comptroller of the treasury wrote to the deputy minister of the Department of Justice in order to get a ruling on the matter. Referring to the Prairie Farm Rehabilitation Act, he says:
Section 7 reads:
" The governor in council may make such regulations as may be necessary or expedient for the effectual execution and working of this act and the attainment of the intention and objects thereof." In pursuance of this authority, the governor in council, by order dated the 19th day of June, 1936, P.C. 1464, approved what

are called regulations (copy enclosed). Section 8 of the act of 1935 was considered inadequate, and by section 4 of an amending act was repealed and the following substituted therefor:
"For the purposes of this act the governor in council may from time to time authorize the expenditures in each of the fiscal years 1937-38 to 1939-40 inclusive, of sums not exceeding the amount appropriated by parliament in each year for such purposes."
This section has been interpreted as requiring

These are the words of the auditor general:
-the approval of the governor in council of all expenditures regardless of their nature, and in effect to nullify the minister's authority under P.C. 1464.
To overcome this difficulty order in council of the 11th day of January, 1939 (P.C. 71) was passed. The intention was to revest in the minister authority to conclude those matters specifically mentioned, and in addition to vest him with authority to pay necessary administration and travelling expenses.
Under a further amending act, 3 George VI, chapter 7, section 8, as amended, was again amended to read as follows:
"For the purposes of this act the governor in council may from time to time authorize the expenditure of sums not exceeding the amount appropriated by parliament in each year for such purposes."
Section 2 of the last mentioned act added three new sections to the statute as follows.
The first mentioned is section 10. I do not think I need read that one. It is the section under consideration now, and if it may be taken as read I shall have it inserted in Hansard so as to have the record complete.
"10. The minister may, subject to section four of this act and with the approval of the governor in council, enter into agreements with any of the provinces of Manitoba, Saskatchewan or Alberta or with any city, town or other municipality within any of the said provinces, or with any person, firm or corporation, with respect to the development, promotion, construction, operation and maintenance of any project or scheme undertaken under and by virtue of this act or which may be deemed necessary or desirable for the conservation of water.
"11. The minister may, for the purposes of this act, and with the approval of the governor in council, purchase, lease or otherwise acquire, or sell, lease or otherwise dispose of, any lands or premises which may be required for or included in any project or scheme, upon such terms or conditions as he may deem desirable.
"12. (1) The minister may, for the purposes of this act, purchase or rent whatever machinery or equipment may be required in connection with the development, construction or operation of any project or scheme; provided that the purchase of any single unit of machinery or equipment of a value greater than $5,000 shall require the approval of the governor in council.
(2) Notwithstanding the provisions of any other act or law, the minister may sell any single unit or such machinery or equipment upon such terms as he may deem advisable, and the proceeds thereof shall be paid to the

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Receiver General: provided that the sale of any such unit shall, if its initial cost exceeded $500, require the approval of the governor in council."
I might recall to the attention of hon. members who were here at that time that the same discussion took place then.


Ernest Edward Perley: That was not as the bill at first read?


James Garfield Gardiner: No; it was changed to some extent. To continue:
I would very much appreciate-
These are the words of the comptroller of the treasury to the Department of Justice.
-you.r opinion as to whether or not the authority granted to the minister under P.C. 1464 and P.C. 71 has been nullified by the subsequent enactment of parliament dealing with those matters.
Note the question asked by the comptroller. He asks whether the authority which he admits was given the minister in the original act has been nullified by amendments brought in from time to time dealing with the situation.
You will note that any action of the minister under sections 10 and 11 must have the approval of the governor in council, whereas under section 12 the minister may act independently within certain limitations, which limitations appear to give recognition to orders in council of 1880 and 1918 (Treasury Mannual, pages 146 and 103 respectively).
Notwithstanding the specific terminology of sections 10 and 11, is it to be inferred that, in administering those sections, regard shall be had to the treasury board minutes mentioned, and that expenditures up to $500 may be paid on the authority of the deputy minister and up to $5,000 on the authority of the minister? Do you consider that the final paragraph of P.C. 71, having reference to administration and travelling expenses, is still operative? If not, is it your opinion that such expenditures must all be approved by the governor in council under either sections six or seven of the act or both?
These opinions were asked for after the discussion which had taken place with regard to payments which had continuously been made throughout the year covering expenses and all these other matters. As the hon. member for Qu'Appelle has stated, it will be recalled that a discussion did take place, led, I believe, by the then member for Kootenay, and on his suggestion I said I did not think it made any difference if there were inserted the words "by order in council" or something to that effect. The words "by order in council" were inserted.
But the legal authorities told me that it made all the difference, and that the insertion of those words made it impossible to administer the act in the way it had been and was being administered right down to the present.
All of this indicates that those of us who are not legal draftsmen probably, at times, take too much responsibility upon ourselves.
The opinion given by the deputy minister of justice, Mr. W. Stuart Edwards, is as follows:
Dear Sir:
I wish to acknowledge receipt of your letter of January 6.
With reference to the questions raised on page 3 thereof, it would appear that the regulations contained in order in council P.C. 1464, dated June 19, 1936, and P.C. 71, dated January 11, 1939, are no longer effective; that the executive directions contained in the. orders in council of 1880 and 1918 do not apply to the administration of sections ten and eleven of the Prairie Farm Rehabilitation Act; and that the final paragraph of order in council P.C. 71, dated January 11, 1939, authorizing the minister to pay necessary administrative and travelling expenses is inconsistent with section six of the act and is ineffective. It would appear that section six must be interpreted to authorize the governor in council to fix the salaries and the scale of expenses of the officers mentioned therein.
The provision proposed in the bill is for the purpose of placing in this act the same power which is in all similar acts and which was previously given through the public works act in dealing with matters of this kind. But we are told that, by reason of the amendment which I myself as minister agreed to at the time, that was made ineffective and that the act could not be administered as was intended. It would be practically impossible to carry out the intentions of this act under a provision that required every dug-out that was going to be constructed costing, say, $50 to be passed by council before it was even authorized. What happened is this. A farmer applies for authority to construct a dug-out. We are going to pay half the cost, four and a half cents on each nine cents. In order even to get that started, we would have to get an order in council for every one of them. As the plan will operate, we authorize the expenditure of money to the extent of four and a half cents a year on an estimated yardage, and check on the total amounts available for the construction of dug-outs, and when we come to the end of it we cannot spend any more money on that kind of project. But until that time the minister passes the different applications in the order in which they come to the office.


Richard Burpee Hanson: What kind of engineering report does the minister require?


James Garfield Gardiner: A farmer first makes application. The engineer goes out and takes soundings; he bores holes to find whether the subsoil is gravel or clay. If it is gravel,
Prairie Farm Rehabilitation

or even if there are streaks of gravel, there is no use in constructing the dug-out, because the water would get away. If the subsoil is clay, the dug-out may be made. A survey is made, largely by eye, of the conditions, whether there will be any water drainage into a hole if one is made, and a decision is given on that basis.


John George Diefenbaker: I have listened with great interest to the statement of the minister, but he has not answered my main objection to this resolution. My objections were, first, that it would place uncontrolled power in the hands of the minister to expend money over and above the amount voted by parliament.


James Garfield Gardiner: No, not as it is operated now; it is controlled by the auditor general.


John George Diefenbaker: 
James Garfield Gardiner: 
Richard Burpee Hanson: What
limitation is in the bill based on this resolution?


James Garfield Gardiner: There is no limitation. The section will read:
Subject to section four of this act undertake the development, construction, promotion, operation and maintenance of any project or scheme or enter into agreements with any province, municipality or person with respect thereto, provided that if the total amount to be expended under any single project or scheme under this section exceeds $5,000 in any fiscal year the approval of the governor in council shall be required.
(b) Pay all necessary administration expenses incurred under the act and all necessary travelling and living expenses incurred by officials or employees in the performance of their duty.

That is the new section 10 as it would read, the only difference being that it is provided in it that all expenditures over $5,000 must be passed by the governor in council. As it was before, it would provide that all expenditures even down to $1 had to be passed by order in council.


Richard Burpee Hanson: What the minister says, therefore, is that it legitimatizes payments up to $5,000 on any project without an order in council. Nevertheless the point made by the hon. member for Lake Centre is that unless there is some limitation somewhere on the gross amount that may be expended the minister's scope is still wide open. Where is that limitation? Surely the minister himself will agree that there must be some limitation.
When the minister comes to speak again on his estimates, or at some point, will he tell the committee what is the gross amount actually expended up to a certain date, what the commitments thereafter were and how far it is proposed to go with this expenditure, because, so far as one can observe, there does not seem to be any finality about it? It would also be interesting to know how many of these holes never held water.


John George Diefenbaker: And how many
broke down.


James Garfield Gardiner: I have the facts with regard to that and shall be prepared to give them, namely, the number of dug-outs that were full of water at a certain date after they had been dug, and the number of dams that went out. That, however, would come more properly under the estimates. I can only repeat what I said the first time I spoke with regard to this measure, which, by the way, was brought in by a previous government, and when we had the provision for the limitation removed. The statement which I made then and which I have no reason to withdraw was that it would take at least $20,000,000 to do this job. Speaking in round figures, I think about half that amount has been spent or will have been spent by the end of this year. The first time I spoke with regard to this measure I think I intimated that probably the projects then being discussed or talked about would require some ten years.


John Ritchie MacNicol: Does that $10,000,000 include all that has been lost in the dams that have gone out?


James Garfield Gardiner: Yes, which is not very much. It is surprisingly small, as a matter of fact, in comparison with the number of

Prairie Farm Rehabilitation
dams that have been built, but we shall have all that information when the estimates are under consideration. With regard to the question of control, the outside control is the $2,500,000 that is voted. Then, of course, as hon. members know, there is another control within departments; that is, the question of whether or not there is virament in the vote, whether you can switch money from one activity to another without the authority of council or of this house or of anyone else.


Richard Burpee Hanson: That is a dangerous practice, is it not?


James Garfield Gardiner: That depends upon the nature of the vote. This always was a blocked vote; you could move money from one activity to another. I do not think it would have been unreasonable, and probably it might have been justifiable from the beginning, to suggest on some division being made by the house which would have put some limitation on the amount of money that could be spent for different projects, but that has never been done. Since this experience, however, the auditor general has insisted on that division being made by the department, and that has been done. That practice was followed last year and is being followed during the present year. That is, we set up certain amounts of money to be expended on reseeding to grass, on pastures, on dug-outs, on small dams, on large dams, on irrigation projects and so forth, and we have said that these were the amounts we intended to expend, making up the full $2,500,000. Then, in practice, before wTe can change from one to another, we have to show the treasury that we have cancelled some of the authorizations that made up the first total, or that we actually cannot complete them. In other words, we are following much the same practice that is followed when these votes are set up in the house in various amounts.


John George Diefenbaker: The minister has
admitted that under the statute as it now stands there is no limitation.


James Garfield Gardiner: There is the limitation of $2,500,000.


John George Diefenbaker: I will read section 8 of the statute as it stood originally:
For the purposes of this tact the sum of seven hundred and fifty thousand dollars shall be appropriated and paid out of the consolidated revenue fund of Canada during the fiscal year 1935-36 and for each fiscal year for a further period of four years a sum not exceeding one million dollars per annum as may be necessary to continue and extend the work undertaken under this act.
Therefore, under the law as it stood originally there was a limitation of $750,000 for the first year and of not more than $1,000,000 a year for the next four years.


James Garfield Gardiner: The limitation now is what the house votes.


John George Diefenbaker: I will come to that, because there is no such limitation; that is just the point I am raising. This section was repealed in 1937, and then in 1939 section 8 was enacted as follows:
For the purposes of this act the governor in council may from time to time authorize the expenditure of sums not exceeding the amount appropriated by parliament in each year for such purposes.
Under this section the authority of the governor general in council only is limited.


James Garfield Gardiner: "Not exceeding the
amounts voted by the house." That is the way these sections are always worded.


John George Diefenbaker: Under the present
suggested amendment the minister will have certain powers over and above those possessed by the governor in council. Until contracts of $5,000 or over are considered, the minister has absolute power. Therefore the limitation under section 8 as it stands at the present time means that expenditures of $5,000 or over may be made to the extent of $2,500,000, the amount provided in the estimates; but no control whatever is imposed on the amount the minister himself may expend on projects amounting to less than $5,000. I bring this to your attention, Mr. Chairman, on account of the necessity of amending section 8 as it now stands, in order to provide that the limit of the expenditure shall cover not only the amount provided in the estimates, or the expenditures made under orders in council, but also the expenditures that can be made by the minister himself under contracts for less than $5,000. To-day under the law there is no limitation at all in that respect. There is nothing to prevent the minister from saying, "I will spend the $2,500,000 on projects costing more than $5,000. I will do that by order in council, but over and above that amount I will spend any sum I deem necessary, without restriction." It is just against that sort of thing, the failure to put in any provision which will protect the interests of the people of Canada, that I make my protest. I ask the minister to give consideration to the necessity of amending section 8 in order to limit the minister's power of making expenditure.


James Garfield Gardiner: I will consider that
point during the dinner recess.
At six o'clock the committee took recess.
Prairie Farm Rehabilitation

After Recess
The committee resumed at eight o'clock.


James Garfield Gardiner: The point raised by the hon. member for Lake Centre (Mr. Diefen-baker) just before we rose for .dinner was well taken. There will be an amendment to add the words "undertaken and by virtue of this act", which will make the minister subject to all the limitation of the act.


Ernest Edward Perley: Earlier in the session I
asked the minister if he would be bringing down any amendments to the Prairie Farm Rehabilitation Act and the Prairie Farm Assistance Act, and I understood him to say that he did not anticipate any amendment to the act we are now considering but he might have some minor amendments to the Prairie Farm Assistance Act. I cannot see any real need for these amendments because I think the minister already has all the power he proposes to take by these amendments. Why did he find it necessary to change the advisory committee? He will recall that the advisory committee set up in 1935 was representative of municipal and other organizations throughout the west, and I think that was a useful committee. He should tell us why that committee was changed. Would he state also what projects he has in mind to undertake this coming season under the act as it will be amended? Would he state just how many dug-outs have been constructed under the act to date?


James Garfield Gardiner: Most of the questions asked would come more properly under the estimates, that is, those with regard to the number of dug-outs, the amount of money spent on them, and so forth.
The other question was the subject of a long discussion during the session when a change was made in the committee. The first act provided for only one advisory committee. When I came into the department the officials advised me that it was most difficult to operate the act with one committee, that there were water undertakings, undertakings with regard to the improvement of land and undertakings with regard to the taking of land out of cultivation, and they wanted more than one committee. Provision was made in 1936 or 1937 for more than one advisory committee, and to-day we have three. The main committee is almost identical with the committee of that time. The leader of the opposition otf the day took strong exception to changing the committee without naming the persons who were to be chosen, and I gave an undertaking at the time that the persons we intended to choose were practically the same as were on the committee at that

time. The only changes made have been on account of changed circumstances. As a matter of fact, I think the hon. member for Souris (Mr. Ross) is still a member of that committee.


Ernest Edward Perley: Representing the municipalities.


James Garfield Gardiner: He was taken on to
represent the municipalities. We continued him as a member afterwards, and so far as I know, he is still a member and has attended most of the committee meetings. I have not the names of the members before me at the moment, but when we get into the estimates I hope to be able to give the names.


Ernest Edward Perley: What representations has the committee made to the department?


James Garfield Gardiner: All matters of policy have been referred to the committee and discussed by them, and every action has been taken for which the act provides. The committee meets at least once a year, and on other occasions in between whenever it is necessary to call them together.


Ernest Edward Perley: Have	they made any
special recommendations for the coming season?


James Garfield Gardiner: I am not certain that the recommendations for the coming season have been gone into fully by the committee, but the hope is that the committee will meet as soon as I am permitted to go west after the end of the session.


John George Diefenbaker: The section outlining the duties of the committee reads:
The committee shall consider and advise the minister as to the best methods to be adopted to secure the rehabilitation of the drought and soil drifting areas in the provinces of Manitoba, Saskatchewan and Alberta.
Have any regulations been passed granting the advisory committee any powers in addition to those provided by the statute? In arriving at a decision as to what projects are to be proceeded with, does the minister make the decision himself, or are the individual projects submitted to the advisory committee?


James Garfield Gardiner: As I stated, there are three committees, and regulations have been drawn up outlining their authority and their duties. I do not think those regulations have been changed materially since the committees were first set up. It stands to reason that only a small percentage of the works comes to my attention. The act provides that all matters of this kind are to be passed by the minister, but in practice they are actually passed by the officials of the department or

Prairie Farm Rehabilitation
the deputy minister. For example, authority is given to certain officials to pass upon dug-outs, and unless some controversial question arose I would not hear of it officially. That is the very reason why authority of this kind must be there. It is not possible to have all these dug-out projects, which may number from 1,000 to 5,000, come to the attention of the minister, but he has the authority to stop any of them or to pass any of them, if he so wishes.


Mr. COLD WELL:: 
James Garfield Gardiner: Never mind getting it. I will agree to it.


Thomas Miller Bell: I have upstairs some posters which were sent to me only yesterday carrying the slogan "Help win the war by growing less wheat." My mind, when I read that, went back to the speeches of the present Minister of Agriculture in 1934, 1935 and 1936. 0 course conditions alter and opinions change. But I wish to urge the government to continue the prairie farm rehabilitation scheme and to expand it, and I am quite sure that if we do that, not only the people of the west but the people of all Canada will be repaid for the amount that is put into these projects.
Resolution reported, read the second time and concurred in. Mr. Gardiner thereupon moved for leave to introduce Bill No. 92, to amend the Prairie Farm Rehabilitation Act.
Motion agreed to and bill read the first time.



WAR CHARITIES ACT, 1939 AMENDMENTS TO COVER FUNDS RAISED FOR PURCHASE OF WAR SUPPLIES, ETC.

[Stage Direction]
Hon. J. G. GARDINER (Minister of National War Services) moved the second reading of Bill No. 64, to amend the War Charities Act, 1939.
Richard Burpee Hanson: Mr. Speaker, before the motion passes, would the minister either now or in committee give again the explanation which he gave on the introduction of the bill with such extensions as he may see fit to give us?
War Charities Act

I must say -that I heard his explanation with some surprise. I did not know that the condition existed to which he referred.


James Garfield Gardiner: Mr. Speaker, in view of the fact that this is a matter of detail rather than of principle, I think it would be better to deal with it in committee.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Vien in the chair.
On section 1-Definitions.
James Garfield Gardiner: Mr. Chairman, I think it is important, before we proceed further, that I should give details of just what the bill intends to do. The division of voluntary services is responsible for the administration of the War Charities Act. When the act was first drawn, it was not undter War Services. The intention now is to amend it to state that "minister" means the Minister of National War Services. The object of this bill is to provide a measure of control and regulation of the voluntary efforts of organizations throughout Canada in their desire to raise money for war charitable purposes. Under the act any organization which makes an appeal to. the public for donations or subscriptions in money or in kind for any war charity fund or which attempts to do so by sponsoring a bazaar or any other entertainment for that purpose must be registered under the act. That is the provision as it has operated down to the present. Since this act was assented to on September 13, 1939, and- up to May 7, 1941, 1,037 central funds have been registered. In addition, there are 751 branch funds, which have been registered- under a central fund. During the above period the registration of sixty-six funds has been cancelled, and seventy-seven have expired, leaving a net of 1,645 which have been dealt with under the act. The great majority of applications come from responsible groups or organizations. That is, it is not very often that an application has to be refused. They are usually responsible organizations.
After investigation, certificates are issued to such organizations. Then, each application which is not approved, after an investigation, is cancelled and refused. Every effort has been made to prevent the commercializing of war charity efforts. We are finding that in some instances a high percentage of the money taken in entertainments, balls, and so forth, is consumed by expenditures. Where that is found to be the situation it is checked up with the organization, before further permits are given; and if the promoters are not able to satisfy the organiza-

tion that they are going to carry on the ball, or the entertainment, or whatever it may be, in a manner which will secure for war purposes by far the greater part of the money taken in, then there is usually some objection.
According to the War' Charities Act, all organizations registered under the act must make financial returns of their operations to the Department of National War Services, as of March 31 in each year. All of these returns are not as yet in for last year, but the department keeps after them until they finally send the returns in.
The collection of those which have been received up to date total $20,450,000. These figures include the figures for the Red Cross, but they do not include the $6,751,000 raised in the recent campaign for the Canadian war services fund. These figures do, however, include whatever sums organizations in the Canadian war services fund may have raised for the year 1940. Those would be amounts outside the united campaign.
A great many letters dealing with these different drives come to the department from time to time. I have before me the particulars of the last drive, namely, that for the war services, under the direction of Senator McRae. The following table will show the objectives in the different provinces, and the actual amounts received:
Amount
	Objective	collected
Prince Edward Island.,	. $ 33,500	$ 64,900Nova Scotia	. 244,000	360,203New Brunswick	. 160,000	228,986Quebec	. 1,175,400	1,525,552Ontario 	, 2,553,200	2,871,026Manitoba	, 240,000	356,258Saskatchewan	, 280,700	401,352Alberta 	. 225,750	310,185British Columbia	. 525,000	601,000
Every province in Canada exceeded its objective in the driv-e, and a to-tal of $6,751,462 was collected. Of that amount, $4,558,674 was collected in cash, and the remaining sum is to come along. It is estimated that by the time the total is all in, it will be in the neighbourhood of $7,000,000.
The cost of the campaign was 3-3 per cent of the total.


Richard Burpee Hanson: Does that include advertising?


James Garfield Gardiner: I believe it includes all the cost. National 'headquarters received $32,000 in direct contributions. The campaign expenses amounted to 3-3 per cent, or $229,000.


Mr. STIRLING:: Which societies combined in the drive?

War Chanties Act


James Garfield Gardiner: The Y.M.C.A., the
Y.W.C.A., the Salvation Army, the Canadian Legion, the I.O.D.E. in western Canada, and the Knights of Columbus united in the drive.


Ernest Edward Perley: Did all these organizations operate in every province, or were there some provinces in which there were other organizations?


James Garfield Gardiner: All these organizations entered into the drive in all the provinces. Many other organizations, however, which existed, organizations which perhaps were mot national in scope, or which were not engaged in actual war auxiliary services, put all their machinery at the disposal of the central committee, so as to put over the drive. I may add that a considerable share of the credit for the success of the drive, and for having all these organizations unite in it, is due to General McRae and the representatives of the different organizations who worked with him. He led the drive.


Ernest Edward Perley: What is the division of the total amount among the different organizations which took part?


James Garfield Gardiner: I am afraid I have not those figures before me. I would point out, however, that the amounts were arranged by each of the organizations submitting its budget to a board. That board, headed by Mr. Burton, reduced, the budget considerably, part of the reduction being made in costs of collection. Those amounts had been figured on the assumption that there would be four or five drives, instead of one. Some overlapping was eliminated, because they were all going to subscribe funds for one common effort. The amount was cut down to $5,200,000. That was set up as the amount actually required; but in order to make a proper division across Canada, and to be assured that if some portion happened to fall down they would still obtain their abjective, they set that objective at $5,500,000.
As, however, the figures I have indicated show, every part of Canada went over its objective. Therefore there is a considerable sum-I believe it is about $1,500,000 or $1,600,000-which is now in a special fund, under the direction of a trust board set up to handle that fund. Anything any organization requires in addition to its original allotment will have to be secured through that board.


Richard Burpee Hanson: The fund is not paid to the government at all?


James Garfield Gardiner: No.


Richard Burpee Hanson: It is kept in trust?


James Garfield Gardiner: Yes.


Thomas Langton Church: In the last war this country had what was known as a patriotic fund. It consisted of moneys subscribed by municipalities, provinces, and private individuals. The day after this war was declared, this country adopted the statute of 1939, which dealt with moneys collected. It would seem that that is now being extended to war supplies.
The minister has said that the united war charities collected about $6,750,000, such moneys to be used by the Y.M.C.A., the Y.W.C.A., the Salvation Army, the Canadian Legion, the I.O.D.E. and the Knights of Columbus. The Red Cross is not included, although I understand it is to take part in the next drive.
I would point out that there are many organizations in the municipalities collecting money from tag days. In addition to that, there are some provincial funds. In this expansion of the War Charities Act, is it the intention to take care of those minor and local agencies, or are they just subsidiaries? I may say there is a wonderful fund, known as the Telegram British war victims fund. I doubt if any fund has done more to educate the people of Canada with regard to the great danger confronting the world and civilization at the present time than this great fund so cheerfully subscribed to all over, at not a cent's cost to the subscribers. That fund should not be interfered with in any way; it is registered, and is a blessing. It is doing great pioneer work, and I am glad to see that it is not interfered with by the new act. It is a separate organization. The war charities board that has been appointed under this bill comprises good citizens, and their first year's work has been well done, but I suggest to the minister that the time has come when the government should make a free, substantial contribution to the mother country in food, clothing and equipment of all kinds. Why could we not make a gift to the people there of grain, butter, and all kinds of food, clothing, and many other commodities that are not covered by the agriculture agreements which the minister has made with the mother country? Further, I suggest that any contributions of that sort and free gifts should be made immediately.
The other day I received a letter from two Canadian soldiers in a village in England. The place was bombed, and among the sufferers was a woman who had lost two sons and her husband. One of the soldiers who wrote to me asked this lady what she would like and she replied, "Oh, if I could only get two pounds of sugar and a pound of butter!"
There is in that reply a principle involved. Why not give this help and these free offerings? Are we or are we not at this time doing
War Charities Act

our full duty to the mother country? We can get the ships, but I do not think we are contributing many of the things that we could very well afford to send over to the old countiy as a gift. For instance, butter is badly needed. Under this particular section of war munitions and war supplies the government itself could collect and send over, weekly or monthly, as a voluntary gift, a large quantity of supplies from the people of Canada. I hope that this new fund of the war charities board will be a success. The work done by that board so far has been most commendable and well done, and I understand that the Red Cross is willing to join in the next drive. In any event, it is to be hoped that the element of time for the next drive will be considered carefully by the minister, because there is bound to be a conflict among these various loan and other appeals to the public. Many organizations and private individuals collecting locally are apt to come into collision, and I hope that every possible step wiir be taken to see that their activities are harmonized, and that the time will be arranged by the government.


Alexander Malcolm Nicholson: I understood there was a difference of opinion between the minister and the Red Cross officials in Saskatchewan in connection with the proposed drive. How was it finally settled?


James Garfield Gardiner: The matter to which the hon. member refers was brought up in the house in the early part of the session. There really was not a difference of opinion between the Saskatchewan group and the minister, but there was a misunderstanding in the organization itself. That difference has been entirely ironed out within the organization. The proposal made at the time the united drive was organized was to the effect that if the Red Cross desired more money to carry on through this year, they should come into the drive which took place in March and ask for more money from the public at that time. They thought, or at any rate some of their officials thought, they would probably be able to get through this year without appealing for additional money, and they so intimated. I understand that later the Red Cross did conclude that if they were to do certain work which some of them suggested ought to be done, they would require more money. That question has been under discussion since, and it has been pretty well determined that if it is decided to go on with that particular work, some means will have to be found of obtaining money for the purpose. Whether that will be done by a limited collection, or how it will be done, has not yet been decided, but the

spirit of the decision made some time ago is being carried out by the Red Cross and by everyone concerned.
At the moment the Red Cross is considering the question whether it will go into one united drive later on. As a matter of fact, it has indicated a willingness to do so. I would not say that it has been definitely decided that there will be only one drive, but the intention is that there shall be only two drives in the year. One will be in the early part of the year to raise funds for auxiliary war services, that is to say, all matters having to do with charities in connection with the war or auxiliary work in camps. The other, it is expected, will be held in the later part of the year and will cover many of the matters referred to by the hon. member for Broadview (Mr. Church), who discussed many of these other activities that are going on. It is hoped that they will all be brought into the second united drive, so that there will be only two main national drives in the year.


Richard Burpee Hanson: Covering
the Red Cross and others?


James Garfield Gardiner: Yes, covering all activities. I did have the figures for which the member for Qu'Appelle asked. A few moments ago he asked about the allotment to the different organizations that went into the drive, and I was under the impression I did not have those figures. I find, however, they are here, and I will put them on Hansard:
War services	Peace time	TotalCanadian Legion	. $ 938,100	$ 938,100Knights of Columbus..	. 725,000	725,000Salvation Army	, . 989,100	$459,000	1.448.100Y.M.C.A	. 1,281,000	458,000	1,739,000Y.W.C.A	. 238,465	49,500	287,965I.O.D.E	. 104,000	104,000$4,275,665	$966,500	$5,242,165
That makes a total of $4,275,665 for war services and $966,500 for peace-time services, or a grand total of $5,242,165 for all purposes. That was the final amount allotted to the different organizations. These are the sums which will be allocated out of the collection, made automatically to these organizations, and any amount in excess will be in the special fund to be taken care of by the trust board.


Richard Burpee Hanson: What
machinery is set up for investigating the proposed charities?


James Garfield Gardiner: A committee is proposed in the act. It has not yet been constituted, but we have auditors who check the accounts of these organizations, or have the accounts

War Chanties Act
sent in to be checked. In my first explanation of the bill I should have said that the most important feature is contained in the definition of "war charities' fund," and the provisions that are made to enforce it. "War charities' fund" now means any fund having for its object or among its objects any purpose, charitable or otherwise, arising out of or connected with the war. It is not intended now that only those raising money for charitable purposes should come to this branch of the department, but any organization that is collecting money for any purpose from the public, and having to do with the war, must apply for a permit in order to make its collection, and its books will be subject to examination by the department.


Richard Burpee Hanson: Does that apply to small undertakings in procuring comforts for the local camps?


James Garfield Gardiner: It is intended to apply more particularly to the raising of funds for Spitfires and all that sort of thing-probably one hundred or two or three hundred thousand dollars.


John Ritchie MacNicol: Has the department considered awarding a decoration in the form of a ribbon, or a diploma, or a card of honour, to the associations throughout the country which have been doing such splendid work in knitting and gathering together comforts of one kind or another and sending them either through the Red Cross or directly to the boys overseas? In the last war a great deal of the same work was done by many organizations, and after the war some recognition was given to the occasional one. But down the ladder among the ordinary people in the towns and cities very little recognition, if any, was given to the many groups of ladies who did that kind of work. I always thought that the authorities failed in recognition of the vast amount of voluntary service that was given.
Since the present war commenced, I know that in my own riding the Davenport Conservative ladies under the chairmanship of Mrs. S. H. Gillson meet weekly in a room that is donated to them for the purpose, with heat and so forth, and there they sit all afternoon knitting and sewing and making comforts, which, when received overseas, are, I am sure, greatly appreciated. In fact, I have seen many letters that have come back expressing that appreciation.
The hon. member for Broadview mentioned another case of splendid work. He did not elaborate on it, and I think I should say a further word about the Toronto Telegram which has done wonderful service, which has
cost that newspaper a large sum of money. Every dollar contributed to the Telegram war victims' fund goes to the Lord Mayor of London's fund. I believe the amount is now on the way to a million dollars and the work is continuing. The Telegram has done a marvellous work not only in connection with that fund but in creating, especially in the cities and towns of Ontario, in the schools, lodges, churches and organizations of one kind and another, a patriotic spirit that is most commendable and that I do not believe would have prevailed to the same extent but for the great work that newspaper is doing. The space that it is giving to the fund, if estimated in advertising dollars, would amount to a large sum. It also pays the full cost of the bookkeeping and collecting of that fund and sending it overseas.
As I listened this evening, I wondered whether the minister had in mind the bringing about of some means of giving fitting honour and recognition to organizations that do this sort of work. I am not speaking of the Telegram particularly; it may not want anything like that; but any organization that does such work is surely entitled at least to a letter of thanks from the government, and not only from this government but from the government in the old country.
Personally I have been thrilled by the work the minister has developed. He took over a new department, organized the programme and I think on the whole has done a very good job that has resulted in much comfort to the men overseas and in the conservation of a large amount of material which otherwise would have gone to waste. The minister I believe deserves the thanks of the committee for organizing this new department and doing what he has done.


Donald Alexander McNiven: The hon. member for Mackenzie made some reference to a misunderstanding between the Saskatchewan Red Cross and the department; that is, some publicity has been given through the press to an alleged misunderstanding. Following the last war the Saskatchewan Red Cross continued its activities, established outposts in what might be called Saskatchewan's hinterland, and likewise maintained a nursing service. It has rendered invaluable service to the remoter parts of Saskatchewan. In addition, the Red Cross established a children's hospital which it has maintained since that time and has done a magnificent work. In the last fiscal year the Saskatchewan Red Cross raised approximately $696,000, which is not too bad for one organization operating in what is popularly known as the dust-bowl or the
War Chanties Act

drought area of Saskatchewan. In that time they have organized some 800 branches, which function largely through the agency of women's organizations, and in addition to money contributions they have done much in the way of providing comforts for the soldiers. Notwithstanding their disappointment at the inability or unwillingness of the department to consent to a second campaign in 1941, they threw themselves, as an organization and as individuals affiliated with the Red Cross, wholeheartedly into the campaign for national war services, with the result that our province of Saskatchewan more than doubled its quota. I am sure that under the Minister of National War Services there will be no misunderstanding, and that much will be done to harmonize and keep intact the splendid Red Cross organization which has been built up in Saskatchewan.


Grote Stirling: Six charities have joined in the national campaign this year. I gather that it will be the policy of the government to increase that number and get more warrantable charities working together in these two campaigns. That being the situation, I should like to know what effect that policy will have on those districts where it has been the custom to join together locally, choosing their own war charities, campaigning in an appeal which shall be the only appeal for those six or twelve months, and making their own allocation. Will it be the policy of the government to attempt to do away with those efforts and substitute for them this national effort?


James Garfield Gardiner: Our first intention was to build from those organizations which were in existence in many cities across Canada and gradually to bring Canada into one united effort in connection with, first, war services and then, as separate from that, the civil charities. We found, however, that was going to be too slow, and therefore we brought the organizations together with the idea of having a united drive arranged from the top down rather than from the bottom up. That was necessitated by certain conditions which arose in connection with financing. We had to raise much larger sums than we figured we might in the early stages. I think the only way the plan can operate successfully is for the different organizations enumerated of the group doing war auxiliary services, the names of which I have already read, and adding thereto the Red Cross, to keep in a group by themselves. All are groups that are actually doing war service either in the camps in Canada or at the battle front. The idea is to keep these organized in that way but to induce every organization interested in collecting funds to put forth its efforts to assist in collecting the money. After all, it is 
just about the same people who do the collecting all across Canada, irrespective of what appeal is being made.


Richard Burpee Hanson: I think they change the personnel of the organization, but they collect from pretty much the same people.


James Garfield Gardiner: In most communities practically the same people will go out in the fall and collect for home charities. At another time, perhaps the same people will go out and put on a drive in order to collect funds for war charities, all under the auspices of this same organization. It is found that in some cities there are organizations purely local in nature, which do not extend to other cities, at least under the same name. Those organizations are interested in some work being carried on in their particular communities. I have in mind cities such as Montreal, for example, where certain organizations carry on work that is not done in other parts of Canada. Those organizations would hardly be considered national. They are doing work that is similar to certain national activities, but it is under different auspices.


Thomas Langton Church: I understand some $6,751,630 was collected in the first appeal under the war charities fund, but I should like to know whether it is intended in the next appeal to seek subscriptions from the municipalities and provinces as was done in the patriotic fund during the last war. I believe that was not done this time. This war charities board has done a splendid job in coordinating this charitable work and avoiding and saving duplication and overhead, and it must be remembered that this war is far different from the last so far as the collection of this money is concerned. Then I should like to know whether various local sporting bodies throughout the country that collect sporting equipment and other material for use by the troops in various local camps will come under this legislation, and whether it will be considered essential that they should register and take out permits.
There is one other question I wish to ask in connection with the parcels being sent overseas by the various organizations coming under this fund. These parcels are sent to the old country, to other theatres of war, and to Germany. I believe all the parcels sent to the old country by the post office are delivered, with the exception of those lost as a result of enemy action; but according to the British Hansard of a few months ago that is not the situation with regard to parcels: sent to Germany. We must remember that there are a number of Canadian prisoners of war in Germany, and I was surprised to learn

War Charities Act
recently that there are thousands of women, a few of them Canadians, who are prisoners of war there as well. It was said in the British house that by reason of the difficulties in Spain, through which parcels were routed from Lisbon to Germany, a great many of these parcels have been lost, and at that time some eleven members that I named last February, of the British house asked the government several questions with regard to the delivery of these British parcels. Can anything be done by the war charities board, or have any rules or regulations been passed by that body, with reference to the sending of parcels to Germany for Canadians through the seven bodies included in this bill; and, if so, what are those rules or regulations? It seems to me that if the British Red' Cross cannot deliver these parcels, it must be doubly difficult for these other organizations to do so, although the Canadian Red Cross reply that they do deliver them. They are all doing splendid work; I intend no criticism of them at all, but I should like to know if any rules or regulations have been adopted by the government or the board with regard to the delivery of parcels to prisoners of war, and I would ask the minister to take up the matter with the board and have some inquiry made into it.


James Garfield Gardiner: My understanding is that the only way in which parcels can be delivered to prisoners of war in Germany is through the International Red Cross, and that the regulations in that respect were drawn up at Geneva. We had nothing to do with the drawing up of those regulations. As a matter of fact, that is one activity which the Red Cross now consider they may have to enlarge, compared with what they have been doing recently. The larger the number of prisoners of war in Germany, the greater and the more expensive will become that work; but it is all carried out under international regulations which were framed at Geneva, and the Red Cross organization is expected to do that work.
In answer to the other question, as to those who will have to apply for permits, as the legislation is now drafted all organizations collecting money for war purposes come under the act and will have to apply for permits to proceed.


[Stage Direction]
Section agreed to.
Sections 2, to 4, inclusive, agreed to.
On section 5

Unauthorized emblem.
Richard Burpee Hanson: This section is considered necessary, is it?


James Garfield Gardiner: Yes.


[Stage Direction]
Section agreed to.
On section 6-Proceedings for offences.
Richard Burpee Hanson: Have there been any prosecutions?


James Garfield Gardiner: I do not think so.
Mr. CASTLEDEiN: What is the reason for repealing subsection 2 of section 12 of the act?


James Garfield Gardiner: Previously the Minister of National War Services had to consent to any prosecution, but in practice all prosecutions are carried on through the department of the attorney general in the province. By the repeal of this subsection, the provincial attorney general is allowed to proceed with such prosecutions.


George Hugh Castleden: Who would have to lay a complaint?


James Garfield Gardiner: Anyone could lay a complaint. It might be done by some official of our department.


Mr. BLACKMORE:: I should like to ask a question arising out of the fact that all those collecting money for this fund are required to have a permit or to be registered. What would be the position of an organization which put on a play and collected perhaps $100, and then decided to give $75 of that to one of these funds? Would they come under this act, or would they not?


James Garfield Gardiner: I should imagine that if they proceeded in that way they would not come under it, although I should not like to be too definite about it. Under this act the department would have power to examine into what reallly happened. If an organization indicates a desire to raise money for war purposes, it must ask for a permit in advance. If it was thought that some organization was trying to escape the necessity of securing that permit, and avoid coming under the act, while its real objective was promoted through the collection of money for war purposes, under this act the department would have the right to examine into the operations of that organization to discover what really happened.


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

[Stage Direction]
The house in committee of supply, Mr. Fournier (Hull) in the chair.
lJf. Production service. Production service administration, $35,560.
Alexander Malcolm Nicholson: I have before me sessional paper No. 210 in connection with the resignation of Mr. Newman, field man with
Supply-Agriculture

the live stock and poultry branch, dominion production service. This return lists some of his qualifications. He graduated in 1924 from the Manitoba agricultural college. For one year he worked with Detroit Creamery Farms, Detroit, Michigan, as herdsman in charge of the herd on the state fair circuit and in charge of the Michigan state herd at the national dairy show, 1925. He then joined the staff of the dominion experimental station at Lethbridge under Doctor W. H. Fairfield, where he was in charge of live stock and dry land cultural investigations from March, 1925, until March, 1930. From 1930 until 1935 he was engaged in practical agriculture. During his period of practical farming he had interesting experience with stock on mineral deficient soils in northern Saskatchewan and with large scale farming, alfalfa production and stock raising in southern Alberta. In 1935 he joined the staff of the dominion live stock branch, and was with them until about a year ago. In my opinion Mr. Newman was a valuable member of the department, and I should appreciate very much having the minister make a statement as to why a member of his staff with such a valuable record should not have been retained in the department. Mr. Newman was performing a valuable piece of work, and surely there must be something wrong with the department when a man with a record such as his cannot be retained in the service.


James Garfield Gardiner: As I understand the situation, Mr. Newman left the department of his own accord. There was no objection to him, in so far as the department was concerned, but he decided that he would like to leave the department and take up other work. I understand he is now doing some organization work in Alberta. The department did not desire him to quit; I understand he just left of his own accord.


Alexander Malcolm Nicholson: He did leave, but it was understood that more responsible work would be given to him. I think the committee is entitled to a fuller explanation than the minister has given. This correspondence would indicate that he did not leave the department willingly or without giving the matter a good deal of thought. I think this department should make greater effort to retain men doing the type of work Mr. Newman was doing.


Richard Burpee Hanson: Who is the present director?


James Garfield Gardiner: No one has been appointed to take his place.


Alexander Malcolm Nicholson: I should like the minister to give a fuller explanation. .


James Garfield Gardiner: The only fuller explanation I can give is that he thought he should be made permanent at an earlier date, which would, of course, carry with it an increased salary. He was not made permanent, and he left the service of the department.


Alexander Malcolm Nicholson: The correspondence
indicates that Mr. Newman gave up a good position with the McIntyre ranch in southern Alberta when he was persuaded to come to the department on the understanding that he would receive a permanent position in the course of a reasonable time. I understand he was with the department five years and still had not received any assurance that he would receive a permanent appointment. I think the department should be able to determine, in five years whether a man of this sort could be given a permanent position. There must have been some reason for keeping him off the permanent staff. This is a matter of considerable importance, and we should have a fuller explanation.


Mr. DONNELLY:: This is not Doctor
Newman, the dominion cerealist, is it?


James Garfield Gardiner: No. If my hon. friend insists upon an explanation, the only thing I can say is that the department did not think it necessary to urge him any further to remain.


[Stage Direction]
Item agreed to.
15. Production service. Health of animals- administration of Animal Contagious Diseases Act and Meat and Canned Foods Act, $1,652,495.
Ernest Edward Perley: What success is the department having in stamping out contagious diseases among animals? The details on page 63 of the estimates show a great number of veterinary inspectors, and I should like to know if it is necessary to have 200 or so of these inspectors in this branch. Could not this number be cut down considerably?


James Garfield Gardiner: There has been considerable pressure in recent years for the examination of cattle for tuberculosis, one of the reasons being the fact that animals shipped to the United States, where most of our surplus cattle go, must be examined unless they are to be slaughtered shortly after arrival. Many of the areas where dairy cattle are raised are insisting upon examinations being made. We have had to cut down considerably this year on these activities, and have had to reduce the amount of money available for this service, compared with two or three years ago. We should like to have more money to spend in order to clean up all districts.
The province of Ontario is insisting strongly on having many districts which have not yet been covered brought in. We have to go on

Supply-Agriculture
and do the work in the districts that have been covered already, at least once and, in some instances, twice. We are not able to cut down on the staff immediately we start to discontinue bringing in counties because we must complete the work and reexamine cattle. At the moment, however, an effort is being made to reduce rather than to increase the expenditures on this work.


Victor Quelch: I hope the minister will
find it possible to continue this work and expand the areas. The farmers in the smaller areas suffer a great disadvantage when it comes to selling their cattle. They find they cannot ship cattle unless they have been passed. Just a few miles south of me is an area into which cattle cannot be shipped unless they have been tested for tuberculosis. We understood at the time that a very large area was going to be taken in, but the department decided not to extend that area, and we are now under the difficulty of not being able to bring in stock from outside unless it is tested. It has been necessary to quarantine stock for six weeks and two months before they could be brought into that area, and that causes a great deal of difficulty and inconvenience. I hope the government will extend that area as rapidly as possible.


James Garfield Gardiner: One of the difficulties in Alberta is that it was only three or four years ago at the outside that Alberta made their first request for an area to be taken in. Prior to that time, the government or the people of Alberta did not see fit to come under the act. Other provinces were coming in. The maritimes-I am speaking from memory- are completely covered, also a large part of the other two prairie provinces, and a large part of Ontario and Quebec, but Alberta did not start to come under the act until three or four years ago, and the area there is not as large as in some of the other provinces. I am soriy that the war has necessitated our cutting down on bringing in any new territory.


Mr. RICKARD:: In Ontario, how many
areas have been taken in, and is it the intention to clean up the areas already in?


James Garfield Gardiner: I have a list of those
counties which have applied but have not yet been tested. All the others which have applied have been tested. The counties which have made application but have not yet been examined are Hastings, Haldimand, Lennox-Addington, Dufferin, Huron, Bruce, Haliburton, Oxford, Perth, Wellington, Middlesex and Elgin. All the other counties which have made application have been examined at least once or are in the stage of going through the test for the first time. It is the intention of
the department to clean up these counties if we can obtain sufficient funds from year to year, and we intend to clean these up before taking in any new areas.


Wilbert Franklin (Frank) Rickard: A great many farmers
feel that once an area has been tested, the work should be carried on if at all possible.


Ernest Edward Perley: How many areas are there
in Saskatchewan?	'


James Garfield Gardiner: The accredited areas in Saskatchewan are: Municipal areas 186, 35, 251, 6, 4, 344, 218, 36, 314, 158, 5, 156, 250, 217, 37, 219, 313, 189, 220, 185, 249, 315, 312, 279, 187, 375, 159, 157, 216, 345, 374, 155, 281, 280.


Ernest Edward Perley: How many is that?


James Garfield Gardiner: About thirty-five.


Ernest Edward Perley: Is it not a fact that Saskatchewan is the healthiest province as regards not only human beings but animals as well?


George Hugh Castleden: I should like to compliment the department upon this expenditure. I wish it were a little larger. I would also draw the attention of the committee, particularly members of the medical profession, to the fact that this item calls for an expenditure of $1,652,495 to take care of the health of the animals of Canada. In comparison with that, I should like them to note the total estimates to look after the health of the human beings of Canada. They amount to $1,011,605.


Mr. GOLDING:: That is from the dominion government only.


George Hugh Castleden: The provincial governments have health departments, it is true, but I believe the federal department of health should extend its work.


Mr. WOOD:: Has the health of animals branch made any investigation with regard to calf-hood vaccination for Bangs disease? This disease works greater ravages among cattle than even tuberculosis. I do not know whether the disease can be passed on to human beings as easily as tuberculosis. I have been led to believe that considerable experimenting has been done in the United States which would indicate that they have something there that is worth while, and I should like to know whether our department here is prepared to provide the serum for the prevention of Bangs disease and whether any investigation has been made into calf-hood vaccination.


James Garfield Gardiner: The department has made investigations. We do not do this work directly but have undertaken, wherever any province desires to have it carried on in the province, to provide cultures with which to carry it on.

Supply-Agriculture

I should like to say a few words in reply to the remark of the hon. member for Yorkton. In all probability this work under health of animals branch would not be done at all if it were not for the fact that tuberculosis in cattle can be carried to human beings. All our activities in connection with contagious diseases in cattle are carried on because cattle and milk are used as human food. Therefore it is all part and parcel of the one job.


Percy Ellis Wright: In certain districts in the west probably 70 per cent of individual herds have been tested. Is there any provision in the act whereby when a certain percentage, say 75 per cent, of the herds in an area have been tested, that area would automatically become a tuberculous-free area and the remainder of the herds be cleaned up?


James Garfield Gardiner: No. That condition
may arise, but it is not accepted as a reason for making it an area. All the herds in the area must be checked by veterinaries and tested for tuberculosis before the area itself is called an anti-tuberculosis area.


Mr. McNEVIN:: I rise to commend the
minister upon the suggestion to proceed with the cleaning up of counties which have already been listed. I should also like to bring to his attention the county of Hali-burton. The county of Victoria, just south of Haliburton, has already been cleaned up, and I believe the same applies to Ontario on the west and Peterborough on the east. The cattle population of Haliburton county is not extensive, but it serves as a source of supply of stocker cattle for Ontario, Victoria and Peterborough. It entails a substantial amount of work on the part of veterinaries serving that area to take care of the rush of stocker cattle which come down at certain seasons of the year. If at all possible, I think it would facilitate matters very much in the four counties I have mentioned, if that area could be cleaned up with as little delay as possible. Such action would greatly improve the supply of milk so essential for the important tourist business of this area.


Mr. McCUBBIN:: I do- not wish to take
issue with what has been said by the hon. member for Victoria, Ontario. Nevertheless, I come from a county where the subject of the tubercular test is a keen one. We in that county import from the west great numbers of stocker cattle. If pressure is brought to bear on the county of Middlesex to have the tubercular test, it will mean great hardship on the men who import those stocker cattle from the west.


An hon. MEMBER:: Which part of the
west?


Robert McCubbin: Saskatchewan and
Alberta.


[Stage Direction]
Item agreed to.
IS. Production service. Compensation for animals slaughtered, $530,000.
Wilbert Franklin (Frank) Rickard: How much has been paid out in compensation?


Ernest Edward Perley: Would the minister give
the figures by provinces?


James Garfield Gardiner: The amount paid out
since the beginning was $13,201,979. The amount paid in 1939-40 was $836,875.33. I have not the amounts by provinces.


George James Tustin: At what rate is the compensation paid?


James Garfield Gardiner: The amount to be paid is two-thirds of the valuation. The highest valuation that can be put on grades is $60, and the highest on pure-bred cattle is $150.


George Ernest Wood: How much was paid out for hog cholera?


James Garfield Gardiner: The total amount last
year was S202.000. The total up to that time, for all preceding years, was $724,569.


[Stage Direction]
Item agreed to.
17. Production service. Live stock and poultry, $707,597.55.
George Alexander Cruickshank: I believe I am
entitled to express my views to the minister. In my constituency the farmers are engaged in either dairying, small fruit farming, or poultry raising. The position in which the poultry farmer of the Fraser valley finds himself is one in which it is absolutely impossible for him to carry on. Hundreds of thousands of their stock have had to be slaughtered, because they could not afford to produce under present production costs, and at present selling prices.
I have secured my information from the bureau of statistics, and from an equally well-known authority in respect of telephone and other rates, namely, the hon. member for Vancouver-Burrard. I believe he has no equal in respect of information concerning freight rates.
At the present time my constituency, and the province of British Columbia, must depend upon export rates because, roughly speaking, our price is based on the export rate received for nine-tenths of our production. That means, obviously, that the domestic rate applies to only one-tenth. I am speaking particularly to farmer members, although I am sorry there are not more in the house. I am glad, however, to see a few members of the legal

Supply-Agriculture
fraternity who happen to represent farming districts. So far as British Columbia is concerned, I would point out that we must receive at least the cost of production, and that in the last year we have not received that much.
I would point out particularly to my hon. friends to the left that agriculture in Canada is not tied up completely with the word "wheat". With all due deference, I would point that out to the Minister of Agriculture. Wheat is only a by-product of agriculture in Canada.


Mr. WEIR:: It is good poultry feed.


George Alexander Cruickshank: All right, now; I do not mind these interruptions from these small wheat farmers.


Ernest Edward Perley: I do not think the Minister of Agriculture should allow that to go unchallenged.


George Alexander Cruickshank: I know, from my past experience, that the Minister of Agriculture is quite capable of looking after himself. We are not getting paid-and I repeat it- for ploughing under our chickens. Last year on the average we received only sixteen and three-quarter cents a dozen for eggs in British Columbia. I do not believe the minister knew that, or that his departmental officials knew it. If they did, then they did1 not bring it to his attention. I repeat that sixteen and three-quarter cents a dozen was the average price the poultrymen in British Columbia were paid in 1940 for their eggs. It is all right for the hon. member for Qu'Appelle, because he will continue to plough under his wheat when I am through with these eggs.
An hon. member from Ontario has mentioned that egg production in British Columbia continues the year round. Any farmer member should know that production from poultry is greater from March to June. I am surprised there are not more practical farmers in the house.
In British Columbia our price is set entirely by the export rate, nine-tenths of which is for export purposes and only one-tenth for domestic consumption; and in order to get into the export market we have to ship to Montreal, Halifax or Saint John. For freight purposes bacon is put in class 4 and eggs in class 5, and both commodities are shipped in exactly the same type of refrigerator car. For the first time in my life I took some notes that cannot be disputed. There is this discrimination. I would point out to the minister and his efficiency experts that apples and eggs are shipped by the same type of transportation. A crate of eggs is 56 pounds and a box of apples 50 pounds, and the type of car is the same. Taking our two colossal insti-
14873-218J
tutions, the Canadian Pacific Railway and the Canadian National Railways, we find that the freight to Halifax and Saint John on apples is $1.29 per hundred pounds, minimum of 37,500-pound car, and eggs from British Columbia to Halifax and Saint John have a rate of $2.10 per hundred pounds, minimum of 40,000-pound car. I do not pretend to speak for all hon. members from British Columbia, but I certainly can claim to speak for the rural riding of Fraser Valley, and I say that while we have never questioned the right of the prairie farmer to a fair price for his wheat, a price that will give him cost of production, we ask for the same consideration from them and from the minister. We want to get cost of production so far as eggs are concerned.
A short time ago we applied to the government for some consideration with regard to the price of butter, and we advanced an argument to show how in our opinion the price could be arrived at. We realized that a contract had to be carried out with the old country in connection with cheese and suggested that it might be necessary to subsidize the price of that commodity in the ratio known in the ordinary farming district as two and a half to one so as to equalize matters in order to allow us to produce cheese. I am glad that the government has done that. At the same time I urge that something be done along the same line for the protection of the poultryman.
I give credit to the government for having reduced the rate on mixed grains, which were supposed to be used as feed for poultry on western farms and, I presume, in the mari-times. But let me point out to the minister, and particularly to his advisers, something that they have not realized, so far as British Columbia is concerned. Within two weeks of that rate being put into effect, the feed companies increased their price on feed from one to two dollars, and not one word was said by the price-fixing board. These facts can be verified by the department. We appreciate the so-called concession on mixed grains to the Pacific coast, but of what advantage is that to us when the feed companies immediately increase their price to the producer from one to two dollars a ton? The same applies to grain of all kinds-bran and shorts or mixed grains. Speaking for the largest poultry producing area in British Columbia, I say it is time the department stepped in. If you can say to the Ford Motor company or to General Motors, "You shall get a fair return on a gun carrier, bren-gun carrier, universal carrier or whatever it is called", then you can say to the poultry producer, "You shall get a fair return on the commodities you produce."
Supply-Agriculture

The price has been fixed on butter and wheat, and I commend the government in both instances because the price was too low. We have at least guaranteed an equitable return to the producers of apples in the east and in the west, and last year and again this year we have guaranteed a return to the fisherman for his lobster catch. Eggs happen to be one of the commodities of which Great Britain is much in need, and I suggest that a minimum return should be guaranteed the producer. At least he should get cost of production. With regard to this item now under consideration, amounting to over 1700,000, I should like to know whether any provision is made therein to see that the poultry producer in British Columbia, who must be guided in his prices by the export market, will be protected in exactly the same way as the apple grower and the .butter and cheese producer-.


Jean-François Pouliot: I would ask members of the committee to be good enough to turn to page 65 of the estimates, which gives details of this item. They will see the absurdity of the classifications of the civil service commission. There is an expert, a B.S.A., who is in charge of the whole Department of Agriculture, Post Office and some other things, and he is crazy-and this does not appear in Hansard, nor is it in the statute book. I hope, however, that hon. members who have page 65 in front of them will take the trouble to follow me as I go through it. In the first place, there is one assistant director, production service, live stock who receives $4,920. Then there is one chief, live stock and poultry production services, $4,140. Then there are two associate chiefs, live stock and poultry production services, one at $3,660 and one at $3,510, or a total of $7,170. There is a chief registration officer at $3,660. Then there is one assistant chief, poultry production services -all services in connection with poultry-at $3,450, and there is another assistant chief, live stock and poultry production services, who has another job-not, perhaps, all poultry production services. It is live stock and poultry production services. Therefore he is more responsible than the man who looks after only the hens, roosters and chicks. He looks after live stock, big bulls and cows, and yet he gets less money, $270 per annum less than the man who only looks after hens and chicks. This must have been decided at Easter.
Then there is a district supervisor, live stock and poultry production services, at $3,300. The district supervisor has a little more than the assistant chief. Then there are the district live stock field men, one at

$3,240, one at $3,000; and three supervising live stock field men, one at $2,880, one at $2,820 and one at $2,790. The supervising live stock field men are paid less than the district live stock field men, and the district live stock field man is better paid than the assistant chief, live stock and poultry production services.
What I say is not Greek; it is the kind of classification made by these so-called experts whom I call fools. I want the committee to realize that these so-called experts are fools, hon. members have it here and can check it for themselves.
Then there is a chief record of performance inspector at $3,000; three live stock production assistants at $2,760; sixteen senior live stock field men, one at $2,760, ten at $2,520, one at $2,490, one at $2,280 and one at $2,220. There is a senior poultry field man. That is an important position, it is like a decoration, S.P.F.M.; he gets $2,340. There is one principal clerk, and there are five live stock field men, two at $1,920, one at $1,860 and one at $1,845, a difference of $15, and one at $1,665. I find that a man must be very able to appreciate the services of two live stock field men and mark a difference of salary of $15 per annum. Joe has $15 per annum more than Tom. It shows how meticulously careful they are and how well they do things. If the one who received $1,845 had received $1,860, it would be theft because he would not have earned it!
Then there is a supervising record of performance inspector at $1,920. He should not be confounded with the chief record of performance inspector who receives $3,000. This is a much lower job. There are poultry field men at lower salaries, and record of performance inspectors who must not be confounded with the supervising record of performance inspector and clerks and stenographers and so forth. I know there are some doctors in the Department of Agriculture, I Wonder whether the fellow who prepared these specifications is also a doctor. But I find it the greatest absurdity. Mark you, I do not blame the minister for that; it is the system, and I think the organization branch of the civil service commission should be abolished. It is only jealousy; there is no reason for all sorts of types being together on the same page in this way.
To conclude with a practical question; I would remind the minister that during those dark days when R. B. Bennett was Prime Minister, nearly all the bilingual propagandists of his department were fired. How many propagandists are there now? I hope the minister will be kind enough to answer the

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question. I shall be thankful to him for telling us how many more are there now than when the Bennett government was defeated?


George Alexander Cruickshank: May I have an answer to my question?


James Garfield Gardiner: I did not have an opportunity to answer before my hon. friend on this side was on his feet, but I would suggest that the proper place to discuss what my hon. friend was bringing up is under marketing. I have not here the officials to whom my hon. friend would like to address his remarks, but I shall have the information a little later to cover some of the points raised.
As to the questions raised by the hon member for Temiscouata, while there may be some things that are not exactly right in connection with the classifications they are not as foolish as he would have them appear. For example, take the assistant director of production services; the salary range in that classification is from $4,320 to $4,920, the increases being at the rate of $300 a year. Therefore an individual who comes in at the bottom of the classification, at the end of the first year goes up $300; next year, up another $300, and so on. It is possible that in going down the list of individuals one could take a man in his first year, compare him with one at the top of the list and say that it is difficult to justify the difference. Then another classification runs from $3,7S0 to $4,140; the next from $3,300 to $3,660, and the next from $3,000 to $3,240. There is some relationship between the classifications, but if one compares a man at the bottom with one at the top of the same classification, it might give a wrong impression.


George Alexander Cruickshank: I should like to
have my question straightened out. Under what section would it come?


James Garfield Gardiner: Marketing comes under
items 22 to 28; live stock and live stock prodi-ucts is item 27; dairy products, item 24. Marketing service administration, under which general discussion of marketing would come, is item 22.


George Alexander Cruickshank: With all due respect to the hon. member for Temiscouata, I am not particularly interested in how much an individual receives so long as he gets results. But I point out that item 22-


James Garfield Gardiner: We are still on item 17.


George Alexander Cruickshank: I was trying to
expedite matters. The minister pointed out that my question would be covered by a certain item and-


The ACTING CHAIRMAN (Mr. Fournier, Hull):: The hon. member's question, I understand, comes under item 22, marketing service administration, to item 27.


George Alexander Cruickshank: I point out that
item 22 does not include enough money, and therefore I shall have to ask to be permitted to explain myself a little more fully.


James Garfield Gardiner: I think I understand what the hon. member has in mind, that the amount of money provided is not sufficient to cover what he is suggesting, namely, an increase in the price of eggs from sixteen to, say, twenty cents. Those steps are not taken under these estimates at all. The action in connection with the price of cheese, for example, and the price of hogs-and the action in connection with the price of eggs if that should .be taken-is taken under the War Measures Act, and the money involved is paid out of the appropriation under that act where we are dealing with a condition that has arisen as a result of the war. There is not enough money in any of these items to deal with matters of that kind.


George Alexander Cruickshank: I thank the minister for understanding what I had in mind when I said this was not enough money. Is there any estimate under which the minister will be able to tell me later on whether or not the money will be available to increase the price of eggs as well as the price of cheese?


James Garfield Gardiner: It will be quite proper
to discuss all marketing matters under the marketing estimates, in spite of the fact that the money is>
not provided under those estimates. The administration of those sums comes under those items; the individuals who are administering the expenditure of the money come under items 22 to 28, and it would be quite proper to discuss that matter then.


George Alexander Cruickshank: There is one other point on which I differ with the hon. member for Temiscouata. I am not particularly concerned with the salaries of the administrators. I am interested in the farmers; the administrators can look after themselves. I take it from the minister that there will be an item under which I can obtain some information with regard to what is to happen to the poultryman, who is a war casualty in British Columbia.


James Garfield Gardiner: Everything having to do with the marketing of poultry, live stock and live stock products may be dealt with under that item.


Jean-François Pouliot: The minister said that those classifications were not so foolish as I represented them to be. Of course that is a matter
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of opinion. Opinions are free. That is the opinion of the minister. I hold the contrary opinion, but that is my own business. On the other hand, I would very much regret having to take time to show in connection with every item that the classifications of each branch of his department are even more foolish than those to which I have already referred. I could show that to the satisfaction of anyone who has eyes to see and ears to listen.


James Garfield Gardiner: The hon. member for Temiscouata asked one question to which I did not reply, namely, with regard to the number of bilingual persons employed on these staffs having to do with this branch of the department. There are 134 employees in the outside staff across Canada, .and there are thirty-nine employed in the province of Quebec, all of whom. I understand are bilingual.


Mr. WARREN:: 
George Alexander Cruickshank: I wish it to be distinctly on the record that the member for Fraser Valley has never yet apologized and never will apologize for the magnificent valley he represents. A little over a year ago I had the privilege of having the Minister of Agriculture visit my riding. Possibly if he had not visited the riding I would not be here to-day. I never have been and I never will be a yes-man. If I thought that my farmers were not getting what they were entitled to, I would be ready to say so. The fact that I am a supporter of the government does not mean that I will always agree with the government. Perhaps I know a little more about Canada than some hon. members because I have been in every province with the exception of Prince Edward Island. I have been in twenty-eight of the United States, and I know something of farming and pioneering conditions in different parts of the country. I claim that Chilliwack is the finest farming district in the dominion, even though I do not happen to live there myself.
I should like to take the hon. member for Renfrew North (Mr. Warren) along our main highway as far as the spa of Canada, Harrison Hot Springs, which the Minister of Justice (Mr. Lapointe) paid us the honour of visiting a short time ago. I would be able to show him that 60 per cent of the farmers along that highway are the class of farmer that my friend mentioned. He did not mention the letterhead on that letter he just
read, but I saw it. He was talking about a city farmer, a rose-bush farmer, a man who never had to make a living off the farm.


Ralph Melville Warren: At one time he did.


George Alexander Cruickshank: He may have at one time, but not to-day. I should like the hon. member for Renfrew North to show me a farmer in British Columbia with enough money to-day to go out and buy ninety cows. There is not a farmer in my riding with enough cash to do so, and I come from a good riding. I have something in my valley which the hon. member has not in his. I have a farmer who bought SI ,000,000 worth of interest-free bonds in bis own name, and SI,000,000 worth in the name of the company of which he is the president. That is the type of farmer about whom my hon. friend is talking. According to the letterhead, I imagine his friend is doing a very good business with the Department of Munitions and Supply. It is, however, a different proposition when one is really farming.
I can assure my hon. friend that I shall have nothing to say about the farmers in his riding because I know nothing about them. I have never been in his riding. I wish to tell him with all due respect that he has not the faintest knowledge about what he is talking in so far as the farmers of my riding are concerned. I have been compared with the hon. member for North Battleford (Mrs. Nielsen). I think yesterday looked after the hon. member for North Battleford. I wish to tell the hon. member for Renfrew North that if he has no more sympathy for the downtrodden fanner than to commend the government for everything it does, whether it is right or wrong, the people of that riding will look after him in the same way as they looked after the hon. member for North Battleford on Monday.
-I have asked for no sympathy from the hon. member for Renfrew North. I know what I am talking about when I speak about my riding. I shall be delighted to have him as my guest. I can show him a millionaire farmer who has his race horses, and another one who has carried on sugar-beet experiments at a possible loss of $40,000, for which I give him credit for experimenting. But he gets that money from oil and other stocks. I am speaking for the farmer who has not these things. I could show the hon. member for Renfrew North a farm in Fraser Valley which is renting for $5.15 an acre when the taxes are $4.88 an acre. He knows nothing of these conditions. Hon. members have never heard me deprecate the value of the minister's own province of Saskatchewan or its needs. I know nothing about wheat, and I know
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nothing about conditions in Renfrew North. But I do know about conditions in Fraser Valley. I know of one municipality of 5,500 people where the relief costs average $4,200 a month. I am told that there are corresponding municipalities in Ontario with an average relief cost of $27. It would bring about more harmony and unity from the agricultural point of view if some of these members from rural Ontario would come out for the farmer who is not getting a fair deal.


Victor Quelch: The hon. member for Renfrew North was critical of the hon. member for Fraser Valley for his reference to sixteen cents a dozen for eggs and stated that in Ontario he is receiving twenty cents for grade A large. He is fortunate in marketing his eggs in Ontario. In Alberta, grade A large eggs bring to the producers fifteen cents; grade A, medium, fourteen cents; grade B, twelve cents, and grade C, eight cents. Therefore I think the hon. member for Fraser Valley is correct in his argument that prices for eggs are to-day altogether too low; and while the government is considering minimum prices, they might as well extend their activities to poultry. May I ask if this estimate covers the branch which regulates the grading of eggs, or is that a provincial matter?


James Garfield Gardiner: The last three or four speakers have insisted on discussing marketing. The marketing votes do not start until we get to item 22. If hon. members wish to discuss marketing, I wish they would let us reach the marketing items, when we shall have the officials here and be able to give them all the information they desire.


Victor Quelch: Does this item refer to
blood-testing?


Thomas Vien: The details are given on page 65 of the estimates.


Victor Quelch: Page 65 refers to field men. What do they do? Do they supervise bloodtesting of flocks for hatcheries? Is that a federal responsibility or provincial? *


James Garfield Gardiner: It is both federal and provincial, but much of that work is carried on by the provinces.


George James Tustin: Would the minister explain the item of $154,678 for prizes, bonuses and premiums?


James Garfield Gardiner: These are prizes, bonuses and premiums for calf clubs, stallion clubs and clubs of that type existing across the country.


George James Tustin: Poultry clubs too?


James Garfield Gardiner: Yes; poultry clubs are included in that.


Wilbert Franklin (Frank) Rickard: Eggs would come under this item. Will the minister explain the new egg grading regulations?


James Garfield Gardiner: That all comes under
marketing. How you feed poultry to get good eggs comes under this item, but the grading and selling come under marketing.


William Gilbert Weir: This is a production item which has to do with breeding better live stock, poultry and so forth. Having regard to what is going on in the old country and the possibility of destruction of some of their stock or the use for other purposes of their fine bred herds, have any steps been taken by the government or by private individuals to bring foundation stock of some of the better herds to this country since the war broke out?


James Garfield Gardiner: There is some difficulty about bringing out cattle or live stock at present. I did visit a herd during this last week when I was returning from the calf sale of eighteen shorthorn cattle brought out from Scotland very recently. One of the difficulties in bringing out live stock is in establishing quarantine places at the shipping points. In this particular instance the man went ahead and arranged to bring out a certain number. The quarantine place was there at the time, and he managed to get one shipment through. That particular shipment was not of any great advantage to him in what he desired to do, because he was waiting to distribute them through a sale across this country and part of them to the United States. He desired to bring out still more, but in the meantime it had become impossible for him to get a proper quarantine place on the Clyde on account of conditions existing there. There are negotiations going on to tiy to overcome in some way these difficulties, but the war makes it very hard to get stock out without perhaps running into trouble because one might bring over to this country foot-and-mouth disease which would do more harm than any good he might get out of the shipments.


Mr. GRAYDON:: In connection with
foundation herds from the Channel islands, when the Germans occupied the islands a year ago this June or July most of the stock was taken over by the Germans, and the rumour is that it was slaughtered. Fortunately, however, a good percentage had been brought over to this country prior to the invasion, and we have in our constituency on the farm of B. H. Bull and sons a large proportion of the foundation herds of Jersey island. That perhaps may answer the hon. member's question.

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James Garfield Gardiner: I remember that the hon. member for Peel asked me a question . in the early part of last session, and I must state that in reply I gave him information which was not entirely correct at that time, although we thought it was correct at the time. Two or three days later it was wrong. Arrangements apparently had been made to take out some of the best bred stock. My memory is that disease broke out and that it was impossible to move the cattle, and they were left there. What happened afterwards it is difficult to say. I imagine that some of them would be slaughtered, and probably disease took care of a good many of them.


Gordon Knapman Fraser: Is
the minister doing anything to check the sale of our pure-bred stock to otheT countries? In the last war, in November, 1917, the export of cattle was prohibited from Canadh except to British possessions. After this war we shall have to build up our stock for Europe because their stocks are all slaughtered. The milk for Scotland all comes now from the northern part of Ireland.


James Garfield Gardiner: We have done nothing yet to prevent the exportation of stock from Canada. While we are on production, I may say that it would appear that we still have very much more live stock of every kind than we had at the beginning of the war. Our production is up in all the different lines, and so far no great harm has come.
Mr.	FRASER	(Peterborough	West):	I
had in mind that people from the south were coming over here, going through our herds and picking out our very best stock for shipment across the line.


An hon. MEMBER:: They think they do.
Mr.	FRASER	(Peterborough	West):	An
hon. member says, "They think they do". We get a good price for them. We do not wish to discourage this practice altogether- but we should keep some in this country.


[Stage Direction]
Item agreed to.
19. Production service. Plant products-seeds feeds,	fertilizers,	insecticides and fungicides
control, including grant of $18,900 to Canadian Seed Growers' Association, $521,642.
Alexander Malcolm Nicholson: I notice it is proposed to spend $521,642 in connection with this item. I have here a large advertisement which	has been	used a good	deal in	the
west. It reads:
Less wheat in 1941 will help win the war. See the secretary of your municipality, he can help you with your application. Published by authority of the Hon. J. G. Gardiner, federal Minister of Agriculture.
Then there are small sheets bearing the words "Less wheat in 1941 will help win the war". Then there is a pink sheet on which appear these words:
Less wheat in 1941 will help win the war. We want hogs; we want butter; we want cheese; we want beef; we need feed. Why grow more wheat than you can sell?
This is also authorized! by the dominion Department of Agriculture. As I pointed out, it is proposed under this vote to spend over half a million dollars for seeds, feeds and fertilizers. Would the minister be good enough to explain why on the one hand we are spending half a million dollars to produce more, while on the other hand we are spending large sums of money to discourage production. It seems to me that the minister might very well cut down this large appropriation.


James Garfield Gardiner: I do not think the hon. member for Mackenzie is logical in his reasoning. The fact that you cut down wheat for one year does not necessarily mean that you are cutting down production. I do not think anyone would suggest that there is not enough seed wheat in Canada. One might, however, suggest that there are many other seeds of which we have not sufficient quantities. As a matter of fact, we did not have sufficient alfalfa seed, or seeds of any of the other grasses, to distribute throughout western Canada this year in connection with the acreage reduction plan. Much of the grass seed will have to be produced this summer, and seeded in the fall of the year, if farmeirs are going to take advantage of the proposal that they should have more grass next year than they had last year. All of this, of course, is related to the vote for plant products, including seeds, feeds, fertilizers and so forth.
We had difficulty in obtaining sufficient seed oats to seed the land taken out of wheat. We had difficulty in getting sufficient barley. The fact that to a certain extent we were shifting from wheat to other crops made all the more necessary the expenditure of money to provide seed, or to encourage the use of seed. But much of the work which has to be done in connection with seeds and fertilizers has to do with entirely different kinds of crops.
For example, when the war started, many of the seeds we were obtaining for gardening purposes were obtained from countries from which we can now get nothing. We are entirely barred from obtaining seeds of any kind from Holland, Belgium or other European countries. Much of the production of those seeds will have to be developed in this country. As a matter of fact, since the war started, there has been more reason for doing

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work in connection with seed development than there was before. The necessity for it is increasing all the time.
In so far as the advertisements held up to the view of the committee are concerned, I would suggest only this, that while we were discussing the wheat acreage bonus, the leader of the opposition asked me how much I thought would be required, and whether we would use the whole $35,000,000. I told him I did not like to prophesy, but I was not quite optimistic enough to think we would need the whole amount. I wish to say, however, that something induced the farmers to reduce their wheat acreage this year to a degree at least as great as I expected when we started the programme. After all, when one puts out posters and advertisements, he tries to put out something which will be effective. I suggest that something was effective in persuading the farmers to reduce their wheat acreage, when they cut it down to the extent to which it has been cut down.


Mr. COLDWELL:: I believe the wet spring had something to do with the matter.


James Garfield Gardiner: The wet spring might have helped. It is better to have providence with you than against you.


Mr. HAZEN:: Why must the minister pay analysts' fees when he employs his own chemists? Why can they not do the work?


James Garfield Gardiner: We have not sufficient
analysts to make all tests required. Then, at times, tests have to be made quickly at places where departmental analysts are not available, and we find it less expensive to use local analysts than to send our men there to do the work.


Douglas King Hazen: What is the total amount
paid to analysts, and are there many employed? If there are not too many, I should like to have their names, and the amounts paid to them.


James Garfield Gardiner: I am sorry I have not
the information in that form.


Mr. HATFIELD:: What is done by the
fertilizer branch? What are their duties?


James Garfield Gardiner: They do inspection
work. All inspection work to keep fertilizers up to a proper standard is done by this branch of the department. Of course certain work in connection with fertilizers is done by the provinces.


Heber Harold Hatfield: Do they have anything
to do with the regulation of prices?


James Garfield Gardiner: We have not regulated
the prices. However, when the war started, it was thought there would be some difficulty

in handling fertilizers during the war period, in view of the fact that the war itself, through the manufacturing of munitions, interferes with certain of the ingredients contained in fertilizers. Some control has been taken over fertilizers by the war supply board, but it is not a matter of controlling prices.


Heber Harold Hatfield: Why was the price of
sulphate of ammonia, which forms a large part of fertilizers used in Canada, allowed to increase to the extent of $10 a ton, and why is it held by a monopoly in Canada?


James Garfield Gardiner: The department has
received representations to the effect that the price of sulphate of ammonia has advanced substantially since the commencement of the war, and has referred the matter to the wartime prices and trade board for investigation as to whether or not present prices are justified. Those facts will no doubt be brought out by the investigation. Advance information indicates that, as claimed, the wholesale price of this product, bagged, has increased about $8 a ton. It is now selling at $36, as against $28 at the commencement of the war. The hon. member has said that there has been an increase of $10. The figure I have given may have been secured at a date different from the one he has used.
The reasons given for the advance in price is that manufacturing costs have increased, and the export demand is strong, at prices much higher than present domestic prices. That is the information I have. It has been submitted to the war-time prices and trade board, and we have not yet had their report.


Heber Harold Hatfield: How many manufacturers of sulphate of ammonia are there in Canada? I understand that there are several manufacturers, because it is a by-product from coke ovens. I believe it can be bought only from one firm in Canada; why is that condition allowed?


James Garfield Gardiner: I am not in a position to answer the first question. I understand that a number of firms sell sulphate of ammonia, but I have not the information as to the exact number; neither am I informed as to whether it is all sold through one company. I would have to take the hon. member's word for that.


Ernest Edward Perley: I notice there is an item of $18,900 granted to the Canadian Seed Growers' association. Is that an annual grant, or is there any variation in the grant from year to year. There is an increase of $3,155 in the item. Would the minister explain the

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increase? What was the cost of the advertisement that appeared in the western papers urging farmers to grow less wheat to win the war, and out of what fund was it paid?


James Garfield Gardiner: I have not checked it, but I presume it will be paid out of the amount voted by parliament.


Ernest Edward Perley: What is the amount?


James Garfield Gardiner: I cannot say offhand. It would be for printing and the cost of sending out the advertisement. The information was sent to every person, and there are between 200,000 and 300,000 on the mailing list.


William Gilbert Weir: This vote has to do with the administration of the Seeds Act, the Feeding Stuffs Act, the Fertilizers Act and the other matters mentioned, but it has no reference at all to the securing of seeds of any kind to seed acreage as suggested to the minister- oats, barley or anything else.
There is one other matter the minister might discuss-the interest taken in the production of fibre flax. I understand that the department has assumed control of the production of that product, and the committee would be interested to know to what degree it has been successful and what the efforts are in connection with it.


James Garfield Gardiner: When the war started, there was considerable agitation to have the production of fibre flax increased, the reason being largely the experience which growers had during the last war. That experience indicated that if the control over seed for the growing of fibre flax was left free, the price would probably rise very high. It might get under the control of one or two individuals and be greatly increased. At the beginning of the war, the agricultural supplies board took control of all fibre flax seed in Canada and distributed that seed at a set price to Ireland and parts of England, retaining in Canada what they thought was sufficient to take care of the requirements of the farmers who would be growing fibre flax here. That seed has been distributed year by year to the different farmers at a set price. For No. 1 certified, it is $6 a bushel; No. 2 certified, $5.25; No. 1 uncertified, $4.25; No. 2 uncertified, $4. The order in council gives the information with regard to the matter, so far as the year 1940 is concerned.	The number of production
centres in Canada totals thirty-five, sixteen being located in Quebec, and nineteen in Ontario. In 1940 the acreage was 22,400, and it is expected that in 1941 it will be over 37,285 acres.	The estimated acreage by
provinces is: In Quebec 25,100; in Ontario, 9,985; in Manitoba, 2,000; in Alberta, 100;
14873-219J
in British Columbia, 100. The total seed requirements for 1941, based on a bushel and a half an acre, amount to 57,000, for which sufficient seed is available, and the exports from the 1940 crop were 22,400 bushels, none of which was certified. Seed distribution was confined this year mainly to those who had facilities for processing the crop, and who applied first for seed. Seed of doubtful breeding was not purchased by the department because this would have meant ruin to the industry in its exports to Ireland. The varieties of fibre flax mainly grown in Canada are Cyrus, Liral, Dominion, Liral Crown, Liral Monarch, Gossamer and J. W. S.


William Gilbert Weir: Does the government control production and designate where the fibre flax should be grown?


James Garfield Gardiner: The department approves the area. It does not exactly pick out areas; but when individuals decide to go into the growing of fibre flax, the department investigates; if the soil and conditions generally are suitable, the areas are approved and the growers go ahead.


William Gilbert Weir: Has the department control of all seed?


James Garfield Gardiner: Yes.


Robert McCubbin: There is an item of
$18,900 for the Canadian Seed Growers' association. What are the names of the members of the board?


James Garfield Gardiner: The amount voted is the same from year to year, neither increased nor decreased. The association is spread across the country, but it would be difficult to give the names of all those engaged in the various organizations. Mr. Wiener is secretary at Ottawa of the Canadian Seed Growers' association.


Robert McCubbin: Is there a board of
directors?


James Garfield Gardiner: There is a board of
about twelve men, but I have not the names.


Ernest Edward Perley: With regard to the increase of $3,155, the detail of which appears on page 67 of the estimates, this is apparently a new item under subsidies. Will the minister explain the subsidy item?


James Garfield Gardiner: This amount is for
assistance to junior grain clubs and is based on last year's records, which indicate that there were the following clubs:
	Clubs	Members
Nova Scotia	
20	252Ontario	
108	1.863Manitoba	
139	1,471Saskatchewan	
264	3,600Alberta	
107	1.754British Columbia,	
19	244
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The reductions in the vote for 1940-41 eliminated the allotment of assistance to provinces conducting educational and field husbandry activities, and so forth. The allotments voted prior to this year were used as prizes for seed fairs and for similar purposes. Crop competitions, et cetera, and junior grain clubs benefited therefrom.


Mr. CARDIFF:: I understand that sulphate of ammonia is a by-product of steel and coke. Is that correct?


James Garfield Gardiner: I understand so.


Lewis Elston Cardiff: If that be so, one would think that since we are making and using twice as much steel since the war, this product should not have gone up in price to the extent of anywhere from $10 to $12 when there is twice the amount available.


James Garfield Gardiner: I do not know whether the hon. member was in his seat when we were dealing with this a few minutes ago. However, there is a piece of information here which I did1 not have before me then. Owing to munition requirements most of the ammonia produced in Canada for the manufacture of sulphate of ammonia is being diverted to the manufacture of explosives. Therefore it is possible that sulphate of ammonia may become scarce in the near future, and a reduction in its use for fertilizer may become necessary. I added that this whole question had been submitted to the war-time prices and trade board, but we have not yet had a report regarding it.


Heber Harold Hatfield: I have not had an answer as to why the fertilizer manufacturers cannot buy sulphate of ammonia from the producers.


James Garfield Gardiner: I shall have to give to my hon. friend the same answer as before; I do not really know. Probably, however, I can find out. The hon. member states that it can be purchased only from one concern, that there is a monopoly. I imagine that will be inquired into by the war-time prices and trade board.


Heber Harold Hatfield: Are they investigating?


James Garfield Gardiner: I should think they will be, with regard to price.


[Stage Direction]
Item agreed to.
SO. Production service. Grants to fairs and exhibitions, in the amounts detailed in the estimates, $65,000.
Mr. SOPER:: I think we are cutting down too much our grants to fairs and exhibitions. I realize that there is a war on, but fairs and exhibitions are the show-windows of the pure-bred live stock producer. They are just the same as the show-windows to the large

department stores. This was never more impressed upon me than last fall when I started out to do a little purchasing and visited some pure-bred herds in eastern Ontario. In practically every place they gave as the reason for their stock not looking better that there was no show or fair at which to show their stock, and consequently their sales were down a great deal. It would be a big mistake in connection with our live stock industry to cut down on fairs and shows.


George Alexander Cruickshank: I think the minister has been very fair so far as exhibitions are concerned, but I should like to corroborate what the hon. member for Lanark has said. On the Pacific coast we have developed a wonderful market for pure-bred high-grade stock, both cattle and horses, as far south as San Francisco. The minister has been very fair in the past, and irrespective of the war I think he and the department should take into consideration the future of live stock which is going to be in great demand in Canada. More consideration should be given particularly to class B fairs.


[Stage Direction]
Item agreed to.
SI. Production service. Grants to agricultural organizations, in the amounts detailed in the estimates, $35,500.
Ernest Edward Perley: Looking at the details on page 68 of the estimates, grants to agricultural organizations, I notice that $5,000 is granted to the Canadian council on boys' and girls' club work. How is that fund handled and distributed to the different clubs? Also, if I understand this aright, it is the junior calf clubs and so forth, and I am very much in favour of it, and would be in favour of increasing this grant, because a splendid work is being done. In my own province and district a number of these clubs are doing very good work, and the experimental farm at Indian Head provides for the meetings of this club and puts on short courses. Would the minister explain how this money is handled and distributed?


James Garfield Gardiner: This $5,000 is the grant that is given to the central organization, of which Mr. McLaurin is secretary. The province contributes as well. Our proportion 'is $5,000; it is for the central administrative costs. The .grants which go to groups that gather at exhibitions are contained in the $65,000 item just passed. That is one of the grants to fairs that we did not cut out; we believe that is an important part of the work and should continue right on through the war period.


[Stage Direction]
Item agreed to.

Supply-Agriculture
22. Marketing service. Marketing service administration, $95,252.
Heber Harold Hatfield: Under what board does the pegged minimum price on butter come?


James Garfield Gardiner: Under the dairy products board.


Heber Harold Hatfield: Why is there a provincial board for New Brunswick as well as the dominion board? They are both putting out regulations and prices.


James Garfield Gardiner: There is a provincial board in New Brunswick, and I understand there is talk of trying to organize a board representative of the three maritime provinces, the idea being, as represented to me, that there is a peculiar situation in the maritime provinces in relation to different farm products, dairy produce being one. The situation is, I understand, that at certain times the price prevailing in the maritime provinces is the Montreal price plus the freight, and at other times under different conditions it becomes the Montreal price less the freight. Double the freight for that distance amounts to quite a margin. An effort is being made at the present time I believe, largely on account of the fact that dairy products are being marketed by the board in Great Britain; that is, we are simply making agreements with Great Britain and taking practically all the cheese for the time being out of Ontario and Quebec and sending it to Britain. Therefore there is a tendency for that to have some effect in t'he maritimes because they are not producing as much cheese as they consume; their cheese is not entering in any great volume into the export, and there is a situation that they wish to clear up for themselves. If they desire to set up a board, no doubt our board will try to cooperate with theirs in seeking to bring about proper conditions.


Heber Harold Hatfield: Does the minimum price cover dairy products sold by a farmer?


James Garfield Gardiner: The minimum price is set for creamery butter graded to certain grades, but the fact that there is a minimum price for creamery butter will have an effect on the price of dairy butter.


Heber Harold Hatfield: Does a person building a cheese or butter factory have to have a permit from the department?


James Garfield Gardiner: I do not think a
creamery operator has to have a permit. There are regulations with regard to marketing, but I do not think it is necessary to get a permit to start.


Heber Harold Hatfield: The reason why I asked the question is this. A creamery company started to build a creamery near Fredericton a year ago. They were refused a permit by the department of agriculture of New Brunswick. They were buying cream and milk in that county and shipping it all the way to Yarmouth, Nova Scotia, to manufacture, and they were refused a permit to build a creamery in the town of Devon just across the river from Fredericton. Can a provincial department of agriculture refuse a permit to anyone to build a butter factory or a factory of any kind?


James Garfield Gardiner: It would depend upon the provincial legislation. I am not sufficiently familiar with the laws of New Brunswick to say whether there is power to do that. While they have not had legislation in Saskatchewan, there was some indirect control over creameries due to the fact that they have the cooperatives which pretty well cover the province. For some time they did try to prevent the building of two creameries in one district, and they may have some similar regulations in New Brunswick. I am not familiar with that.


Alexander Malcolm Nicholson: I have in my hand a copy of The People's Weekly, published in Edmonton, dated May 10, 1941, which contains a photograph of a number of apples headed "Government dumps unsold apples." Below this photograph I find this article:
Growers not permitted to give them away in B.C.
On April 16th last 5,000 boxes of tasty Delicious apples were taken from cold storage at Oliver, B.C., and dumped on the authority of the dominion government, which pays eighty per cent of the average price for the quantities which the grower cannot sell.
I checked up in the parliamentary library and found that one of the weekly newspapers published in the fruit district made reference to a similar article which appeared in the Vancouver press. It has not been categorically denied that this was done. Has the minister anything to say as to whether this is an accurate photograph of apples which were dumped and, if so, would he explain the policy under which that was done?


James Garfield Gardiner: I have not the article before me, and I do not know exactly to what it refers. I know that for the last two seasons we have had agreements, and that we are entering into another agreement this year, under which the government of Canada assists the apple growers on account of the fact that since the beginning of the war they have not been able to market their apples in Britain. In the first year of the war Britain
Supply-Agriculture

did take some of our apples, but none have been exported since that time. The first year we canned some of the surplus; we dehydrated some, principally in Nova Scotia, and we entered into an arrangement with the apple growers of British Columbia whereby we agreed to pay them a certain price per box for any apples they had left the following March; and it was under that arrangement that some of the apples-I am not sure that the number stated is correct-had to be taken over by the federal government at the end of March of this year. I presume that is what is referred to in that article.


Alexander Malcolm Nicholson: Would the minister complete the picture? This article goes on to say:
Sponsored by the Vancouver board of trade,
72.000	apples were given away to school children last January. The gesture might well have been repeated.
The article also states:
A resident of Oliver, in sending along the above picture of some of the dumped apples, states, "They are lovely apples, many of them wrapped, but they are not even allowed to give them away. The growers have not had 'apple money' for a long time."
Would the minister state whether or not those apples were thrown away?


James Garfield Gardiner: I understand that some apples were dumped out, but I can assure the hon. member that while a few of the apples in the boxes might have been good, they were not dumped out generally if they were fit for use. Some of the apples in the boxes might have been fit for consumption, but generally speaking any that were thrown out could not be used. As a matter of fact, the year before, we shipped a great many boxes of apples to the prairies, out of the quantity we had to take delivery of, and gave them away; and I am quite sure that if these apples had been good, they would have been given to somebody.


Alexander Malcolm Nicholson: The article states that
5.000	boxes were dumped, and the photograph would indicate that a great many of those apples were in good condition. Many of the people on the prairies have not been able to buy apples for a long time, and apples have not been issued to people on relief.


James Garfield Gardiner: That is what I am trying to say; I do not believe the article is exactly correct. They must have been poor apples, or they would have been shipped to somebody.


Alexander Malcolm Nicholson: Could the minister
say what quantity has been dumped? Apparently it was quite a large quantity.


James Garfield Gardiner: The contract is not
completed yet, and we have not the final figures. Therefore I would not care even to try to guess at how many were unfit for use and were dumped.


Alexander Malcolm Nicholson: As I understand it,
the minister does not question the accuracy of this article-


James Garfield Gardiner: I neither question it
nor agree with it.	I did not write the
article, and consequently I do not know whether it is right or wrong.


Alexander Malcolm Nicholson: In this connection I
have a letter from one of my constituents which offers a suggestion in connection with getting rid of the wheat surplus:
I happen to be the local attendance officer for this school district. By the teacher's report there were three children kept home during the month because their parents had no flour to bake bread for their lunches.
What applies to flour certainly would apply to fruit. I have before me a copy of "Farmers in a Changing World," the year book for 1940 of the United States department of agriculture. Has the minister given consideration to anything similar to the stamp plan in the United States which, under the direction of Milo Perkins, has been used to dispose of a number of surplus commodities? This article states:
Millions of low income people would eat more of these surpluses if they had the chance. The stamp plan is designed to give some of them that chance. It kills four birds with one stone. (1) The farmer sells the so-called surplus through (2) the grocer, who thereby increases his business, to (3) low income families, whose health is bettered by eating these foods; and finally (4) the nation gains all around through partially solving an acute economic problem and lifting the standards of health at the point where they are usually lowest.
Has the minister given consideration to a plan of that kind in order to dispose of a considerable quantity of our surplus wheat and fruit, in view of the fact that we are not likely to be able to sell large quantities of Canadian fruit in the European markets for the next few years?


Heber Harold Hatfield: And potatoes.


Alexander Malcolm Nicholson: Yes, and potatoes,
because last winter there were parts of Canada without adequate supplies of potatoes.


James Garfield Gardiner: We have gone very
much further than giving consideration to it. I hope my hon. friend knows that this government combined with the provincial governments to do that very thing some time ago. A great deal of the fruit given away was gathered up in the eastern part of Canada

Questions
and British Columbia and shipped to the prairies for distribution. We did that not only with fruit but also with fish, cheese and many other products. Then I think it was only two years ago that we bought up the extra butter in the months of June and July and gave it to people in cities right across Canada. As a matter of fact, the plan which has been followed in the United States has been adapted to the needs of this country. We have not the large centres of population they have in the United States, and therefore could not follow exactly the plan they have followed; but as a government we have bought, up food and given it to people who otherwise could not have obtained it. We have bought fruits and vegetables of different kinds and shipped them into some of the very areas from which letters such as the one read by my hon. friend might have come.


Heber Harold Hatfield: But not under the stamp plan.


James Garfield Gardiner: Under a similar plan. All the stamp plan means is that these people go on to the market when they think the price is too low and buy up the surplus, which is delivered by means of stamps to unemployed people in the cities. We did not use stamps, but we gave them certificates which they could take and get butter with. It was much the same principle.
Item stands.
Progress reported.
It being four minutes after eleven o'clock, the house adjourned, without question put, pursuant to standing order.
Wednesday, June 4, 1941.