1941-02-18

PRIVILEGE-MR. POULIOT REFERENCE TO EDITORIAL IN THE TORONTO GLOBE AND MAIL

[Stage Direction]
Mr. JEAN-FRANQOIS POULIOT (Temis-couata): Mr. Speaker, I rise to a question of privilege. The Toronto Globe and Mail published on December 17 last an editorial in which the following sentence appears:
How was Mr. Purvis honoured by the Canadian government for the time and energy he gave unsparingly? When his report was under debate in the House of Commons in April, 1938, the Liberal member for Temiseouata created a scene by throwing a copy on the floor and calling it "rotten", demanding the deportation of Mr. Purvis to his native country, England, as an undesirable. Although Hon. Norman Rogers, Minister of Labour, rebuked the irresponsible member, we have no information that Prime Minister King was moved out of his complacency.
The Globe and Mail was born of a merger of two respectable papers, one being the Globe, which was a respectable Liberal organ. In its issue of May 24, 1935, the Globe carried an editorial entitled " 'Irresponsible'-Never", which reads as follows:
An Ottawa dispatch from the editor of the Globe, appearing in yesterday's issue, contained one of those unfortunate errors generally classified as "typographical", and one which, in this instance, was particularly ridiculous. As written in Ottawa it referred to M. Jean-Frangois Pouliot as "the irrepressible member for Temis-couata"; in print the word "irrepressible" became "irresponsible"!
The member for Temiseouata being anything but "irresponsible", the mistake is obvious to those who know him. If "irrepressible" had been changed to "irresistible", indefatigable", or any one of a dozen other words that would apply aptly to M. Pouliot, it would not have been so bad-but "irresponsible" is the limit of absurdity. However, the imp that muddies such things had its way.
M. Pouliot is among the valuable members of the house, well informed on all subjects; a tireless worker, who of late has added to his parliamentary duties the difficult task of compiling a sadly needed classification of unemployed persons in Canada, which will be of the greatest value in relief work.
The editorial concludes with a quotation from Horace Greeley.
The other parent of the Globe and Mail was the Mail and Empire, a highly respectable Tory paper, which in its issue of May 18, 1936, referred to the member for Temiseouata in these words:
Mr. Pouliot is just about the most interesting and the most hopeful figure which the present parliament possesses. . . .
Likeable and always courteous, sincere and hard-working. Such are the attributes which
commend him. . . . The only sure conclusion is that he is definitely one of parliament's significant personalities. It is likely that democracy could not function if every member of parliament insisted on being a Pouliot.
Some hon. MEMBERS:: Order.


Mr. POULIOT:: It is also a fact, however, that many of the abler members of parliament would go far towards restoring parliament to its traditional ideal if they fashioned themselves more on the Pouliot model of independence to party domination, and diligence.
Now, sir, just one word. I was mentioning the fact that the Globe and Mail was produced by merging two respectable papers, one Liberal and one Tory; and the result is a still-born	shrimp-un avorton	mort-newhich is a true emblem of the national government which is advocated by such hon. members as the member for Parkdale (Mr. Bruce).



WAR MUNITIONS AND MATERIALS


Hon. C. D. HOWE (Minister of Munitions and Supply):: I desire to lay on the table,
as requested by the leader of the opposition (Mr. Hanson) all contracts between the Department of Munitions and Supply and the John Inglis company, and copies of all orders in council passed in that connection.



DOMINION-PROVINCIAL CONFERENCE QUESTION AS TO CARRYING OUT OF SOME OF RECOMMENDATIONS OF ROWELL-SIROIS REPORT

[Stage Direction]
On the orders of the day:
Hon. R. B. HANSON (Leader of the Opposition) :: I desire to ask a question of the
Prime Minister. In a return tabled yesterday, sessional paper 103C, being the correspondence between the dominion government and the governments of Manitoba and Saskatchewan with reference to the royal commission on dominion-provincial relations, there appears a letter under date September 23, 1940, from1 the Prime Minister of Canada to the Premier of Manitoba. In that letter appears the following paragraph:
You will appreciate that it may be possible to carry out some of the commission's recommendations without calling a conference in the first instance. So far as it may appear to be in the national interest and that of the provinces so to do, the government intends to proceed accordingly.
Will the Prime Minister be good enough to indicate to the house at an early day what recommendations of the so-called Sirois

Suspension oj Standing Order

commission might, in the opinion of the government, be carried out without the calling of a conference in the first instance, and what action is now proposed by the government with respect to such recommendations?
Right Hon. W. L. MACKENZIE KING
(Prime Minister): As my hon. friend has been kind enough to ask me to reply to that question at an early day, I shall be happy to do so.


Richard Burpee Hanson: Very well. BUSINESS OP THE HOUSE



SUSPENSION OF STANDING ORDER 60 TO PROCEED WITH WAR APPROPRIATION MEASURE

[Stage Direction]
On the orders of the day:
Right Hon. W. L. MACKENZIE KING (Prime Minister):: It was understood at the time of adjournment yesterday that, if the house would give its consent to-day, the government would proceed with the introduction of the resolution on which the war appropriation bill for 1941-42 is based. To proceed, however, with that resolution will require, as I have indicated, not only the unanimous consent of the house but its consent to waiving standing order 60, which is as follows:
If any motion be made in the house for any public aid or charge upon the people, the consideration and debate thereof may not be presently entered upon, but shall be adjourned till such further day as the house thinks fit to appoint; and then it shall be referred to a committee of the whole house, before any resolution or vote of the house do pass thereupon.
The motion to ask the consent of the house to dispense with standing order 60 will be put by the Minister of Finance (Mr. Ilsley) when he requests permission to introduce the resolution. I am referring to the matter at the outset in order that 'hon. members may appreciate the procedure suggested and comment upon it if they so desire. Hon. members will see that the regular procedure, if one followed the rules literally, would prevent the house having before it any explanation of the war appropriation bill earlier than Thursday of this week; because, while the notice appears on the votes and proceedings of today, to-morrow it would appear under government orders, and at that time the Minister of Finance in giving notice of his intention to proceed would be obliged to advise the house that His Excellency the Governor General had been informed of the subject matter of the resolution and recommended it to the consideration of the house, and that on the day following he would move that the house go into committee of the whole to consider the resolution. To follow that routine of procedure-

which has much to commend it at certain times but would seem rather to impede progress at the present time-would occasion delay and would, I imagine, deprive hon. members getting, as early as they would wish to receive it, the information which the Minister of Finance would give on presenting the resolution.
May I say that the government has no desire to press any of its measures at any stage unless so doing is going to accommodate the house generally. I should like it to be distinctly understood that we will not press for the advancement of the resolution by a single stage, certainly not at this stage of the reassembling of the house. But I do think hon. members will agree that it would be desirable to have some business to proceed with this afternoon. If the motion is carried we will then have the opportunity of receiving at once a statement on the war appropriation bill from the Minister of Finance. How much further proceedings should be carried will be, of course, a matter for the house itself to decide.


Richard Burpee Hanson: I should like to say on behalf
of this party that we are cognizant of all the things which the Prime Minister (Mr. Mackenzie King) has alluded to. Further I would like to observe that probably this is the most important resolution in size or magnitude, measured by dollars and cents, which has ever come before the Canadian House of Commons. The figures which have been spoken of and which will be revealed are almost fabulous to us who deal in small things. Therefore I agree with the Prime Minister that there should not be the slightest move on the part of anyone, least of all the government, to press the matter forward. But I do think it would be a pity if we should have to wait two days formally to get the matter before this House of Commons and to have the minister make his opening statement.
So far as we are concerned we shall be glad to waive the rules with respect to notice and have the Minister of Finance (Mr. Ilsley) make his motion this afternoon, and his preliminary speech, on the understanding that the debate will be adjourned in order that I, and everybody else I would hope, may give due consideration to the magnitude of this proposal of the government, having regard to the times through which we are passing. The figures are astonishing. The Canadian people must be brought to a realization of the greatness of the effort as measured in terms of dollars and cents and all that that implies. Therefore, so far as we are concerned, we shall facilitate the introduction of the motion on the under-

War Appropriation-Mr. Ilsley
standing that ample time be given not only for the membership of this house but for the general public, through the medium of the great press of Canada, to understand just what is involved in it.


William Lyon Mackenzie King: I understand the leader of the opposition to say that he gives his consent to the motion being immediately introduced by the Minister of Finance, on the understanding that if the motion carries and the minister introduces the resolution and makes his speech thereon the debate will then be adjourned.


Richard Burpee Hanson: That is my understanding.


William Lyon Mackenzie King: May I observe that we are perhaps apt to forget that parliament has been already in session for four or five weeks. Hon. members may not recall as clearly as they would had there been no adjournment, what was said during the debate on the address. If the session were being opened now, I should feel that, at the time of the introduction of the war appropriation bill, it would be desirable for the ministers of defence and the Minister of Munitions and Supply to make statements outlining the activities of their departments in relation to Canada's war effort. But these statements, however, have already been made. They appear in Hansard. For that reason the government does not propose to have that particular course repeated at this time.
Hon. members will recall that when the war appropriation bill was introduced at the last session, I made in concise form a statement setting forth the government's war effort programme. Yesterday, speaking on foreign affairs, I took advantage of the opportunity to include in my remarks a concise statement of the government's present programme. There will be no necessity, therefore, to repeat that statement.
I mention these two facts as hon. members, in debating this particular resolution and the bill, may wish to refresh their memories by looking up in Hansard the reviews made by my colleagues and the activities of these several departments and also should they so desire that portion of my remarks of yesterday outlining the government's war programme. For this reason, I agree with the leader of the opposition that it would be in the interests of all concerned to have at this stage of the session, an adjournment after the Minister of Finance has spoken. I share his view that there has never been any measure introduced in the parliament of Canada which has involved as large an expenditure as the bill which will be based upon the resolution which
is to be presented to-day. I believe that the public of Canada will appreciate the desire of hon. members to have as much time as possible carefully to study that statement in all its implications before beginning to debate the resolution. The public will realize that, as we have just come back after an adjournment of several weeks, the only means whereby such an opportunity could satisfactorily be afforded would be to adjourn the proceedings of the house for the remainder of the day so that hon. members might prepare themselves for further debate to-morrow.



WAR APPROPRIATION BILL


Hon. J. L. ILSLEY (Minister of Finance):: As the Prime Minister (Mr. Mackenzie King) has said, it will be impossible for me to make the motion without the unanimous consent of the house, which I understand is being given. As I understand the procedure, I make two motions. The first is that the house resolve itself into committee of the whole immediately. If that passes I then move that the Speaker leave the chair, and on that motion I make such remarks as I have to submit to the house.
I move:
That the house resolve itself into committee of the whole this day to consider a resolution to provide that moneys be granted to His Majesty towards defraying expenses or making advances or loans during the year ending March 31. 1942, and that standing order 60 be suspended in relation thereto.
His Excellency the Governor General having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.


[Stage Direction]
Motion agreed to.
James Lorimer Ilsley: That Mr. Speaker do now leave the chair.
He said:	I wish to .speak to this motion.
Perhaps the shortest way in which I can bring the subjeot matter of the resolution before the house is to read the resolution as it appears in the Votes and Proceedings:
Resolved, that it is expedient to introduce a measure to provide, inter alia,
1.	That sums not exceeding $1,300,000,000 be granted to his majesty towards defraying any expenses or making any advances or loans that may be incurred or granted by or under the authority of the governor in council during the year ending March 31, 1942, for-
(a)	the security, defence, peace, order and welfare of Canada;
(b)	the conduct of naval, military and air operations in or beyond Canada;
War Appropriation-Mr. Ilsley

(e) promoting the continuance of trade, industry and business communications, whether by means of insurance or indemnity against war risk or in any other manner whatsoever; and
(d) the carrying out of any measure deemed necessary or advisable by the governor in council in consequence of the existence of a state of war.
2.	That the governor in council be empowered to raise by way of loan under the provisions of the Consolidated Revenue and Audit Act, 1931, such sum or sums of money, not exceeding in the whole the sum of $1,300,000,000 as may be required for the purpose of defraying such expenses or making such advances or loans, the principal and interest of any such loan to be a charge upon and payable out of the consolidated revenue fund.
3.	That the governor in council be empowered to reexpend, advance or loan moneys that may be received by way of refund or repayment of advances, loans or expenditure under the war appropriation acts of 1939 (2nd session), 1910 and 1911.
If this resolution pass it will be followed by a bill, the War Appropriation Act of 1941. This bill will be substantially in the same form as the War Appropriation Act passed last summer. The essential features of the bill are:
(1)	A vote of credit.
(2)	A grant of borrowing authority; that is to say, it gives the governor in council power to borrow funds to pay for any of the expenditures covered by the vote of credit.
(3)	It confers power to make temporary recoverable advances to any allied government.
The only change of substance is a provision authorizing the governor in council to reexpend refunds of expenditure or repayments of advances or loans made under this or any previous war appropriation act. For example when a dominion wholly-owned corporation buys, let us say, rubber or silk, the purchase price is charged against the war appropriation. Later the government corporation sells the rubber or silk to firms which have war contracts, and the government is reimbursed for its original expenditure. The purpose of the amendment-perhaps I should call it the new feature of this bill-is to allow the amount reimbursed to be reexpended without making an additional appropriation.
The same principle is involved in connection with temporary advances or loans which are really in the nature of revolving funds. The adoption of the new principle will avoid duplication or pyramiding of expenditures or loans.
Perhaps I should follow the precedent which was set in the introduction of war appropriation bills in the last war, and give the house some indication of the expenditures that were made under the last War Appropriation Act. It might be more appropriate if I did that

at the time of the introduction of a supplementary war appropriation act, which will be necessary before the end of the present fiscal year, but it is a little difficult for the house to give intelligent consideration to the war appropriation bill which we are introducing now unless the house knows something of the disposition that was made of the moneys provided by the last War Appropriation Act.
Expenditures under last year's act:
Under the War Appropriation Act of 1940, which was assented to on May 29, $700,000,000 were provided for war expenditures. In the budget brought down by the present Minister of National Defence (Mr. Ralston), then Minister of Finance, in June of 1940, he stated that the amount required for the full fiscal year would be larger than this total by perhaps $150,000,000 to $200,000,000.
On the second day of August last I spoke in this house and indicated that the total commitments then outstanding for the present fiscal year were approximately $940,000,000. I think the leader of the opposition (Mr. Hanson) will remember that occasion, because for some days 'he was pressing the government to state what the commitments were for the present fiscal year, and $940,000,000 was the best estimate we could make then, after crediting the money that we expected to be repaid to us by the United Kingdom government.
Now, what has been the actual experience? For this fiscal year up to January 31 the actual cash outgo on the dominion war account has amounted to $53S.804,000, excluding $27,133,000 of disbursements recoverable from the United Kingdom or other allied governments. This amount is broken down as follows:
Militia services	
Naval services	
Air Force
Home War defence and overseas	
Air training plan-Canada .. Other defence services (administration, internment, censorship, Royal Military College,
etc.)	
Department of Munitions and
Supply	
Other departments

This total does not take full account of obligations incurred overseas for which accounts have not yet been rendered by the United Kingdom government. We have made certain advances on account pending the working out of final accounting arrangements, including per capita issue rates for various supplies and services.

War Appropriation-Mr. Ilsley
For the full fiscal year it is now estimated that our total war expenditures will approximate $875,000,000. That is the closest, the most accurate estimate that can be made now. It means a rapid expenditure during the remaining months of the fiscal year; the expenditure being made now is at a rapid rate. Starting at relatively low levels in the early spring and summer months-approximately $25,000,000 a month in the first quarter of the fiscal year-our war expenditures increased rapidly, amounting in December to $84,000,000 and in January to $87,000,000. This is at a rate of over a billion dollars a year.
In planning the war programme for the coming year we have had regard to the following factors:
(a)	The physical capacity of Canada to produce equipment and supplies for ourselves and Britain;
(b)	Our consultations with the British government as to the forms our effort should take in order to make the most effective contribution to the joint cause; and
(c)	Our belief that the Canadian people desire that this country do its utmost, and that they are willing to make the sacrifices and bear the burdens which such an effort involves.
To finance the programme that has been developed on the basis of these considerations we have decided to ask parliament for a war appropriation of $1,300,000,000 for the coming fiscal year.
The war programme which was outlined by the Prime Minister yesterday and the war activities which will be carried on during the next fiscal year, as set out in the statements made by the defence ministers in the debate on the address, will involve a total estimated expenditure in excess of this sum by perhaps as much as $150,000,000. But, as the house will realize, there are very great difficulties in making precise estimates of war expenditures. In particular, there are at least three factors which make accurate estimates impossible.
First, there is the impossibility of calculating wastage of equipment and the amount of ammunition that will be used, as this will depend upon the nature of the warfare that develops.
The second factor has to do with the capital assistance which has been given to manufacturing plants through the Department of Munitions and Supply. Large sums of money have been advanced, and additional sums will be advanced, to contractors to pay for adding to their plants or to build new ones. Additional sums will be advanced to provide working capital. In many cases Canada and the United
Kingdom are making advances on a joint basis, but in some of these cases the division between the two countries has not been settled. In the meantime the money has been put up in order that there shall be no delay; the division will be worked out later.
A part of these advances may be returned during the course of the year, but this cannot be determined now. Furthermore, a portion of the amortization cost of the capital expenditures resulting from such advances may be included in the cost of the equipment which is included in the estimates of the Department of National Defence. If this is the case there may be some duplication in the amounts included in the estimates of the Department of Munitions and Supply and the Department of National Defence. At this stage it is difficult-impossible, I should say-to determine the extent of such duplication because the costs of the equipment which is to be produced are themselves based on estimates. The accuracy of these estimated costs will depend to a considerable extent upon the quantity of equipment which will be produced.
The third factor making for uncertainty in estimating is the question of the amount of war materials and equipment which can be physically produced and delivered within the coming fiscal year. Estimates have been made of the probable deliveries, and I assume that the Minister of Munitions and Supply (Mr. Howe) will be discussing the whole question of the production programme at the proper time. It will suffice if I say that this programme is dependent in certain important aspects upon the delivery of machine tools and parts from the United States. If there should be delays in such deliveries the completion of the equipment in question will be held up.
In view of these various uncertainties I thought it preferable not to ask at this time for the total of the estimates which have been submitted. Instead, as I have said, the bill calls for an appropriation of $1,300,000,000. It may be that the total cost of our war effort expenditures during the coming fiscal year will exceed this figure by a considerable amount, and if it does it will be necessary for me to come back for an additional appropriation at a later date.
However, in determining the magnitude of our total war effort we must not overlook another burden which Canada has assumed. I refer to the assistance which we are giving to the United Kingdom in financing the war materials, equipment and other supplies which are being produced for the United Kingdom in Canada. During the first eleven months of the war we made available to her 184 million

War Appropriation-Mr. Ilsley
Canadian dollars by our repatriation programme; that is, by buying in or paying off Canadian securities which were held in the United Kingdom. For the succeeding six months period ending January 31 of this year we agreed to provide 8150,000,000. We have done this, and indeed by the end of this month will have provided an additional $137,000,000 by accumulation of sterling which, in part at least, is in anticipation of repatriation to be carried out in later months of the year. I cannot now estimate the total amount which we will be able to do for the second full year of war or for the fiscal year 1941-42, but I can say that we are following the policy of going as far as it is practically possible to go.
While repatriation involves the repayment of foreign indebtedness, and thus will strengthen the economy in the long run, it is obvious that to-day it imposes additional strain on Canada by increasing the amount her people must save in order to purchase the securities which are being returned to this country. For practical purposes, in considering the burden which is to be placed upon this country it is just as much a part of our war effort as the expenditures which we propose to make on our own account.


Richard Burpee Hanson: Would the minister allow me to interrupt in respect to this repatriation? Would he be good enough to elucidate as to the character of the securities repatriated and whether they have been or are to be placed upon the market? That is quite an important point.


James Lorimer Ilsley: All the securities that have
been repatriated by or on behalf of the Canadian government to date have been government or government guaranteed securities.


Richard Burpee Hanson: They are being cancelled, then?


James Lorimer Ilsley: 
Richard Burpee Hanson: Mr. Speaker, as has been intimated
by the Prime Minister (Mr. Mackenzie King) it is not my intention to proceed with this debate this afternoon, and I think the concluding observations of the Minister of Finance (Mr. Ilsley) will indicate to the house and country one of the reasons why I do not wish so to proceed.
I wonder if the membership in this chamber followed those figures? I wonder if the Canadian people will realize their significance?

War Appropriation-Mr. Hanson (York-Sunbury)
I may say to you, sir, that the significance of those figures impressed me more than anything else connected with finance I have heard since coming to the House of Commons. It could not fail to do so. The magnitude of the sacrifice the people of Canada are to be asked to make for 1941 will be emphasized in their minds by the staggering amounts of money the Minister of Finance has asked them to provide.
For these reasons I do feel we ought to take time to ponder what has been said this afternoon. Each one must face the situation squarely, as a citizen, to see how it will affect him, and how it will affect the country as a whole. On more than one occasion I have said the people of Canada will give the government money for its war effort, and the people will hold their government strictly accountable for the manner in which the effort is carried on and in which the expenditures here indicated will be made. I repeat those statements to-day. By and large, Canadians will make willingly any sacrifice the government may ask them to make, if they are assured the money is to be spent in a proper manner and for the purposes for which parliament is about to vote it.
Notwithstanding the fact that this is a party government,-and it still is-motivated by a party spirit, the people of Canada are behind the government's war effort. But those same people I am satisfied are determined to see this war .through, if it takes their last dollar. I congratulate the Minister of Finance upon having made a plain statement, notwithstanding the magnitude of the amounts mentioned in it. I hope Canadians will read that statement, every word of it, and understand the significance of it.
On motion of Mr. Hanson (York-Sunbury) the debate was adjourned.
On motion of Mr. Mackenzie King the house adjourned at 3.55 p.m.
Wednesday, February 19, 1941.