1941-03-21

Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, hon. members will have learned with profound regret and also, I am sure, with a sense of shock, of the very sudden passing last night of one of our number, Mr. Frederick C. Casselman, the member for Edmonton East.
WThen the house assembled yesterday the hon. member was in his accustomed place in this chamber, and when the house reassembled
The Late F. F. Casselman

in the evening he was again here and, I believe, remained until after the resolution respecting the war appropriation bill had been passed and the bill itself had been introduced and received its first reading. He then left the Commons to go to his place of residence in Ottawa. As he was about to enter the door of the house he was overcome by a heart seizure and passed away immediately.
The very sudden passing of one who was only in his fifty-sixth year, one who in so many ways appeared strong and well, is evidence to us all of the great strain under which men who hold positions of responsibility labour in the discharge of their duties to-day. I doubt if any of us begin to realize how great is the burden upon the heart, as well as the mental and nervous strain borne by members of parliament who seek to discharge their duties as representatives of the people in these terrible times. So momentous have been the events of the past year that it is difficult to realize that it is less than a year since hon. members in this chamber were returned to the House of Commons by the people of Canada. Mr. Casselman, a supporter of the present administration, was one of the number who were elected to parliament for the first time in the general elections of March 26 of last year. He had therefore been a member of parliament for less than a year. He was of Canadian parentage, though born in the state of Montana. Only the first five years of his life were spent in the United States. He was educated in the province of Ontario, at Queen's University, at the university of Toronto, and later supplemented his education at the university of Alberta. He held degrees in both arts and law, and in the course of service overseas was awarded the Military Cross. He had been wounded in action.
In his chosen profession of law in the city of Edmonton Mr. Casselman gained a position of real prominence in the city. He was not content to devote his time merely to his profession. He gave evidence at an early age of his desire also to serve the public in disinterested ways. He began, as many men in public life have begun, by serving on the school board, a position he held for many years. Later, in 1937, he was elected as an alderman in the city council of Edmonton This position he continued to hold up to the time of his death. The place Mr. Casselman had won for himself in the community, his character, his abilities, his attainments, all helped to gain for him the confidence of the citizens of Edmonton, who honoured him with the representation of one of the city's constituencies in this House of Commons.

As I have already indicated, Mr. Cassel-man's services were genuinely patriotic as well as public-spirited. When he went overseas in the last war as a member of the Canadian expeditionary force, he had enlisted as a private and served for two years with Canada's forces. Later he joined a regiment of one of the imperial forces and received a commission as a lieutenant.
Reviewing the career of one who was but fifty-six years of age, a career embracing public service to his municipality, to his province and to his country, both in its parliament and on its fields of battle, one feels that the nation is indeed poorer to-day through the loss of so public-spirited and patriotic a citizen. Had Mr. Casselman been spared, there is no doubt he would have played an increasingly prominent part in the public life of Canada. As it is, he has left a record of honourable services to his city, his province and his country with which his name will be long and gratefully associated.
The hon. member has left to mourn his loss, a widow and a daughter. It will be the desire of all members of this house that you, Mr. Speaker, should convey to Mrs. Casselman and her daughter an expression of the very deep sympathy which we have for them in their great bereavement.


Hon. R. B. HANSON (Leader of the Opposition):: May I be permitted, on behalf of myself and my colleagues, to join in the sentiments of respect and sympathy which the Prime Minister has just so eloquently expressed. I had not the honour of Mr. Casselman's acquaintance but I had observed his work in the house. I understand he was a man who did his own thinking and who was capable of expressing his own view. He came, if I gather aright, from a stock that has been the very foundation stock of this country, the United Empire Loyalists. He served his country as a schoolmaster, as a professional man, as a gallant soldier and as a legislator. He must have had a full life. He himself probably would have said that he had no regrets so far as his public activities were concerned. It will be said of him that he was a scholar and a gentleman. I am sure that on this occasion the sympathy of all of us goes out to his loved ones.
I appreciate what the Prime Minister has said with respect to the strain to which public men and those in positions of great responsibility are exposed in these terrible times. I am going through that experience myself. Therefore I think we should1 all have a measure of charity in respect of each other's failings, remembering the strain and pressure that is upon every one of us.

St. Lawrence Waterway


Hon. J. A. MacKINNON (Minister of Trade and Commerce):: Mr. Speaker, I wish in a few words to add my tribute to what has already been said by the Prime Minister and the leader of the opposition regarding my late colleague from the city of Edmonton.
I knew Mr. Casselman for many years in Edmonton and had been intimately associated with him. I know of the high esteem in which he was held. To a very great degree he has enjoyed the trust and confidence of the people of Edmonton, and lately in particular of the constituency of Edmonton East.
Mr. Casselman took a self-effacing but very prominent part in the public life of the city, serving with great distinction for many years as a member of the Edmonton school board, and latterly as a member of the city council. He did good by stealth, and his untimely passing is a very great loss to Edmonton, to Alberta and this parliament.


Mr. M. J. COLDWELL (Rosetown-Biggar):: On behalf of my colleagues and myself I would join with the Prime Minister, the leader of the opposition and the Minister of Trade and Commerce in expressing regret and sorrow at the passing of another member of this house. I have often thought in the last six years, since I have been here, that the strain of public life has told in this chamber probably more than almost anywhere else. These sad occasions have brought home to me the truth of the words of the prayer book of the church in which I was brought up, the Church of England, "In the midst of life we are in death."
I would therefore on behalf of my colleagues and myself join in the expressions of sympathy and regret that have already been voiced. I little thought yesterday as I walked into this chamber with Mr. Casselman that we would be speaking of him to-day as a departed colleague.
We extend to the widow and the bereaved daughter our very sincere sympathy in the loss which they have sustained.


Mr. J. H. BLACKMORE (Lethbridge):: On behalf of the members of my group I wish to associate myself with the kind words, so thoroughly deserved, which have already been spoken regarding Mr. Casselman. The member for Edmonton East was one whom this house at this time could ill afford to lose. He was a man of understanding, vision and courage. Our sympathies go out earnestly to his bereaved family. In their sorrow they can take some comfort from the fact that he died in harness, doing, and ready and eager to do, his part.


Mr. DANIEL McIVOR (Fort William):: As a humble private member may I be allowed to pay my tribute to one whom I came to know intimately. As I saw the flowers here yesterday to cheer the living, and as I see now the flowers on the departed member's desk to commemorate one living on the other side, I am reminded of the last conversation I had with him, when I said: "What difference does it make what may be our creed or our party?" And he interrupted and said, "If you shoot straight and follow the Master Workman, that is what matters."
Our colleague has gone to God's other world and now he may see better than ever what is going on in this house.



ST. LAWRENCE WATERWAY AGREEMENT RESPECTING DEVELOPMENT OF POWER AND PROVISION OF DEEP WATERWAY FROM HEAD OF THE LAKES TO MONTREAL   DOCUMENTS TABLED

William Lyon Mackenzie King: I rise to table the correspondence and documents relating to the Great Lakes-St. Lawrence basin development, 193841, which I promised the house on Wednesday last would be tabled to-day.
I am tabling the documents in the form of a white paper which comprises the following:
Part I. Agreements with the United States and with Ontario concerning the Great Lakes-St. Lawrence basin development;
Part II. Correspondence between the governments of Canada and the United States, concerning the Great Lakes-St. Lawrence basin development;
Part III. Correspondence between the government of Canada and the government of Ontario concerning the Great Lakes-St. Lawrence basin development;
Part IV. Correspondence between the government of Canada and the government of Quebec concerning the Great Lakes-St. Lawrence basin development, and
Part V. General plan.
A publication regarding correspondence and documents relating to the St. Lawrence Deep Waterway treaty, 1932, and Ogoki river and Kenogami (Long Lake) projects, and export of electrical power, was tabled in the House of Commons on February 28, 1938. A supplementary publication was tabled on March 21, 1938. The white paper now tabled includes the [DOT] correspondence and documents relating to the Great Lakes-St. Lawrence basin development subsequent to those publications and up to the date of the Canada-United States agreement of March 19, 1941. With what is contained in this white paper and the two previous similar papers that have been tabled

St. Lawrence Waterway

the house will I believe have before it the essential documents and correspondence relating to the Great Lakes-St. Lawrence waterway agreement.
I have in my hand a summary of the outstanding features of the agreement, something in the nature of a historical sketch of the events leading up to the agreement, essential features of the agreement and the like. This has been prepared by officials of the Department of External Affairs and was given out to-day as a release to the press. It might be of some service to hon. members in subsequent discussions in the house if, for purposes of reference, this statement were printed in the Votes and Proceedings of to-day. I shall table it for that purpose.
My hon. friend the leader of the opposition (Mr. Hanson) asked me to place on the table the legal opinion of the law officers of the crown with respect to the position of the agreement as an agreement in contrast with its presentation in the form of a treaty, more particularly with relation to the binding nature of the agreement upon both countries. I now table the correspondence setting forth an opinion from the legal adviser of the Department of External Affairs and from the Deputy Minister of Justice, also an opinion of the legal adviser of the state department, and of the Attorney General of the United States. They relate respectively to the validity of an agreement passed upon the legislative authority of parliament and of congress.
I propose that this correspondence be also printed in Votes and Proceedings so that it may be available to hon. members for future reference.


Richard Burpee Hanson: Before we leave this item of business I wish to thank the Prime Minister (Mr. Mackenzie King) for having sent me, just after noon, copies of these documents, except the legal opinions which he has now tabled. In the cursory glance that I was able to give them I did not see any figures showing the ultimate cost to Canada of this project. Have any such estimates been made, and if so where can they be found?


William Lyon Mackenzie King: The engineering report which I tabled the other day has some data; other data will be found in the white paper tabled to-day, and in part V of the summary.


Richard Burpee Hanson: There are data, but there is no indication what Canada's share is.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Richard Burpee Hanson: I should like to ask the Prime Minister whether the government have given consideration to the question of the Easter adjournment. Easter Sunday is April 13, and Good Friday is the 11th. Hon. members of this house who live at a distance are particularly interested in any announcement the government may make. Personally it does not matter very much to me whether we have a long adjournment or a short one, but certainly it would be a great convenience if we could have a few days at Easter to look after pressing personal affairs. Therefore if the Prime Minister is in a position to make any announcement I should be grateful if he would do so.


William Lyon Mackenzie King: My colleagues and I have carefully considered what would be most advisable in the way of an adjournment at the Easter season. The choice seems to lie, as my hon. friend has just said, between a very brief adjournment possibly from the Thursday until the following Tuesday, or an adjournment sufficiently long to enable hon. members in all parts of the house to return to their constituencies if they desire to do so; and particularly, I may add, sufficiently long to enable members of the government, who have been pretty constantly in attendance in the house during the discussion of the war appropriation measure, to give much needed attention to many important matters in their respective departments, and to give us all an opportunity to catch up on arrears. In addition, I hope to secure opportunity for something in the way of much needed rest and recreation in that period of time.
In these circumstances, I have thought that if it were acceptable to the house I would suggest an adjournment from April 9, that being a half day, until Monday, April 28. As hon. members will see, that period includes three Saturdays and Sundays. Actually the adjournment will be for little more than a fortnight. Having regard to many matters to which the government must give attention I think it is important that the adjournment should be for that length of time.

War Appropriation-Mr. Hanson (York-Sunbury)



WAR APPROPRIATION BILL


[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved the second reading of Bill No. 19, for granting to his majesty aid for national defence and security.
Richard Burpee Hanson: Mr. Speaker, I have no intention of delaying the house in connection with this measure. We had a considerable amount of discussion in the resolution stage, and certainly I would be the last to want to inflict a speech on the house in connection with the second reading of the bill. Nevertheless I do not think it should go through without something being said.
The resolution called for the appropriation of a very large sum of money; and the bill, which I have perused hurriedly, follows closely the provisions of the resolution. When we reach the committee stage of the bill there are one or two features which I shall bring to the attention of the minister. One point to which I desire to refer at the moment is that under section 4 of the bill there is no division whatever between the amount that may be raised by taxation, and that which may be raised by borrowing. The whole amount of 81,300,000,000 may be borrowed. This is a vote of credit for the full sum of 81.300.000,000, all of which may be borrowed by the minister.
As has been said so often in this house, of course that is a very large sum of money, and it seems to me that before second reading is given, the minister might indicate with some degree of certainty that the government are not going to borrow the whole sum. It would, I think, be contrary to government policy to borrow the whole amount, and I believe the people of Canada would not wish that to be done. Per contra, I think the government should announce that all this huge amount is not to be raised by taxation. To raise it all by that method would be too severe, and in large measure would dry up those sources of revenue which are and will continue to be so essential. I invite the minister again, as I did on a previous occasion, to indicate, if he will, just what portion is to be raised by taxation and what portion is to be raised by way of loan.
In connection with this part of my remarks, I would reaffirm the faith I have expressed in this chamber on many occasions during the past eight or ten months, that the people of Canada will produce the money for this government's war effort, no matter what their opinion of the war effort may be. I want to go farther than that and pledge to the service of the state not only myself and my own personal effort, but the membership of my party in this house and in the country to the end that this money will be raised, especially such portion of it as has to be raised by way of loan. I think it would be the most unpatriotic course I could pursue if I were to refuse in any degree to participate in the forthcoming appeal which will be made to the Canadian people. Therefore I have indicated to the gentleman who has been appointed to take charge of this loan that I shall be glad to place myself, with such limited powers as I may possess, at his disposal, and at the disposal of those who are preparing to make the appeal to the Canadian people, and who are preparing to make the loan a success. I desire now to reaffirm that pledge, and to associate with it all my friends in this house. Through the medium of the press I ask at this time the loyal people of the Conservative party to stand behind this government, so far as its loan is concerned. I am sure they will do so.
It is a large sum of money. If all the money were to be spent in Canada, from the purely economic standpoint I do not think there would be any great difficulty in getting it. But a substantial portion of the amount required will have to be spent in the United States and the purchases paid for in the currency of that country. To that extent provision of the money will at least be fraught with some difficulty. If the money is raised from our own people, then theoretically this would be a matter more or less of bookkeeping. I do not claim to be a great economist, but it would seem to me that this would be a self-contained matter, and would not present any great difficulty, except as regards the quantum of the amount to be raised. If, however, as I apprehend will be the situation, a substantial amount of the money must be exported from the country to purchase war supplies and other materials in the United States, in terms of their currency, then I would visualize considerable difficulty in connection with war financing in this year.
Especially will I expect that difficulty if the amounts reach the astronomical figures which have been indicated. It must be remembered that not only this sum of $1,300,000,000, but a further substantial sum estimated by the Minister of Finance (Mr. Ilsley) at $160,000,000, together with a supplementary appropriation for the now expiring current year will have to be raised. The circumstances I have indicated will, I believe, present substantial difficulties to the Department of Finance and to those who are charged with the responsibility of making those payments.
1758	COMMONS
War Appropriation-Mr. Hanson (York-Sunbury)
I was interested a few days ago to read the report of a statement purported to have been made by the Secretary of the Treasury in the United States, Mr. Morgenthau. It was intimated that Mr. Morgenthau had been assured by the deputy minister of finance that Canada was prepared to finance her requirements in the United States for the year. I assume the calendar year of 1941 was meant. He said, however, that after that there would be more difficulties. That remark may not be properly attributable to the deputy minister of finance; but if it is, and he did say that, then I am more or less in agreement with him. With the growing commitments for war supplies, commitments properly incurred, I believe there will be increasing difficulties in taking care of that position. It is my belief that we shall be confronted with two courses, both of which will have to be adopted. The first is that there will have to be further restrictions on the importation of non-essentials from the United States, and, second, that we may have to resort to borrowing in that country.
That is all I have to say with respect to the general principles involved in the bill. Before I resume my seat, however, I desire to make one further appeal to the Minister of Munitions and Supply (Mr. Howe) in connection with Federal Aircraft. I do not make the appeal in any carping spirit. While the resolution was being debated in committee, there may have been engendered some expressions of opinion which might better have been left unsaid. On the whole, however, I believe the debate was more or less on an elevated level, and the minister himself came to the conclusion that no one was aiming any shafts at him, personally. No one was attempting to intimate that he had fallen down in the tremendous work he has undertaken upon himself. There was a feeling, however, that there had been a failure to adopt a definite policy such as the minister himself had indicated in his press releases of early last summer.
I have no intention whatever of rehashing the whole story of Federal Aircraft. I would ask permission, however, to call the attention of the minister and the house to a statement made by him through the director of public information on July 2 of last year. At that time the minister is reported to have said:
The Canadian aircraft industry has responded so splendidly to the emergency created by Great Britain's inability to ship components under the terms of the joint air training scheme, that the larger part of the original programme, which covered two years, has been compressed into a one-year plan. Elementary trainers are already being manufactured on a mass production basis

and the construction of advanced training planes is proceeding in accord with the needs of the accelerated schedule.
Then he goes on to say:
The ability and willingness of the operators and workmen of the Canadian aircraft industry to meet the unprecedented demand, have been so pronounced that the government will be able to complete both the Canadian programme and the whole joint air training programme on the basis of the dominion's own resources and without assistance from overseas.
I confess at once that when I read that statement I thought it was a cheerful one, and one which would bring comfort to the Canadian people, who had heard appeals for planes and more planes-and that sort of thing-from overseas. I was content to accept the matter at its face value.
At the same time the minister announced the appointment of Mr. R. P. Bell to the executive committee of the department with -and note this-the responsibility for coordinating the entire aircraft production throughout the dominion and accelerating, even beyond its present speed, the output of the aviation industry. Then the minister proceeded as follows to summarize aircraft production:
Work is well advanced on all the orders for planes required under the joint air training plan. Arrangements have been completed for the purchase of some 5,000 engines.
Originally most of these engines were to have come from Great Britain. Orders have also been placed for instruments and other necessary equipment of the aircraft production programme.
Under the air training plan, pilots receive their first air experience in elementary flying training schools. There they fly Fleet trainers and de Havilland Tiger Moths. According to the plan, some 800 of these elementary machines are needed. One Canadian plant is producing more than two of these planes a day. Nearly 200 of this type of plane have already been delivered from Canadian plants. By the end of the year Canada will have produced all the elementary training planes required.
I think that schedule has been lived up to pretty well; at least that is my understanding of the situation. The minister went on to say:
To fulfil her part of the training plan, Great Britain was to have provided 400 Gypsy engines for the Tiger Moths. To replace these, 400 Menasco engines have now been purchased. The engines required for the Fleet trainers also have been bought.
As the pilots graduate from their elementary training, they are taught how to handle the bigger and faster craft. These include Har-vards, Fleet 60's and Ansons.
He then went on to indicate the orders which had been placed in Canada and the United States for Harvard training planes. He then said:
The production in Canada of Ansons, Har-vards, and Fleet 60's has been so scheduled that they will be available as pilots graduate

War Appropriation-Mr. Howe
from their preliminary training in the elementary planes. Deliveries of Harvards will begin within a month.
As I understand, the Fleet 60's are intermediate planes. The minister then proceeded to state that the Anson programme, involving the construction of 1,509 twin-engined craft, was proceeding vigorously in the nine Canadian plants that are manufacturing the various component parts, and that in order to coordinate the output of all Anson parts and to expedite the production of the complete Anson machine-one of the most important units in the air training plan-steps had been taken to segregate this work from the remainder of the aircraft programme and to place it under one management and direction.
He then announced that a company had been formed for that purpose, Federal Aircraft Limited, with headquarters in Montreal. Mr. Ralph P. Bell would be its president. He would be assisted by a board of directors, consisting of Mr. Sidney Dawes, Mr. Blair Gordon, Mr. Russell Smith and Mr. Allen Aiken. The general manager would be Mr. R. J. Moffett, formerly chief aeronautical engineer of Canadian Vickers; and Mr. Frank L. Jeckel, a member of a firm of chartered accountants, had been appointed treasurer.
The company was then set up, and I understand a contract was entered into directly between the department and this company for the production of these planes. The company was to have the planes assembled, and to arrange to have the parts manufactured and the engines imported from the United States, as has been indicated here. As I understand it, Federal Aircraft Limited was set up at the suggestion of those who were directing aircraft production in the department; it may be attributed to Mr. Bell and perhaps to Mr. Sanderson. They suggested the setting up of this company to do the engineering and reengineering and to procure certain essential parts. This was necessary because of the involved state of the Anson programme at that time.
My understanding is that the original statement to the minister, and of course from the minister to the government, was that the company should be independent of ordinary government facilities in connection with the treasury and that sort of thing; that that suggestion was approved by the government, either formally or informally. But I understand within a short time the whole set-up was changed and Federal Aircraft Limited became merely an agent for the Department of Munitions and Supply, all its actions being subject to the approval of the minister. I should like to know if this is correct; if there was a change and the basis of the change.
I assume that the change was made on the theory that there was no responsibility for the expenditure of public funds. With that principle I do not think any one who has had any experience in public life will have any great quarrel. I should, however, like to point out that while such a principle may be absolutely essential in peace time for the protection of the public treasury, it is too inflexible for war time. This is the sort of thing which had to be overcome in Great Britain and which was overcome by the appointment of Lord Beaverbrook as minister of aircraft production and his inclusion in the ministry.
I have received substantial information with respect to the history of the company from that time onward, but I shall not repeat it here for two reasons. First, I do not think I should take up the time of the house in doing so and, second, I have not had an opportunity of verifying the information which has been given to me. I realize that the difficulties which have arisen have been multitudinous and sometimes almost insurmountable, on account of the combination of circumstances. If, however, those charged with responsibility had had a little more foresight, had had a better understanding of conditions as they were, and had taken a long range view, some of those difficulties might have been obviated. I think we will all agree that so far as the Anson programme is concerned, the delays have been too numerous, the programme has been retarded, and the set-up to-day is not as satisfactory as it might be. That is putting the case quite mildly.
In closing my remarks, I appeal to the minister to review the whole position with respect to the Anson programme and consult with those who do know the industry. I do not suggest that he should put one of his subcontractors in charge of the programme, as he has intimated we have suggested. That suggestion has been made, however, by some of those who know or pretend to know about this matter. I appeal to him to review the whole position with respect to Federal Aircraft so that we can get some action on this Avro-Anson programme. This is the attitude the country is taking. If we get satisfactory action in the not too distant future, I am sure the country will forget a good deal of what has happened in the past.


Hon. C. D. HOWE (Minister of Munitions and Supply):: Mr. Speaker, I intend to make only a few remarks on this bill because I think the subject matter has received complete consideration. My hon. friend opposite has, however, raised one or two points and has asked me to deal with them. The hon. member for Rosetown-Biggar (Mr. Coldwell) asked some
War Appropriation-Mr. Howe

questions which I shall attempt to answer. I shall deal also with the matter of brass which was brought up in the debate in a rather offensive way.
As far as the very moderate remarks, which my hon. friend has made about the Anson programme and Federal Aircraft, are concerned, there is a fundamental difference between us. During my absence in England an attack w'as made on Federal-I have traced the source of this, but I do not know that this is of any particular interest to the house-and by the time I had returned this had grown to be a rather virulent newspaper debate. I looked into the situation very carefully on my return because having established the company I had to decide what should be done. I viewed wdth an open mind the situation as it had developed and I came to the conclusion that w'hile the management had perhaps not been all that could have been desired, it was still most decidedly advisable to continue as we had started and straighten out the management.
My hon. friend is quite correct in saying that we established the company to coordinate our wyork that could not be placed in a single aircraft plant. Situations vary from time to time, but at that time every plant was developing from small beginnings into a position to handle a substantial programme, and every plant had a substantial programme.
By February it had developed that the de Havilland company were anxious to take over the whole programme. In July, the time to which my hon. friend refers in connection with the press statement from my department, de Havilland was one of the busiest plants in Canada trying to step up production of primary trainers.
My hon. friend says that it was set up with the idea that the management would have a free hand. May I say that several men who have joined our department have come in with the great idea of having a free hand. That idea of authority without responsibility seems to be the great goal of men who enter into government work, but no man and no government company has that kind of free hand. The purpose of the government company is to manage and recommend. No expenditures can be made by a government-owned company except through the ordinary channels of government. If it is an item over S5.000 the expenditure must be recommended to the government and approved by them and an order in council prepared just the same as for other government expenditures. If the item is less than S5,000 it must have ministerial authority. Each of the public companies has a limit within which it is allowed to use its own discretion, and that [Mr. Howe.l
limit is not large. So far as I have been able to observe there have been no great handicaps to the business of these companies through the fact that no person in them has had a free hand to spend the money of the taxpayers of Canada. The purpose of the government-owned company is not to avoid the restraints on public expenditures.
My hon. friend has referred to Lord Beaver-brook as having a free hand. As a matter of fact I know from personal contact with him that he has not a free hand because I have been present at battles between Lord Beaverbrook's staff and the staff of the British treasury and it is just as difficult-this may seem almost unbelievable-to get accounts through the British treasury as it is for a member of this government to get the approval of the treasury board of Canada. This "free hand" in spending public money exists only in theory, and I for one have no desire that it should exist in practice. If it did exist in practice I do not believe public business would be greatly expedited.
The purpose of Federal Aircraft is the purpose which up to the present it has carried out. The delays which have occurred and the difficulties in the relations between Federal Aircraft and its subcontractors have arisen out of the necessity of completing the redesigning of the plane. We had no thought in July that the plane would be completely redesigned. We knew that certain adaptations had to be made from British to Canadian standards, but the extent of the redesigning subsequently decided upon went far beyond that. We were greatly disappointed at the inability of our designing staff to complete the design as quickly as we could have wished. Until these designs were completed the most expert business management and the most superior board of directors in the world would have been just as helpless as were the directors of Federal Aircraft to place firm contracts with subcontractors on a basis that would allow them to proceed to furnish the finished planes.
The fact is that to-day the redesigning has been wholly finished. The orders which had been placed for raw materials were necessarily placed subject to the furnishing of finished designs and layout drawings. These designs and layout drawings have been furnished; the Anson programme to-day is in the hands of the builders and the builders are now in a position to go full-out on the programme. There was a delay on the engineering end, but I have never been able to see that any charge of incompetence would have been justified against the directors of the company, who have been giving a tremendous amount of their time to this work. If there

War Appropriation-Mr. Howe
is any company whose business I know well it is the Anson company because I have gone into it personally in minute detail. I felt it was my duty to do so on account of the decision that I had to make with regard to the company. The Anson programme is completely in order to-day and I think that the prospects of obtaining Anson planes on schedule are just as good as the prospects of obtaining any other plane that has not yet gone into production.


Mr. BLACK (Cumberland):: Under the
programme to which he refers, does the minister care to say what quantity is contemplated at this time?


Clarence Decatur Howe: The present contract is for
1,050 Anson planes.
My hon. friend, referring to my so-called press statement, referred to the statement that it would be possible to speed up the air training programme and do two years' work in one. I do not know whether that was ever a correct statement of the intentions of those responsible for the air training programme, but I do know that the air training programme has been speeded up very substantially. My colleague has made a statement to that effect in this house, and so far as I know we have kept him in planes- not all the planes he could have wished for; nevertheless it has been possible to speed up his programme very greatly. We are ahead of the schedule that was given to us for the production of planes, and the fact is that he has received the planes to carry out that programme.
The hon. member for Rosetown-Biggar (Mr. Coldwell) asked for certain information concerning the Canadian Broadcasting Corporation. My officers have prepared a reply which I shall be glad to place on Hansard. It is as follows:
Three of the Class I-A channels allocated under the Havana agreement to Canada have been assigned to privately-owned stations in order to meet a provision of the treaty that some use must be made of these channels within one year from March 29, 1941, but under the present policy the stations concerned may only use their present power. With regard to the possibility of a misapprehension in this respect on the part of the owners of these stations, there is no vested interest in the licence issued for the operation ef a radio broadcasting station.


Richard Burpee Hanson: That is to say, the government can refuse at any time to renew the licence?


Clarence Decatur Howe: Yes. It is definitely stated in the act that there is no vested interest.
730 Kc. is a Class I-A assignment to Mexico-
Not to Canada.
Under the provisions of the Havana agreement Canada may use it for Class II assignments provided no interference is caused on the Mexican border and the live kilowatt (not fifteen kilowatts)-
The fifteen kilowatts is in parenthesis. My hon. friend said five and I said fifteen.
-station CKAC may have to use a directional antenna if interference is caused. The assignment of 730 Kc. to CKAC is a Class II assignment. No Canadian frequency facilities^ were given up in obtaining the use of 730 Kc. by CKAC.
The separation between CKAC and CBL is well beyond the separation required between a 5 kilowatt and a 50 kilowatt station on adjacent channels (10 Kc. separation).
CKBI Prince Albert, CFPL London, CHML Hamilton, CJBR Rimouski are assigned Mexican Class I-A channels as Class II stations as permitted by the treaty. The selections were made in accordance with the engineering standards of the treaty. These assignments do not imply a permission later to increase the power.
In fact, quite the reverse.
The immediate and future requirements of the Canadian Broadcasting Corporation long term plan of national coverage did govern the allocation of frequencies.
All frequency allocations were concurred in by the board of governors of the Canadian Broadcasting Corporation in accordance with the requirements of the Canadian Broadcasting Act. 1936. The Canadian Broadcasting Act, 1936, gives the corporation complete jurisdiction over all network broadcasting in Canada. The authority is section 22, subsection 1, clause (a), which says:
"The corporation may make regulations to control the establishment and operation of chains or networks of stations in Canada."
Pursuant to this power, appropriate regulations have been passed by the board of governors covering national and international chain broadcasting. The contracts which stations CFRB (Toronto) and CKAC (Montreal ) have with the Columbia Broadcasting System give them the right to accept or reject such commercial programmes as they desire, having in mind the interests of Canadian listeners. There is no obligation on their part, under the contract, to clear time for Columbia at any time, either for sustaining or commercial programmes.
The contract is made subject to the provisions of the Canadian Broadcasting Act and all rules and regulations made thereunder, and to annua! reconsideration by the Canadian Broadcasting Corporation.
The corporation fully appreciates that parliament intended that it should be the network broadcasting authority in Canada, exercising supervisory control over all chain transmissions, irrespective of whether they originate within or outside the country. The regulations have been framed in the light of this consideration and administration has proceeded to this end.
Now I come to a matter which was brought up in this house at a time when I had no information to enable me to go into it fully. Hon. members, from observations they have made to me personally, have an idea that I

War Appropriation-Mr. Howe
have been rather bad-tempered in the discussion of this particular bill. I think on consideration they will admit that the only time I have been extremely bad-tempered is when a member of my staff has been accused of doing less than his best. I do resent suggestions in this house that some member of my staff has used his position in the government to further his private interests, or that he has been dishonest in the exercise of his judgment. I therefore wish to go into the subject raised by the hon. member for West York (Mr. Adamson), which was a very serious reflection on senior members of my staff, one of whom he mentioned by name.
To lay the background for what I have to say, I wish to read two letters, one signed by Mr. M. S. Moss, general manager of Anaconda American Brass Limited, and the second from Mr. H. Horsfall, president and managing director of Canada Wire and Cable company.


Mr. HOMUTH:: The minister refers to the hon. member for West York having made reference to a member of his staff. I do not recall that he did.


Clarence Decatur Howe: Yes; he referred to Mr. Henry. That was on March 13, 1941. This is the letter from Mr. Moss, on the letter head of Anaconda American Brass Limited, and it is dated March 19, 1941. It is addressed to myself:
Honourable Sir:
As requested by Mr. Henry Borden, we are furnishing the following information with regard to the questions raised in the House of Commons by Mr. Rodney Adamson, M.P., as reported in Hansard for Thursday, March 13, 1941, at pages 1652 and 1653.
I have inquired of Mr. John A. Coe of Waterbury, our president, Mr. W. H. Stewart, our secretary, and Mr. W. M. Moffatt our superintendent, who with me as general manager are the officials in charge of our business, and neither any of them nor I have given any information on the subject to Mr. Adamson. It is possible that some member of our organization without authority may have talked to Mr. Adamson.
In regard to placing the contract for a government mill with us, the facts, as we understand them, are as follows:
At the request of the war supply board, we submitted our estimate for the erection of a government mill on our property to Mr. W. S. Lecky, of the war supply board, on April 8. The amount of our estimate was $2,735,040. On May 29 we were asked to attend a meeting in Mr. Woodward's office. Present at this meeting were Messrs. W. C. Woodward, Colonel W. A. Harrison, W. M. Moffatt, superintendent of Anaconda American Brass Limited, and the writer, general manager. At this meeting we were told that it was a little hard to get any action on the government mill at our plant due to the fact that the exact poundage of metal required -was not known, so it was hard to tie down the British and French commissions to any concrete proposition.

Mr. Woodward stated that the French commission were very desirous of owning a mill in Canada, preferably in Quebec, as they thought such a mill would be of value after the war was over to produce slab metal for export rather than exporting copper and zinc separately, and they had asked the executive committee to locate a manufacturer who would build a plant for the French government, preferably not our company.
Mr. Woodward stated that officials of other companies had been summoned to Ottawa and asked to figure on a new mill, it being the idea that this mill would be built at the expense of the French government and the mill would belong to them after the war. It was further stated at this meeting that the quotation for the Quebec mill would include a rod and sheet mill, while we had only been asked to quote on a sheet mill. _ A.t no time did we understand that we were bidding against the Canada Wire and Cable Company Limited.
On June 17, 1940, Mr. Moffatt and the writer attended another meeting in Mr. Woodward's office. Mr. R. A. C. Henry was also present. At this meeting we were told definitely that Mr. Murdoch of the Noranda Mines Limited had been asked to erect a mill capable of producing 100,000,000 pounds of metal annually, and we were told that in addition to this mill our company would be asked to build a mill. We were asked to secure options on the necessary machinery capable of producing a substantial poundage. We were not authorized to go ahead with the work, but from Mr. Woodward's office a firm of engineers were called on the phone and were amted to get in touch with us in regard to plans.
The Beauharnois Company's name was never mentioned at any of the meetings that we attended in Ottawa, and the writer has no recollection of Mr. Henry ever mentioning ower, although it is possible we may have een asked if the Hydro-Electric Power Commission could serve us with sufficient power in New Toronto to take care of the new mill.
In regard to the statement that the Canada Wire and Cable Company Limited had to come to our company and ask for help with the layout of their plant, we can say positively that we had nothing -whatsoever to do with this layout, but after the plans had been made they were shown to our superintendent. Our relations with the Canada Wire and Cable Company Limited have always been friendly and during the time their plant in Quebec was being erected we gave certain of their officials the run of our plant and gave them all the information we could on any matter that was brought up.
In regard to the training of men, it will be found by referring to our agreement with the government for the erection of a government mill on our property, which was drawn up by the Allied War Supplies Corporation and signed on September 11, 1940, that a paragraph appears whereby we are authorized to train forty men for the government mill at government expense, and providing we would give a certain percentage of them to the Canada Wire and Cable Company Limited. In training men as we did for the Allied Brass Limited we were only living up to our agreement.
In regard to increasing our prices one cent per pound to amortize the cost of the government mills, the possibility of doing this was one of the many things which were talked over in Mr. Bateman's office on February 5 or 6, 1941, but it was thoroughly understood that

War Appropriation-Mr. Howe
no action at all would be taken in this matter without it first being submitted to the minister for approval and being made the subject of an order in council. Mr. G. C. Bateman, metal controller, would be able to tell you more about this than we can.
Yours very truly,
Anaconda American Brass Limited, M. S. Moss,
General Manager.
The next is a letter on the Canada Wire and Cable company's letter head, president's office, dated Toronto, March 20, 1941:
Dear Sir,-
I acknowledge your letter of the 18th instant re speech of Mr. Adamson, M.P., with copy as reported in Hansard attached. I wish to advise:
1.	No help was asked of Anaconda on the design, layout or construction of the brass plant referred to. Our engineers visited the most modern United States plants for the production of this product and were given every facility and all information necessary to do this work.
2.	The Anaconda company have cooperated fully with us and have always been very friendly. It is true that a number of our men were trained at the Anaconda plant under an agreed arrangement which has been most helpful.
3.	Mr. Adamson's remarks regarding power are incorrect. The question of power was never discussed at any time, with anybody, nor has anyone in our company had any conversation with the Mr. Henry mentioned by Mr. Adamson. I. personally, am not acquainted with Mr. Henry, the Beauharnois company was never mentioned at any time.
4.	No suggestion was ever made by any officials of this company that the price of brass should be increased by 1 cent per pound or by any other figure for the purpose of writing off the cost of the brass plant in Montreal, and while the writer has heard some hearsay rumours in this connection, I can state positively that any such suggestion did not originate in this organization.
Yours very truly, >
H. Horsfall,
President and Managing Director.
I should like to deal with the remarks of the hon. member for York West (Mr. Adamson) as reported in Hansard, page 1513:
I come now to a condition of expenditure. In my riding the largest industrial plant is the Anaconda American Brass Company. They are, or were until a very short time ago, the largest and practically the only manufacturers of brass in Canada.
This is the statement to which I should like to call attention:
Some time during the latter part of last year the Department of Munitions and Supply asked for tenders on a plant to produce 100 million pounds of brass sheet and rod a year.
The answer to that is that no tenders were asked for, but negotiations took place with two companies, one being asked to submit an estimate for a sheet mill, and the
other for a rod and sheet mill. I should like hon. members to note that the two proposals are quite different. They are the same in that both had sheet capacity, but only one proposal also includes extrusion press and rod capacity.
The hon. member continued:
On this tender there were two bids, one from the Anaconda company and one from the Canada Wire and Cable Company in Montreal. When the contracts were let, it turned out that the Anaconda company had made a bid of $1,500,000 less than the bid actually accepted. There is now a discrepancy of $2,300,000 because, after the original contract was let, the demand for brass increased to such an extent that the government had to ask the Anaconda company to build a plant of the same size as it originally intended to build.
The answer to that is found in the Anaconda letter, the fifth paragraph. It shows that estimates were not for the same project. Then he went on:
The Anaconda American Brass Company have offered to run this government plant entirely and absolutely without fee.
The answer to that is that the contracts with both companies provided for a management fee, but last November the Anaconda company advised the government that they did not wish to accept the fee provided for, and I acknowledged this helpful action on their part by letter of November 4 last.
The hon. member continued:
I understand from the information I have received that the Canada Wire and Cable Company is charging a fee for the operation of their plant. Further than that, the Canada Wire and Cable Company had never made brass sheets and rods before. They had to go to the Anaconda company in New Toronto and ask them, first, to help them with their layout of plant-
The answer to that is in the Anaconda letter, paragraph 8, and the Canada Wire and Cable company letter, paragraph 1.


Mr. JACKMAN:: Had they turned out the brass rods?


Clarence Decatur Howe: Yes; the plant is in production now and the brass rods are now being turned out.


Harry Rutherford Jackman: I mean, had Canada Wire and Cable company been turning out brass rods before this contract?


Clarence Decatur Howe: No; the Canada Wire and Cable company had never been manufacturers of brass, but of course they are one of the largest, in fact the largest manufacturers of copper rods and sheets in the country.
The hon. member went on:
. . . and, further, to train men in their private plant-not in the government plant-in the manufacture of brass sheets and rods.
War Appropriation-Mr. Howe

I may say that Allied War Supplies, who have charge of these contracts as part of their explosives and chemical work, made an arrangement with Anaconda so that they would train men for both government plants at a price that was agreed upon, and that was done. The men were trained there, but under an agreement with Anaconda. The hon. gentleman went on:
When this information was presented to me I naturally investigated the matter, because this concern is in my riding, a company that is vitally important to the welfare of York West, and one on whose lists there are to-day the names of some four thousand men wishing for employment. Therefore I assumed with my constituents who are members of this organization-
And I stress these words:
-that the reason why the contract was given to the Canada Wire and Cable Company could not be lack of labour in York West, because there is plenty of labour available there.
The answer to this is found in the Anaconda letter, paragraph 4, beginning, "Mr. Woodward stated" and ending "preferably not our company." Then the hon. member went on:
Then I said, perhaps there is a power shortage in York West, so I inquired of the Ontario Hydro-Electric Commission and officials of the company and found that ample power was available. But one of the members of the company said to me: "Yes, we had lots of power, I understand that the Canada Wire and Cable Company were guaranteed power and that the deal was put through by a Mr. Henry" 

I think the name was-"who said there would be opportunity to get plenty of power from the Beauharnois company, they had a surplus of power, and that they couid build their plant in Montreal."
As hon. members will recall from reading the letters. Mr. Horsfall said he had never heard of Mr. Henry and that no member of his staff had discussed power with Mr. Henry, while Mr. Moss stated that he had never at any time heard the subject of power mentioned in Mr. Henry's presence.


Richard Burpee Hanson: Did he not say he did not recall hearing it? That is quite different, you know.


Clarence Decatur Howe: Nevertheless, here we have absolutely no foundation for that statement. It was pure innuendo, designed to destroy one of the senior men in my organization, a man who from the inception of the defence purchasing commission, I think, has worked as hard as, if not harder than, any man we have on the staff to keep this war effort of ours moving. It is the sort of thing I despise.


Richard Burpee Hanson: Of course I do not agree with that interpretation of the hon. member's remarks.


Clarence Decatur Howe: It is absolutely plain.


Richard Burpee Hanson: I do not think there was any intention to destroy Mr. Henry. The hon. member had been told that Mr. Henry intimated that there would be ample power available from Beauharnois.


Clarence Decatur Howe: It was dragged into the discussion in a very different way from that. The hon. gentleman mentioned that with a sneer in his voice, and this was what he said:
But one of the members of the company said to me: "Yes, we had lots of power, but I understand that the Canada Wire and Cable Company were guaranteed power and that the deal was put through by a Mr. Henry"-I think the name was-
The name was dragged right in there.
-"who said there would be opportunity to get plenty of power from the Beauharnois company, they had a surplus of power, and that they could build their plant in Montreal."
It is quite obvious from reading the letter that this had absolutely nothing to do with it, and I have my own opinion of a man who will go out of his way to bring discredit on a faithful officer of this government. I need not read all of these remarks. I will go on down to this point:
The suggestion was made to a very high official of the Anaconda American Brass Company that he should increase the price one cent a pound so that the Canada Wire and Cable Company would be able, or the government would be able, to write off this plant in Montreal.
We are not talking about additions to either the properties of the Canada Wire and Cable company or the properties of the Anaconda American Brass company. These were wholly owned government plants, and all that we arranged for was the designing and operating technique of these two companies. The plants were owned and paid for by the government. There was this difference: the same operating fee was arranged by contract with both companies, but last November the Anaconda company said that after consideration they had decided that they did not wish to accept the fee and would donate their services, both for design and for the operating of the plant, to the government. This was a splendid act on their part, and an offer that I was glad to accept. I may say that from time to time we have had other offers of that kind, and have accepted them, in similar transactions.
The question came up of two government-owned plants. We went through with the Montreal plant as one which was to be owned by the French government. We were just completing negotiations with them when the collapse of France took place. After Dunkirk, the British took over all the French commitments in the United States while the Canadian government took over the French

War Appropriation-Mr. Howe
commitments in Canada, which fortunately were very few. So we took over the French commitment in the matter of the brass plant at Montreal.
From time to time we have been studying the question of the amortization of these government-owned properties. It is my belief that where part of the product is going to a customer other than the owner, the question of amortization should be considered. It is considered in the United States, where the amortization is carried on over a five-year period; and we have come to the conclusion that where questions of amortization arise- and it is only a question of bookkeeping as far as the government is concerned except in so far as it affects the price of the product-


Karl Kenneth Homuth: During the discussion on the resolution, did the minister not say at one time that this was written off at the start in government-owned plants because we were financing the whole thing?


Clarence Decatur Howe: So it is, and no question of amortization enters where the government owns the plant and the same government obtains the product. But where one government wholly owns the plant and another government accepts the product, it is only fair that the second government should pay an increased price for the product which would include an amortization charge. I am told that in trying to price the product of this government^owned plant to take care of amortization on a five-year basis, it was questioned whether the current market price of brass would permit that to be done; and a discussion took place as to whether the price should be increased by a cent a pound to take care of the full amortization charge. The matter never got to me; the decision was that certainly we should not attempt to sell brass at more than the current market price of the product, and the matter ended there. It was only an academic discussion, in an attempt to see how the product could be priced to work out amortization in five years.


Richard Burpee Hanson: It will have to be dealt with sooner or later, will it not?


Clarence Decatur Howe: What we have decided, and I think it is the only thing we properly could do in connection with a commodity sold in current market transactions, is that we will charge all our customers the market price of the brass. Of course, anything between the bare cost and the market price will be returned to the government for the amortization of the plant. It may be more or it may be less than the amount required to amortize the plant in five years; nevertheless I think any reasonable consideration would indicate that we should not attempt to sell brass for more than its world market price.
I feel sure the margin will be sufficient for our requirements. That is the matter of brass. I should like once again to impress upon the house that we are talking about two entirely different types of plant. One is a rod mill, with a large rod capacity as well as sheet capacity; the other is a sheet mill. We never asked for tenders on the two plants. We asked for proposals, one for one type of plant wanted by the French government, and the other for another type of plant we require for our own shell programme. The French plant came into our hands at the time of the general assignment of French contracts in this country, so that we now own two brass plants, one at Montreal and the other at Toronto. Both of them are needed. We are very close to the thin edge of our brass requirements. Both are in good hands. The plant at Montreal now in operation is turning out brass. Brass from that plant has already been used in ammunition orders; it is a finished product. The sheet metal plant at Toronto will be in operation very shortly.
In my opinion these were thorough business transactions, and I believe anyone who cares to inquire into them will find nothing to criticize about either.
Before taking my seat I do ask hon. members to be fair in their criticism. I do not object to fair criticism. I believe in fact that our department should be criticized. I believe criticism is helpful. I believe I never have shown any resentment concerning anything in the nature of fair criticism or a desire to seek information. I realize that it is in the best interests of good government to give all information any member can ask. I shall try to deal with criticisms fairly; but I do ask that hon. members do not take the offhand attitude that any individual member of our organization who cannot be here to defend himself is either acting dishonestly or is improperly carrying out the duties assigned to him.


Richard Burpee Hanson: I rise only for the purpose of asking a question on a related matter. May I add that personally I have not criticized the minister's stand; I have praised him.


Clarence Decatur Howe: Quite.


Richard Burpee Hanson: In most cases the men in that department are doing good work. I could name some of them. For instance, Mr. Crabtree is one I would name,- a great business executive in Canada who is giving his entire time to service to this country-and he is giving us service of the very highest order. He may be guilty of errors in judgment-I do not know anything about

War Appropriation-Mr. Homuth
that; but certainly I never have criticized these gentlemen. Criticism, if any, has come from the minister's own friends more than from this side of the house.
With respect to the matter of treasury control over these government companies, it is my understanding with respect to Federal Aircraft that within a period of two or three weeks the position was changed, because they could not have unlimited control over expenditures of government money. What is the position with relation to these government plants which are being set up and managed, we will say by Canada Cable or Anaconda, through Allied War Supplies Corporation? What is the position as to observation and control of these companies by the treasury? Would someone in the ministry make the position clear so that the public, including myself, will have a clear understanding?


Clarence Decatur Howe: Mr. Speaker, so far as construction and purchase contracts are concerned, the transactions are recommended to the government by Allied War Supplies Corporation. Those contracts are then approved by the government. The contracts are drawn by Allied War Supplies Corporation, but payments are made by treasury officers of the government, in conformity with the usual procedure. Vouchers are sent through in the usual way, certified by the officers of Allied War Supplies, signed by my deputy minister and passed on to the treasury.
So far as operating goes, the treasurer of each of these companies, or of each government-owned plant, is an officer of the Minister of Finance, and certain accountable advances are given the company. The work is carried out subject to the audit of the auditor general, who has a staff in very close touch with the plants. The accountable advance is given for working capital, and the operations then go on, subject to the supervision of the auditor general and the Minister of Finance, in the same way that the president and board of directors would have control over any private business.


Richard Burpee Hanson: There is full control?


Clarence Decatur Howe: Yes.


Richard Burpee Hanson: That is what I wanted to know.
Mr. KARL K. HOMUTH (Waterloo South): Mr. Speaker, I do not wish to delay progress of the bill, and I would not attempt to refer in detail to what the minister has said respecting matters to which the hon. member for York West (Mr. Adamson) addressed himself.

But as closely as I could follow the letter I concluded that there was at least some reason for some of the things said.
It is matters of this kind which give rise to suspicion in the minds of the people. The hon. member for Winnipeg South Centre (Mr. Maybank) made certain statements in the house a week ago, and returned to his subject again this week. On both occasions he spoke about the building of a cordite plant outside the city of Winnipeg, and the installation of heating equipment therein. From his statement in the house and from a careful reading of his speech one cannot help being led to the conclusion that in that plant there is an expenditure of $100,000 or $200,000 extra for heating purposes, and that that money could be saved.
These are matters which should be cleared up in the minds of the public. Speaking not only as a member of the Conservative party but as a Canadian I say the worst thing that can happen to our war effort is to have even the breath of scandal directed against it. Had I a thousand pieces of information of a scandalous nature I would refuse to take them up on the floor of the house at a time like this, because I believe we are all concerned with only one thing, and that is the winning of the war. Party politics have to go to one side. For that reason I say we should be most careful in the contracts we let and the way they are administered. I make that statement in all seriousness.
During the discussion on the resolution which preceded this bill I wanted on several occasions to ask the Minister of Labour (Mr. McLarty) to give us a clear explanation of the various orders in council passed in connection with the regulation of labour. For instance one order in council practically pegged wages at either the 1926-29 level or the present level, whichever was the higher. Another order in council was passed under which those engaged in war industries and requiring help were limited as to the manner in which they might advertise for that help. One order in council pegs wages and the other pegs labour at the job. These work disadvantageously to labour, and the Minister of Labour might give a clear explanation with regard to them. On several occasions I was going to ask him to explain this, but the time of the committee was taken up with the discussion of a heating unit at Winnipeg, with the discussion of wheat or butter or something else, which broke the whole trend of the discussion. Could the minister, when the bill is in committee, give an explanation of the various orders which were passed with

War Appropriation Bill
respect to the limitations put upon labour both as to wages and as to seeking employment in other industries?


Mr. THOMAS REID (New Westminster):: Mr. Speaker, I should like to offer a word of commendation to the Minister of Finance (Mr. Ilsley) in connection with one aspect of raising the money needed to meet these expenditures. I refer to the war savings certificates campaign which has been in operation for the past number of weeks. More than 50,000 Canadians have given of their services freely and nobly without any hope of reward. A sum of over $150,000,000 has been, shall I say, given to the government by thousands of Canadians. All this speaks well for the spirit of our people. The good is twofold. First, it shows the willingness of the people to lend to the government and, second, thousands of our people are putting by for the day when the war will be ended. At that time they will have returned to them the savings which they so willingly gave to the government during these stressful times. I commend what has been done to the house and the country, and I congratulate the minister upon inaugurating this wonderful scheme.
Mr. NORMAN J. M. LOCKHART (Lincoln): Mr. Speaker, I should like to associate myself with the remarks of the hon. member for Waterloo South (Mr. Homuth). I have personal knowledge of employees in certain plants being seriously inconvenienced by the orders in council referred to by the hon. member. If the Minister of Labour (Mr. McLarty) could clarify the situation in the minds of employers and employees, it would prove helpful. I have in mind a number of instances in which employees have desired to make certain changes, but were told it was impossible under the provisions of the orders in council.
Motion agreed to and the house went into committee, Mr. Fournier (Hull) in the chair.
On section 1-Short title.


Richard Burpee Hanson: I think the suggestion made by the hon. member for Waterloo South could properly come before the committee at this time. Personally, I should like to have an explanation from the ministry as to the effect of these labour orders in council.


Mr. ILSLEY:: The Minister of Labour is not in the committee, and I am informed that he is going away this afternoon. I hope that the passage of the bill will not be delayed on this account alone. There are at least two opportunities of asking the minister to give that information later on.


Richard Burpee Hanson: On this bill?


James Lorimer Ilsley: It could be asked when we are discussing the supplementary appropriation bill, and the other occasion would be when the minister's estimates are being considered. If he were here, I would send for him, because he is the only one who can give the information.


Mr. BRUCE:: I should like to ask the Minister of Munitions and Supply if consideration has been given to the erection of a high-powered short-wave station as a war measure, particularly in view of the possibility of one of the stations in England being destroyed.


James Lorimer Ilsley: I would suggest that this question should be asked under the next section. This section deals merely with the short title, whereas the next section covers the appropriations, and any questions as to expenditures should be asked then.


Richard Burpee Hanson: It is
understood that the Minister of Labour will make the statement requested on either of the two occasions referred to by the Minister of Finance.


James Lorimer Ilsley: In so far as I can bind him.


Mr. NICHOLSON:: Just before six o'clock yesterday I asked a question of the Minister of Munitions and Supply with regard to a
clause in the John Inglis company contract which reads:
No member of the House of Commons of the United Kingdom of Great Britain and Northern Ireland or of the Senate and House of Commons of Northern Ireland or of the House of Commons of Canada shall be admitted to any share or part of this contract or to any benefit to arise therefrom.
No mention is made of members of the Senate of Canada and I was wondering whether that is an oversight.


James Lorimer Ilsley: On a point of order, am I not correct, Mr. Chairman, in saying that a question of that type should not be asked when we are discussing the section relating to the title?


The ACTING CHAIRMAN (Mr. Fournier, Hull):: The questions should relate to the section before the committee. I do not think this particular question should be put under section 1.


James Lorimer Ilsley: It could be asked under
the next section.


[Stage Direction]
Section agreed to.
176S
War Appropriation Bill
[Stage Direction]
On section 2-Appropriation.
Clarence Decatur Howe: Perhaps I could answer the
question asked by my hon. friend opposite in connection with the erection of a high-powered short-wave broadcasting station. This matter has received a good deal of consideration, but it is not an easy problem to solve. Certain representations have been made by Great Britain that it would be desirable to have a station here. To be effective, however, the station would cost two or three million dollars to build and would require a large annual charge to operate. The Canadian Broadcasting Corporation obtains its funds largely from the sale of radio licences in Canada, and it is questionable whether funds so acquired should be used for broadcasting outside Canada. I think we can assume quite definitely that such funds should not be so used. It would be difficult, apart from a direct government grant, which in my opinion is not desirable. It is hard to know where the funds would come from to finance the operation of a station of this kind.
We have not, however, closed the door upon the matter. It was the subject of some discussion when my colleague and I were in Great Britain and, judging from subsequent correspondence, it is the view of the British government that the erection of such a station here is not now necessary for their purposes. Some day I assume we shall have a shortwave station, but I hope it will not be in a period when its chief use will be the supplying of propaganda to enemy and neighbouring countries. My hon. friend says that the contract is not clear, however, the independence of parliament act must be observed. That act is a statute of Canada, and as the law of the land it must be observed whether or not there is a clause in the contract referring to it.


Karl Kenneth Homuth: Not as regards a limited
company.


Clarence Decatur Howe: The independence of parliament act applies whether it is written into the contract or not.


Alexander Malcolm Nicholson: But why is specific
mention made of the House of Commons and no mention made of the Senate? How does that happen?


Clarence Decatur Howe: I am sorry I cannot say
because I did not draw the contract, but I assume that members of this house have not acquired that venerable and august appearance which distinguishes members of the upper chamber. The statute, however, is applicable to one chamber just as much as to the other.


Thomas Reid: As one who advocated last
session a high-powered station for Canada, may I urge on the minister, when he is thinking of propaganda, not to think of propaganda only in connection with war. The whole economic life of the world is changing at this moment, and we may have to look for closer trade relations with other countries. We send out our trade commissioners, but we do nothing to back them up, and I believe that a high-powered radio station would serve a useful purpose in bringing Canada into touch with the countries of south America, if it served no other end. The government should take a broad view of the proposal instead of thinking only of propaganda which might be used for war purposes. I might add that propaganda is an effective weapon even in war time. I believe we are falling down in that respect. I do not think the people of Canada should be called upon to contribute by way of licence for the purpose I suggest; but in view of the millions we are now spending, we might well consider the erection of a high-powered broadcasting station.


Mr. ROSS (St. Paul's):: The minister says that such a radio station would cost between [DOT]$2,000,000 and $3,000,000. My information is that a short-wave high-powered broadcasting station would not cost more than 8500,000. I was careful to get the facts before I spoke on the subject last year, and I was astounded to hear the minister mention that it would cost between $2,000,000 and $3,000,000.


Clarence Decatur Howe: It all depends upon what
sort of station is required. We had in mind a 50,000 watt station, which my hon. friend is quite correct in saying would cost about $500,000, but the sort of station Britain discussed with us was four 50,000 units, similar to the station at Daventry, and that cost about $2,500,000.


Douglas Gooderham Ross: With the improvements that have been made in broadcasting, the sending out of radio direction signals and so forth, would not a modern station of the type I have in mind costing $500,000 be able to do very good work? Is it necessary with the modern apparatus we have to-day to have such a high-powered station as four
50,000	watt units? Many improvements have been made in the last few years, and I certainly think we should erect a new high-powered station, not only because of the position of Great Britain but because it would help us to keep in contact with the countries of south America. At the present time Canadians are not permitted to travel to south America, or to the United States to any considerable extent, and I think the Minister of

War Appropriation Bill
Trade and Commerce (Mr. MacKinnon) ought to welcome a station of this kind as a means of developing our trade and keeping in touch
with the south American republics, Mexico and the United States.


Clarence Decatur Howe: We always had a station in contemplation as a peace-time project, and we had in contemplation for some years the type of station my hon. friend suggests, a 50.000 watt station, costing about $500,000, which could be used to help marketing Canadian products. But what has held that back is that we could never find any department of government that would give us $500,000 for capital expenditure on such a station, however much they might be for it in theory. I think that is the type of station we shall have some day, but the Daventry station, which is similar to the type of station we have been discussing with Great Britain, is a very much more powerful station and one that can be used for broadcasting propaganda all round the world.


Karl Kenneth Homuth: Why not let the Minister of Trade and Commerce build it instead of
taking the census this year?


Douglas Gooderham Ross: I do not want to appear too persistent, but the value of our motion picture bureau and the work it is doing are recognized, I think, by everybody; and in considering the erection of a shortwave station, we would do well to bear in mind the results that have been obtained from the motion picture bureau.


Mr. HANSON (Skeena):: Has any consideration been given to the requests that have been made by the people of central and northern British Columbia for improved radio reception? It is practically impossible and has been so ever since we had the radio to get Canadian news in northern British Columbia from Canadian stations. All we are getting is United States news, and in view of the licence fee we have to pay we feel we ought to be able to get Canadian news. Some of the news we get from the south at the present time is not desirable for some of our people, and I know that several requests have been made from boards of trade and other organizations in our province for improvements to ensure better radio reception in northern British Columbia from Canadian stations. I understand, as a matter of fact, that about half the radio owners in the northern part of the province are not paying the licence fee because they cannot get Canadian stations.


Clarence Decatur Howe: It is true that there is a small vote in these estimates for radio for war use, but I hardly think this is the proper place for H873-112
a general discussion of radio. I may say, however, to the hon. member for Skeena that the broadcasting corporation have been considering for some time the problem of serving northwestern British Columbia, but the problem is a difficult one in that it would require a very large expenditure to serve a very small population, and the corporation have not been able so far to adjust their finances to let them do it. But the matter is still receiving consideration.


Mr. STIRLING:: They have been considering it for four years.


Percy Chapman Black: Is a shortwave channel reserved for Canada, and is there any danger of some other country usurping that wave length if we do not use it? Personally I agree with the hon. member for New Westminster and the hon. member for St. Paul's that even at some sacrifice we should establish a short-wave service in Canada.


Clarence Decatur Howe: We can always get a shortwave channel.


Percy Chapman Black: Has a shortwave channel been allocated to Canada?


Clarence Decatur Howe: No; but we can always get one.


Richard Burpee Hanson: May I change the subject from broadcasting to fish? Our much overworked Minister of Fisheries (Mr. Michaud) has not had anything to do lately, and I should like to have an explanation from him as to the expenditure of $158,000 for lobster control in the last year and as to the proposed expenditure of $600,000 for the coming year. I should like him to give a pretty full statement.


Mr. RALSTON:: Which clause is my hon. friend referring to?


Richard Burpee Hanson: To lobsters, under this clause.


Mr. MICHAUD:: The $603,000 proposed to be spent this year, is divided into two items. First, there is an amount of $3,000, which is the estimate of possible expenditures that may be required to cover the costs of the advisory board that had to be set up, composed of producers and exporters of fish to Great Britain. The importation and distribution of fish in Great Britain having been taken over by the British government, under the food controller, it was necessary to have a central organization in Canada to negotiate with the food controller, and it has been requested by the industry and by those who are interested in the export of fish that the government set up some central body to coordinate relations with

War Appropriation Bill

the British food controller. To that end it was thought advisable for the department to take the responsibility of organizing an advisory board, which comprises persons interested in the business, the leading exporters of the country.


Richard Burpee Hanson: Has the board been set up?


Joseph Enoil Michaud: Yes.


Richard Burpee Hanson: Who are the members of the board?


Joseph Enoil Michaud: So far, the necessities of the trade have required the setting up of a board only on the Atlantic coast. There is one representative from a firm in Sydney, Mr. Nickerson; there is Mr. Connors of Halifax, representing the Maritime Fish company; from Lockeport there ig Mr. Swim; and Mr. Smith represents the fisheries in Lunenburg. In my opinion, they represent the only companies that put up and export frozen fish to Great Britain.


Richard Burpee Hanson: They are fresh fish exporters.


Joseph Enoil Michaud: Yes, frozen fish. The food controller in Great Britain has asked that frozen fillets of cod be put up in a certain way and has given definite specifications; and in order to facilitate the provision of ship space, and to deal with the food controller in Great Britain, it has been deemed advisable to have these exporters recognized officially as a board in Canada working under the direction of and consulting with the deputy minister of fisheries. A board will be set up on the Pacific coast comprising exporters of frozen and canned fish in that part of the country, but up to the present time the necessity has not made itself felt for the constitution of that board, because on the Pacific coast the exporters themselves sent overseas a representative to consult with the food controller. On his advice the fish exporters on the Pacific coast, who are well organized, will make suggestions to the department as to whom they wish to have recognized officially as the representatives on their advisory board. The sum of $3,000, it is estimated, will be required to cover the cost of travelling of these advisers. That is one of the items making up the $603,000.


Richard Burpee Hanson: The minister has spoken of frozen cod fillets. Does the food controller take no other kind of frozen fish-chilled haddock, for example?


Joseph Enoil Michaud: No. The specifications
laid down do not indicate that he will take any other kind of frozen fillet, but the advisory board are trying to convince him that

consumers in Great Britain could be persuaded to accept other kinds of frozen fillets which could be put up cheaply and in larger quantities by Canadian producers. We had word recently from the British food controller that the British government would send one of their representatives to Canada to consult with Canadian exporters with a view to reaching some agreement. People in Canada may not realize the difficulty in dealing with the food controller just now, because the English people are not used to Canadian frozen fish except halibut and frozen salmon, which are considered as luxuries at the present time. An attempt has been made to import cheaper frozen fish from Canada, but the English taste must be cultivated.


Richard Burpee Hanson: No luck
yet?


Joseph Enoil Michaud: No; and of course there is the difficulty of transportation. The exporters are faced with many difficulties, and they feel that they should be recognized by the Canadian government and constituted as an advisory body. They wish to have some official recognition and some authority in dealing with the British food controller. That is the purpose for which the $3,000 is required.


Richard Burpee Hanson: Has any of it been spent?


Joseph Enoil Michaud: No.


Richard Burpee Hanson: Was there any such fund last year?


Joseph Enoil Michaud: Yes. As soon as the
British government placed the import of fish under the food controller, we set up the committee and we have spent $150 since last November. I believe the board had two meetings. This amount is to cover expenses.


Richard Burpee Hanson: They do not draw salary?


Joseph Enoil Michaud: No.


Richard Burpee Hanson: That is
the $3,000.


Joseph Enoil Michaud: I do not think we shall spend that amount. That is the limit.


Richard Burpee Hanson: What
about the $600,000?


Joseph Enoil Michaud: That is provided as a working capital in connection with lobster. This committee will recall that shortly after the outbreak of the war, the British government declared certain imported foods as luxuries and their import into Great Britain was virtually prohibited. Up to that time for many years since the canned lobster industry started in Canada the pack was exported to Europe to the extent of about 85 per cent.

War Appropriation Bill


Richard Burpee Hanson: What is the value in a normal year?


Joseph Enoil Michaud: About $2,000,000. A month after the outbreak of the war, the market for that old-established industry was absolutely wiped out and the export to continental countries like France, Germany and Norway was destroyed by force of circumstances.


Richard Burpee Hanson: By force majeure.


Joseph Enoil Michaud: I might say "torpedoed" by the declaration of war. But the export to Great Britain, which constituted the bulk of the trade in canned lobster, I would say an average of about 60 to 70 per cent-


Richard Burpee Hanson: Was it not nearly all sold there and largely distributed on the continent from there?


Joseph Enoil Michaud: Well, yes and no. We had some exports direct to France, Germany and Norway, but the great bulk was to Great Britain. The exporters had very old-established trade connections. This business was a cash one, well established; it was destroyed by the declaration of the British government that canned lobster was a luxury, in consequence of which no sterling was available to buy it in this country. This meant that a $2,000,000 industry had to be abandoned or else new markets found. Producers and exporters appealed to the government for help. We asked them to come to Ottawa and consult with us and the officials of the department, and it was finally decided that the government would guarantee the marketing of the coming pack, beginning May, 1940. This encouraged the packers to make advances to the fishermen. The fishermen went on fishing as usual, and the department stood by its undertaking and agreed to take all of the pack that would meet the inspection requirements.


Richard Burpee Hanson: That is the entire pack?


Joseph Enoil Michaud: Yes; we undertook to take the entire pack if it was offered to us.


Richard Burpee Hanson: Without any limitation at all?


Joseph Enoil Michaud: Eighty per cent.


Richard Burpee Hanson: Eighty per cent of the entire pack, but no limitation on the amount of the pack? If they doubled the pack, you were still prepared to take eighty per cent?


Joseph Enoil Michaud: To the extent of 55,000
cases.


Olof Hanson: Oh, then there was a limitation.
14873-112^


Joseph Enoil Michaud: Yes, to the extent of
55,000	cases.


Richard Burpee Hanson: What is the relation of 55,000 cases to the average pack?


Joseph Enoil Michaud: Eighty per cent.


Richard Burpee Hanson: That would be eighty per cent of an average pack?


Joseph Enoil Michaud: For the last five years.


Richard Burpee Hanson: Was consideration ever given to the question of giving the lobster industry a rest at this time? If the minister will allow me, I should like to suggest that the time has come when the government should give consideration to the question of conservation of this wonderful food supply. I know there will be some distress. I have watched this thing all my life. When I was a boy we used to fish lobsters in Passamaquoddy bay on the neap tides with a pole and hook, and you would get a bushel basket of merchantable lobsters on any neap tide in the months of May and June. To-day you could not get a lobster if you searched there for a month. The change that has come over this industry in fifty years is so alarming that, in my opinion, if something is not done, within our lifetime the lobster fisheries on the eastern coast will become a thing of the past. It is distressing to go to Shediac or such places and see the size of the lobsters that are being canned-baby lobsters. Fresh lobsters are one of the finest foods in the world, but they are disappearing. What consideration has the minister and his officers given to conservation of this resource during this time of war? It seems to me a grand opportunity to do something in the way of restriction. I do not mean the elimination of the entire pack.


Joseph Enoil Michaud: I agree that some measure of conservation should be adopted. This was realized some time ago. In the last few years restrictions have been placed on the length of the season during which lobster fishing is permitted. Gradually the length of the season during which lobsters can be legally caught is being cut shorter and shorter.


Richard Burpee Hanson: What does that restriction amount to?


Joseph Enoil Michaud: In most districts the open season is only six weeks in the year. Of course we have a reaction from the fishermen who claim that their rights are being curtailed. We are also placing a minimum limit on the size of lobsters that can be caught.


Richard Burpee Hanson: How is
that observed?


Joseph Enoil Michaud: Fairly well.
War Appropriation Bill


Richard Burpee Hanson: Is there
any restriction on the number of traps that may be set in a particular period of time? Is there any restriction on overlapping in the laying of traps? A lobster has not a chance for his life in some sections.


Joseph Enoil Michaud: Limiting the number of
traps which any fisherman may put in the water is very difficult to enforce. But we are limiting them to using the traps in only one season of the year, licensing one person to fish only once during the year, or one licence to one fisherman a year. Then we are not permitting a man to lease his traps to another fisherman in another season.


Richard Burpee Hanson: Would the minister make that clear? Does that mean that a lobster fisherman who is licensed to fish in one area for a limited period cannot move on to another location at another period.


Joseph Enoil Michaud: That is right. Those
are the three restrictive measures which have been adopted to conserve the lobsters: curtailing the length of the season; prohibiting persons from fishing in two areas during the same year, and limiting the size of the lobsters that may be legally taken out of the water. In most areas around the Nova Scotia coast the size now is nine inches, but in those areas lobsters are fished for the live lobster trade, the export trade.


Richard Burpee Hanson: Which is
the real business after all.


Joseph Enoil Michaud: We hope that eventually most of the trade will be of that kind. In other districts, where distances are longer or the fishing areas are distant from large centres of population, where heretofore difficulty of transportation existed, the lobster fishermen can their lobsters, and naturally a smaller size is permitted. Last year we took a step which had been considered in the department for some time, and placed a minimum size on all lobsters caught in Canadian waters. Of course this had the effect of curtailing the pack; there is no doubt about that.


Richard Burpee Hanson: That was the intention, was it not?


Joseph Enoil Michaud: To a considerable extent; and the indirect result was that a certain number of lobsters were left a year longer in the water than they would have been if a minimum size had not been established. These are the three measures which have been taken in an endeavour to conserve

the lobster industry, as my hon. friend has suggested. With regard to the expenditure of $600,000-


Richard Burpee Hanson: Just
before the minister leaves the question of conservation, have he and his officers considered the question of promoting the export trade in fresh lobsters, vis-a-vis the canned lobster trade? What would be the effect on the individual fisherman? These are days of rapid transportation. Trucks are operated clear from Shediac to Boston, which is the outlet for our live lobsters. I have eaten lobsters in Florida that were brought by plane from New York.


Joseph Enoil Michaud: So have I.


Richard Burpee Hanson: And of
course we paid something for them. They had nothing like them in the south. What would be the effect on the individual lobster fisherman if he sold fresh lobsters only instead of selling his catch to the canneries? My own view, speaking subject to correction, *-and perhaps I am a little rash in making the statement-is that he would get three dollars for every, one he gets now; that for the lobsters he exported to the luxury trade in New England he would get three times as much as he is paid by the canned lobster trade, which now is nearly non-existent. Lobster consumption has gone down. The minister will find himself with a very large quantity of canned lobster on his hands when he gets through spending this $600,000, and I do not know where he is going to dispose of it. It cannot go overseas, and I do not think either the New England or the Canadian people will take it unless it is very cheap. What is the minister's opinion with respect to transforming the fisherman's business into one in which he sold only fresh lobsters? I think it could be done, and that it would be all to the good so far as the fisherman is concerned. Just take the status of the lobster fisherman in Shelbume-Yarmouth, around that end of the bay of Fundy or in Kent county, New Brunswick. What is the position?


Joseph Enoil Michaud: In the first place, the fresh lobster market is the luxury market, and the quantity of fresh lobsters that can be absorbed by that market is limited.


Richard Burpee Hanson: In the
home market?


Joseph Enoil Michaud: In the home market as well as the United States market.


Richard Burpee Hanson: Oh, I think there is an unlimited market over there.

War Appropriation Bill


Joseph Enoil Michaud: To-day practically all the lobsters caught along the coast of Maine, around the southern coast of New Brunswick, and in the Bay of Fundy, are exported to the United States market. Fresh lobsters must be consumed quite soon after they are out of the water; they cannot be conserved or kept in cold storage for any length of time.


Richard Burpee Hanson: Lobsters may be kept alive all summer in a pond. Go to St. Andrews and you will see them fished out every day.


Joseph Enoil Michaud: Exactly. Then we must take account of the fact that the canned lobster industry has been established for some time; that a large amount of capital is invested in it, and that a certain number of fishermen and also a number of cannery men and fish exporters depend upon that industry. In order to transform it into a more modern method of marketing, time is required. We cannot overnight, or even in a year or two, absolutely wipe out the investments of the last thirty or forty years and change the industry entirely. That takes time.
With that in view, for some years past the department has been encouraging the keeping of lobsters in ponds. We have licensed people who will invest the money necessary to keep lobsters the year round, and market them. This has been quite successful, and of course the demand of the market is practically the limit of that branch of the industry. Those who go into that business have a very good and profitable market, but as I said before, the ability of this market to absorb lobsters is limited, and the amount of fresh lobsters marketed is limited by the demand. It is certain that along the coast from Prince Edward Island, the northern part of New Brunswick, the strait of Northumberland, the coast of Kent county, Northumberland county and Westmorland county, there were no live lobsters exported three or four years ago. At the present time throughout the fishing season, from May 10 until the end of June or the first week of July, trucks especially fitted with tanks leave New Brunswick practically every night and arrive in Portland the next morning. There the lobsters are loaded on trains and reach the Boston market the following noon. However, as I have said, this market has a limit. There is no doubt, of course, that the development of this branch of the industry has had its effect on the canning branch. Last year the reduction in the pack of canned lobsters was due partly to the profitable fresh lobster market which the fishermen had.


Richard Burpee Hanson: What does the minister now propose to do with the
55,000	cases? That is important.


Joseph Enoil Michaud: I do not propose to do anything, because the 55,000 cases were all sold out, three weeks ago.


Richard Burpee Hanson: To whom?


Joseph Enoil Michaud: 
Percy Chapman Black: What for?


Joseph Enoil Michaud: Working capital.


Percy Chapman Black: What was the profit or loss last year?


Joseph Enoil Michaud: I will come to that. We asked for a first advance of $173,000, as working capital. We did not know how the trade would be affected, or what we would have to do. That was the first venture we had made. Fortunately, we did not have to use that advance of $173,000. We took all the canned lobster offered to the lobster controller, provided it met with the established inspection standards, and sold it. The cost to the department was about $12,000.


Richard Burpee Hanson: That was a total loss to the department?


Joseph Enoil Michaud: Yes.


Richard Burpee Hanson: Was that
a loss in sales?


Joseph Enoil Michaud: No; there was a margin of profit on sales. But the actual cost of setting up provisions for the marketing of that lobster was about $12,000. Only 20 per cent of the pack was offered to us. Of course we encouraged the packers to sell their own pack, because the department was not interested in ousting them from their business, taking their place, or disturbing the usual business practice they had established. It was our intention simply to encourage them; that we did. It cost us $12,000 and established a new market for the Canadian industry. Up to last year the United States market absorbed only 10 per cent or 12 per cent of the pack.


Richard Burpee Hanson: That is
canned lobster?


Joseph Enoil Michaud: That condition arose
from two causes: First, there was the competition of Japanese and Russian crabmeat, and there was the further cause arising from inferior quality in the pack our fishermen were offering to the United States market. Last year we made a determined effort to break into the United States market. We circularized the packers urging them that their
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goods should be produced as first quality. That was done to meet the main objection offered by the United States buyers.
By cooperation between the packers and the departmental officials we were successful in enlisting the good-will of the United States buyers, and succeeded in obtaining their agreement to give another trial to the Canadian product. As a result, we marketed last year in the United States 66 per cent of the pack.


Richard Burpee Hanson: At what
price?


Joseph Enoil Michaud: There were three grades at prices of $16, $17 and $18 respectively, if I remember correctly. We did that through connections we succeeded in establishing with chain-store buyers from the United States who were willing to give a preference once more to the Canadian product. Further, we succeeded in convincing the Canadian consumer to give greater consideration to Canadian canned lobster.
The surprising fact is that in the five years preceding last year, out of an average of
85,000	or 90,000 cases no more than 5,000 were consumed in Canada. Last year, however, we consumed in this country from 35 per cent to 40 per cent of the Canadian pack. The result was that we disposed of last year's pack on the Canadian and United States markets to the point where three weeks ago none could be found in Canada. The market was short.


Richard Burpee Hanson: That seems to be a successful operation. In view of it, does the minister require $600,000 working capital this year?


Mr MICHAUD:: Again this year we do not know what the conditions may be. The catch might be much larger than it was last year, and larger quantities may be placed on the market.


Richard Burpee Hanson: Is that desirable?


Joseph Enoil Michaud: From the viewpoint of
conservation, it is, strictly speaking, not desirable; but when the lobsters are in the water, we may be sure the fishermen will catch them and offer them to Canadian consumers. That is practically the only cash crop of the fishermen on the Atlantic coast.


Richard Burpee Hanson: There is something in that.


Joseph Enoil Michaud: It is an important paying crop-


Richard Burpee Hanson: The minister is absolutely right, there.
IMr. Michaud.]


Joseph Enoil Michaud: -and it would be difficult to convince the fishermen that they should not take advantage of it. My hopes are that if we have to use the $600,000 as working capital, we might make a profit' rather than have a deficit in the coming year.


Richard Burpee Hanson: What the minister has said with respect to the lobster fisheries being the only cash crop of the fishermen on that coast is absolutely right. In the light of that fact, *while I shall not now press the Minister of Fisheries for an answer, I advise him that when his estimates are before the committee I shall ask him what he is doing for the other fishermen on the Atlantic coast, as well as for those on the Pacific coast. As I indicated last summer, there can be no question that the fisherman, at least in eastern Canada, is the forgotten man. His position is deplorable to-day in most centres.
For instance, the smoked herring trade of Grand Manan island is shrinking to almost nothing. When I was a boy it was the staple product of 3,000 people. I know that, because we were directly connected with the trade, and supplied practically all the boxes in which they were packed. As a boy I had an intimate knowledge of the trade. To-day it amounts to nothing. I know the efforts which have been made by the marketing board to nurture it, and when the time comes I shall ask the minister what he proposes to do for those people. My colleague now wishes to ask some questions about the lobster board.


Percy Chapman Black: Has the
minister given consideration to the bonusing of the lobster fishing industry for not catching lobsters, as a solution or partial solution of the difficulty. We know that action is being taken to help solve the wheat situation in the prairie provinces. They are offered a bonus for not producing wheat. The waters surrounding my constituency constitute the finest lobster fisheries in the world. I suppose the same could be said for the waters in the constituency of the hon. member for Prince. I should like to know if the lobster fishermen in Cumberland, Prince and other counties are to receive a bonus for not catching lobsters, in order that the lobster industry may be conserved.	[DOT]


Joseph Enoil Michaud: Has my hon. friend tried to convince the fishermen of Cumberland or Prince or Yarmouth that they should not fish when the lobsters are there?


Richard Burpee Hanson: They want both the bonus and the fish.


Joseph Enoil Michaud: There is a demand for this product on the Canadian market. The suggestion might be in order if there were a

War Appropriation Bill
surplus, but actually there seems to be a shortage. During the last three weeks inquiries have been received from large distributors in Canada and the United States for canned lobster. Under such circumstances I do not think it would be wise to pay people not to carry on this profitable industry.


Percy Chapman Black: The main purpose would be to conserve the lobster industry.


Joseph Enoil Michaud: We are trying to conserve the lobster industry. At the same time we are trying to take advantage of the markets that offer. These factors must be taken into account in an effort to satisfy the people who depend upon this industry for a livelihood, and at the same time to conserve the industry.


Mr. KINLEY:: You are able to sell the lobsters?


Joseph Enoil Michaud: Yes. The leader of the opposition suggested that something should be done to help the industry, and he referred to the smoked fish or smoked herring industry. At one time this was a profitable industry on Grand Manan and other islands in those waters. However, world conditions have changed. This product was put up largely for export, but the people living in countries which took this product are now demanding a different kind of fish.


Richard Burpee Hanson: Is that correct, or is it not that they cannot find the money with which to buy them?


Joseph Enoil Michaud: Both. They are asking for a cheaper fish which cannot be obtained in Canada. We cannot compete with Newfoundland and Norway in putting out certain varieties of cheaper fish. This is a difficult problem which we have to face. It has confronted all governments, and all those who have occupied the position which I now occupy.


Percy Chapman Black: Who constitute the lobster board?


Joseph Enoil Michaud: Mr. Lee of Halifax is the administrator.


Richard Burpee Hanson: Is Mr. Magee on that board?


Joseph Enoil Michaud: He was on the advisory board when the board was first set up. There is Mr. Tidmarsh of Charlottetown and Mr. Mclnemey of the United Maritime Fishermen's Union.


Percy Chapman Black: What expenditures were necessary in connection with this board? The Minister of Finance has told us that no partisanship is to enter into these expenditures, and I should like to have the assurance from the minister that this principle
has been applied to all appointments and to all rentals of premises in connection with the lobster board.


Joseph Enoil Michaud: It does apply as far as I am concerned. The gentlemen who compose the board were not known to me before their names were suggested by the deputy.


Percy Chapman Black: Does the board appoint the staff?


Joseph Enoil Michaud: The deputy minister is the lobster controller, and he appoints the staff. Mr. Magee is the only one who was known to me. I knew Mr. Mclnemey slightly because of his connection with the United Maritime Fishermen's Union. There was considerable difficulty last year in obtaining suitable quarters. In Charlottetown it was necessary to *take quarters in the skating rink or auditorium. In Halifax we were able to get space in the harbour cold storage plant.


Richard Burpee Hanson: That is
for storage purposes?


Joseph Enoil Michaud: In New Brunswick we had some difficulty in Shediac, but it happened that an English packing firm had to discontinue business because it could not export its products, and we leased its premises for a short time during the season.


Richard Burpee Hanson: What is the cost of operating the board?


Joseph Enoil Michaud: There was a deficit of


Richard Burpee Hanson: That is
for last year; what is the estimated cost for this year?


Joseph Enoil Michaud: If we have the required volume, we expect to have a profit.


Percy Chapman Black: How many
cases were involved in this deficit of $12,000?


Joseph Enoil Michaud: Twenty thousand cases. We try to find markets for the established trade rather than take over ourselves. This year if it is possible we will do the same, and if we have the volume we shall make a profit on what is turned over to us. We had a set-up -we had to provide it at the beginning of the season-to handle a business of $1,000,000.


Mr. GREEN:: May I ask the Minister of National Defence to tell us the channel through which it is planned to raise reinforcements for the active army. An announcement was made early in the year that Canada would require from 40,000 to 80,000 men this year, and as I understand it the procedure before was to raise them through depots-that is, the regiments overseas would have a depot at home which would raise the necessary reinforcements. But recently there seems to have

War Appropriation Bill
been a change made, to have the reinforcements come in through the reserve units. That may be all right, but I would point out to the minister that in at least some cases these reserve units were recruited last summer after the fall of France, and older men and men with families enlisted in these units for the purpose of being prepared to defend Canada should that be necessary. A great many of them I think could not go overseas. It does seem to me that there is danger of the government getting its wires crossed on these reinforcement plans if it is intended to recruit the reinforcements entirely through the reserve units. It is very discouraging to the reserve units to be called on for reinforcements and find themselves in the position of not being able to respond at once because of the type of men they have in the unit. Will the minister tell us just what the plan of the government is and how many men have so far been recruited this year for the active army?


James Layton Ralston: The question, Mr. Chairman, will require quite a long statement in answer. As a matter of fact, as I intimated to the committee the other day, the Minister of National Defence for Air and the Minister of National Defence for Naval Services and myself have had a committee together in an endeavour to prepare a statement in words of one syllable, if I may put it that way, so that the recruiting system may be understood.
If I may take a moment or two before the committee rises, the system is this. At the moment, just as I am speaking, a call has gone out for reinforcements for a certain quota. I shall not give the serial number of the quota but I can tell my hon. friend the number of the reinforcements. The number of the reinforcements for this particular quota will be
6,000	other ranks. That quota is prepared at National Defence headquarters and is sent out to the military districts, the basis being the relation of the number of artillery units in the different districts, the number of artillery recruits required from the whole of Canada for this quota is 1,576, to be exact. As I have said, that number is divided amongst the different districts on the basis of the number of reserve artillery units which are there. And the same with the engineers; but there the number required is less. Bach district is given its quota to raise. The same with the signals, each district being included in the quota. For the armoured corps the number required is 731, divided among the different districts. For infantry-that is, rifle battalions-there is a call on four districts only of the eleven districts in Canada and for infantry, machine gun units, there is a call on only one district. For the R.C.A.S.C. there is a call on all districts, 894 recruits being

required, and for the R.C.A.M.C. there is a call on nine of the eleven districts. For the R.C.O.C., the ordnance corps, there is a call on the whole eleven districts, and for the provost corps the same For coast defence there is a call on the coast districts only, Nos. 6. 7 and 11; and for the forestry corps there is a call on four districts altogether.
What happens is this, that the district officer commanding gets the list, and having a call for a certain number of artillery personnel he allots them among the reserve artillery units in the district to give them all a chance.


Richard Burpee Hanson: The troops are taken from there first?


James Layton Ralston: Yes. The district officer commanding knows long before he gets this call about how many men in a particular unit are ready to enlist if the call comes. The district recruiting officer has kept in touch with the commanding officer and the recruiting officer advises the district officer commanding.
I am informed that, speaking roughly, one-third or more of these men will be got from the reserve units; that they are prepared now to furnish at least one-third of the number required The other men will be obtained through enlistments direct at the district depot of men who come in off the street, to use the phrase I used in answering my hon. friend the leader of the opposition the other day. These men who come into the district depot and enlist there will be documented at the depot and then be sent along with the men who have come in from the reserve units -the one-third I mentioned a moment ago- and go to the training centre.


Mr MacNICOL:: Will these new recruits be eligible for overseas service?


Mr RALSTON:: This quota is all for overseas service.
Mr. HANSON (York-Sunbury); Will public notice be given as to how many enlistments will be accepted at a particular military depot? Many men will come in and be disappointed -I have seen them turned back-unless they know just what the number required is.


James Layton Ralston: I have not seen the advertising that is done, but as members of the committee know, there is an allotment for each district for advertising for recruits. I was talking with the officers this morning and I asked that very question myself. It seemed to me that there was no reason why the public should not be advised how many men were wanted; that would prevent men from being disappointed when they come in and having to go home again. I see no reason why that should not be done. They told me

Rush-Bagot Agreement
that it is done in some cases, that they advertise that so many men are wanted for a particular arm of the service.
I have given a very rough outline of the procedure, in answer to the question of the hon. member for Vancouver South, and I should like an opportunity at some time to amplify it because it is useful information for members of the house and for the public too.
I just want to say this, in addition. I said to my hon. friend the other day that the recruiting offices were not open every day. I should have qualified that by saying that they are not open every day for recruiting for every arm of the service. For instance, in connection with this particular quota, vacancies will probably not be open for men who come in off the street to enlist in infantry units, and if they are open it will be only in a few districts. I am informed by my officers that it is probable, however, that infantry men in very limited numbers could be taken on even though not included in this quota because probably they could be used in the next quota. Generally speaking I think I can say that for the artillery, engineers, signals, the armoured corps, and probably the ordnance corps as well, there is opportunity in every district for a limited number, and only a limited number, of men who enlist off the street in addition to the men who come in from the reserve units.
The last thing I want to say is that the commanding officers of the reserve units, who receive pay for organization and recruiting, the commanding officers and the officers concerned have as one of their primary duties, in justification of the salary which is paid them, to see that their unit is organized and prepared to furnish a reasonable quota of men for the unit which their unit is reinforcing overseas. Secondly, and perhaps, along with that, they should make every effort to see that the unit is kept filled with men who will be able to take the place of those who have volunteered for overseas service.


Howard Charles Green: Does that mean that you do not want in the reserve units the older men who would be available to defend Canada but not to go overseas?


James Layton Ralston: The other day I invited an expression of opinion from the committee, though I have not heard anyone say anything, as to whether or not the time had come when the reserve units, henceforth, should be confined to men of A and B categories instead of including category C as well. In connection with the training centres, the regulations which have been laid on the table indicate that in those centres we are only taking men 14873-113
of A and B categories who would be qualified physically to go overseas if the opportunity offered. As a matter of fact, the officers commanding the reserve units have been asked to see to it, though not by shoving men out, that in connection with their enlistments some attention shall be paid to the possibility some day of an opportunity being given to their unit to be mobilized for overseas service, ensuring that the physical condition of the men shall be such that they will not have to drop a great number who would really like to go overseas but could not for physical reasons.


Richard Burpee Hanson: That is not settled yet?


James Layton Ralston: That instruction went to the officers, but the matter is not settled as to whether the category for enlistments in the reserve unit is to be definitely limited entirely to A and B category.
Progress reported.
On motion of Mr. Crerar the house adjourned at six o'clock.
Monday, March 24, 1941.