1941-03-20

Right Hon. W. L. MACKENZIE KING (Prime Minister):: Before the flowers are
taken away, may I have the pleasure of extending to my hon. friend the leader of the opposition (Mr. Hanson) my best wishes for many happy returns of the day. I do so as well on behalf of my colleagues, on behalf of all hon. members on this side of the house, and, may I say, on behalf of all hon. members of the house. We all wish him many happy returns of the day.


Hon. R. B. HANSON (Leader of the Opposition) :: Mr. Speaker, may I thank the
Prime Minister for his kindly sentiments expressed just now to myself. It is a matter of the greatest regret, I think, to every one of us that time will not pause. I declare now that I am not going to have any more birthdays.



QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
civil protection committee
['I\ncannot answer that at the moment.']
Mr. LAPOINTE (Quebec East):: I can
only answer question 2, which concerns the Royal Canadian Mounted Police; to this question the answer is, none. Perhaps it may be just as well to have the question stand for the other departments.


Mr. COLDWELL:: Yes.


Mr. SPEAKER:: Stands as to 1, 3 and 4.

Questions



Mr. BLACK (Cumberland):: 1.	Has the Department of Public Works a dredge at Liverpool, Nova Scotia? If so, state, (a) when it was last in service and where it operated; (b) what has been the cost each year since 1935, for repairs, caretakers, rental for storage or wharfage accommodation, other expenses?
2.	When was such dredge built, what is the present estimated value, and what is the estimated cost to put it in satisfactory working condition?
Mr. CARDIN;
1. Yes, dredge "No. 115."
(a) 1930-31 at Liverpool, Brooklyn, and Loclceport, N.S.
(b)	1935-36	1936-37Repairs	
Nil	NilCaretaker	$2,007	10	$1,765	08Storage and	wharfage..	688	50	646	75Stores, etc	
557	30	235	00
*To January 31, 1941.
2.	(a) 1906; (b) $45,000; (c) $14,675.
1937-38	1938-39	1939-40	1940-41* *Nil	$ 130 06	$ 85 00	$ 16 15$2,061 28	2,064 51	2,096 78	1,730 65638 25	638 75	640 50	535 50192 45	346 02	90 49	175 00


IMPORTS OP FRUITS AND VEGETABLES
Mr. GRAYDON:: 1.	What was the total value of the imports of fresh fruits from the United States into Canada during the calendar year 1940?
2.	What was the total value of citrus fruits and fruits of a class or kind not grown in Canada imported from the United States during the said year?
3.	What was the total value of fresh vegetables so imported during the said year?


Mr. MacKINNON (Edmonton West):: 1.	Total value of imports of fresh fruits from the United States into Canada during the calendar year 1940 were $16,132,037.
2.	Total value of citrus fruits from the United States into Canada during the calendar year 1940 was $9,625,373.
3.	Total value of fresh vegetables from the United States into Canada during the calendar year 1940 was $5,890,223.


DECENNIAL CENSUS
[Stage Direction]
On the orders of the day:
Mr. GORDON GRAYDON (Peel):: I should like to direct a question to the Minister of Trade and Commerce. In view of wartime conditions, and in the interests of economy, has the government decided to postpone the taking of the census for this year?


Hon. J. A. MacKINNON (Minister of Trade and Commerce):: The question of the census is under consideration by the government.
Mr. GRAYDON; Does that mean that there is some chance of postponement?


James Angus MacKinnon: I
cannot answer that at the moment.



WAR APPROPRIATION BILL


[Stage Direction]
The house resumed from Wednesday, March 19, consideration in committee of a resolution to provide sums not exceeding $1,300,000,000 for the year ending March 31, 1942, for the carrying out of measures consequent upon the existence of a state of war- Mr. Ilsley-Mr. Vien in the chair.
Mr. GREEN:: I think it would be very helpful to the committee if the Minister of Pensions and National Health (Mr. Mackenzie) would explain the present situation with regard to air raid precautions work across Canada. As I understand it, a year or so ago the government set aside a certain amount of money to be used to finance the development of air raid precautions groups in certain parts of the country, and looked to the provincial governments and the municipalities to carry out the details. I do not know of course what the situation is in the other provinces, but in British Columbia the time has come when some government, dominion or provincial or municipal, must be given the responsibility of leadership in the making of necessary further arrangements. For example, in British Columbia several thousand people have taken training and have really made great sacrifices
War Appropriation Bill

to fit themselves to take charge in the event of air raids, but now they have no proper places in which to store their equipment, nor have they any alarm signals or sirens; there is no central control system such as would be needed in the event of air raids, and they have no depots at all for various headquarters, no first aid posts. In many ways the scheme has come to a dead end.
These people have shown an excellent spirit throughout, over a long period of time, and if all that effort is not to be lost, definite steps must be taken at once either by the federal government or by the different provincial governments. I notice that in this war appropriation provision is made for $250,000 for air raid precautions work. I would ask the minister to tell us just how far the government proposes to go. Are the various local committees that have been set up being given any information that will enable them to judge as to the seriousness of the danger of air raids? How can they tell whether they should organize on the basis of an imminent threat or on the basis of the mere possibility of danger?
I think the local governments are entitled to have that information from the federal government, and they should know whether or not they have to put up any further money that is required or whether it will come from the federal government. Some of the municipalities find themselves without the legal power to tax, to raise money for furthering this work; yet the provincial governments are hanging back, not paying out the necessary money, and there is great confusion in different parts of the country. I am quite certain that leadership is needed from the government here and I would ask the minister to tell us what the government proposes to do.


Mr. MACKENZIE (Vancouver Centre):: As indicated last year before war broke out, an interdepartmental committee was formed to consider the question of air raid precautions in Canada and a report was available with respect to the situation before the outbreak of the present war. Acting upon the recommendation made in that report, the responsibility for initiating certain measures was entrusted to the Department of Pensions and National Health, as in England. There, the ministry of health was entrusted with the work. The first method of Drocedure was to
ask the Department of National Defence to specify which areas in Canada would be considered vulnerable.


Howard Charles Green: Will the minister tell us what areas have been so specified?


Ian Alistair Mackenzie: It would not be wise to do so.


Howard Charles Green: That is confidential information?


Ian Alistair Mackenzie: I can tell my hon. friend privately, but I would not state it in public because it is marked most secret by the Department of National Defence. Otherwise I should be glad to tell my hon. friend.
Certain degrees of vulnerability are assessed in the recommendations made by the Department of National Defence, and consequent upon that the officers of the Department of Pensions and National Health got in touch with the various provincial governments-at first, only four governments: those of Nova Scotia, New Brunswick, Quebec and British Columbia. The provincial premiers were interviewed well over a year ago and they agreed to set up provincial committees, and it was also agreed to set up municipal or regional committees in the various provinces. Generally speaking, the recommendation of the first committee was that air raid precautions work was in the nature of passive defence and would be considered to be in the main the responsibility of the local authorities, that is, the provinces and the municipalities. The order in council itself was rather secret and was not circulated. A letter of instructions based on the terms of that order in council was sent out to the various provinces outlining what their responsibility would be and what measure of cooperation would be extended by the federal government.
Excellent work has been done in all provinces and since that time the organization has been developed in Ontario and is now under way in the federal district in Ottawa. A recommendation was made by my predecessor at the very outset of the war that a grant be made to these four provinces, for the purpose of organization only, of $5,000 each, and there may be some more small grants for the purpose of organization. But in recent months the assistance being given by the federal government from these moneys, last year some $100,000 and $250,000 this year, consists
[Mr. Green.)

War Appropriation Bill
practically entirely of literature and thirteen or fourteen different kinds of equipment which I shall be glad to specify later. So that at the present time I do not think assistance is being given for anything like salaries or expenses, which are assumed entirely by the various provincial governments. In Nova Scotia, for instance, they have expended only one or two thousand dollars of the first grant, and they have done excellent work. I saw the black-out once myself in Halifax, it was most successfully carried out. Excellent work is being done also in New Brunswick.
The trouble has been, if I may use the word, that the patriotic urge to serve outran the
terms of the intention of the recommendation of the committee when that recommendation was first submitted. In some provinces, notably Quebec and our own province of British Columbia, through keenness and anxiety to branch out they did engage in many activities which really were not related to air raid precaution work as such. There is now some disappointment in some of these centres because they have trained great numbers of men in this very excellent work-


Howard Charles Green: Can the minister give the
numbers?


Ian Alistair Mackenzie: Yes, I was just going to do that. They are as follows:
Province
New Brunswick..
Nova Scotia	
Ontario	
Quebec	
British Columbia Federal District.
Total personnel, 64,764.
Wardens	Auxiliary- fire	First aid	Municipal1,712	in	587	1541.500	100	400	10010,000	5,000	2,500	1,00030,000	1,000	2,500	7502,800	650	600	2502,200'	250	450	15048,212	7,111	7,037	2,404
This was made up last week.
In regard to the nature of the work carried out, in the first place the wardens, who are practically all volunteers, are attached to the various police forces. Their duties are to know the districts to which the various workers are assigned, to know the locations of first aid posts, fire alarm boxes, and the resident address of doctors; to prevent panic or confusion; to patrol and enforce lighting restrictions during black-outs.
The auxiliary fire services consist of volunteers trained by the fire chiefs to augment and assist the regular fire departments by relieving the firemen of ground duties.
The engineering services are volunteers trained by the ordinary municipal repair crews to assist in regard to water mains, sewers, et cetera, also a number trained in decontamination wTork and the demolition of buildings.
Under public utilities, are volunteers to assist, if required, repair gangs of electric light, gas and telephone companies.
The first aid are volunteers for stretcher parties and first aid posts. Under the Red Cross there are volunteers for relief and care of temporary homeless-this is a matter of training of course; for the care of evacuees if the evacuation of any centre is found necessary; for the hospitalization of injured.
Under transportation come volunteers with privately-owned cars and light trucks used as ambulances or for other transport needs. That is the basis of the transport organization, following closely experience obtained by some officers who had been overseas and seen the methods adopted over there. But the responsibility of carrying them out is entirely that of the local authorities. This government is assisting as far as possible in the type of equipment most necessary to carry out that work.


Howard Charles Green: Does the government intend to go any further than it has already gone? It is of the greatest importance that this work should not be allowed to drop at this stage. The minister has just said that there are approximately 64,000 volunteers trained to do this work. I fear that if further equipment is not provided without much more delay these volunteer groups will not be held together. The vote has been increased this year; is it not possible for the government to provide the equipment which has become necessary in connection with the more advanced training? For example, should not the government provide alarm signals and the central control system, and depots in which to store equipment which after all has been bought with federal government funds? There is not much money involved, but if the government does
War Appropriation Bill

not step out and take a lead the whole thing may be lost; thousands of people who had felt they were doing something to help the war effort will be discouraged, and there will be a weakening of morale right across the country. Is the government not prepared to go further and meet this present situation, or must the provincial governments do it?


Ian Alistair Mackenzie: I stated very carefully in reply to my hon. friend that to make it a primary federal responsibility would be an absolute departure from the entire spirit of the recommendation upon which they acted in the first place. Even in England, where of course there is much greater necessity for this kind of work, they commenced it on a local authority basis. I saw a clipping from a Scottish paper in which it was stated that the local community were complaining that they could not carry on their share of this work. But it would be unwise to assume this as a federal responsibility. It is the responsibility of the local authority.
In regard to equipment I see no reason why we cannot assist materially in that regard. There are considerable quantities of equipment now in the provinces.
In regard to storage, something can certainly be done. I am not aware that there is any necessity for storage facilities in any centre, but I will certainly look into that. If any additional equipment is recommended by those in charge of the work, I see no reason why-


Howard Charles Green: Who would make the recommendation?


Ian Alistair Mackenzie: Doctor Gliddon, our federal officer, is in constant touch with the provinces. He was in Vancouver a couple of weeks ago. Ontario has got out an excellent booklet on the various phases of A.R.P. work, and they have done the same in Quebec and in the maritime provinces.
Having regard to the experience of other countries, unless the situation drastically changes I think it would be a mistake to assume this as a federal responsibility entirely. 1 am satisfied that excellent progress has been made in all centres, and, as mentioned by my hon. friends, the spirit of these volunteers is simply splendid in every way.


Howard Charles Green: At the moment I am not suggesting that the federal government should take over the plan in its entirety. What I want to know is whether or not the federal government will provide the funds required for the further equipment which is needed if the training is to be carried on.


Ian Alistair Mackenzie: If our experts who are in constant touch with the situation recommend it as necessary.


Howard Charles Green: That is, if Doctor Gliddon recommends it, the government will act?


Ian Alistair Mackenzie: Yes.


Howard Charles Green: What arrangements are being made to provide for compensation in the event of any of these wardens being killed or injured? Is any provision made for them or for their families?


Ian Alistair Mackenzie: Not definitely as yet, but that matter has oeen under consideration for some time and an order in council has been prepared to deal with it. The order in council is now before the Department of Justice for review.


Mr. HOMUTH:: Is it the looal committee in the municipality that requisitions whatever equipment it may need?


Ian Alistair Mackenzie: Yes. They would probably get in touch with the provincial A.R.P. officer. The municipal authorities dealing with this work, say in the city of Toronto, would get in touch with that officer. If he, after consultation with the attorney general, who is in charge of the matter, thought it was a federal responsibility, we would be asked immediately to supply the equipment, and in all likelihood that equipment would be issued.


Mr. LOCKHART:: Just following that
through, is it entirely under provincial jurisdiction as to what equipment will be supplied to the local groups in the various municipalities, or does the federal government come through with certain recommendations? Who is definitely responsible for the type of equipment that is being bought; and what supervision does the federal government exercise?


Ian Alistair Mackenzie: From our experience certain equipment has been supplied, and perhaps if I name that equipment it will answer my hon. friend's question: Badges and arm bands; crutches; first aid haversacks complete with eleven articles; first aid kit boxes complete with twenty articles; first aid pouches; metal stretchers; protective clothing; splints; rubber knee boots; tarpaulins; gas masks and carriers for instructional purposes. These are some of the items. Other types of equipment, such as those mentioned by the hon. member for Vancouver South, have not yet been supplied by this government, but that is a matter for discussion with the various provinces.

War Appropriation Bill


Norman James Macdonald Lockhart: Have there been any actual trial black-outs in Canada, and is any consideration being given to the need for air raid shelters?


Ian Alistair Mackenzie: There have been several trial black-outs. I do not think they have had any on the Pacific coast as yet, but that is entirely a matter for the local authorities to decide, as a rule after consultation with the officers of the Department of National Defence in the area concerned, when they are sufficiently well equipped to have a black-out arranged. I think my hon. friend will find certain procedure set out in sections 32 and 33 of the defence of Canada regulations. The officer commanding the area or district would be interviewed by the chief provincial A.R.P. officer, and the air force and other defence services probably would cooperate in staging any such black-out.


Norman James Macdonald Lockhart: What about the air raid
shelters?


Ian Alistair Mackenzie: So far as I know there is no provision as yet for any shelters.


Norman James Macdonald Lockhart: Has that been considered by an}' department of the government?


Ian Alistair Mackenzie: It has been discussed, and it was the considered opinion that for the time being it would be premature to embark upon an extensive policy of air raid shelters.


Norman James Macdonald Lockhart: How many paid employees has the dominion government in this air raid work?


Ian Alistair Mackenzie: Just Doctor Gliddon and whatever secretarial staff he may have. Recently, for purposes of inspection, Colonel Snell, who of course is a high officer in the St. John ambulance corps, accompanied Doctor Gliddon across Canada to interview the authorities in. the various districts I have mentioned.


Norman James Macdonald Lockhart: Has the minister any idea how many paid employees there are in the different provinces?


Ian Alistair Mackenzie: I have not that information but I can get it for my hon. friend later on.


Norman James Macdonald Lockhart: They are all paid by the provincial governments?


Ian Alistair Mackenzie: Yes, not by us at all.


Richard Burpee Hanson: The whole thing was intended to be on a voluntary basis, was it not?


Ian Alistair Mackenzie: Yes.


Richard Burpee Hanson: A grant of $5,000 was made by this government to the government of New Brunswick, and, after some considerable delay, action was taken to organize air raid precaution work in that province. I should like to pay a tribute to the former mayor of the city of Saint John for the work he did in connection with this matter.


Ian Alistair Mackenzie: I quite agree with my hon. friend.


Richard Burpee Hanson: He is a first class citizen of Canada, and he took a keen interest in these matters. Will the minister say that if requisitions are sent on for A.R.P. material such as he mentions, the government will at once arrange to have it issued? So far I think it has been limited in New Brunswick to the seaport city of Saint John, though there have been some small efforts made by the city of Moncton. With these exceptions the movement has not been extended, I suppose on the theory that Hitler's submarines have not reached this side of the ocean as yet. In the city of Halifax, however, they have done a very considerable amount of work. How far is the government prepared to go towards, shall I say, underwriting the cost of this movement, or has consideration been given that point?


Ian Alistair Mackenzie: In regard to locality the department administering these moneys is governed by the recommendations of a staff committee of the Department of National Defence. In other words under our authority we cannot properly expend any of these moneys in areas other than those proclaimed to be vulnerable by the Minister of National Defence.


Richard Burpee Hanson: That seems very sound.


Ian Alistair Mackenzie: In regard to equipment, that would be a matter of experience. Any equipment that might be deemed necessary for the thorough training of these volunteers in the various subbranches of the service would be supplied by the federal government.


Norman James Macdonald Lockhart: Would the minister be good enough to give us a break-down of the $250,000 which is being supplied the provinces under this estimate?


Ian Alistair Mackenzie: It has not been broken down at all; it is purely an estimate. I can give my hon. friend the amounts spent in the various provinces up to date, if that would answer his question.

War Appropriation Bill


Norman James Macdonald Lockhart: Yes, and how the last appropriation was spent.


Ian Alistair Mackenzie: It will not be exactly limited to the last appropriation, for this reason: a governor general's warrant was obtained at the very outset of the war, and some of those moneys were used for the purpose of obtaining emergency equipment, before we got any moneys from the war appropriation of last year. As I said, there were grants made of $5,000 each to Nova Scotia, New Brunswick, Ontario and British Columbia, and $10,000 to Quebec, and $5,000 to the St. John ambulance corps. Printing and stationery, head office, $4,551; this was for sending out these pamphlets and booklets. The amount spent in Ontario for printing and stationery was $1,648.50. For further books of instruction we spent at headquarters $1,410.20. Films cost $298.87. Then the travelling expenses of federal officers all across Canada amounted to S4.037.77.


Norman James Macdonald Lockhart: May I ask how many federal officers?


Ian Alistair Mackenzie: Just the two I mentioned a moment ago. Incidentals, freight, express and so on, $2,812.42; supplies, head office and Plaza stores, $32,516. That is for the various types of equipment specified. The supplies by provinces were as follows:
Nova Scotia	 $ 8,149
New Brunswick	 7,064
Quebec	 15,408
Ontario	 42,577
British Columbia	 15,048
Federal district	 5,019
That makes a total of $126,185 for supplies; and with the other items with which I began my reply the total is $175,943.82.


Mr. FRASER (Peterborough West):: I
should like to ask the minister if the women's auxiliary corps throughout the country have been used in connection with this work. In the city of Peterborough they have a women's auxiliary corps with over two hundred members. They have been training for over six months. They have taken a course covering the St. John ambulance corps first aid course; they have had lectures on anti-gas work, and they have been helped by the officers of the training camp there. "A" company have had military training, under an officer, in army office work and correspondence. "B" company have had training in map reading, and later on they are going to take up motor mechanics. "C" company have had lectures under Doctor Clarke, medical officer of health of Peterborough, id sanitation, and is now taking an advanced course in first aid under St. John

ambulance corps officers. "D" company have completed a course in dietetics, and in another week they go into canteen work. Could these women be used in that work? Yesterday the hon. member for Lake Centre asked the Minister of National War Services a question on this point. These Peterborough women are anxious to get into war work and do what they can to help win the war.


Ian Alistair Mackenzie: Many women are now being used in connection with these services. The information I have before me, which was compiled about two weeks ago, shows that there were at that time in Canada about 65,000 registered volunteer air raid precaution workers. Of these, 1,438 were doctors and 3,119 nurses. Of the others many thousands had then completed their training in first-aid during the year 1940. The department has now a record of almost 38,658 first-aid certificates issued by the St. John Ambulance Association in 1940 to those who have completed their training. Those certificates were not all for individuals at the time enrolled in A.R.P. work, but a large majority will be eventually. In addition about 22 new divisions of the St. John ambulance brigade have been formed, the majority of them in Ontario. More than 23,000 persons have received training in order that they may be qualified to serve as air raid wardens, and approximately 4,000 volunteer firemen were taking training. More than 2,700 persons were trained in mobile squads to assist the police in preventing any disorder or looting at the time of a crisis.
The answer, then, is that many women are now being employed in the rendering of most excellent services. I do not think any organization, as such, could probably be used in this work. But probably many of the members referred to in the question of the hon. member are now rendering excellent services.


Mr. McIVOR:: Mr. Chairman, I rise to give expression to one or two thoughts which have been passing through my mind, and which I am sure have been in the minds of persons in this house and outside it, with regard to the patience of the government in answering questions as to details. I am just wondering when there is going to be a limit.
I shall give a concrete example of courteous procedure in the furnishing of details. A young man who trained in Toronto and took an eight-weeks' course interviewed the hon. member for Weyburn, asking why he did not have a job. In Fort William I was interviewed by a young man who came from the west, and who wondered why he did not have a job. He had had ten months' training in an aeroplane factory, and thought he

War Appropriation Bill
should have obtained a job at the expiration of that training. I believe he showed wisdom in approaching the local member, because a local member in a constituency should be able to answer questions of that kind, settle difficulties, or give direction as to where an answer can be obtained. I told him what to do, and said that if he did not get redress he might come back to see me. But the reason he was not employed was that he was a Chinaman.
I appreciate very much the fact that the Minister of Labour is keeping in motion the machinery set up by the late Hon. Norman Rogers, at one time Minister of Labour, who did good work in connection with the youth training plan. The present minister is keeping the machinery oiled in such a way that it is functioning in a splendid fashion throughout Canada. So well does it function that with the exception of one person a whole class has come in from a western city for employment in another place.
I have risen to speak because I am wondering when this debate is going to close. So far it has reached only the resolution stage, and the legislation must still be considered on second reading and in committee of the whole. When is this debate going to close? When you and I hear over the radio and read in our newspapers what happened in London last night, when we know that they are being shot at and bombed to pieces, and when we know that the people of the United States are stepping on the gas-and I use that expression advisedly-because they see the need, and realize what the democracies of the world are facing, why should it take so long for us to pass this measure? Why is it that congress can pass a bill in four days which involves seven billions of dollars, and we cannot pass this resolution, even after two weeks of discussion? I suggest we should have a little more regard to what is happening, that we should get this resolution through and let the Minister of Finance get on with his work. I suggest that we do this so that we may tell the United States and the world that we mean business, and that we are going out to support the allies in the winning of this war.


Gordon Graydon: Mr. Chairman, I rise to make some comments with respect to the statements made by the previous speaker. He is a gentleman, and a member for whom I have perhaps as high regard as I have for anyone in the House of Commons. I hesitate even to correct some of the thoughts which he said were drifting through his mind and which obligated him to speak this afternoon.
May I point out-and I do this in a sense of fairness, and I believe in a constructive way 

that if we are looking for the persons responsible for the circuitous manner in which this debate has been conducted, for the delay and for the lack of continuity, I believe that entire responsibility can be placed upon the government, not upon the opposition or upon those of whom the hon. member for Fort William has spoken.


Mr. BRADETTE:: That is not what the public thinks.


Gordon Graydon: May I point out-


Joseph-Arthur Bradette: The public knows better than that.


Gordon Graydon: Before my hon. friends become too caustic they might better reserve their judgment, because I am going to say something with which they will agree.


Mr. DUPUIS:: We want to say it is not so.


Gordon Graydon: In the first place hon. members will want to speak themselves, and at such time I shall be glad to listen.
When the debate on the resolution in committee began, most of us wondered how the government was going to conduct the debate. It was not until March 13 of this year that we finally got the war-time estimates from the government. In times of peace we have always followed the course which we thought would expedite debate, namely, that of discussing estimates department by department. Had the government done what has always been done in peace time; had it handled its present war-time estimates department by department instead of having all the war ministers as well as other members of the cabinet sitting here day after day, the results would have been much better. Had the estimates been brought down department by department there would have been no need for the attendance of more than one minister of the crown at any time. Ministers would have been saved the time they spent sitting in the house, away from their departmental duties, and in addition there would have been some continuity of effort in the debate. For that reason I suggest that when the discussion


Joseph-Arthur Bradette: Let us get on with the business of the house.


Gordon Graydon: Mr. Chairman, I have a high regard for the hon. member for Cochrane. I do not believe I have ever interrupted him, and I can assure him that his humorous interruptions this afternoon are being taken in the spirit in which they are made.
Now, if I may proceed, I will say that while perhaps-
War Appropriation Bill


Joseph-Arthur Bradette: Keep on moralizing.


Gordon Graydon: I did not hear that.


Joseph-Arthur Bradette: Keep on moralizing.


Mr. MARTIN:: He asked the hon. member to be moral.


Gordon Graydon: I was looking in that direction, and perhaps I may have deviated from that course a little.
It is not yet too late for us to pursue a sensible course in committee, so that the government can carry out the ordinary peacetime procedure of dealing with the estimates for the separate departments one by one. If we do this we shall have the opportunity of discussing the different items in an expeditious and orderly manner, and can release these hard-worked ministers for their other work.
I see in front of me now the Minister of National Defence, the Minister of National Defence for Air, the Minister of Munitions and Supply, the Minister of Pensions and National Health, and other ministers as well. There is no occasion for all these ministers to be here waiting to answer any question that may be asked from any corner of the house on any subject. I do not think we have ever witnessed a greater waste of time in this parliament than has resulted from the failure of the government to adopt the proper procedure for the regulation of this debate.
I make these comments in the very best spirit; I am only expressing now what I have felt for some considerable time. I had intended to get up before but I thought the government might change its way. When the hon. member for Fort William (Mr. Mclvor) brought the matter so forcibly to the attention of the committee I felt that the house and the country should know the real reason why there had been some delay in the course of this debate.


Mr. RALSTON:: I do not know a more good natured member than my hon. friend the member for Peel (Mr. Graydon). Some comment has been made already in connection with procedure, and I know that my hon. friend and other hon. members opposite are pretty well satisfied with the procedure which was adopted by Sir Robert Borden and his government as a procedure that would be in the interests of the country. I think if my hon. friend will look at the records of Hansard-I remember having looked it up some time ago-he will find that exactly the same course was pursued then. The bill was introduced and my hon. friend will find that very few pages of Hansard were taken up with a discussion of individual items. The measure was regarded as a war measure for

which the government was taking responsibility, and information was elicited rather on the larger matters of policy. There was nothing like-and I believe this is a considerable understatement-the examination in detail which has taken place in this committee. There was no consecutive taking of one department after another. It was a free-for-all in which anybody could ask any question he liked on any matter covered by the appropriation that was being asked.


Richard Burpee Hanson: That was early in the war.


James Layton Ralston: My hon. friend will find that the same course was pursued all the way through. As I explained before, the ministers for the defence services have been making statements, and I do not think those statements were received with particular acceptance by my hon. friends opposite, who rather indicated that they were eut-and-dried statements and that they would prefer to proceed in the other way by question and answer. We determined that if that was the way they wanted it, we would go about it in that way. We have pursued that course. Hon. members will recall that about one week was taken up with a discussion of the aircraft situation particularly, and with regard to matters in connection with munitions and supply. Then one night the Minister of National War Services made a statement on the activities of his department, feeling no doubt as many other hon. members did that the taircraft subject had been pretty well exhausted, the members always having the right to go back to aircraft if they wished. Considerable time was taken up in discussing the work of that department, and then the members on the other side went back to the aircraft industry and discussed that over again, and I remember one or two speeches which rather repeated what had been said on previous occasions.
Then I made a statement on the army and the Department of National Defence. Somebody suggested that it was long. I did not read the statement but I endeavoured to give the house as full information as I could with regard to the whole gamut of expenditures in my department, and I answered questions as fully as I could. Even then we had interjected into that discussion a number of different things which had nothing to do with the army at all but with other projects W'hich might technically at least come within the scope of this resolution. I think even the agricultural policy was touched upon. No one had any objection to that on this side, but it just illustrates what may happen in a democratic assembly where no member is bound by any agreement that one department

War Appropriation Bill
shall be taken up after another and no other department discussed until that one is disposed of. That is the way we have proceeded.
The Minister of National Defence for Air then made a statement and we spent considerable time on that, and even yesterday we went back to the army, not because of the minister wishing to do so but to suit the convenience of members of the committee who wanted more information. That information we endeavoured to give in full.
The Minister of National Defence for Naval Services then made his statement, and there was considerable discussion on that. Now we are discussing a small amount which is to be appropriated for air raid precautions.
I do not think, therefore, that anybody is to blame in connection with this matter, except in regard to the amount of detail which seems to be required at this stage in connection with the appropriation which is asked to be voted. Perhaps we might have avoided some discussion of detail, particularly discussion with regard to expenditures, in view of the fact that a special committee is going into the matter of war expenditures. Nevertheless that was the will of the committee. I am perfectly willing to say that nobody is to blame in connection with this matter. It is the perfect right of the committee to have this information before it if they so desire, but I do say that the procedure is at variance with that followed in the last war, particularly as to the wealth of detail required. The procedure which has been adopted by the government in connection with this measure is exactly the procedure which was adopted and followed by Sir Robert Borden and his government during the three or four years of the last war when similar appropriation bills were brought down.


Richard Burpee Hanson: The Minister of National Defence I think has made a fair and moderate statement of the position, but there are a few things he might have mentioned, I think, which he did not mention. First of all let me point out to him, and I do so with the utmost good-will, that when the war appropriation resolution was before this committee last year the utmost expedition was afforded to its passage with great goodwill by opposition members. At the same time we coupled with that exhibition of goodwill the statement that when we met again we would ask the government to give us the items of expenditure in some detail. I remember saying that the Canadian people would pay this money willingly but would hold the government accountable as trustees for the manner in which the money was expended.
The policy that was adopted by the government this year was to have the Minister of Finance bring down a very short resolution, and I must express some surprise at the lack of detail there was in his opening statement on the resolution. His statement did not occupy twenty minutes. When you are asking parliament to vote the sum of $1,300,000,000, which later the Minister of Finance increased by $160,000,000, the fullest information and detail must be given. I must confess that to me the amount of the appropriation was staggering. Just how to approach the consideration of this huge appropriation was something that I debated with myself for a considerable length of time. The discussion proceeded and I noticed that we were not getting very far. I am bound to say that the debate on the aircraft industry injected itself very early in the discussion. That was something that was bound to come up. It had to be aired on the floor of this house either at this time or at some other time. So far as I know, it is now pretty well out of the way; there may be repercussions of that branch of the discussion at a later stage, but certainly not now.
Then it dawned upon me that the government did not propose to give us any further information as to how this money was to be expended. I was astounded by the statement of the Minister of Finance that it was our duty to ask for the information and to dig it up. I should not have thought that was the principle upon which information as to government expenditures ought to be given to the public. It certainly is not the principle upon which we proceed in peace time. I admit at once that the two positions are not quite comparable, and that it might not be wise, perhaps would not be possible, to follow out the peace-time method of developing items of expenditure, for this huge war appropriation and for the $700,000,000 which was authorized last year, and the additional amount that was spent. But it was a matter of surprise to me when the Minister of Finance told me it was my duty to dig this out from the government, and that in effect I had been derelict in my duty. Well, I was not conscious of any dereliction of duty. I am just a young fellow trying to get along and to do a job, and I was astonished at the minister's statement, because I believe that trustees must account whether they are asked to account or not. That was the principle which was running through my mind as a lawyer, and when the Minister of Finance intimated that I was not on to my job, that I had not done my duty to the Canadian people, he rather " set me up," if I may use that expression. So this thing has gone along, and it will continue to go
War Appropriation Bill

along for a limited period of time. I agree that a good deal of time has been wasted, but I do not feel guilty, myself, and if there was the war pressure on this parliament which there was in June last, this resolution would go through just like that! But there is not.


Paul Joseph James Martin: It is worse now.


Richard Burpee Hanson: Well, that is a matter of opinion. I know that in certain parts of the ministry there is an increasing war effort; I think that that is true of the two or three war ministers. But if they themselves had established an organization such as I think should have been done, and not waited for us to set up an organized debate for them, there would have been no necessity for any more than one of them to be in this chamber at a time. They could have intimated, for example, that "the Minister of National Defence will be here to-day and will not be here to-morrow." There would have been no cavil about that. The whole thing might have been organized on an orderly basis and a lot of time saved. Business would have gone along, we would have got the information we wanted, the resolution would have gone through, and in due course the bill would have been introduced and passed. I do not think it is up to a private member to lecture this house, but I believe the ministry will agree that there was a lack of organization in getting the matter directly before the committee. Perhaps we can all assume some share of responsibility for that. I am willing to take mine; I want the ministry to accept theirs.


James Layton Ralston: I am sure that I do take responsibility so far as I am concerned, as other ministers do, for the course which was followed.


Richard Burpee Hanson: I do not
say this in any cavilling manner.


James Layton Ralston: But the course that was
'aken was considered.


Richard Burpee Hanson: Well, I
issume that every piece of government policy has been considered. But may I say this and say it in no spirit of fault-finding, that I believe that there was just a little lack of candour on the part of the ministers when the resolution was introduced. If they had come forward earlier with the information we wanted, instead of deferring it until just before the middle of this month, things would have been much better organized, and possibly by this time the resolution would have been through.
With this statement may I ask the Minister of Munitions and Supply if he would
[Mr. E. B. Hanson. 1
be good enough to give me a statement of what he proposes to do at Saint John under the war vote. I am very much interested in that item. I am glad to see it there. When I had the honour to represent New Brunswick in the government of this country I undertook to do something with respect to the port facilities at Saint John. We had already let a very large contract for the rebuilding of the docks on the west side; they were completed in due course and a very fine job was done. On the east side of the harbour are two old wharves known as the Pettingill wharf and the McLeod wharf. They are old timber structures which have been there for, I suppose, a third of a century. They were not adapted to modern dock facilities, and I undertook to have them rebuilt. The government was defeated; my hon. friend became Minister of Transport, and in the course of his journeys down east he saw for himself the facilities, or rather the lack of facilities on the east side of the harbour of Saint John, without which facilities, I suggest, this great Atlantic port of Canada can never be considered to be a twelve-months port-an ambition of its citizens with which I strongly sympathize. When the minister went down before the war, in company, I understand, with the then sitting member for the city of Saint John, he agreed to rebuild the Pettingill and McLeod wharves, and I was delighted. But the work was not done. I do not know the reason why, whether it was lack of money, or what. Now that the war is on I am glad to see that he has in this appropriation, government-owned enterprises, an item of approximately one million dollars, indicated on page 1630, "National Harbours Board, $995,000": I assume that is for the construction of some new piers at the city of Saint John.
As to the location, I have seen in the press that there are to be additional facilities on the west side. Well, I am not in a position to judge as to the location. I know that the port is overcrowded five months in the year, especially in war time. But I hope that the minister has not forgotten the speech he made to the people of Saint John and his promise to rebuild the Pettingill and McLeod wharves. Maybe this item is to cover that cost, but from what I saw in the newspapers I understand that what is intended is an entirely new venture, to be located on the west side, designed no doubt to take care of the present congestion at that point. I should be glad if the minister would give us a statement of the position, and so far as I am concerned that will be an end of the matter.


Mr. HOWE:: Mr. Chairman, perhaps I
should touch slightly on the past. As my

War Appropriation Bill
hon. friend knows, the building of permanent dock facilities in the port of Saint John is an exceedingly expensive business.


Richard Burpee Hanson: Very.


Clarence Decatur Howe: It is difficult and expensive, on account of the great fluctuations in tide. It has been the policy of all governments, I think-


Richard Burpee Hanson: I should not like to put it on that ground. I do not think that they will, either. The difficulty is in the contour of the harbour bottom.


Clarence Decatur Howe: Yes, and also the fluctuation in tides makes the dock structure much higher and much more difficult to keep stable. However, it has been the policy of all governments gradually to improve the facilities of the port of Saint John, and this government, as my hon. friend knows, finished some extensive improvements and had got to the point where it intended to rebuild the McLeod and Pettingill wharf. The wharf is useful to-day. It is getting near the end of its life, and it should be rebuilt to give more and better facilities than are now available. As I said, it was the intention of that government to undertake this work. Plans had been prepared, and I am not sure that tenders had not been called, when the war broke out. We were faced then with the difficulty that, while work was under way-and as I remember, it was a two-season job-half the dock would be out of commission, and it seemed obvious to us that we were going to need every foot of dockage we could get during this war; so that, so far as the war effort was concerned, we would be further ahead were we to postpone the rebuilding of that dock until half the wharf could be spared without interfering with the handling of freight in the harbour.
There is a proposal to build additional dockage in that port at the present time. But I might explain that we are not attempting at this time to build permanent facilities; we are trying to provide facilities which can be built in one summer season and put in use for next winter season.
The same policy is being adopted at Halifax as at Saint John; that is for the duration of the war the facilities we shall build will be temporary only, presumably to be replaced with permanent work as time goes by. The present proposal is to build a structure 900 feet long by 60 feet wide with a 30 foot draught on the deep water side and a shallow draught of approximately 12 feet on the south side for the accommodation of cargo lighters. Three standard railway tracks will be laid on the structure. The structure will be located on the west side of the harbour immediately
north of the Rodney wharf on the site of proposed* berth No. 4. It is also proposed to extend loading facilities at both Halifax and Saint John to meet war emergencies by introducing a system of lighters, so that in addition to loading alongside docks it will be possible to load at anchorages in the harbour.
We expect shortly to call for tenders for a considerable number of lighters and to provide docks so that the loading facilities of both harbours can be supplemented in this way; and provision is being made at this new berth for 900 feet of loading space suitable for loading these lighters. There may be other work proposed for the harbour of Saint John; I may point out that the harbour board is no longer under my jurisdiction, though I am sure that when the estimates of the Department of Transport are up my colleague will be glad to advise about that.


Richard Burpee Hanson: My understanding, then, is that this is really only a temporary proposal.


Clarence Decatur Howe: Yes, that is all.


Richard Burpee Hanson: Is it
intended to build it of cribwork, and will tenders be called?


Clarence Decatur Howe: Yes; I think tenders are being called at the present time.


Richard Burpee Hanson: On plans prepared by the harbour commission?


Clarence Decatur Howe: That is right.


Richard Burpee Hanson: Well, I am rather disappointed. Of course, they have had the proposal under consideration for quite a while and I would not pretend to put my judgment against that of the members of the harbour commission and their engineers, who have no doubt given intensive study to the situation. It may be that this is the quickest way in which facilities can be obtained for the present nature of the freight being offered there. After all, this is only a stop-gap, and I was wondering whether a larger view could not be taken of the position in the city of Saint John. The building of a wharf of 900 feet, with a 30-foot draught, will of course provide space for good sized freighters. That means 30 feet at low water, I assume, which would mean 56 feet high water, where good sized freighters could lie afloat at all times; and with three lines of railway trackage on it, this work might be very useful in connection with loading the type of freighters that are coming there now. I understand that they are not of such large tonnage that they cannot be accommodated, but I would not frown at all on the system of lighters proposed. That, I think, will relieve pressure to a great degree.
War Appropriation Bill

I am rather disappointed, however, to find that this is only a temporary measure after all, and that there is nothing permanent about it. A crib structure at that point of the Rodney wharf, having regard to the nature of the bottom, which is more or less mountainous-it can hardly be so described, but it has sharp declivities, because I have seen pictures of the bottom-may be satisfactory for the time being, if this is all that they are going to do. But it will not meet the permanent situation at all.
The question of crib work as opposed to the other type of construction, cylinder construction, concrete construction was a matter that gave us great concern prior to 1935. We acted on the basis of the best engineering data available, including outside engineering data, and it was concluded that the cylinder type would be much better than a crib work structure. There is a school of thought in the department which believes that the crib work type would- be preferable for the city of Saint John. There is always a danger of sliding. I suppose that is present too in the other type but not nearly to so great an extent.
I am glad to know that the work is being provided for but I must express disappointment that it is only temporary.


Clarence Decatur Howe: My hon. friend knows that to build a permanent structure would take not two seasons but probably three.


Richard Burpee Hanson: It would take about two years.


Clarence Decatur Howe: Sometimes it runs into the third season, and -what we need there is the provision of dock facilities immediately. This autumn all our harbour facilities in the east will be heavily taxed and we are not looking beyond immediate needs.


Mr. QUELCH:: There are a few observations which I should like to address to the Minister of Finance at this time. The subject is, in my opinion, of sufficient importance to justify my taking the time of the house.


Mr. ILSLEY:: War Appropriation Bill

list except to say that no securities of the Canadian Pacific Railway were included in it. To the extent that Canadian Pacific Railway company shares or debentures are held in the United Kingdom they remain in the hands of private owners. There has therefore been no change in the situation as a result of the war.
The Canadian dollar securities which I have just mentioned have been sold in Canada through ordinary market channels under the supervision of a representative of the treasury of the United Kingdom, who has worked in close cooperation with the Bank of Canada and the foreign exchange control board.
My hon. friend refers to Sir Edward Peacock and to the mission on which he is engaged in the United States. There has been no suggestion that his mission will be extended to Canada, nor have I any expectation that it will be so extended.
I think that answers the outstanding questions that have been asked in the debate so far.
The minister takes, I think, a very optimistic stand regarding the question of repayment of the war debt. As I look back to confederation I do not think there is any ground for such optimism, for since that time our national debt has steadily increased, in practically every year, with a few exceptions around 1928. If, on the other hand, we include the total debt of Canada, municipal and provincial as well as federal, then we can say that the public debt has increased in every year.
I do not dispute that we shall be able to meet our obligations, but we shall do so largely by refunding, paying only the interest, so the debt will be continually increasing.
I remember before the war the former Minister of Finance told us that it was taking forty-six per cent of the revenue from taxation to pay interest charges alone on the national debt. Where shall we come to if we continue such a policy? The time will come when it will .take considerably more than forty-six per cent, unless we are continually going to pare down interest rates.


James Lorimer Ilsley: It does not take anything like that percentage now.


Victor Quelch: That statement was given to the house by Mr. Dunning. Of course interest rates have been reduced, but at the same time the amount of the debt has increased greatly. Would the minister be prepared to tell the committee that there is no danger of running into a depression after the war? If we do, it is likely to take more than forty-six per cent, even disregarding the fact that our debt is increasing.
We were told that the issue of war savings certificates is twice blessed-that statement
(Mr. Ilsley.]
was made by Doctor Clark-in that it provides revenue for the government now, and will provide revenue for the investor when the next depression hits us. Already he is looking forward to the next depression. In that regard I would ask, if we are going to have another depression, when we are in that depression and the people need the money they have invested in war savings certificates, where is the government going to obtain that money? Surely increasing taxation in order to pay off those certificates is not going to help us out of a depression. Therefore the only way the government would be able to pay them off would be by an expansion of credit.


James Lorimer Ilsley: Does my hon. friend realize how much we are raising by way of taxation at the present time? We are taxing at the rate of about $900,000,000 a year now, and that will be considerably more next year even without any increase in rates.


Victor Quelch: Yes, but the minister will admit that after this war the government will not have anything like the revenue it has at the present time.


James Lorimer Ilsley: Well, I don't know.


Victor Quelch: When the day of peace comes, most of these munitions factories will automatically cease operations, and it will not be any small problem under the present system to find ways and means of putting these industries to work. I will admit that if we changed the system and made our one objective production to satisfy the needs of the Canadian people, and issued money for that purpose, it would not be a major problem; but in the past that has not been the policy of this government. The main policy of this government has been foreign trade; they have been willing to sacrifice anything and everything to expand our trade. We all know how a nation maintains a large favourable balance of trade. That is done by reducing the prices of primary products to levels where they can compete with those of other countries. In other words, you have to reduce our farmer to the level of the lowest paid farmer in the world, making him compete with slave or peasant labour. If I remember rightly, since confederation we have had only about eleven balanced budgets. Not only have we not been able to pay our debts; we have not been able to pay our expenditures out of our current revenue. I am satisfied, as I believe the majority of the people are satisfied-and the statement already quoted from the remarks of the general manager of the bank of Montreal expresses the same fear-that we are heading towards a situation where our total debt charge one day will be greater than our revenue.

War Appropriation Bill
I have listened with interest to many of the speeches made during the course of this debate since the introduction of this resolution over a month ago. One of the things that has surprised me has been that, although we are discussing an appropriation bill, practically the entire discussion has centred on how we are going to spend the money, and there has been very little discussion as to how we are going to raise it. Of course I will admit that it is always easier to spend money than to provide it. Many hon. members have deplored the fact that in many industries our production has lagged. A great deal of criticism has been levelled against the aeroplane industry, and I believe the Minister of Munitions and Supply admitted that the production of aeroplanes was three months behind schedule. I was especially interested in the remarks of the hon. member for Northumberland, Ont. (Mr. Fraser) in this regard. He stated:
To my friends on the other side I say with respect-and with pity-that in the interests of Canada and the British empire it is too bad that we did not year by year, particularly in 1938 and 1939, get sufficient money in our estimates to be in a position to build up an aeroplane industry in this country.
The hon. member for Jasper-Edson already has referred to this statement, but I should like to make a few further observations regarding it. I think the hon. member for Northumberland, Ont., was ill-advised to address that statement to the opposition. I say that because from 1935 to 1939 the Liberal party had an overwhelming majority in this house. They had power to introduce any legislation they desired. I am well aware of the fact that the Prime Minister has tried to place the blame for the failure to build up our defences upon public opinion. He has stated that from 1935 to 1939 public opinion was not such that it would have supported greater expenditures for war purposes. I think the Prime Minister should have followed through on that point. Why was public opinion not prepared to support a greater expenditure for war purposes? For the very simple reason that year after year, from 1935 to 1939, we heard the former Minister of Finance continually tell the house that the only money available to this country was the money the government could tax from the pockets of the people. The former Minister of Labour, the late Mr. Rogers, went even further and stated that if we were to increase expenditures it would be necessary not only to increase taxation but to increase taxation upon people in the lower income brackets. In view of the fact that during the period in question we had in the neighbourhood of a million people on relief, with hundreds of thousands of others enduring a very low standard of living, it 14873-1091
seems only natural that they were not willing to have their incomes still further reduced in order to meet increased war expenditures.
It is interesting to note that as soon as war was declared the present Minister of Finance, who was then acting minister, told the house that the government would adopt a policy which would include a moderate monetary expansion. I do not want it to be said that I have misrepresented what the minister stated on that occasion, so I will quote his words:
All this is not to say that a small and carefully regulated amount of credit expansion may not be desirable in the early stages of the war in order to assist the increase of production and employment.
And again:
If at the beginning of the war there are unemployed resources, some credit expansion may give an impetus to their prompt utilization. If it is carefully controlled, the expansion of production may prevent any abnormal rise in prices, confidence may be maintained and the initial impetus may be carried on and accelerated by the insistent demand that exists for supplies.
The question I should like to ask the minister, and I think it is a question that should be answered now, is this. If it was sound to have monetary expansion in September of 1939 in order to bring about greater production and greater employment, why would it not have been just as sound in the years from 1935 to 1939? Then some of the unemployed could have been utilized to build up our defences, while the remainder were used to expand the production of consumer goods in order to satisfy the demand created by the money paid out in the defence programme. Many people are asking that question, and I wonder whether the minister would deal with it.


James Lorimer Ilsley: I do not think I ever said that monetary expansion of itself would bring about increased production. There are a number of factors that bring about increased production and increased employment. I should be very much surprised if I ever said-


Victor Quelch: I quoted the minister's
exact words.


James Lorimer Ilsley: Just quote them again and let us see what they were.


Victor Quelch: The minister had been
criticizing the idea of inflation, and then he went on to say:
All this is not to say that a small and carefully regulated amount of credit expansion may not be desirable in the early stages of the war in order to assist the increase of production and employment. ... If at the beginning of the war there are unemployed resources, some credit expansion may give an impetus to their prompt utilization. If it is carefully controlled, the expansion of production may prevent any
War Appropriation Bill

abnormal rise in prices, confidence may be maintained and the initial impetus may be carried on and accelerated by the insistent demand that exists for supplies.


James Lorimer Ilsley: Oh, well, that is different from bringing about increased employment or production by that one thing alone. In the early stages of a war there will be, for a number of reasons, increased production and increased employment. For one thing, the psychological state of the people is altogether different, and I said in that speech that some monetary expansion might be necessary to assist in the increase that was taking place, so as perhaps to give an additional impetus.
That, however, is quite different from saying that that one factor, monetary expansion, would in a period like 1936, 1937, or 1938, have brought the same results. As a matter of fact, it might not have brought those results at all. It might simply have scared capital at that time, so that you would lose more in unemployment than you would gain by increasing employment.
I believe we are facing the old issue which has existed for a long time, namely, as to whether monetary measures alone can bring about prosperity or increased employment. I do not think they can. I do not believe the Cooperative Commonwealth Federation think so. I believe that is a theory held by a comparatively small group of people in the world, some of whom are monetary reformers. They hold the view that everything depends on the amount of money. That is not so.


Victor Quelch: I am not suggesting that various precautions and other means would not have to be taken. I am pointing out that it does not matter what you do, in a time of depression you cannot improve conditions until first of all you have monetary expansion. In September, the minister admitted that it would be desirable to have monetary expansion. Why? The minister realized that if they tried to borrow money from the people they would be drawing money out of circulation, and reducing production. Therefore, first of all they hire-and I use the word advisedly -the chartered banks to create $200,000,000. I remember well the statement made at that time by the Minister of Finance. He said, "When this money is paid out it will increase the savings of the people, and then we will be able to borrow those savings." But the minister realized that the government would not be able to borrow savings from the people until it had created those savings by an expansion of money. In other words, the expansion must come first.
The minister has said he cannot see the similarity between the condition in September and the condition between 1935 and 1939. I

will give the similarity. During that time industry was running at about 50 per cent of its capacity. We had in the neighbourhood of half a million unemployed. We had, in the form of a million people on relief, a tremendous undeveloped market for goods. The logical question, then, is this: Why did we not put people to work in industry to produce goods to satisfy that market? Why did industry not expand? I have heard the criticism of industry that it did not have sufficient confidence to expand during that time. To me the reason is obvious; industry at that time could not sell the products it was already producing. It knew well that if it expanded production it would have a still greater unsold surplus of goods.
I say to the minister that if during that period of time we had had monetary expansion for the purpose of putting a certain proportion of the unemployed to work in capital goods industries-such as armaments, road building, the elimination of railway crossings, and so on-and had we utilized the remainder of the unemployed for the purpose of expanding production of consumer goods, then those goods would have been available to satisfy demands which would have been created by payment of moneys to those people working in capital goods industries. I am satisfied that industry in Canada will always be ready to increase production, when it knows that it is going to be able to sell what it produces. The trouble between 1935 and 1939 was that it could not sell what it produced. During that time we had a favourable balance of trade amounting to about $200,000,000 annually. In the committee I asked the governor of the Bank of Canada this question: During that period why could we not have put into operation $200,000,000 worth of national projects, so that the money paid out in these projects would have created in this country a demand for the $200,000,000 worth of goods that were credited to us abroad? He did not deny that this could be done, but said that it was purely a matter of government policy.
I remember that in 1935 in his pre-election speeches the Prime Minister (Mr. Mackenzie King) stated that if the Liberal party were elected, a great battle would be engaged in between the government and the money powers. I make this charge: Had the government engaged in that battle with the money powers, and had the governments of Great Britain and of France engaged in that great battle, the history of Dunkirk as we have it to-day would not have been written. Because of the deflationary policy which existed throughout those years, defences were allowed to deteriorate.

War Appropriation Bill
I want to refer now to a statement placed on record by the minister in his reply to a question I asked on February 20. According to that statement we have borrowed from the chartered banks in the neighbourhood of half a billion dollars. The minister will agree that, other things being equal, deposits would have increased by a like amount. As a matter of fact, it is admitted in the state: lent that in so far as the $250,000,000 that was borrowed in the spring of 1941 is concerned, deposits would have increased by that amount, other things being equal. That is to say, when we borrowed the money from the chartered banks, they lent us that money by creating the means of payment. I do not believe the minister would disagree with that statement. It is true that for years prominent officials of various banking institutions in this country have carried on the delusion or the hoax that they are in a position to lend only their depositors' money. We have heard members in this chamber say that banks are able to lend only their depositors' money. I do not doubt that many hon. members are still in that fog, or confused state of mind.
In any event, it was refreshing in 1939 to have a statement by the deputy governor of the Bank of Canada to the effect that it was nonsense to suggest that chartered banks could lend their deposits, because it was pointed out that deposits are liabilities, and that it would be impossible to lend their liabilities. Then, again, when giving evidence before the committee on banking and commerce in 1939, the governor of the Bank of Canada said, as reported at page 455 of the proceedings, that the chartered banks cannot, of course, loan the money of their depositors. He also admitted that they lend by creating the means of payment. Hon. members may verify this, if they wish, by turning to the evidence of the banking and commerce committee of 1939, page 456, where it was pointed out that the banks lend by the simple procedure of creating the means of payment.
The main question in connection with which I am particularly interested in receiving an answer from the minister is this-and I want to put it accurately. When we have obtained from the people all the money we consider it wise to take, whether by taxation or by the sale of war savings certificates, and when we deem it necessary to indulge in a form of inflationary borrowing, why do we not obtain the money from our own bank, the Bank of Canada, instead of from the chartered banks, who will merely create the amounts of payment?


James Lorimer Ilsley: That would be far more
inflationary.


Victor Quelch: Why?


Richard Burpee Hanson: It would
be pure inflation.


James Lorimer Ilsley: It would be far more inflationary to borrow from the Bank of Canada than it would be to borrow from the chartered banks.


Victor Quelch: Why?


James Lorimer Ilsley: Because, if we borrow from the chartered banks, the amount of new money, or the additional deposit liability, is the amount that we borrow. For instance, if we borrow $250,000,000 from the chartered banks, there are deposits immediately in existence, after the loan, of $250,000,000 more than there was before. That is inflationary, to a certain extent, other things being equal. If we borrow from the Bank of Canada, the result of a loan of $250,000,000 from that bank is a deposit in the Bank of Canada of $250,000,000 which, when we use it, finds itself in the possession of the chartered banks, as cash reserves.
The banks, in order to carry on a banking business along the lines commercial banks have always followed the world over, must lend a good deal more than $250,000,000 to the public. The ratio is nine or ten times as much as that, and that in turn creates deposit liabilities, which add to the total deposits of the country a very large sum and are very much more inflationary in their effect than borrowing from the banks would be. This could be nullified or offset if we were to raise the reserve ratio. The legal reserve ratio at the present time, as the hon. gentleman knows, is 5 per cent. If we were to make it 100 per cent, we would have no more inflationary effect if we borrowed from the Bank of Canada than if we borrowed from the banks, because when that $250,000,000 found itself in the commercial banks as cash reserves, the banks could not lend a thing on it. There would be a deposit liability of $250,000,000 and a reserve of $250,000,000.
There is, however, a certain cost- for carrying deposits. In addition to the cost of carrying on the banks, there is the interest which the banks must pay on their savings bank deposits. When the money comes back to the banks in the form of savings bank deposits, the banks have to pay one and a half per cent interest on it. It is estimated that nearly one per cent is paid in interest. Therefore, to create a 100 per cent reserve ratio which would nullify or equalize the inflationary effect in the way I have mentioned, would mean that you would, in effect, be asking the banks to carry on at a substantial loss in respect of that transaction.
War Appropriation Bill

In other words, it would be a tax on the banks which would be passed on either to the depositors of the banks or the shareholders of the banks, or passed on in some other way. If, as a matter of policy, we decided to lay that additional tax on the banks, we could borrow from the Bank of Canada instead of from the commercial banks and have exactly the same effect. Unless, however, we take some steps like that, if we merely change that feature of the present system which is the only feature which the hon. member is talking about now, we would be setting in motion . forces which would have a powerful inflationary effect.


Victor Quelch: I appreciate that answer of the minister. It is similar to the answer given by his predecessor, Mr. Dunning. The minister is aware of the fact that many prominent bankers of the United States have advocated the adoption of what is known as the 100 per cent system. That is the policy which the minister has just mentioned. If he has read "One Hundred Per Cent Money" by Irving Fisher, he will have seen there a long list of prominent bankers of the United States who advocated that this system should be put into operation. Therefore, evidently they did not visualize being put out of operation by its adoption. Furthermore, it is advocated strongly by Robert Hemphil, former credit manager of the federal reserve bank at Atlanta, and more recently by Babson's Incorporated in their letter of March 20, 1939, where they point out that the banks would still continue to make a fair profit. They also point out that you would have to differentiate between current accounts and savings. At the present time a depositor is supposed to give notice before he can draw out his money from a savings account; but, as a matter of fact, savings accounts are treated the same as current accounts in that respect. As Babsons, however, point out, you would have to have the savings banks deposits withdrawable on notice only.


James Lorimer Ilsley: If the hon. member will permit a question, while I do not think this is really the occasion for a protracted debate on monetary policy, may I ask if he is advocating the adoption of the 100 per cent system, plus borrowing from the Bank of Canada instead of from the commercial banks? Does he advocate that as the financial policy of the government?


Victor Quelch: No; but I would say that the 100 per cent system would meet the objection which the minister has raised.
I would advocate the 100 per cent system so far as current accounts are concerned, but not as regards savings accounts, which should be

treated the same as any other investment. Money in savings accounts should be treated as an investment and as the property of the bank. I would apply it as Irving Fisher and Babson's advocate, and use it only in so far as current accounts are concerned. The banks would still have their savings accounts to lend from, if they need more money to put into circulation they can borrow money from the Bank of Canada at a nominal sum and then lend it at a higher rate. They would, however, be in a position to expand their loans only provided the Bank of Canada gave them authority. Unless they got the money from the Bank of Canada they would not be able to expand their loans. In that way the government would have effective control over the volume of money in circulation.
You do not, however, have to go as far as the 100 per cent system. Increase the cash reserve requirements of the chartered banks to the extent necessary to prevent an expansion of loans. If they were at the time operating on a ten to one basis, for example, you could increase the cash reserve requirements of the banks to the extent necessary to prevent them from expanding their loans on the basis of their increased cash reserves.


James Lorimer Ilsley: Would you be any further
ahead?


Victor Quelch: If I remember rightlyand I am speaking more now from hearsay- the government of the United States of America in 1937 increased the cash reserve requirements of their banks to 20 per cent. The cash reserve requirements of the banks in Canada could be increased to 12 or 15 per cent or to whatever degree was necessary to prevent the chartered banks from taking advantage of that new issue of money further to increase their loans.
Some people may argue that it would not be fair to the chartered banks, that it would seriously decrease their profits if we took such action. On the other hand, when one considers the profits of the chartered banks for the past ten years, I think it will be agreed that they are in a position where they can readily stand a reduction in their profits. I have figures taken from the "Canada Year Book'' showing the profits of the various chartered banks over the past ten years, and I find that on their paid-up capital the profits are as follows for the ten-year period:
Per cent
Bank of Montreal	 9-35
Bank of Nova Scotia	 13-15
Bank of Toronto	 10-6
Dominion bank	 10-6
Imperial bank	 10-6
Royal bank	 9-35

War Appropriation Bill
That is the profit on their paid-up capital, and that ten-year period includes one of the worst depressions this country has ever known. No one can say that a business which is making 10 per cent profit over a period that includes the worst depression ever known is not doing very well indeed. In addition, they have built up their reserves and built up a number of fine capital structures; they also have their hidden reserves. I think the position of the banks so far as their profits are concerned is a very satisfactory one, and that their profits are greater than necessary, especially when one considers that they were made over the period of the depression. If one takes the period just prior to that ten-year period, they were then making as high as 14 to 16 per cent. It was the depression that brought their profits down to approximately 10 per cent. I have not seen tlhe figures for 1940, but I have no doubt the profits of the banks are now increasing. The Financial Post stated that their assets were increasing, although their liabilities might be increasing in the same proportion.


James Lorimer Ilsley: I wonder whether the hon. member would care to express an opinion on this point. Was it not a good thing for the country that the profits which the chartered banks were receiving in the decade of the twenties were sufficient to enable them to accumulate reserves which kept them solvent in the early thirties and prevented bank failures in this country such as they had in the United States? In other words, is it not a matter of considerable importance to the public that the banks should at all times be solvent?


Victor Quelch: I quite agree, but the minister will admit that under the 100 per cent system the banks would be in a safe position because they would have one dollar of cash behind every dollar of their deposits. A run on the banks would be absolutely impossible. That is why so many bankers support the idea of the 100 per cent system in the United States. They got such a cleaning up through what happened in years gone by, that no doubt it would relieve their anxiety if there were no danger of a run. Under those circumstances they could very well suffer a decrease of profits. There would be under this system no danger of insolvency, because any time the banks needed money for this purpose they could obtain it from the Bank of Canada. That bank would have absolute control.
What happens at the present time? The Bank of Canada issues a certain amount of money, or the government through the Bank of Canada issues a certain amount of money, and they do not know what the result will be.
The banks may expand it by ten times, or they may not. There is no direct control under this system.
I have heard this argument advanced against the proposal, that in view of the fact that people bought shares in the chartered banks in good faith, in the belief that the same system would be maintained in operation and that, therefore, they could expect to continue to draw the same profits, it would not be fair to the shareholders of the chartered banks to change the system to one whereby those profits would be reduced. That may be a fair argument. In that event, however, the only thing would be for the government to undertake to buy up the shares of the chartered banks and then there would be a government-owned system. I am very much in favour of buying up the shares of the chartered banks and having a publicly-owned banking system, because I do not believe it is a desirable state of affairs to have any body of private persons in a position where they can increase or decrease the amount of money in circulation. When you are in a position to do that you are also in a position to raise or lower prices.


James Lorimer Ilsley: Does the hon. gentleman
think it would be a desirable state of affairs to have the government of Canada making all the commercial loans required by the people of Canada?


Victor Quelch: Certainly not. I regard
that as the business of the chartered banks. I believe, however, it is the business of the Bank of Canada to act as the nation's bank, and our expenditures should be financed through the Bank of Canada without borrowing a single dollar.


James Lorimer Ilsley: I thought my hon. friend said he was in favour of the Bank of Canada buying up the shares of the chartered banks.


Victor Quelch: I am in favour of the
government buying up the shares of the chartered banks, but the people who manage them would continue to do so as now. The chartered banks would be under the control of the Bank of Canada and would be making commercial loans.


James Lorimer Ilsley: That is, the government would be in the banking business.


Victor Quelch: Not any more than one can say that the government is in the wheat board or in the post office. The board of the Bank of Canada would be looking after the whole banking system. I know some people claim that every time an election took place, the bank management would change. I hope we are not quite so rotten as that. I know that sort of thing may happen in connection
War Appropriation Bill

with some post office appointments, but I will frankly admit that in so far as western Canada or Alberta is concerned, I have not noticed it, and I hope it will never occur. It is certainly not a nice charge to make against any government that it finds it necessary to change all the postmasters every time there is an election; and I hope it would be possible to leave the administration of the banks entirely under the control of the Bank of Canada.


Karl Kenneth Homuth: But the government of Canada would then be making the commercial loans.


Richard Burpee Hanson: We would be right in the business.


Victor Quelch: I see the hon. gentleman's point in that regard, that in view of the fact that the chartered banks would then be publicly owned, the loans would be made by an institution of the people. But the people of Canada would be handling their own business, because that institution would be directly under the control of the government-although I admit that in these days we have not very much control of the government. Unfortunately, there are, outside of government, forces which largely control us at the present time.


An hon. MEMBER:: What about the
government of Alberta?


Victor Quelch: If this government will give Alberta the power to have a bank, I think that province will indicate many advantageous ways in which that bank could be utilized. It seems a pretty hard thing for Alberta to get a bank. I believe the dominion government would be well advised to allow our province to have that charter, and let us see what we can do.


Mr. MacNICOL:: Conditions are bad
enough now, without it.


Victor Quelch: I will now deal with a
slightly different angle of this subject, the pay-as-you-go policy. The minister, in a statement in September, 1939, frequently repeated that he believed in adopting as far as possible a pay-as-you-go policy. The minister will admit, I think, that if we maintain production at its maximum level, utilizing a certain portion of the production for war purposes, the standard of living of the people cannot be higher than the portion that is left of the production.
No matter how the war is financed, the standard of living of the people cannot be higher than that portion of the production which is left after the rest has been utilized

for war purposes. Therefore, if we utilize taxation alone for the purpose of reducing the people's spending power and make up the remainder of the required revenue, from the Bank of Canada, the standard of living of the people will be no lower than if we financed by the issue of bonds to the public. It could not possibly make any difference. On the other hand, however, there would be this vast difference, that a real pay-as-you-go policy would have been adopted and there would be no increase in debt. That would make a very great difference in the standards of living of the people after the war. We would not have to increase taxation to pay interest.
The Minister of Finance, however, has contended that people should be allowed to put aside a little for a rainy day. He stressed that point in his budget speech in September. I agree with that; and for that reason, we are not opposed to the sale of war savings certificates, but we believe that the amount each individual is allowed to purchase should, be definitely restricted. It is now restricted, I understand, to $600, but in the case of a family of five or six people, that family is allowed, in my opinion, to put aside too much for a rainy day; in that instance, it is $3,000 or $4,000. That people should be allowed to put aside a little for a rainy day does not justify the sale of large amounts of bonds to the public. In my judgment we shall have a lot of days of drought, rather than rain. I do not like that expression "rainy day"; "drought" would be a more accurate term, so long as we carry on the policy which has been in operation since the present government came into power in 1935.


Paul Joseph James Martin: Is the hon. member opposed to all savings?


Victor Quelch: I am not opposed to anybody putting aside a certain sum for a rainy day'. I am, however, opposed to this government saying that in order to provide a person with an investment, they are going to put the people into debt, because just so long as the government adopt that policy, the consequence is that a large amount of bonds are sold to a comparatively few individuals. A national debt is being formed1, which the governor of the Bank of Canada says is a national asset; but remember that it is the asset of only a comparatively few people, and it is a liability of all the people. Therefore the government must make a levy against all the people in order to pay tribute to a comparatively few people.
Let people save and invest their money in industry. Why should this government be

War Appropriation Bill
obliged to provide an investment for them? By all means save, but do not penalize the rest of the people when yon are doing it.
Let us at all times remember, especially in view of the conditions which are existing in Europe to-day, that war is a scourge.


Paul Joseph James Martin: Are we not saying this with regard to the war savings certificates? First of all, they are not restricted to any particular group; there is a wider diffusion than in the case of bonds. We are also saying, "You save this money so that at a future date production may be enhanced as a result of this investment; but we now want a curtailment of production, or rather, to confine production to certain very necessary channels for war purposes."


Victor Quelch: I would ask the hon. member how production in the future can be enhanced by issuing a lot of war savings certificates now; because when you get in a depression, the only way by which you can pay off the certificates under the present government's policy is by taxation, and that would increase the depression. You would require to have monetary expansion, and if you are going to have that, you might as well have it now; now is the time we need it.
I have pointed out to the hon. member that I am not opposed to the issue of war savings certificates so long as it is understood that the object is to reduce the spending power of the people, not to provide revenue for the government. I remember Professor Plumptre made that plain. He stresses the point that war savings certificates are needed, not to provide revenue, but merely to prevent spending.
Let us remember that war is a scourge and not a carnival, and no one should hope or desire to profit materially as a result of war. I am sure the minister would agree with that. When we bear in mind the terrible sacrifices that are being made in England and Europe at present, not merely from day to day, from week to week, but from month to month, j'ear in and year out, then I think we are all agreed that no one should hope to profit in any shape or form as a result of such suffering. Recognizing that fact, if people can go through this war in a state of comparative safety, enjoying a decent standard of living and being no worse off at the end than they were at the start, then I say they should consider themselves exceedingly fortunate. I am sure the government will agree with that.
When I read and listen over the air to statements urging people to be patriotic by investing their money in gilt-edged securities, that is, dominion bonds at 3 per cent; when I
see that type of profitable investment eulogized as patriotism, I feel positively nauseated to think we should be guilty of such rank hypocrisy in this country. Let us keep in mind, Mr. Chairman, that, apart from external loans, the real cost of war must be met out of current production. The Mniister of Finance emphasized that time and again when speaking in this house in September. I wonder whether he realized what his statement really meant at that time, because I do not think he would suggest for a moment that we are even trying to adopt a pay-as-you-go policy to-day. Let me read what he said- because it is so easy for someone to rise in his place and say that I am misrepresenting a certain person.


The CHAIRMAN:: I am sorry, but I must remind the hon. gentleman that he has already exceeded his time.


Victor Quelch: I have had a large number of interruptions.


An hon. MEMBER:: Let him go on.


Thomas Vien: Shall the resolution carry?


Some hon. MEMBERS:: No.


Victor Quelch: May I continue?


Thomas Vien: Not unless the hon. gentleman has the unanimous consent of the committee.


Victor Quelch: I will not take long. I want to refer to one or two statements made by the Minister of Finance on September 12, 1939, regarding a pay-as-you-go policy. He said:
	as I have already said, the real costs
of war must come out of current production, out of the goods and services produced during the war. It is true that some stocks of military supplies may be on hand at the beginning of a war, but their importance is slight for a war of any duration ....
First of all let me emphasize that however we finance the cost of the war, whether by taxation or by borrowing or by inflation, we cannot escape its real costs. By the real costs I mean the goods and services which have to be sacrificed out of our current production to meet the needs of war.
.... and I repeat it again, that in real terms, namely, in terms of the loss to the nation of this production, a war is paid for substantially during its duration.
I am afraid that the minister at that time was indulging in wishful thinking.


James Lorimer Ilsley: I was stating a fact; I was not announcing a policy.


Victor Quelch: The minister admitted that the real cost of war was substantially paid for during the war. If that is so, why cannot its financial cost also be met during the war? I will put it to him in this way. We must
War Appropriation Bill

admit that while we are prepared to pay the real cost of the war, in so far as goods are concerned, we are not prepared to pay the financial cost; that is to say, a certain class of society is not prepared to make the sacrifice which is necessary in order that such a policy may be adopted. If they were, there would be no increase in debt apart from that resulting from the sale of war savings certificates. What we are really saying is this, that while we are providing the goods to prosecute this war, we are going to demand that future generations shall compensate us for a large proportion of this production. And remember that by far the greatest proportion of that compensation will be paid to a comparatively few people.
I cannot understand how anyone can say that that is an honest policy; for what is the government really doing? It is misappropriating the funds of future generations. Some people may attempt to justify such a policy on the ground that we are fighting a war to make the world safe for democracy for future generations, and that, therefore, future generations should be prepared to pay a certain proportion of the cost of the war. I heard the same sort of statement made time and again from 1914 to 1918. I heard it said that we were fighting to make the world safe for democracy, that we were fighting the war that would end war; yet here we are to-day, twenty-five years later, engaged in one of the greatest wars the world has ever known.
No; I do not think we have any right to ask future generations to sacrifice themselves for the troubles that we are facing to-day, because I believe that future generations will have plenty of troubles of their own without having to look after ours, as we are having to take care of troubles that were incurred hundreds of years ago. Britain is still paying interest in connection with the Crimean war, and in connection with every major war fought in the last hundred years or so. It is high time we started a real pay-as-you-go policy, because it would not entail a reduction in the standard of living of the people to a level lower than that due to the present policy of the government; whereas the difference that would be brought about would be this, that people would not have as a result of the war, at the end of the war, large accumulations of bonds representing nothing more or less than war profiteering. I say again, therefore, that there is no justification for the attempt to pass on any large proportion of the financial cost of the war to future generations.
I do not suppose it will do any good to ask the Minister of Finance again to consider this question. I appreciate the fact that he

has been quite frank in answering a number of questions, but before sitting down I should like to put to him a few more very short questions, which I think he can answer easily without deep consideration. Can he explain why rates of interest on money borrowed from the chartered banks vary? Why does the interest rate on money borrowed from the chartered banks since the declaration of war vary as it does? In one instance, it is two per cent; in another, one and a half per cent.


James Lorimer Ilsley: Money is borrowed for different period.


Victor Quelch: Can the minister explain why the length of time for which money is borrowed, is reflected in a difference in the rate of interest? Is it from fear that interest rates may go up in the meantime?


James Lorimer Ilsley: I am not sure I can give a complete answer to that question, but it is well known that the interest rate which is proper for one period is not proper for another. A certain rate prevails for long term loans, a certain rate for short term loans; and for very short term loans, such as treasury bills, the rate is almost negligible. The rates are fairly well graded between those points. That applies to loans generally.


Victor Quelch: 
James Lorimer Ilsley: The hon. gentleman is opening up rather theoretical questions here.


Victor Quelch: No; the governor of the Bank of Canada has admitted that the banks loan by creating the means of payment.


James Lorimer Ilsley: I do not know that I would undertake to answer these questions impromptu. It is rather like writing a book, or an essay, to deal with such matters. The hon. gentleman, I suppose, has spent a good deal of time in working out these questions and he asks them of me in the committee and

War Appropriation Bill
wants an immediate answer. Perhaps I have not given so much thought to the theoretical foundation of the variation in the rates of interest depending on the length of time the money is borrowed, but I do not think there is anything in the point that the hon. gentleman has just made, that it is merely a bookkeeping transaction as compared with an individual going to borrow money from a bank.


Victor Quelch: That is true; when an
individual borrows money from a chartered bank, it creates the means of payment.


Richard Burpee Hanson: What is
that?


Victor Quelch: Surely the leader of the opposition is not going to dispute the fact that when an individual borrows money from a chartered bank, it creates the means of payment.


Richard Burpee Hanson: It all depends on whether the individual takes the money away in his pocket or puts it back in the bank.


Thomas Vien: Order. The hon. gentleman had the consent of the committee for a few minutes more, but unless he now gets further consent, his time is up.


Victor Quelch: On a point of order, I have finished the speech I was making and I am now asking questions. I understand that in committee one may ask questions as long as he likes.


Mr. HANSON (Skeena):: On the point of order, we have discussed this resolution for three or four weeks-


An hon. MEMBER:: Not this angle of it.


Olof Hanson: In the United
States they took five days to pass an appropriation of seven billion dollars. And they are not in the war. At the rate we are going the war might be over before this resolution is passed.


Thomas Vien: My ruling is that the hon. gentleman's time is exhausted.


Mr. DOUGLAS (Weyburn):: I should like to ask a question of the Minister of Finance. What happens to these repatriated securities? I understood him to say that the government securities and the Grand Trunk obligations were held by the Bank of Canada. What happens to the unspecified securities? Does the government sell them on the market, or hold them?


James Lorimer Ilsley: Nothing has been repatriated by the government except government bonds or government-guaranteed railway bonds, and they have not been put on the market.


Thomas Clement (Tommy) Douglas: There have
been no other bonds repatriated?


James Lorimer Ilsley: Not by the government.
As I said in my statement, some other securities have been repatriated, but in a different way. They have been sold on the Canadian market to private buyers by the United Kingdom government, which has taken them over from the United Kingdom holders.


Thomas Clement (Tommy) Douglas: But the
repatriation activities under this appropriation are confined entirely to repatriating government securities and the Grand Trunk guaranteed bonds, all of which are held by the Bank of Canada; is that correct?


James Lorimer Ilsley: To date that is the situation.


Thomas Clement (Tommy) Douglas: If there should be any repatriation of private securities, some disposal will have to be made of them, and we shall be told then how they are disposed of?


Richard Burpee Hanson: The government policy of repatriation is based on accumulating sterling on the other side? Or what is the policy?


James Lorimer Ilsley: WTe accumulate sterling and
then repatriate as much as we can. I am not sure that I understand the hon. gentleman's question. We are trying to supply the United Kingdom with dollars. We can go on and accumulate sterling if we can afford it. Then we might have a huge accumulation of sterling, and residents of the United Kingdom would still have their securities. That would perhaps leave us in a not too desirable position at some time. It would depend on developments. It has been considered that we should try to keep our accumulations of sterling within hailing distance of these repatriations.


Richard Burpee Hanson: What is
the policy with respect to the accumulation of dollars for the United Kingdom? How has that been done?


James Lorimer Ilsley: We just buy the sterling,
that is all. We get the sterling and they get the dollars.


Victor Quelch: It has been suggested that it makes a big difference whether a person goes to a bank and gets notes or gets a deposit. Why does a person borrow money? Can one imagine anyone going to a bank and borrowing money at interest to keep it in his pocket? He borrows it to pay for something and it comes back into the bank.
There is another question that I want to ask the minister. Would he explain certain issues sold to the Bank of Canada? I notice
War Appropriation Bill


James Lorimer Ilsley: What is the question?


Victor Quelch: 
James Lorimer Ilsley: Those two amounts have asterisks opposite them, and the note says: These issues purchased by Bank of Canada in order to provide funds for the foreign exchange control board to purchase gold and foreign exchange from the Bank of Canada in the amount of $253,507,331 and from others under the foreign exchange acquisition order, 1940.
My recollection is that under that order the foreign exchange control board took over foreign securities held by Canadian residents. This money was, I presume, used to pay for them.


Victor Quelch: 
James Lorimer Ilsley: 
Victor Quelch: Up to the present time the government have not used the Bank of Canada for the purpose of obtaining money to meet current expenditures, apart from refunding and the purchase of gold? That is really what I wish to know.


James Lorimer Ilsley: No.


Victor Quelch: There is only one other question I should like to ask the minister. How is it proposed to raise this amount of $1,300,000,000? Could the minister give any information in that connection? I do not expect a detailed analysis.


James Lorimer Ilsley: On that point, Mr. Chairman, I took exception when the request was made the other night. I think it was first made by the leader of the opposition, who felt that during this debate I should tell the committee how the government proposed to raise this money.


Richard Burpee Hanson: That is hardly a fair statement. I asked how much was to 'be raised by taxation and how much by loan. I expressly excepted the ways and means of getting the money; I thought that would be improper at this stage, but I wanted to know if the minister could tell me what was what as to the other point.


James Lorimer Ilsley: 
Victor Quelch: I was not trying to find out about taxation, because this resolution has nothing to do with taxation. It states that the governor in council shall be empowered to raise money by way of loan. What I want to find out is whether the minister can give us any indication of how that loan will be raised. How great a percentage does he expect to obtain through the sale of war savings certificates; how much by monetary expansion; how much by loans from the chartered banks, and how much from the sale of bonds; and does he expect to obtain any by the sale of bonds to the Bank of Canada?


James Lorimer Ilsley: In the first place the hon. member says "that amount." I do not know that "that amount" will be borrowed at all; that is, the $1,300,000,000, so we cannot get past that first hurdle. I shall have to give the house that information when the budget comes down. We have never held that back. I and my predecessors have come before the house and said how much money it was expected the government would require during the next fiscal year or the current fiscal year, as the case might be; and in our budgetary and financial statements, when dealing with the whole field, we have been very particular to give the house a full statement as to the manner in which we expected to obtain the money. That I will do at the proper time.


Victor Quelch: Could the minister give
the committee the assurance at this time that there will not be any increase in interest rates during the war?


Some hon. MEMBERS:: Oh, oh.


Victor Quelch: Someone laughs, but it is not a laughing matter. Through the Bank of Canada we have power to control these interest rates. We have the power to force interest rates down. If interest rates go up, it will be at the instigation of this government. We have power to keep interest rates down, and I hope the minister can give the committee the assurance that interest rates will not be allowed to go up during the war.


James Lorimer Ilsley: I cannot give any such
assurance. Obviously the hon. gentleman is a deeper student of these matters than I am, but I do not know just how we could control interest rates with that precision. For instance, if we considered, as a matter of policy, that in the public interest we needed to make a very wide sale of war savings certificates, or of war loan bonds-


Victor Quelch: To meet these expenditures?


James Lorimer Ilsley: For any matter of public interest, or as a matter of public policy. I do not think we could arbitrarily say, for example, "We are going to pay one per cent, Mr. Public, and we want your money; come across with it." I think the amount we get will depend upon what we offer, and I do not think it can be arbitrarily fixed.


Victor Quelch: I would say to the public, then: "The main reason for taxation, or the sale of war savings certificates in war-time, is in the first place, to reduce spending and, in the second place, to allow everybody to put a little aside for a rainy day. If, on the other hand, people do not want to take advantage of that opportunity, then it will merely mean an increase in taxation. To the extent that this does not provide the revenue necessary, we will utilize the Bank of Canada and finance our war expenditures at no cost other than the actual cost of operating the accounts in the banks." If that were explained to the people, I believe the government would have no trouble in keeping down interest rates, because otherwise the people would have the money taxed from tlhem.


Thomas Clement (Tommy) Douglas: In repatriating these securities, what was the basis of payment and how was it arrived at? Were these securities repatriated at their market value, at their face value or at some value arranged between the persons in the United Kingdom holding them and the Canadian government?


James Lorimer Ilsley: My recollection is that the United Kingdom government took them over at the market value, and that we bought them at that value.


Thomas Clement (Tommy) Douglas: And the Canadian government bought them from the British government at the value at which the British government had procured them?


James Lorimer Ilsley: That is my recollection. There may have been some slight variation for some charge there somewhere, about which I do not remember, but substantially that was the transaction.


Thomas Clement (Tommy) Douglas: It would be approximately the market value?


James Lorimer Ilsley: Yes.
War Appropriation Bill


Mr. NICHOLSON:: The minister was kind enough to answer a question which I placed on the order paper some time ago in connection with interest-free bonds. I was delighted to see that the Canadian public had responded in a very generous manner, but I was surprised to learn that the minister's department had spent only something like $600 in popularizing this type of saving. Perhaps the minister would make a statement about the possibility of spending additional sums of money to try to promote the sale of bonds of this type.


James Lorimer Ilsley: It is not the policy of the government to promote the sale of interest-free bonds by campaigns of advertising, or the like. That policy was decided upon after a great deal of consideration. As to whether it is a right or a wrong policy, I never have been sure. I believe that in England1 they ask the public to buy interest-free bonds, and they also ask the public to make donations to the government. It was felt in this country, however, that if we started advertising campaigns. which cost a lot of money, and otherwise promoted in a wide-spread manner the sale of interest-free bonds, the result would be that the conscientious, generous and self-sacrificing part of the population would perhaps be buying interest-free bonds as a matter of duty, and the more selfish or prudent part of the population would be buying the bonds which carried interest. It was thought that we would be open to severe criticism. It would be suggested that there was not that equality of sacrifice about which we have been talking. Therefore, when we have asked the public to buy bonds, it has always been in connection with bonds which pay interest. We make it clear, however, to any persons who wish to buy interest-free bonds as a matter of patriotic duty, that we deeply appreciate their action, and we make the particulars with respect to those bonds available. Also, when persons send us donations-and there are thousands of people who make gifts to the government-we do not discourage them. We are very grateful for those donations, and appreciate the spirit which prompts them. We offer our thanks for such donations, but we do not go out and advertise for them.
It is open to the committee to express its views as to that policy; but if we took the other one, I am afraid hon. members in the group which has been addressing itself to this matter would be the first to criticize it by saying that the long-headed and shrewd part of the population were lending their money at fairly good rates of interest, while we were trying to force these bonds on the more unselfish and self-sacrificing part of the popu-

lation. It would be suggested that there could be no equality in a programme like that.


Thomas Clement (Tommy) Douglas: Has the minister not presented a good argument for compulsory interest-free loans? That is what he has done.


James Lorimer Ilsley: Perhaps I presented one argument. I believe, however, other arguments against compulsory loans would outweigh the one I have presented. The hon. member knows that other considerations enter into the matter.


Mr. CASTLEDEN:: I believe all hon. members who are at present in the chamber will benefit in some degree from the discussion which has taken place this afternoon. The results that may flow from it will no doubt be seen in the days which follow. I believe the people of Canada are interested in seeing that as light a burden of debt as possible be placed upon the coming generation. We do not want another crop of millionaires lining their pockets with tax-free bonds, as they did after the last war.
I do not offer any excuse this afternoon for having taken time of the committee in discussing this measure. We are considering a resolution which would permit the expenditure of $1,300,000,000. If we continue as we have been doing, it will be $2,600,000,000 next year and $5,000,000,000 in the third year. If our programme of shipbuilding alone is to be continued until 1945, I feel quite sure that anyone who knows anything about elementary arithmetic will realize that the debt structure we shall have in Canada after this war will not stand the burden. Every realistic person realizes that wre are going to need a new set of rules. The seed that is destroying the present system is the seed of interest. It may bring down our whole financial structure after the war is over, and there are a great many parts of that financial structure which I believe most of the people will be glad to get rid of.
This resolution provides for advancing $103,000,000 as capital assistance to private corporations and contractors in Canada. I maintain that some of those companies are quite capable of obtaining the money for themselves. I have in mind a company such as Canadian General Electric which, I understand, is a branch of General Electric of America. There is a further amount of
S2,500,000	to the Canadian Pacific Railway; $8,000,000 to the Consolidated Mining and Smelting company; $3,500,000 to the Dominion Steel and Coal company, and more than $3,000,000 to the Ford Motor company of Canada. I do not know to what extent the John Inglis company needs the money, but I

War Appropriation Bill
note that there is provision of $18,000,000 to that company, and $13,000,000 to the Canadian Car and Foundry company.
Coming from Saskatchewan, where people with reduced incomes are depending more and more upon direct relief, I would say that they view with great apprehension the decision of this government, at this time of heavy expenditures, to cut off direct relief assistance. Some of those people are going to face even more dire straits than they have faced in the past. If hon. members had seen what I have, they would know that those people have gone down economically further than should happen in a great and young nation such as Canada.
I repeat that I offer no excuse for discussing these matters in committee. Last year we shortened discussion and criticism because the government was in a hurry. We were informed that new war boards were being set up. We were told that the thirty-seven panels and committees which were set up would so correlate our production with our natural resources, distribution and production, that by the early months of 1941 we would be producing-I believe these were the figures- twelve planes a day or 360 a month. We kept quiet because we believed the government should have a chance to implement its policy. What we wanted most of all was results. We want delivery of goods, and when they are not being delivered we wish to know why.


Paul Joseph James Martin: What particular goods?


George Hugh Castleden: Planes constitute one of them. We are three months behind schedule. Hitler is not waiting. He is coming over London dropping his bombs. I think the paper says that about 10,000 bombs were dropped last night.


An hon. MEMBER:: Talk a little while longer, and they will be more than three months.


George Hugh Castleden: We want delivery of the goods, and the government has power to deliver them. Why are they not being delivered?


Mr. McCANN:: Why not pass the
resolution?


George Hugh Castleden: I wish to refer briefly to a matter brought to the attention of the committee a few nights ago. I refer to the matter of health. Apparently we need men to man our aeroplanes. These are figures which Canada must face. I quote from the words of the Minister of National Defence for Air (Mr. Power) at page 1605-6 of Hansard:
There will be for training this year 93,000 young men of the age of twenty-one years.
Without hesitation one can knock off 33 per cent of those as being unfit even for military training camps.
That is, 30,000 of these men would be unfit even for military training camps. To continue:
That is, they would be placed in classes C-l or C, and unfit to walk five miles.
What a glorious tribute to the health of Canada's youth!
They are completely eliminated, so far as the air force is concerned. Then, the difference between C and A-plus, with good eyesight, would mean that one would knock off another 30,000, leaving about 30,000 annually from which we can draw.
Then, if one looks at them from the point of view of educational qualifications I believe he would knock off another half of those-these would be the ones -who have not high-school matriculation-leaving 15,000 eligibles.
One man in six, the flower of Canada's manhood, men in the prime of life, twenty-one years of age! What is happening to the health of Canada? What has happened in the past? Perhaps these facts will shock the Canadian people from some of their apathy. They reveal that the health problem in Canada is a real one. It is urgent, and I want to know why it is neglected. It is closely linked up with the matter of education, and I think it has arisen from neglect, poverty, insecurity and bad housing conditions. If the facts were given to the Canadian people with regard to present housing conditions in Canada, I am sure we would hang our heads in shame. Bad housing is where crime and vice breed. That is where a nation declines. We are at war, and yet we find that only one man in six who is examined is fit to be a pilot. A poverty stricken, ignorant and unhealthy populace fits in well with the plans of certain European dictatorships. Such people are easily frightened and easily bribed. You can drive such a populace wherever you will, like frightened sheep. I maintain that in Canada we have no room for a populace which is unhealthy, ignorant or poverty stricken. Such conditions have no place in Canada's economy. The right to health in this country should be as readily recognizable as the right to breathe. What kind of country are we building? I want to know who is responsible for these conditions. Is it political expediency that allows such conditions to exist? Have we a department of health?
Looking over the membership of the house, I find that there are seventeen medical doctors -fifteen on the government side, and I believe two on the opposition side. There are at least a dozen laymen like myself who are willing to help, but we seem to be blocked at every step we try to take. I inquired last July whether there would be a committee on health. That was in the closing days
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when the estimates were before the house, and I was informed that the matter was under consideration-that is the usual answer. I asked again in December what was going to happen in this matter, and I was told that a voluntary committee of members of the house was set up. I was a member of that committee, and I can say that it was set up only for the purpose of trying to get action from the government in attacking this problem of health. But such action was not taken. When I inquired again in February of this year I was told that the minister did not intend to set up a parliamentary committee on health.
Nevertheless there is much work to be done. There is the matter of research. Perhaps research would reveal more startling facts regarding the health of the Canadian people which would not make very good reading, and if the statement which I saw in the Montreal Gazette this morning by a member of the provincial legislature of Quebec is true, there are some startling health facts which the people of Canada should know. This question needs publicity. We need cooperation between the health departments of the provinces and health organizations right across Canada, and the Department of Pensions and National Health in this government should be correlating and bringing together, the various schemes of the provincial departments of health. Splendid work is being done by provincial recreation centres in British Columbia and by the antituberculosis league in Saskatchewan. Why not extend such efforts? This matter is closely linked up with education. We need a proper national viewpoint, and this house should be giving that leadership on the question. We are paying to-day for our failure in the past to attack this problem. We need men now who are strong, virile and healthy. I am sorry the Minister of Pensions and National Health has left his seat, but I suppose the financial questions which have been discussed this afternoon have wearied him.


Thomas Clement (Tommy) Douglas: Oh, no; he is a monetary reformer.


George Hugh Castleden: I think this question is too urgent to be disregarded any longer. We need A-l men, A-l plus, as we never needed them before, and it is not just for cannon fodder that we need them. We want tihem for the reconstruction period after the war is over. You cannot build a worthy nation unless it is healthy, is educated and has proper security. Canada can give all these.


Alexander Malcolm Nicholson: I had a question which I intended asking of the Minister of Munitions and Supply, blit possibly the Minister of Finance might give me the information. I

have here a copy of the capital expenditures contract between His Majesty the King in the right of Canada and the John Inglis company, under date of October 31, 1940, and I quote a clause from the contract reading as follows:
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.
There is a corresponding clause in the contract on production between the John Inglis company and His Majesty the King in the right of Canada, under the same date. Am I not right in assuming that members of the Senate of Canada should likewise be debarred from any share or part of this contract and from any benefit to arise therefrom? No provision is made to bar members of the senate from the benefits of this contract. Would the Minister of Finance explain this omission?


James Lorimer Ilsley: I will bring it to the attention of my colleague the Minister of Munitions and Supply and see if there is any explanation or whether it is just an omission. I would have thought the matter was covered by the House of Commons Act governing the independence of parliament and that it was not necessary to have that clause, but I may be wrong about that.


Richard Burpee Hanson: That clause is often put in, and I have always thought it was an insult to members of parliament. I have protested against it on more than one occasion.


Alexander Malcolm Nicholson: Why mention the House of Commons and not the Senate of Canada?


Paul Joseph James Martin: The Independence of Parliament Act does not cover shareholders.


Richard Burpee Hanson: No.


Alexander Malcolm Nicholson: Would the minister
make a statement on this point after the dinner recess?


James Lorimer Ilsley: I will bring it to the attention of my colleague.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Mr. ROSS (St. Paul's):: Mr. Chairman,
the Minister of National Defence (Mr. Ralston) said before the dinner recess that we on this side should be satisfied with the way in which this debate has been carried on. because it was the method which Sir

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Robert Borden used in times gone by. I took the trouble to look up Hansard of 1917 and 1918, and I found that there is quite a lot of difference. In 1917 Sir Robert Borden introduced a similar resolution in the House of Commons, and immediately started in and gave the full details of the estimates for 1914-15, 1915-16, 1916-17, and then the war estimates for the then current year. That was the procedure followed; there was a great deal of detail, and several other ministers spoke at that time.
In 1918 the resolution was introduced by the Hon. J. D. Reid, who, in introducing it, said:
I may say that an understanding was arrived at between the Prime Minister and the leader of the opposition to the effect that the statement which is necessary to be made in connection with the resolution should be made on the second reading of the bill. It was decided between them that this resolution should be allowed to go through and a bill founded upon it introduced.
There was very little discussion about it. But what happened was that by mutual consent the resolution was allowed to go through. Then on April 10, Sir Robert Borden gave a full and detailed account of all the expenditures theretofore and the appropriations which would be necessary for that year for the carrying on of the war.
Even though the Minister of National Defence thinks the present procedure is good enough for us because of what was done by Sir Robert Borden, the resolution moved by Sir Robert Borden was for $500,000,000, which was a lot of money in those days, yet it was not quite on the same scale, either in vastness of amount or in the detail connected with it, as the resolution now before us, and it seems to me that the government should have taken a little more care to have the debate carried on in an orderly fashion. If the important point was to get the appropriation through quickly so that the government would have the money required to carry on with, there can be no question that, with the consent of the house, a proportion of the money could have been voted, just as for years we have voted a proportion of the estimates. Further, it would have been very easy to have had a book prepared giving in detail by departments all the estimated expenditures, without the necessity of having the ministers stay in their places and repeat the details to the committee. Had this material been printed, hon. members would have had an opportunity of studying it.
I admit that there has been a little delay, and possibly some repetition. On the other hand, under the system involved in this resolution, hon. members, who cannot be in their
places all the time, may miss something, when it is brought up in this unorderly way, if they happen to be out of the chamber, and that naturally leads to repetition and loss of time. Had they had the estimates to study, much delay would have been avoided.
On the other hand, the last thing in our minds-in mine, anyway-is to delay anything. A plan such as I have outlined, whereby the estimates would go through without the necessity of ministers attending other than the minister in charge of the particular department, would save members of the cabinet a great deal of time.
It must be pointed out that our constituents are interested in knowing how this money is being spent. They want to know what has been going on. They want to know what progress is being made. It is our duty, even in times like these, to find these things out. The $700,000,000 which we voted last fall went through with hardly a murmur. Now, it seems to me, the people of the country are entitled to some details of the expenditures.
In connection with certain financial aspects of this resolution, for example matters affecting companies which are in receipt of capital assistance, the banking and commerce committee could be properly asked to investigate and find out what has happened, where there are no secrets concerned. I am sure that the public would be well satisfied if all material facts were brought to the light of day.
I suggest that, in future, some course such as I have outlined should be followed, and I do not think it is too late now to do something of the kind. Certain elements of these war expenditure estimates have not yet been accounted for: for example, items with respect to the post office, the national revenue-a small item, it is true-and fisheries. Possibly, when we get into committee on the bill, some such arrangement could be adopted.


Richard Burpee Hanson: In connection with the Department of Agriculture, on page 1497 of Hansard the minister gave a statement of expenditures from April 1, 1940, to Janury 1, 1941. Included are these two items: disposal of Canadian apples, 1939 crop, approximately one and a half million dollars; disposal of Nova Scotia apples, 1940 crop, $1,172,000.
I had a complaint from New Brunswick about the disposal of Nova Scotia apples in New Brunswick, where the arrangement does not apply, and where, according to my correspondent, who is a truthful man, a grower, and much interested in horticulture, the local market was very much bedevilled by the way in which the marketing of Nova Scotia apples was handled. The minister may not have got my letter. If he has not, I would not expect
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him to answer offhand. I had hoped I might get an answer from him before this. Possibly the matter has not come to his attention. Will he tell us what the explanation was?
While it is too late to cure what happened last fall and this winter, I should like to have some kind of understanding that it will not occur again with respect to the fairly limited market for New Brunswick apples in New Brunswick. I understand the crop is not large, not more than 50,000 barrels or so, and the local market can absorb it pretty well if there is no dumping from Nova Scotia. The marketing regulations might, I think, be tightened up a little bit so that at all events ungraded fruit will not be dumped into the New Brunswick market. The gravamen of the charge, as I recall, is that ungraded fruit was dumped into the New Brunswick market and sold at a price away below the market price, and that the difference was made up by this government. That, I believe, is the crux of the matter, and if it is true the situation is one that ought not to obtain.


Mr. GARDINER:: I recall a letter having come to my desk. I sent a letter from the leader of the opposition (Mr. Hanson) to the department to get any information obtainable on the subject. So far as I can recall, no reply has yet come back to me, but as soon as I receive it I shall give full information. On the last point made, it would not be correct, as I remember the terms of the agreement, to say that on any ungraded apples dumped anywhere the government had assisted, unless it might be considered that they had done so indirectly, because ungraded apples of that type are not covered by agreement at all.


Richard Burpee Hanson: I may be wrong about ungraded apples. Apples, we will 6ay.


James Garfield Gardiner: It is just possible that ungraded apples might be those that were dumped. We have had, for a time, some difficulty not only in Nova Scotia but in Ontario as well with ungraded apples. We have not full control over the sale of apples within a province. We would have as between Nova Scotia and New Brunswick possibly, but we have had difficulty with ungraded apples being sold on a market that we have been attempting to hold for graded apples in connection with which we have been giving some assistance financially.
Last year we attempted to carry on without any zoning. The previous year we had zoning under which we did not permit apples to be shipped from one area to another during certain seasons. Last year we attempted to get along without that provision, but we think

there will probably have to be an element of it again this year in the arrangements under which, between certain times, it will not be possible to ship apples from one section to another without a permit from the government, so that we may have more control. I will look into the matter and get information which I will put in the form of a letter and send it to the hon. gentleman.


James Layton Ralston: May I say a word in answer to the hon. member for St. Paul's (Mr. Ross). I do not think he gave the committee the dates and the time consumed in connection with the proceedings to which he has referred. Let us take the war appropriation legislation which was dealt with in 1917. The year 1917 was the third year of the war, corresponding to the year 1942 of the present war. In 1917 the war appropriation of $500,000,000 was the largest that had been asked for up to that time, and the resolution was introduced on February 1, 1917. Sir Robert Borden took altogether six pages of Hansard to make his statement. As I say, his resolution was introduced on February 1 and it passed on February 6, taking six days in all.


Richard Burpee Hanson: By agreement.


James Layton Ralston: No, not by agreement in
1917. The same day the bill was introduced and it was given three readings and passed on February 7. This resolution has been before this committee for a month. That shows the difference in the time taken in 1917 and the time taken on this resolution. As I stated before, I am not blaming any one. I repeat that the procedure which the government has adopted in the present matter is very similar to the procedure adopted by Sir Robert Borden. My hon. friend said that Sir Robert Borden gave a great deal of information. This is the information he gave.


Richard Burpee Hanson: He gave
a break-down.


James Layton Ralston: No. He gave expenditures on account of the war. Of course he gave the expenditures for 1914-15 and 1915-16, because there were two years back which we have not; we have only the past year. He also gave expenditures for the preceding year for the different departments-no break-down but just for the different departments, at page 355 of Hansard of 1917. Similar information was given by my colleague the Minister of Finance. Sir Robert gave, second, an estimate of expenditures of the various departments, which was what my colleague the Minister of Finance gave. Sir Robert gave one more thing; he broke down his

War Appropriation Bill
statement into pay and allowances; rations and subsistence, other items of that kind: objects of expenditure such as I gave particulars of when I was speaking. The hon. member will find that practically no questions are asked in connection with these general items. Questions were asked on certain matters of policy, and it took only six days in which to do it. Sir Robert Borden's statement was an extremely general one. The only thing in connection with which he went into detail was the arrangement with the British as to capitation allowances, the amount paid for maintenance of troops overseas, and that is what takes up a great part of his statement. In 1917 it took from February 1 to February 7 to pass not only the resolution but the bill, and that was not in the first year of the war but in the third year. That is certainly quite different from the time which it has taken on this resolution.
I repeat, I am not blaming any one, but on behalf of the government I am not accepting blame for the course which the debate has taken.


Alexander Malcolm Nicholson: I should like to discuss a few matters affecting the Department of National War Services. I am sure that all hon. members were interested in the description the minister gave some days ago with regard to the national registration, and I have no doubt that hon. members have been greatly concerned about the large numbers of people in the various constituencies in Canada who are still waiting anxiously for directions as to where they may find employment in the different war industries. The minister, speaking on Tuesday of this week, said that for some reason or another a great many people now think they should make application to Ottawa and they write to some minister or to some person connected with the promotion of some particular industry. He said:
We simply had to advise them that all the information with regard to these matters is now, as it always has been, at the labour offices and that that is the proper place to apply; that they can get action quicker in that way than by applying to someone else somewhere else.
The difficulty in Saskatchewan is that the labour offices find it next to impossible to direct people seeking employment to places where they might find it. I had some experience with the employment office at Yorkton last year when the air training school was under construction. On one occasion I was told that there were some 700 employees on the waiting list, and one of our difficulties has been that apparently we have no machinery set up to make it possible for the unemployed to move from one part of Canada to another.
The minister, writing from Ottawa on July 27, said:
We hope to be able to help the Canadian people by means of the information gathered -to direct those presently unemployed to employment, and to aid those who are employed in obtaining more gainful employment.
I realize that there are difficulties in carrying out an objective of that sort, but the letter was written on July 27 and I think the department should be able to report by now some progress in that direction. Hoping that some machinery would be set up by November,
I wrote to the associate minister stating that I had received a letter from the secretary of the Pelly branch of the Canadian Legion in connection with finding employment for the daughters of one of the veterans of the last war, one girl aged twenty-five and the other nineteen, and that I wondered if he could give me information as to where and when employment might be found. The associate deputy minister replied, saying:
I would strongly suggest that (the) two daughters write to the secretary of the commission and secure applications.
The reference was to the civil service commission.
They should complete the same and return them. Thus they will be in line for employment in the future as and when further employees are being sought.
I discussed the matter with the secretary of the civil service commission and was advised that it would be misleading to these girls to encourage them to make application to the civil service commission because at present they had no machinery for the placing of girls who were not stenographers or had no other special qualifications. Therefore, on the advice of the secretary of the civil service commission I did not carry out that suggestion.
The associate deputy minister went on to say:
I have had a good many letters from people in the west with special qualifications amply fitting them for employment in war industries, and I have suggested to them that they go to their nearest employment office, register thereat, and ask the manager of the office to communicate with the employment offices in the larger industrial centres of Canada. These offices are pretty well informed as to where employment is to be found. In this way they do bring together those seeking employment and those seeking employees.
The letter went on to say:
The whole problem is very much to the fore at the moment, and I know is being thoroughly canvassed and considered by the Department of Labour and the national labour supply board. It will also be given consideration by the minister of this department, the Hon. Mr. Gardiner, on his return from Great Britain.
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That letter was dated November 6. The difficulty seems to be that we have not any machinery that will enable the people seeking employment, in Saskatchewan for example, where we have no war industries operating at the present time, to get in touch with industries in Ontario or Quebec. The minister mentioned the other night that they have machinery here, so that manufacturers wishing employees could find out where properly qualified people might be found, and I am sure that a valuable piece of work is being done in that connection. I should like, however, to ask what machinery we have for keeping these cards up to date. The registration took place last August. Is there an up to date record as to which of those registered as unemployed last year now have employment, so that manufacturers who wish to secure toolmakers, for example, or steel workers, could obtain the names of those who were unemployed in that particular industry and know whether or not they are now working? Further, what progress is being made towards directing the unemployed to where they might find employment in other parts of Canada?


James Garfield Gardiner: I think the system under which the direction is given is pretty well outlined in the letter written by the associate deputy minister. In the first place, as I stated the other night, there is in the statistics branch of the Department of Trade and Commerce, which is doing this work now at the request of the war services department, a list of persons across Canada who are capable of doing certain kinds of work. So far as industries that require that type of labour are concerned, there is no difficulty; they can make application to the department and get lists from any part of Canada they desire, and with those lists they can make inquiry and engage as many of those persons as they require.
When the initiative is taken by the industry, the machinery is to be found in the lists that are available. As to keeping the lists up to date, an effort is made to do that. That effort will not be entirely successful unless there is one hundred per cent cooperation on the part of those looking for jobs; that is, if they move from one place to another, they should notify the branch keeping the lists. An attempt is being made to get that done, but it may not be done quite one hundred per cent.
On the other hand, individuals desiring to find employment should as far as possible follow the advice that was given by the associate deputy minister; that is, they should use the machinery which has been set up by

the Department of Labour at Ottawa, cooperating with the labour branches in the different provinces, by listing their names with the labour offices. It is assumed that if they request that that be done, those names will be filed at the centres where industry is situated and where employees may be required. In so far as that is done, I think the machinery makes it possible to bring the unemployed person in touch with the industry where employment is available.
Further, I do not think it is impossible for the individual to get service by writing direct to the labour offices in the larger districts and seeing that their names are filed there. In other words, it is to be assumed that the individual will do everything possible on his part. I know that most are anxious to do that, but they often do not know just how to proceed. If we as members, when we get communications from individuals seeking work, would try to instruct them along that line, sooner or later the greater number would at least know how to make use of the machinery that is available. We are putting out information regarding it from time to time, but I am afraid it does not always reach those desiring it.
I do not think there is anything I can add so far as the machinery set up is concerned. I am doubtful whether we could set up machinery that would be any more complete. We might change the administration from one department to another and get more of it into one place, but it is a question whether that would produce any better results.
The other difficulty referred to by the hon. member was that of persons getting from where they are to the place where employment might be found. The information that I have is that with regard to most of those who are requiring employees, that is in connection with war industries or shipbuilding, when they have been able to locate persons suitable for their employment there has not been any great difficulty in having funds advanced to take them from where they are to the place of employment. The main difficulty is, I think, to convince the industry that the individual is qualified to do the work so that it will take the chance of paying the transportation. It would probably be just as difficult to get government bodies to do the same thing. We have, of course, the additional difficulty that there may be a certain amount of unemployment in a province, and if persons were to be moved into that province from another one, the provincial government would probably have to be consulted. The machinery, however, is there, making it possible to bring about the contact. It may be it is not sufficiently generally known that the machinery is provided.

War Appropriation Bill


Thomas Clement (Tommy) Douglas: What has been done by the voluntary service registration bureau? Is it still functioning, or has its work been taken over entirely by the national registration?


James Garfield Gardiner: The voluntary service registration bureau was conducted in the first instance under the Department of the Secretary of State. All the applications made to any of the departments of government early in the war period were turned over to that organization. In addition, persons made application direct, knowing that the organization was there. There was a very considerable list- of persons who sent in their names from all across Canada. That list, I am told, was combed thoroughly by the supplies department when it was first set up, and information with regard to the names contained therein was passed on to industry, which made some use of it but perhaps did not take all the persons who thought they should have been employed as a result of having registered in that way. At the present time the list is still with the Department of the Secretary of State, but I believe it is just in process of being turned over to the Department of National War Services, to be used along with the lists we have, although I would suggest that hon. members should not take from this that no use has been made of that list since the present department was set up. That list has been consulted from time to time, and from it have been taken the names of persons available for certain types of employment, where that was requested by industry.


Howard Charles Green: How many names are on the list?


James Garfield Gardiner: I have forgotten; there are some thousands.


Howard Charles Green: Last summer it was reported that there were 75,000 names on it.


James Garfield Gardiner: I imagine there would be that many. For the benefit of the committee and, I think, of the country, I would say that I believe those who made up that list had very much the same experience as we have had from the lists under the registration. It will be noted that in Ontario, for example, there is a very large number of people between the ages of thirty and fifty, a much larger number than perhaps one would expect. It is unfortunate that a great many people between the ages of forty and fifty and even between fifty and sixty, who found themselves unemployed during the period of depression, are finding the greatest difficulty in getting back into employment again. I regret, as I am sure every other hon.
member will, that this is the situation. Probably the time will come when it will be necessary to urge, much more strongly than we have been able to do up to the present, that many of these persons be employed in industry. It may be that younger people could do the work to better advantage, but there may be some other work to be done by younger people that older people can not do, and in such instances it might be necessary to urge the employment of many of those who were on those lists made up under the voluntary effort. Not only does that apply to voluntary effort; I think a large part of those seventy thousand names will be found in the one or other of the ten-year age groups referred to in Ontario at the present time, and the same thing will be true right across Canada.


Mr. MUTCH:: It seems to me that we in this house are in danger of overdoing the slogan, "This time we are all in the front line." With all proper respect to the author of those words, so far as Canada is concerned they simply are not true. It is not only untrue that we are all in the front line in Canada; unhappily it is true also that many of us apparently have not realized the magnitude of our task, which is to get on with the battle itself. It is now a month since we began to deal with this resolution, and perhaps *we should note that it is not taking nearly so long to deal with the seven billion dollar appropriation which is being discussed in Washington to-night.
This debate has lagged disgracefully. It is a spectacle that reflects no credit upon either the earnestness or the sincerity of any of us in this house. To emphasize in its defence the importance of opposition is to insult the intelligence of all, and does not fool anybody. The word "break-down", I think, has become almost overworked during this discussion; I believe if we took out that one word we would save a day or two. The break-down, if there has been a break-down in this house, has been the break-down of the opposition which, bankrupt of ideas, keeps bobbing up, hinting this and insinuating that. As a result of this procedure, two conditions have arisen in this house and in the country. In the first place, unthinking criticism has had and is having the effect of widening the gap between the government and the public, or perhaps it would be better to say the gap between parliament and the public; and this at the very time when public confidence is essential to victory. The second result of this recognized weakness has been that the newspapers of the country have been led to attempt to usurp the function of opposition, to become the thoughtful, informed critics of the administration. Apropos of that
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situation, I should like with your permission, Mr. Chairman, to recall the words of a very wise American editor, now dead, who said: "A government without newspapers would be intolerable. A government with newspapers is endurable. A government by newspapers would be the worst conceivable."
Linked' with the folly of criticism without regard to ultimate consequences is another evil which is sometimes evidenced in this house. We have been told how difficult it is for a camel to pass through the eye of a needle. Sometimes I have thought that a camel passing through the eye of a needle would have an easy time compared with the problem of a cabinet minister admitting an error in judgment. This chamber has been called the last refuge of free speech, and that has not been a jocular reference. There is real reason to agree with the thought that in this country it is the last refuge of free speech. But that does not justify or excuse licence in connection with this forum. We have been singularly free from licence, in the sense of misuse of our privileges, but this does bring me to one or two conclusions.
The first conclusion to which I have come is that in this country we have been a bit silly about censorship. I do not think any real harm has been done, but personally I object to the banning of publications because they hold views which are unpopular or not in accordance with those of the majority of us. I protest against that sort of thing; in my opinion it is a violation of the rights of the citizen. I do not think it heals any breaches in public opinion. I think it accomplishes no worth while end. Our cause

the cause of the government, of parliament, of the country and of the empire-is a just one; I think we can justify ourselves both at home and in the eyes of the world with regard to our methods of protecting the system of society in which most of us still believe and have a good deal of confidence, without resorting to the very practices against which we are fighting at the present time. I should like to make it perfectly clear that I am referring not to military censorship, but rather to the type of censorship which is aimed at things, written or oral, with which the majority of us happen to disagree.
Even I know the exasperation which comes from attempting to answer carping criticism. Most of us, perhaps, have not the consciousness of virtue which cloaks almost all governments-and I suppose always will-like a mantle; but even you and I would sometimes choke off thoughtless criticism if we dared or if we had the opportunity. I think we all need the criticism of both friend and foe in

order to retain our proper perspective, and in any event, to my mind this is the essence of the democratic principle.
This unreality of the proceedings here during the last' month or so; this failure to face up to our situation, as evidenced by our deeds rather than by our words, has come as a shock to people outside the house. I have no hesitation in saying that the atmosphere which pervaded this house during the first ten days of our participation in this war was something which will not be forgotten by anyone who had the privilege of experiencing it. A good deal of that has, it seems to me, evaporated somewhere in the meantime. And in spite of the example of those in other lands who have been lulled by temporary inaction we are following the same fatal practice here, and trying to do business as usual. It occurs to me that with respect to the debate on this resolution, in particular, the government is not to blame. With praiseworthy promptness the resolution was put before us. We may haggle about the method of it and the phraseology of it, or the general practice with respect to it, but the fact remains that within forty-eight hours of the time we arrived here we had an opportunity to begin our deliberations.
We the members of the House of Commons in all parties are those who are responsible for delay. Our people are willing and anxious to be led to greater things than any inspiration they can get from this last month in the House of Commons would justify. Every day since I first came to this chamber in 1936 I have had the opportunity to sit on the opposition side of the house. And during the last days I have been here I am bound to say I have been more comfortable about it than I had ever been during the previous time. I am not paying tribute to any changes or to any newcomer on this side of the house, when I say that. But, disturbed as I am about what I conceive to be the unreality of our attitude, it is worth something to me to be able to sit on this side of the house day by day and to be able to look into the face of the one man who, I am sure, has looked into the future with eyes undimmed by false hopes and without being motivated by pious wishes. I seek the opportunity to say that because I believe it represents not only the view which is my own, but the view of those whom it is my privilege to represent.
We have been rather tender about mentioning polities in the last little while, except to mention it by suggestion or innuendo, as something which is a bit discreditable. In connection with that I have a word or two I should like to say. There is a form of political brigandage which is not confined to the east

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or to the west, and which is not entirely confined to political parties. It creeps sometimes into organizations of persons who have banded themselves together for purposes other than the promotion of the government of the country. I do not care whether that type of propaganda-politics-is cloaked in the verbal garb of patriotism or whether it comes out openly as a kind of self promotion; it is something which should be scotched. No dignity should be lent to it by taking it into consideration in the deliberations of this chamber.
I wonder whether we have so soon forgotten the spirit of sacrifice that built this country? I wonder whether no one does any more dedicate himself or herself to the task which is ours with something of the fine fervour of the Jesuit fathers, the covenanting Scot, the Puritan pilgrims or the huguenots? Men starved and froze, strained every nerve and tissue to make this country what it is and to win the privileges which we have, to the protection of which we all give lip-service in between bouts of seeking our own selfish ends.
Some excuse themselves on this account from greater service on the plea that there is in the war effort inequality of sacrifice. There awcr was and there never will be equality of sacrifice with respect either to the war effort or to any of those problems or those efforts which require sacrifice. Sacrifice is not something which can be measured in a measuring cup, or with a yardstick. Sacrifice involves- if it means anything at all-giving all an individual has. Fortunately or unfortunately, all are not equally endowed.
Let me repeat that equality of sacrifice is an objective always to keep in mind, bearing with that thought the realization that there is not any common yardstick for measuring it. In debates such as this, and in consideration of problems such as we are now considering, it has become a political catch-phrase, the cloak of the demagogue and those who imitate him.
At this point I should like to say a word or two about questions which have been asked during this session. In my opinion, most of the questions which have been asked in the house concerning the military efforts of Canada were improper questions. And I make bold to say that at least some of the answers which were made were at least indiscreet. The first reason I believe for the asking of improper questions arises out of an honest desire to understand what is taking place. Perhaps in some instances some of us ask questions in the hope that by asking our questions we may give the impression that we understand something which, in fact, we do not understand. Generally speaking, I fancy the real reason
is an honest seeking after information. The question-harassed minister perhaps cannot resist the chance to give some credit to 'his hard-pressed staff, who are seldom offered anything in the way of praise. If they have accomplished something worth while, the temptation must be great to give some credit, because no one would assume that the minister had done it all himself. Perhaps under those circumstances we sometimes hear too much.
I fancy only a fool would try to guess what issues will predominate at the next election in Canada. That being the situation, I am at a loss to understand a good deal of the delay we have had in this debate. I am not so foolish that I cannot understand honest questioning and serious debate, but I have heard a good deal which I believe frankly was not serious, and I have read more of it than I have heard. If we admit, and we must admit, that we do not know what is going to be our problem in three or four or five years from now, I cannot see the point of spending so much time in raising little issues which the whirlwind of the next two or three months or the next two or three years will cany into oblivion-possibly with some of us, ourselves. But there is an issue which is conceivable, namely, the preservation of this chamber and the system it stands for. Every idle word spoken now, every utterance of political clap-trap and every careless word that mars the mutual understanding and cooperation of all elements in this country and in this chamber will be turned against those who in that day champion the cause of parliamentary and representative government.
If there are failures and follies in the war effort of this country-and there are; I do not think anyone denies that-we have an opportunity, and many have taken it, of going directly to the minister or the ministers who are responsible, and placing the situation before them. After all, they are the only people who can do anything about it. I say it ill becomes anyone who professes to be interested in promoting that effort to pin medals on his own breast for discovering the fault, when our real and earnest endeavour should be to draw the fault to the attention of those who are responsible, in order that the machinery may be perfected.
By the same token it seems to me that those who accept responsibility in a time like this should not regard criticism as sacrilege. Our problems are a bit too serious to let personal considerations on either side of the question enter into it at this time. I might venture a word of warning, and perhaps one of advice, since I am not one in the habit of
War Appropriation Bill

taking either. The pressure of war administration and the hand of time will too shortly, as most of us believe, deplete the ranks of those schooled in the practices of government, and steeped in the traditions of our parliamentary system. It is time those in authority began to train in the school of experience-and I do not mean just the government; I mean those of all parties who are interested in the preservation of our institutions-some who will be called upon to carry a share of the load, some who may be trained in the school of experience to meet the problems which will come. It is putting too much on Providence to believe that we can simply coast along through this war period and go through whatever is coming afterwards, and that the Lord will look after everything and raise up properly trained people to take care of the situation. I might illustrate my thought by referring to my immediate neighbours to my left. Certainly no one would say that the Conservative party is a godless party, but yet at this very moment it is a headless party, by its own admission. That is not due to Providence but partly due, at all events, to the improvidence of the party itself. That is something we might well think about.
As a Liberal who does not believe that the Liberal party has a monopoly of all grace; as a staunch believer in the two-party system; and as a sincere Canadian, I pray for the emergence of the sort of opposition which with watchful eye and helping hand will press onward with the government in order that we may speedily win the victory upon which the survival of all of us depends.
The hardest lesson which we have to learn, and some never learn it, is that war alters all values. We all need to remember that a decision which is or may be regarded as bad politics should be taken cheerfully by each and every one of us if we honestly believe it is in the interest of our common aim which is victory. By the same token, it borders on treason, just for the sake of winning some political or personal advantage, to destroy public confidence at a time when so much sacrifice is asked of those by whose grace we happen to be here.
Some day this government will disappear. It will be defeated. That is a situation which I think Canada can face with a reasonable degree of equanimity. Some day our Conservative colleagues will form a government, and I believe that Canada will survive even that. But the thing we must above all be afraid of and avoid is the failure of our free institutions of government themselves to survive. I am of opinion that by our action here, or perhaps by our words and lack of

action, something is being done to destroy the confidence of our people in those institutions which we should be doing everything to uphold. Parliament as an institution is in the hands of its members, and when some of us forget that, we all suffer for it.
Finally, referring back to what I said before, I think we should all question the wisdom of the slogan that now we are all in the front line. I think that breeds a sort of atmosphere among our people which I do not think is helpful. And growing out of that, I would say that the sons, brothers, mothers, sisters, wives and sweethearts of our soldiers, sailors and airmen, and our men themselves, have a right to expect us to match in some measure the sacrifices which they themselves so freely make.


Howard Charles Green: Mr. Chairman, for the last few weeks the Minister of Mines and Resources (Mr. Crerar) has been having a fairly easy time in this house, although I have no doubt that he has been more than doing his bit outside. To-night I should like to ask him a question wTith regard to the guest children coming from Great Britain to Canada. I see in the war appropriation estimate the sum of $214,800 which is earmarked to cover "expenses re British evacuee children." We have been reading in the press during the last few days, how badly the people of Great Britain are being bombed, with an increasing number of casualties which no doubt include many children.
In the annual report of the Secretary of State for External Affairs for the last calendar year, at page 8, I find:
The total number of applications from British parents exceeded 70,000 up to July 5, 1940, when postponement of the scheme had to be announced, due to the difficulty in securing convoyed shipping space.
The report goes on to say:
On September 20, 24,130 children had been approved for Canada; 1,538 had actually sailed.
In other words, there are about 23,000 British children who have been approved for passage to Canada but have not been able to come out. The British children who have already come to Canada have won the hearts of the Canadian people. They have been more than welcome, and I believe that there are thousands and thousands of Canadian homes open now for children from Great Britain but unable to get the children. Some one has said that as many as 60,000 children could be placed. I think that just at this time it would cheer the people of Great Britain very much if this house could show beyond any question that we are only too anxious to welcome and take care of every single British child who can be brought to

War Appropriation Bill
this country. I would ask the minister to
make a statement with regard to this matter.


Mr. CRERAR:: It is quite true, Mr. Chairman, that the committee has heard nothing from me so far in this debate. I would not, however, want the hon. member for Vancouver South (Mr. Green) to get the impression that it has been altogether a pleasure to me to listen for four weeks to a discussion on this appropriation bill ranging over almost every subject that one could imagine. We have had monetary theories expounded, opinions given as to how the war could be won, discussions on the merits and demerits of lignite and bituminous coal, as well as the discussion of a great many other subjects as I have observed with much interest, when I have been listening to the debate.
On the subject of British guest children which has been raised by the hon. member for Vancouver South, he has, I think, stated the pertinent facts pretty well in quoting the extract he read a moment ago. As I recall it, between 1,500 and 1,600 of assisted passage British children have reached Canadian shores. In addition, there were several thousand, as I recall, approximately 5,000, who, some with their parents and some without their parents, found their way to Canada without any assistance from either the British or the Canadian government.


Howard Charles Green: Did the minister say 5,000?


Thomas Alexander Crerar: Yes; my recollection is that it was about 5,000. I give that figure with reservation because I do not recall the exact number, and as I said a moment ago, between 1,500 and 1,600 of assisted passage children came out under arrangements made between the two governments. The movement started in the latter part of last summer and continued for several weeks, but as the autumn closed in and the danger of transport across the ocean increased, the British government of its own volition suspended the movement for the winter months. So far as we are aware, it was the intention of the British government to resume the movement with the coming of spring. It will, however, be in the minds of every hon. member, I am sure, that the risks to-day are even greater than they were a year ago, and consequently the British government and the British parents who might wish to send their children to a safe haven in Canada have to make a very difficult and tortured decision as to whether it is safer to keep the children in Britain, subjected as they are to bombing, or to take the risks of transferring them across the Atlantic, where they may be subjected to submarine attack. Consequently,
it is not for the Canadian government to advise the British government as to what they should do under these circumstances. The people of Britain are the best judges.
There is no misunderstanding in the minds of the British government or the British people as to the willingness of the Canadian government and the Canadian people to give asylum to all the children they can send to this country. That has been made very clear on more than one occasion; and we simply have to wait on events and see what course the matter may take in the light of the conditions of the war as they develop in the weeks which lie immediately ahead.


Howard Charles Green: It is perfectly clear that we will welcome all the children that can be sent?


Thomas Alexander Crerar: There is no question of that.
May I just say an additional word on how the scheme has worked out so far as the children are concerned. Hon. members will recall that the basis of operation of the scheme was the utilization of the existing welfare agencies in each of the provinces. As a result of conferences held in Ottawa, the plan was developed and homes were carefully inspected by experienced social workers as to their suitability for the reception of the children. That occurred in every province. Here may I pay a very large meed of praise to the provincial governments and to the social welfare agencies under their control which have cooperated in making this scheme, I think, a fine success. These children have been placed all across Canada. It is true that occasionally changes of homes have had to be made; that was inevitable; but I think I may say with confidence that the plan has worked out excellently and that the overwhelming majority of these children are happy and safe; and that is the important thing.
At the commencement of the scheme the British government sent a representative to Canada who was attached to the British high commissioner's office in this city. In the late months of last year and, I believe, the beginning of the present year, this gentleman made a trip across Canada, personally visited a great many of the homes in which children were placed, and met the people who had the direct supervision in the provinces. When he returned he came to my office to express his satisfaction on the whole with the manner in which the plan has worked out. If there are complaints, they have not come to my notice. I think I would have heard something of them if the scheme were not working out on the whole satisfactorily. I have not received by letter a single complaint from any part of

War Appropriation Bill

Canada as to the operation of the scheme, and to the best of my knowledge and belief it is working out in a satisfactory manner. These children are being cared for as though they were the children of the homes in which they are placed. They are receiving proper medical and dental care, adequate clothing for winter weather, and all the educational facilities that the communities in which they reside can provide.
I wish to say here publicly a word of thanks to the supervisory committee that has had under its close and unremitting attention the welfare of these children. As hon. members are aware, Doctor Wallace, president of Queens university, is chairman of this committee; Mr. Logan, president of the Canadian Bank of Commerce, is honorary treasurer of the committee.
It may be of interest to the committee to know that quite a considerable sum of money -I cannot at the moment give the precise amount-has been received1, not in response to a public appeal, but by way of voluntary giving on the part of many people throughout Canada and some in the United States who have made contributions to the welfare of the children. These gifts have been applied to such extra expenses as are involved in hospital, medical and dental care where the homes in which the children were placed have not the means themselves to provide these necessaries.
I am glad that the hon. member asked the question, because it has given me the opportunity to state just how the scheme has worked out so far. The amount in the appropriation bill to which my hon. friend referred, is, of course, an estimate. Should the movement be resumed in a large way, all the money may be required. It is put in for that purpose and is about as close a guess as we are able to make at the present time.


Thomas Clement (Tommy) Douglas: Could the minister give us any information as to the distribution of these children over the different provinces? Have most of them been located in one province, or have they been distributed pretty well over the various provinces of Canada?


Thomas Alexander Crerar: I could get that information for my hon. friend; I do not have it at the moment. They 'have been distributed to every province in Canada. I should say, to hazard a guess, that there are probably more in Ontario than in any other province.


George Hugh Castleden: Has any part of this expenditure been made to pay people for keeping children?


Thomas Alexander Crerar: No, not beyond the items mentioned a moment ago.

' Mr. CASTLEDEN: Yes, I understand- social service.
Resolution reported, read the second time and concurred in. Mr. Ilsley thereupon moved for leave to introduce Bill No. 19, for granting to his majesty aid for national defence and security.
Motion agreed to and bill read the first time.



NATIONAL PARKS


[Stage Direction]
Hon. T. A. CRERAR (Minister of Mines and Resources) moved that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to amend the National Parks Act for the purpose of withdrawing certain areas of land from the Prince Albert national park as presently constituted, and for establishing new boundaries for the said park as a consequence thereof.
Richard Burpee Hanson: Will the minister explain the object of the resolution? It withdraws certain areas of land from the national park in Prince Albert. What is the area, and what is the purpose of the withdrawal?


Thomas Alexander Crerar: The total area of the Prince Albert national park at the present time is 1,870 square miles. It is proposed to reduce that by 376 square miles, leaving the park thereafter with an area of 1,494 square miles. The part that will be taken out under this legislation comprises three different blocks, one a comparatively large block which is rather swampy with a certain amount of timber and which, as a matter of fact, should not have been included in the park area in the first instance.


John Ritchie MacNicol: Who is asking for it to be taken out?


Thomas Alexander Crerar: I will deal with that in a moment. I should say that the areas taken out of the park will revert to the province, but we have reached an understanding with the province that one block of eleven square miles, which is fair Agricultural land, will be added to an Indian reserve near the southeast corner of the park. This additional block of eleven square miles will prove very useful to the Indians on that reserve for development in an agricultural way, and the other small block will probably be opened up to settlement. It lies on the southern boundary of the park.
The reason for this is that it will reduce to some extent the cost of administering the

National Parks-Prince Albert
park. The area has to be patrolled to guard against fire and to protect it against illegal trapping, because trapping is forbidden in the park. After giving the matter considerable thought, the park officials came to the conclusion that the exclusion of these particular areas I have mentioned would reduce the cost of administration and would not detract in any way from the purposes for which the park was created. After I had studied their recommendations, I agreed with them.


Alexander Malcolm Nicholson: Has any survey work been done by the minister's department to find out whether the land to be set aside for agricultural purposes is suitable?


Thomas Alexander Crerar: No, we have not made any particular surveys of the land. We know the general nature of the land, and we know that similar land is being farmed to-day. My hon. friend is familiar with the Prince Albert district. He knows that north of Saskatchewan river, north and west of Prince Albert, there is fine agricultural country developed as a result of clearing timber off the land, and the information I have is that the two smaller blocks, one of which goes to the Indian reserve, are land of this type. It would be suitable for settlement.
Motion agreed to and the house went into committee, Mr. Vien in the chair.


Richard Burpee Hanson: The minister gave a brief explanation and, so far as I know, there is no question about the matter. Is it the primary object of the bill to cut down the cost of administering the national park?


Thomas Alexander Crerar: Yes.


Richard Burpee Hanson: Is there
any other object?


Thomas Alexander Crerar: Not that I am aware of.


An hon. MEMBER:: Who recommended it?


Thomas Alexander Crerar: The recommendation came from the officers of the department.


Alexander Malcolm Nicholson: Has the department
of natural resources in Saskatchewan been consulted? Has it made representations expressing a desire to secure these lands?


Thomas Alexander Crerar: Not that I am aware of.
The matter was taken up with the Saskatchewan government, because the land will revert to them, and we wished to secure these eleven square miles for the Indian reserve, to which they agreed.


Richard Burpee Hanson: That
area of eleven square miles will have to be dealt with in the bill?


Thomas Alexander Crerar: Yes.


Major James William Coldwell: Has this land which
has been classified as agricultural been surveyed by the soil survey department of Saskatchewan? I ask the question because a great deal of land in that part of the province which was thought to be good agricultural land was found after a few years to be leach land and not really suitable for agricultural purposes, although it looked all right. Saskatchewan, has, I believe, done more in soil survey work than any other province, and I was hoping that before any of this land in the north country was opened up for agricultural settlement, the soil survey branch of the university of Saskatchewan would first of all advise as to its suitability. I wonder whether, in throwing open this land out of the park, attention has been given to that matter. In my opinion it is of vital importance, because we are going to have a further relief problem in northern Saskatchewan for the reason that people have settled on land which is not really suitable for agricultural purposes, because it is so badly leached.


Thomas Alexander Crerar: The larger area I spoke
of, lying to the east of the park, is, I am informed, not suitable for agricultural purposes. It is more or less swampy, with some timber. The two smaller areas, one of which goes to the Indian reserve and the other lying at the southern part, have been described to me as fair agricultural land. As regards the part that goes to the reserve, the Saskatchewan government will have nothing to do with its administration. So far as the other part is concerned, that which lies westerly and at the southern boundary of the park, when it will be opened up for settlement and the conditions under which it will be opened up are, of course, matters for the provincial government to deal with. I should think it likely, although I have no knowledge of the subject, that in the light of their experience in the past they would probably have soil surveys made, such as the hon. member for Rosetown-Biggar (Mr. Coldwell) has referred to, before opening up the land for settlement. That, however, is a matter wholly for the Saskatchewan government to determine. Of course we did not make the provision; indeed, it would have been wholly unwarranted on our part to have made it a condition that they institute a soil survey of this area before they would open it to settlement. We simply arranged with them to take it back. The conditions of settlement are for the Saskatchewan government to determine.


Mr. CHURCH:: It seems strange to me why the National Parks Act is being amended for the benefit of these prairie parks, although I am not objecting; but during the last two
National Parks-Prince Albert

or three sessions there was a proposal for an amendment as far as Ontario was concerned. which is almost a similar case, and nothing has been done. Ontario has the smallest area in national parks of any province of the dominion. The proposal was to link up all the government properties from the Trent canal, lake Simcoe, Muskoka, Parry Sound, right through to new Ontario into a grand scheme of national parks, with Muskoka which is very suitable both in summer and winter. What has become of that proposal?


Thomas Alexander Crerar: f think there was some discussion along the lines my hon. friend has mentioned; indeed, I think he himself advanced that in one of his occasional speeches in the house last session. But there was no proposal of any legislation to amend the parks act or enlarge the parks to take in the various areas he has mentioned. Legislation is necessary in this case because the park boundaries are set under the National Parks Act, and consequently we cannot reduce the area of a park or enlarge it without legislation. The purpose of the legislation in this case I have already stated.


Richard Burpee Hanson: What has become of the proposal, now six or seven years old, to set up a national park in New Brunswick? About 1934 the former government undertook to establish a national park in that province, and an expert was sent down there to make a survey of the several locations suggested. One, known as the Lepreau area, I think got grade A; the other in Albert county, which some people sought to call the Bennett national park, got grade B. Before that squabble was settled, the change of government came and the Bennett park disappeared. Then a new provincial government came into power in New Brunsw'ick, and I suppose there must have been a dozen-that may be an exaggeration, but at least there were three or four new entries in the race for the location, including one in Victoria-Carleton, and another in Queens county. Perhaps the minister would tell us if that has died a natural death, and who was the executioner?


Thomas Alexander Crerar: I would not say it has
died either a natural or an unnatural death; I think the idea still has the breath of life in it. An examination was made of several sites, and that data is available in our parks branch. I would draw the attention of my hon. friend to this, that two considerations have to be met before a national park can be established in New Brunswick or anywhere else. The first is that the area selected must be suitable for park purposes. I am sure that

no difficulty will be experienced in meeting that condition in the beautiful province of New Brunswick. Indeed, I have heard it said that the whole province is a park.


Richard Burpee Hanson: Yes; I
agree with that, but not with the implications of that statement.


Thomas Alexander Crerar: The next considerationand I think this is where the difficulty arose in 1935 or subsequently-is that the area must be conveyed for park purposes without charge to the federal government.


Richard Burpee Hanson: In other words, the province has to deliver the goods.


Thomas Alexander Crerar: When it comes to establishing a park in New Brunswick, where settlement has existed for many years in practically every part of the province, it means, or at any rate I am so informed, that private properties have to be acquired by the government.
Mr. HANSON	(York-Sunbury):	Some
private properties.


Thomas Alexander Crerar: Some private properties
have to be acquired by the provincial government and transferred free of charge to the federal government. I think that is where the difficulty has arisen. Certainly for two years at least after this government came into office we had a vote of $25,000 a year to carry on preliminary surveys, once the area had been made available to us. So far it has not been made available. I am not criticizing anyone for that; I think very obvious difficulties have arisen. I think it is quite impossible during this time of war to proceed with the establishment of any new parks. I would have great difficulty in convincing my colleague the Minister of Finance that it is desirable to spend money in developing new parks during the war. I have no doubt, however, and I express my own view in the matter quite frankly, that New Brunswick should have a national park, and that when the troubles we are now experiencing have passed away, that province will have a national park.


Richard Burpee Hanson: I agree
entirely with the last proposition of the minister, that it would be ridiculous to talk about establishing a national park in any province to-day. But I might give him a little piece of information. A park would have been established if his friends in the provincial government could have agreed among themselves, but they absolutely failed to do so.


Thomas Alexander Crerar: I, of course, have no knowledge of that. We deal with these matters, or at any rate we endeavour to, in a coldly realistic way in the departmental administration.

National Parks-Prince Albert


Daniel (Dan) McIvor: I think this discussion is
getting out of order, but if it is in order to discuss the parks of Canada in general I should like to present a claim for Kakabeka falls near Fort William.


Thomas Vien: I would point out to the committee that my task is rather difficult. I have tried to apply the rules, but a custom developed during the last debate of allowing the greatest possible latitude of discussion to all hon. members. I am sure, however, the question of the hon. leader of the opposition was altogether out of order on a question with respect to the boundaries of a park in Saskatchewan. Therefore the point of order is well taken.


Olof Hanson: I shall
not pursue the matter any further.


George Hugh Castleden: What is the name of the Indian reserve to which the eleven square miles is being added. Is that the reserve just north of Birch Hill?


Thomas Alexander Crerar: I am sorry I cannot give my hon. friend the name of the reserve at the moment, but I can describe its location fairly accurately. As I recall now, it is at or near the southeast corner of the park.


George Hugh Castleden: In one of those reserves there is a valuable piece of land on the south side of the Saskatchewan, and I wanted the assurance of the minister that it was not the intention of the department to exchange the eleven square miles which are being added to another portion of the reserve for that very fine piece of land on the south side of the river, which now is included in that reserve.


Thomas Alexander Crerar: Oh, no; we would never think of such a thing.


Alexander Malcolm Nicholson: Just what is the saving likely to be? I have not had an}' communications in connection with this park, but it is one of the most valuable tourist centres in Saskatchewan, and we would be greatly disappointed if the beauty of this park should be in any way affected by any such transfer of properties. Could the minister estimate what will be the saving to his department as a result of this transfer?


Thomas Alexander Crerar: I have no definite figures that I can give my hon. friend as to the saving. Perhaps we might save the expense of a few fire rangers who patrol this area, since, as I have said, it is largely swamp and timber. I can assure my hon. friend that it does not add anything to the beauties of the park; as a matter of fact, it should not have been included in the park area in the first instance. Occasionally we have changed the
boundaries of parks where experience has indicated that it was advisable to do so, and the recommendation for this change came from the officers of the parks branch. As I stated in reply to a question by the leader of the opposition, after I had looked into and studied the matter I agreed with their recommendation, and consequently the resolution is here.


Thomas Langton Church: Who is requesting this amendment?


Gordon Knapman Fraser: I
would suggest that the minister get for us the figures with regard to the administration costs of the park; and, as the hon. member to my left suggested, what is going to be saved. We have all too few parks across Canada now. I understand that this year we are going to spend 8500,000 in advertising to bring tourists to Canada; but if we cut down our parks by so many square miles each year, in another ten or fifteen years we shall not have any parks. We must have some attractions to offer the tourists. The minister says these are swamp lands, but I think that is the very part that should be retained, because that is the part of the park where the deer and wild animals feed during the winter.


Thomas Alexander Crerar: I think I would be in a position to give the hon. gentleman the information he has requested with regard to savings when the estimates of the parks branch are before the committee at a later stage. Let me relieve his apprehension at once as to the effect of this transfer on the general park system of Canada. I agree that it is desirable to have these national playgrounds, and for quite a number of years now, successive dominion governments have spent considerable sums of money in developing our parks. Since the present government came into office at the end of 1935, two new parks have been developed or are in process of development, one the Cape Breton Highlands park in Nova Scotia-[DOT]


Richard Burpee Hanson: Which
will be one of the best in Canada in time.


Thomas Alexander Crerar: -which is a matter of very great pride to my colleague the minister of naval services, and also a park in Prince Edward Island. If conditions had remained normal; if our revenues had been fairly buoyant and we could have afforded it, I think it would have been the policy of the government to increase the number of these national parks throughout Canada. I am a thorough believer in the national park system.
National Parks-Prince Albert

Perhaps my hon. friend did not hear me, or he may not have been in the chamber when I stated earlier that all we are doing in this instance is reducing the area of the Prince Albert national park from 1,870 square miles to 1,494 square miles. In making this reduction we are not detracting in any degree whatever from the essential features of the park. We still have a very large area, and we have to keep a balance in these things. For instance, a park of 1,500 square miles requires a great deal of patrolling, and necessitates the expenditure of money for protection against fires and so on. We are turning back to the province an area of swamp and forest land. The province will assume the responsibility of protecting that area against fire, and our expenditures will be reduced correspondingly. How much they will be reduced, I cannot say at the moment.


Gordon Knapman Fraser: When that land is turned back, will the province keep it in its present condition?


Mr. SLAGHT:: That is their business.


Gordon Knapman Fraser: I do not know. I should think that would be up to this government. I was in the house: I have the figures the minister gave, but I should like to know if the province will keep that land in its present condition. Some restriction should be imposed.


Thomas Alexander Crerar: No; we could not do that; it would be quite impossible. I think my hon. friend will realize that if he gives the matter a moment's thought. This land reverts to the province and becomes part of the public domain of the province, which administers it just as it administers the rest of its public domain. I have been advised that there is a certain amount of timber on this part, I do not know how much, which will be transferred back to the province. I have no doubt that they will look after it just as effectively as we would be able to look after it, and perhaps even more so, because they have the timber areas adjoining.


Gordon Knapman Fraser: What I was afraid of was that the province might get in there and make a slash through this timber, which would be a detriment to the park. Some restriction should be put on, so that they would have to keep it in good shape.


Thomas Alexander Crerar: We cannot put on any restrictions when we return the land to the province, but I do not think my hon. friend's concern in that regard is very sound. I have no doubt that the province will look after this area, and this transfer will not affect the remainder of the park in any event.
fMr. Crerar.]


Alexander Malcolm Nicholson: There is some value to the point just made by the hon. member for Peterborough West. There is the further point that very often, when areas are thrown open for farm settlement, the fire hazard increases. I am not familiar with this portion of the park, but I think some precaution should be taken to see that the park forest should not be endangered by land settlement which might be carried out by the provincial government.


Thomas Alexander Crerar: I do not think there is any foundation for that fear, either. As a matter of fact, settlement does adjoin the park now over a considerable length of its boundaries, and our experience has been that there is very little danger of fire originating on farms adjoining the park. It is of interest to note that it is estimated that 80 per cent of the forest fires in Canada are what are described as man-made fires. The remaining 20 per cent may be due to natural causes, such as lightning. The higher percentage would be due to carelessness on the part of campers and people travelling through the forests. That is what we have to guard against within the park boundaries. Someone smoking a cigarette may be driving along a road in an automobile. When the cigarette is half consumed it may be thrown out of the window of the car, and start a fire which may do a great deal of damage. That is the sort of thing we have to guard against in patrolling these park areas. I might say there is a road which passes through this swampy timbered area which we are returning to the province. It passes through the park down to Montreal lake to get into water courses which go away back into the Lac la Ronge country.
Resolution reported, read the second time and concurred in. Mr. Crerar thereupon moved for leave to introduce Bill No. 20, to amend the National Parks Act.
Motion agreed to and bill read the first time.



TRANS-CANADA AIR LINES EXTENSION OF INITIAL SUBSIDY PERIOD-CHANG- ING OF FIXATION-OF-RATES PERIOD

[Stage Direction]
Hon. C. D. HOWE (for the Minister of Transport) moved that the house go into committee to consider the following resolution:
That it is expedient to amend the Trans-Canada Air Lines Act, 1937, changing the period for the fixation of rates for the current year, as defined in the act, and extending the initial period during which a subsidy may be payable to Trans-Canada Air Lines.
Motion agreed to and the house went into committee, Mr. Vien in the chair.
Richard Burpee Hanson: Would the minister make an explanation now, or shall we ask questions later on?

Trans-Canada Air Lines


Clarence Decatur Howe: I should be glad to explain. The bill to be based on this resolution has the effect of further extending the date after which the rates for the carriage of mail by Trans-Canada Air Lines will be fixed automatically by the financial results of the preceding year. Our difficulty in applying the automatic feature is that the traffic is growing very rapidly on Trans-Canada Air Lines, and the mileage operated is growing to meet the requirements of the traffic.
In the year ended December 31, 1940, about 5,000,000 miles were operated by Trans-Canada Air Lines, and the plans for the fiscal year 1941-42 call for the operation of well over 7,500,000 miles, or more than 50 per cent increase in the mileage flown. Of course the greater mileage and the increasing traffic increase the operating profits of the company. Based on the operating results of last year, the automatic feature of the bill would fix a rate of fifty-three cents a mile for the mail rate for 1940-41. We feel, however, that in view of the increased mileage and the steady increase in business on the line we can do rather better than that for the post office, and the objective will be to fix a rate of not fifty-three cents a mile but forty cents a mile, as the basic mail rate, which is a reduction of course from sixty cents a mile to forty cents.
Last year the earnings of the air lines, after all write-offs and interest on investment, was something over $500,000. This year it is anticipated that the earnings from air mail based on the increased mileage and the 40cent rate will be S3,153,000. The passenger revenue will be $2,170,000. Miscellaneous revenue, comprised chiefly of express, will amount to $250,000, giving a total gross revenue of $5,573,500. Operating expenses are anticipated to be $5,315,477, giving an operating income of $258,032, less interest on capital, and other income charges, of $197,500. That leaves us with an estimated surplus of $60,523.


Richard Burpee Hanson: After
depreciation?


Clarence Decatur Howe: Yes; depreciation is an operating charge.


Richard Burpee Hanson: What is it
figured at?


Clarence Decatur Howe: At 25 per cent of the value of the aeroplanes, engines and flying equipment; I believe the rate is 10 per cent on the buildings. I might say that throughout the period of the operation of Trans-Canada Air Lines we have had a steady increase in the poundage of mail carried, subject to seasonal variations. Over an average period the increase in the amount of mail carried
has been at the rate of 4 per cent per month, a very steady increase. Anticipating that this increase will continue throughout the fiscal year 1941-42, we have reached the point where the post office will almost break even on revenue as against expenditure, counting four cents of the six cents charged for air mail as revenue to the air mail, and two cents as the cost to the post office for the collection and distribution of the mail. A very slight increase in mail beyond the normal increase will balance the books, and we anticipate that in the following fiscal year the post office will make a profit on the sale of air mail stamps.


Richard Burpee Hanson: On the basis of forty cents?


Clarence Decatur Howe: Yes. We have also brought the cost of carrying air mail down to about the level that is current in the United States. I may say that this is something of a freak, because our equipment costs us about 50 per cent more than similar equipment in the United States, since we pay duty, sales tax and all other charges on the equipment when we bring it into Canada. Also we are charged higher rates for gasoline than are paid by air lines in the United States.
For purposes of comparison, the mail rate on the Trans-Continental and Western Air Line, from New York to Los Angeles, via Chicago, is forty cents a mile; on the Canadian Colonial Airways, from New York to Montreal, forty cents per mile; on Northeast Airlines, from Boston to Caribou, Maine, thirty-six cents per mile; and on Northwestern Airways, Minneapolis to Winnipeg, thirty-seven cents per mile. Therefore, while passing through the development period, in the brief time Trans-Canada has been in operation we have succeeded in getting the mail rate down to a comparable basis with similar services in the United States. We have succeeded in building up a volume of mail much more quickly than had ever been anticipated. When we started the line we anticipated that five years must elapse before the post office could break even on its operations, but we are on the point of achieving that in about three years' operation, and we shall have at the end of the year a service that, I think, will be adequate for the business of Canada. Of course, this will always be an expanding service, but at the end of this expansion the changes will be more normal and the automatic feature of the act will then operate quite properly.
This bill makes one other change in the situation. The fiscal year of Trans-Canada Air Lines is the calendar year, and formerly it was provided that any change in rates would take place on January 1, but there were operating difficulties in getting the data to fix the new
Trans-Canada Air Lines

rate on January 1. It usually takes from one month to six weeks to close the books of Trans-Canada, and there was also the difficulty of the post office budgeting for a fiscal year when there might be a change in the rate in the last three months of the fiscal year. Therefore, the bill provides that hereafter the rate established under the automatic feature for the carriage of mail shall extend from March 31 in one year to March 31 in the following year.


Richard Burpee Hanson: What the minister has told us of this bill and the effect of last year's bill would seem to indicate that the automatic rate fixing structure in the statute as originally passed was entirely out of line. Is that about the effect of it?


Clarence Decatur Howe: It is out of line when there is a very rapid expansion of the mileage, but there will come a time, and it is coming I think after this year, when I do not think we shall have to ask parliament for such extensions because the mileage will be reasonably stabilized. There will be the matter perhaps of an extra trip on a given route or a short route may be added to the mileage, but that will not seriously affect the automatic feature. A fifty per cent addition such as we anticipate this year would, of course, increase the earnings to a point where the automatic feature would not be fair to the post office.


Mr. HARRIS (Danforth):: Mr. Chairman, it is a matter for congratulation that Canada has made such headway and achieved this fair amount of success in the operation of Trans-Canada Air Lines. A good deal of that success, as the minister probably admitted in his statement to-night, has been due to the fact that so far as financing is concerned the post office has helped out very considerably.
The minister was good enough to give a few of the rates that apply on certain runs in the United States. The rates he quoted were in the neighbourhood of forty cents a mile, with one as low as thirty-six cents. Perhaps, before we pass this bill, the minister, who no doubt has the information before him, will tell the committee if there are rates in force in the United States as low as nineteen cents a mile.


Clarence Decatur Howe: They are not comparable rates.


Richard Burpee Hanson: Rates
caused by competition, perhaps.


Clarence Decatur Howe: Yes.


Joseph Henry Harris: Take, for
instance, the average rate for the carrying of mail in the United States. I would not want the impression left upon the committee that we were carrying our mails at a lower 
cost than that which obtains in the United States. As I say, I am not complaining. I think it is a matter for congratulation that the Postmaster General was able to get this legislation before the house and get the rate down from the very high rate of sixty cents. The observation I made on a previous occasion I repeat now, that when the balance sheet was struck, with a rate of sixty cents; when depreciation charges were provided for, and quite substantial depreciation charges, in some instances as high as twenty-five per cent, and when interest charges were taken care of, the statement was made that they had earned big money, and I notice that the minister in his statement said, "Our earnings will be such and such". Quite so, so far as bookkeeping earnings are concerned. But is it real earnings so far as the consolidated balance sheet of the Dominion of Canada is concerned? The word "subsidy" has been used, and I think it would apply to a degree.


Clarence Decatur Howe: It is quite an improper use of
the word "subsidy."


Joseph Henry Harris: Very well, we will reserve our opinion with regard to that. It certainly is not now a subsidy to the same degree as obtained previously. Previous balance sheets showed as much as $2 revenue received from the post office till as against SI for the carriage of passengers. The post office will contribute $3,153,000 and the passenger service, $2,170,000, with a few miscellaneous services which do not affect the picture. I look forward to the day when passenger and other revenues will be sufficient to equalize at least the post office-I shall have to find a new word for subsidy-contract, we will call it. I am gratified to note that there has been a continual increase in the amount of business, an increase of four per cent on the average, but I think that is not enough.


Clarence Decatur Howe: Four per cent a month.


Joseph Henry Harris: That is forty-eight per cent a year. That is a good record. But we shall not be able to keep that up beyond a few years.
As to passenger travel, we have had a minimum of accidents, and I say to the minister that those of us who feel disposed to look into the work of the department and offer constructive criticism must not be charged with being parties to wanting to demoralize the service, as it were, or not giving it all the attention required, with the result that now and then there may be accidents. Gasoline costs are higher, and then there are sales tax and all these other charges to be taken care of. But more and more attention should, I believe, be given by Canadians to the service given

Trans-Canada Air Lines
by Trans-Canada Air Lines. It is a good way to travel, and I should like to see more members of the Canadian House of Commons
using this service.
I saw a skit in a Toronto newspaper of Friday, March 14, which read:
A member of a reserve unit writes, re transportation for the soldiers:
"If there is room on the train for big fat politicians like Joseph Harris, there should be room for people like these boys."
That will be found-I hope the press is listening-in the issue of Friday last.


Richard Burpee Hanson: What
paper?


Joseph Henry Harris: The Toronto Telegram. I am not complaining at all, because every knock is a boost, as we all know, otherwise I probably could not have answered the roll call for two decades.


Clarence Decatur Howe: They have said worse things than that about some of us.


Joseph Henry Harris: I merely wanted to point out the irony of that suggestion because, in order to be here after completing a day's work in Toronto, I was privileged to ride to Ottawa by plane, and pay my fare. And this is the newspaper report I find when I get here.


Paul Joseph James Martin: That would not be the first mistake which that paper has made.


Joseph Henry Harris: I suggest to the government that it might cancel all these passes. I say to my friends the press that this is the sixth time I have urged in the House of Commons the cancellation of all passes, so that the railways would come that much nearer to balancing their budget; yet I got a telephone call on Monday last from Trans-Canada Air Lines to my office, asking me if I would pay my fare or whether I was travelling on a pass.


Clarence Decatur Howe: My hon. friend never was asked that. He is mistaken. There is a policy under which S300 is paid and put in a credit and charged to the passenger's account. Nobody travels with a pass on the Trans-Canada.


Joseph Henry Harris: The question asked was, was I travelling on a pass or was I paying my fare. I am not complaining about the question. They have a right to ask it because, as I understand it, those who travel on passes on the Trans-Canada Air Lines have to take second place to those who pay their fares.


Richard Burpee Hanson: I understand there are no passes.


Joseph Henry Harris: The minister can correct me if I am wrong. I understand that, if there is a spare seat, a person who rides free can have it. If all the seats are taken by paying passengers, those who travel on passes have to wait. That is quite a proper provision, but I would go further and cancel all passes on the Trans-Canada Air Lines. That is only by the way; it gave me an opportunity to reply to a suggestion which I noticed with some pleasure in the press.


Mr. REID:: The cost would not be so light to British Columbia as it is to Toronto.


Joseph Henry Harris: Quite; and following up the point the hon. member has raised, as far as railway and aeroplane passes are concerned this house should deal with the matter in a businesslike way, the same as any industry, and pay a voucher, in the case of any hon. member travelling on government business, whether he comes from the Yukon or Halifax. Then we would be all on a parity. It would, however, stop a lot of joy-rides.


Thomas Reid: Cut them all out.


Joseph Henry Harris: Yes, when an institution is not making money, and Canada has to foot the bill.
I should like the minister to explain what effect will the changing of the date have. What rate applies? Does sixty cents apply to the' end of December, and forty cents from then on, or does sixty cents carry through until the end of March?


Clarence Decatur Howe: Answering the question of my hon. friend, the sixty cent rate carries through to the 31st of March, and the forty cent rate obtains for the fiscal year, April to April.


Arthur Graeme Slaght: Just before this resolution is passed, as I assume it will be, I rise to pay to the minister who introduced it what I believe is a well-earned tribute for his development and administration of this difficult service. I shall spend only a moment on it. I know something of the story. It fell to the lot of our minister to take on this task while he was Minister of Transport, administering the department of railways, the department of marine, and what is sometimes described as that other department, radio. He was in competition with four east and west air lines in the United States, nearly all of which had been established for ten or eleven years, tapping a business, both postal and passenger, with which our sparsely populated country furnishes no parallel whatever. In the administrative personnel that he selected and in the operating personnel that

Trans-Canada Air Lines

he selected, barring one misfortune of recent date which appears to have been one of those accidents for which no one could be held responsible, the administration of this service and the place it now occupies in the east and west traffic of this continent are remarkable. There is one man more than any other who is responsible for its success, and that is our minister who has had the responsibility for the work.
In addition to setting up the system, he has had to negotiate with the authorities at Washington regarding many intricate and difficult problems of air service between our country and the republic to the south. I had personally an opportunity of learning the respect in which the board at Washington hold our minister, and the success he has had in these delicate and difficult negotiations. I believe that I am speaking for almost every hon. member in taking this opportunity to pay a measure of tribute to him for the big job he has done.


Richard Burpee Hanson: I cannot
pay an equal tribute to the minister-I see him blushing over there at the words of encomium from his follower-but I will take it for granted that everything said is correct and endorse what has been done. There is, however, one criticism about this service in the east.


Mr. MAYHEW:: Don't spoil it!


Richard Burpee Hanson: Well, I
have a duty to perform. I shall do it as quickly as possible.
The Saint John Telegraph-Journal, which is the leading morning newspaper in New Brunswick, published on March 18 an editorial under the caption, "Our Unsatisfactory Air Service." I had no idea that this matter would come up to-night, but I am going to read this to the minister and then leave it with him, in the hope that he will draw it to the attention of the officials of Trans-Canada and see if something can be done.
It is not based on the fact that the terminus has been changed from Moncton to Halifax. Our friends, I think, put over rather a fast one on the hon. member for Westmorland. I suppose that while he slept, they were working. Personally I believe it will do no harm to anyone to have the terminus at Halifax; in fact, I regard it as a logical growth of the system. It may hurt the pride of Moncton a little bit to feel that they are no longer the eastern terminus of Trans-Canada, but they are going to be served by Trans-Canada as well as and perhaps better than they have been in the past.

This is the voice of Saint John, and of course some of us must pay attention to it. Here is the complaint:
Changes in the Trans-Canada airways service east of Montreal, under which the large passenger liners which hitherto stopped at Moncton will soon be continuing on to Halifax, will leave the large port city of Saint John and New Brunswick's capita.! city of Fredericton in the same unsatisfactory position as they have been since the T.C.A. lines were extended to this province. Prior to their advent there was a service between Saint John and Halifax which is not now operating. The plan just announced at Ottawa is to the effect that early in April the Montreal to Moncton plane, after stopping at Moncton, will continue on to Halifax, thus doing away with the transfer at Moncton to a smaller plane. The return trip from Halifax will also be via Moncton. So far as the situation as regards other important places in New Brunswick is concerned, it remains exactly as it was-practically no air service. Fredericton has no connections at all, and Saint John is on the end of a so-called feeder line which makes connections at Moncton to and from Montreal, but no connections with Halifax. Air mail from Saint John to Halifax is flown to Moncton in the afternoon, but it arrives too late to connect with the Halifax plane, and must go on from there by train.
That seems to me a cause of complaint which could perhaps be easily remedied if the Postmaster General, who, I know, is alert in the discharge of the duties of his office, would give ear to that complaint and have that plane started a little earlier in order to have it make connection with the Halifax plane. If that were done, that complaint would be done away with.
Likewise, mail from Halifax is brought by train to connect with the aeroplane for Saint John.
I do not understand why that is. I should think that the mail would come up by plane and be transferred there. There ought to be some cooperation with the feeder system.
The same situation exists with regard to passengers. If a person wants to fly from Saint John to Halifax, he is obliged to remain overnight and until early the next afternoon in Moncton, and adopt the same procedure on the return trip. In other words, it consumes two full days to make the return trip.
I have not checked on that, but I think it is true. Of course that is an impossible situation with regard to aeroplane travel between the two Atlantic cities. This, then, is the complaint of the newspaper:
It is about time that some serious consideration was given to this thoroughly unsatisfactory situation. Here are the two principal cities on the eastern seaboard, between which there is an increasing commercial traffic, virtually without air connection, and the capital of this province entirely omitted from the plan.
Well, in Fredericton we are used to that. Unfortunately, we have never been on the main line; nevertheless we are very happy

Trans-Canada Air Lines
indeed, and some day perhaps we shall get aeroplane connection. I have no high hopes in the immediate future, but I will revert in a moment to a situation which may help to remedy that. The article goes on:
Many efforts have been made to remedy this deficiency but all to no avail. Now that something is being done to improve the service between Montreal and Halifax, the matter of a service between Saint John and Halifax and connections with Fredericton deserves immediate consideration.
I think the situation between Saint John and Halifax ought to be remedied within a reasonably short space of time. I cannot see very much hope for air connection with Fredericton. I do not believe the traffic presently offering would pay for a feeder service. It may be that in time it will be developed, but I have had some conversation with the minister with regard to the development of the Blissville air field. That was established by the late government as an emergency landing field. It is on the beam between Moncton and Montreal. It is only thirty-five miles from Fredericton and about the same distance from Saint John. I hope that the government will do something this year, and I entertain high hopes in that regard from what the minister has said about developing that field, so that planes can land there with a much greater degree of safety than at the present time. There are no runways. The field has been cleared and put into shape and it ought to be extended somewhat, and some runways built. I hope the minister will give consideration to having Blissville established as a permanent port of call, or at least as a flag station. Perhaps that is a fair thing to ask for at the start. If business is offering between Montreal and Moncton, then I hope he will consider having the Blissville air field established as a port of call if, as and when it is required. That would be, as far as I know, the only solution of the problem of aeroplane service as between Moncton and Halifax on the one hand and Montreal on the other, in respect of Fredericton at least.
I do not think the cost of building an air port at Blissville would be very great, and of course it would be a great convenience to a great many people, who could utilize it to get to Montreal quickly by evening plane. I believe that one reason why it has not been pressed for before is that we have an excellent train service from western New Brunswick to Montreal. You leave in the evening and are in Montreal the next morning. Being now at the advanced age of sixty-two, and not being air-minded, I find that method of transportation quite good enough for myself. I have never thought I had any business up there; my wife tells me the same thing, and 14873-111}	'
I am not proposing this on my own account. I am quite content to travel in the good old-fashioned way, but I seriously suggest to the minister that he give some consideration immediately, if he will, to this complaint about lack of connection for both air mail and aeroplane passenger service between Saint John and Halifax.
There was an airways company which operated a plane service on a triangular basis covering Moncton, Halifax and Saint John. I would suppose that company could not continue. I believe they do the Island work, with certain flights to the Magdalen islands and they are open for charter; but that service will not continue, at least not without some kind of mail subsidy, and I assume, from the arrangements made with Trans-Canada, that this is out of the question now so far as Saint John and Halifax are concerned.
I do not think it is asking too much to have a decent feeder service between Saint John and Moncton so as to take advantage of their planes. I would ask the Minister of Munitions and Supply, who has the aeroplane situation under his guidance, and the Postmaster General to put their heads together and find a solution of this problem. If they do not, they will hear more about it at a later date.


Joseph Henry Harris: There is one
further question I wish to ask, for the hon. member for Peel (Mr. Graydon) of the Postmaster General. At Malton there are, to my knowledge, no post office facilities, with the result that air mail going from Ottawa or Montreal to Toronto goes to Malton, and from Malton it takes it an hour to get to the general post office where it is sorted for dispatch to its destination. The net result is that it is almost as quick to send mail in the ordinary way from Montreal to Toronto or from Ottawa to Toronto as against the air mail facilities. It would be of advantage if some post office arrangement were made at Malton, or air mail directed there so that, if picked up there, there would be a considerable saving of time and more of the mail service between those points would be used.
Perhaps the minister in charge of this matter would be kind enough to let the Postmaster General put on record the position, and if he feels so disposed, the other question also with regard to the rates obtaining in the United States other than those the minister put on record. The statute of 1937 definitely says that this rate is a matter of negotiation between the Postmaster General and the minister of the department administering the Trans-Canada Air Lines. We have the Trans-Canada Air Lines point of view on record with regard to these negotiations. Would the

Trans-Canada Air Linen
Postmaster General put his point of view on record, and how he came to agree to the 40cent rate? I realize that it is lower than the fifty-three cents which might have been payable, but at the same time I can visualize that he had some difficulty in reducing a rate from sixty to forty cents, and I think that ought to be put on record.


Mr. MULOCK:: I shall be glad to discuss the question of putting postal employees at Malton with the official in charge of air mail, and also with the hon. member.
Regarding the second matter, that of the attitude of the post office towards this rate, I may say that we are well satisfied with the arrangement that we have been able to make with Trans-Canada Air Lines. The minister in charge has been very cooperative, has given us every possible assistance. We sat down with officials of each department and worked out what we thought was a fair rate.


Joseph Henry Harris: And saved a
million dollars for your department.


William Pate Mulock: That was one idea, I may tell my hon. friend. So far as the post office is concerned, naturally we would be glad to have the rate reduced still further, but I think he will agree that Trans-Canada has made an excellent showing and that the post office has made a pretty good bargain in getting a reduction from sixty cents to forty cents in one year.


Richard Burpee Hanson: It all
depends on whether sixty cents was too high before.


William Pate Mulock: Still, it is a substantial reduction. If we could be so fortunate as to reduce some of our debts and taxation in the same measure, it would be very satisfactory.


Joseph Henry Harris: What is the
grand average for the United States?


William Pate Mulock: It depends what lines you take. I think that is a matter for the Minister of Munitions and Supply to deal with. I do not want to encroach on his department.


Richard Burpee Hanson: It is fair to state that a number of these rates in the United States are established by competition between air lines which want the distinction of carrying the United States mails. They seem to think there is something in that. I understand that some rates from New York south are as low as nineteen cents.


Mr. JACKMAN:: Would the minister
endeavour to settle a doubt which arises in my mind, and I am sure in the minds of many, in connection with the projected increase in flying miles from 5,000,000 to 7,500,000, an

increase of 50 per cent. That seems almost incredible in time of war, and surely must interfere with our war effort. I noticed in a recent United States paper that the United States government through its proper agency was limiting the expansion of the airways in that country to a very modest degree. The air line companies were allowed to purchase only sufficient planes to replace those wearing out in the service and add in a very meagre way. Would the minister explain why it is necessary that the Trans-Canada should expand fifty per cent in this year 1941 when we know that planes are so badly needed, particularly the large bomber type which is used in the Trans-Canada service, especially in view of the fact that these planes must be purchased in the United States and that I believe in the last twelve or fourteen months we have used nearly a million dollars of United States exchange in the purchase of these planes.
If there is a demand for aeroplane transportation in war business, either passenger or mail, surely we can use the existing facilities for the very necessary purpose of expediting the war effort and raise the mail rate from six cents to twelve cents, or whatever rate might be feasible, and also raise passenger fares which at present are not very much higher than railway fares. It would appear that Trans-Canada Air Lines are making severe competition for the railways as to passengers and for the post office as to ordinary letter mail, when the air mail postage rate is only six cents as against three cents. If it is so necessary that war business be carried by air, surely we could, by raising the rates, eliminate much unnecessary other business in these trying times.
Another question, which is perhaps slightly divorced from those I have mentioned, is this: We all feel that the Minister of Munitions and Supply, under whose aegis the Trans-Canada Air Lines come, is a much overburdened man. He was good enough to tell me privately why it was that Trans-Canada Air Lines continued under his jurisdiction. I am sorry to say, however, that his statement did not sufficiently impress itself upon my memory, although I think I understood it at the time. It would be of interest if he would explain why it is that he as one of the busiest members of the cabinet still keeps Trans-Canada Air Lines under his jurisdiction.


Clarence Decatur Howe: I think my hon. friend's first question was whether the contemplated expansion in mileage would interfere with the war effort. I would say that at least fifty per cent of our business is in connection with those travelling up and down the country on war business. It is a very great convenience for people to be able to get in a plane in the

Trans-Canada Air Lines
morning, come to Ottawa, do their business and be back home the same evening, as many do. It is a great convenience to be able to telephone a man in Vancouver and have him in Ottawa next morning to discuss the business we have in hand.
We bought six planes this year, but they were bought out of the depreciation fund of the Trans-Canada Air Lines. No new capital was involved. Of course the purpose of a depreciation fund is to make sure that we do not end a certain period with no equipment. The purpose of the fund is to keep the equipment up to a standard.


Harry Rutherford Jackman: But you bought six new planes; you could not keep your full number of old ones and add six new ones out of depreciation.


Clarence Decatur Howe: Yes; the age of the old ones was getting on, and as we take them out of service we add new planes. We had at one time a fleet of fifteen planes; we lost one in an unfortunate accident; we have fourteen old planes and six new ones. The old planes are about three years old; they have a theoretical life of four years, and we have six of a larger and more expensive type bought to replace those planes. Of course it is desirable not to have all your planes bought the same year but to stagger them so that some end their theoretical life each year. However, as I say we have not changed the capital of Trans-Canada Air Lines. The capital invested is $3,250,000, and it is not anticipated that additional capital will be required at any future stage.


Harry Rutherford Jackman: We cannot purchase
these planes for use against the enemy and at the same time use the planes in Canada.


Clarence Decatur Howe: I can assure my hon. friend
we are purchasing a good many planes both for training and for use against the enemy.


Harry Rutherford Jackman: All we can get, I should
suggest.


Clarence Decatur Howe: What was the next question?


Harry Rutherford Jackman: The minister's answers
do not quite satisfy me. I feel, as I am sure we all do, that every available plane should be used overseas. There has been a shortage of planes; we all know that production in this country has not been all that we hoped for, and here we are using what I might term the very lifeblood of the country for a purely domestic service. At the same time we are using United States funds for the purchase of these planes, which means that these funds are not available for the purchase of planes or other war equipment which could be used in the first line of defence across the ocean. For that reason I think we should go as
easily as possible in the expansion of this service during this extremely critical period. I know that Trans-Canada Air Lines has had a splendid record, but from the experience of many who have used it I feel that they could have travelled by train just as easily. The great centres of industry are in Quebec and Ontario. If a man from Toronto uses a plane, it merely means that he sleeps at home rather than on the train, so there would be no very great loss of time if he travelled by train. The same thing applies to a man living in Montreal. It is true that this service is a great convenience to anyone going to the Pacific coast; but there, as we have heard so often in this house, there is not a great deal of war industry. For these reasons I feel that this committee should seriously consider this great expansion of Trans-Canada Air Lines at this time.
That was one of the points I raised. I also suggested that if it should be considered necessary to confine traffic on the air line to the war effort, as it were, the rates should be increased so that unnecessary commercial and pleasure traffic could be eliminated and the available space left for those people who really have a vital need to use these planes. That was my second point. The third question was why the minister should keep this department under his jurisdiction together with the very important work he is doing in connection with munitions and supply.


Clarence Decatur Howe: It is necessary to maintain
transportation facilities in this country even though we are fighting a war. We are buying box cars, passenger cars and rolling stock all the time. We are buying equipment to haul tourists to Banff and Lake Louise from points in the United States, and we are purchasing aeroplanes so that we may bring tourists from New York to Toronto and open up new routes of that kind. We must maintain our communications in this country. If they are necessaiy in peace time they are even more necessary in war time; and I think the capital cost of these planes in United States funds will be only a small fraction of the United States funds which will be brought into Canada by the run between Toronto and New York.
As for rates, the act requires that the rates charged in Canada shall be competitive with the rates in the United States. As a matter of fact, they are exactly the same, both for mail and for passenger traffic, except that we collect in Canadian funds and across the line they collect in United States funds. It would be quite impossible, of course, to have a rate for air mail in Canada different from the rate for air mail in the United States,
Trans-Canada Air Lines

because the two are readily interchangeable. That would only make more confusion. Similarly, in my opinion, the passenger traffic should be competitive.
As to why I kept the department under my jurisdiction, I did it as a matter of convenience. I was Minister of Transport at the same time that I was responsible for the war supply board. A considerable part of the work at that time had to do with the construction of a number of air fields across Canada; that is still an important part of the work. In the Department of Transport we had developed a large, highly trained staff familiar with the work of locating, designing and supervising the construction of airports. When I left the Department of Transport I thought it would be a very great convenience if I could retain the use of that staff. There was also the fact that the radio control at military airports is the same as the radio control at civil airports; and there again we had a staff well trained in the installation and operation of the controls. It was a convenience to have that staff associated with the department that was building the military controls. The department of air services is a unit; the same technicians serve the radio department, the meteorological department and the air regulations department. In taking one branch of that service, it is practically necessary to keep the three together. As a matter of fact, the meteorological work is very closely associated with the work of military airports, in that we have a man from the weather bureau at each military airport, and we also have teletype communication between the central weather service and the military airports. This department was taken over as a matter of convenience. If I do not object to the strain, and if hon. members do not object to the service the branch is giving, frankly I do not think it is anyone's affair very much, except the government's as to who has the department.


Richard Burpee Hanson: Before the minister leaves that, would he not say a word of encouragement about the matter I brought up, namely, the service between Saint John and Halifax, both air mail and air passenger.


Clarence Decatur Howe: Yes, I should say something about that. We have had difficulty in working out a satisfactory service to the maritimes, but gradually we have been able to iron out those difficulties. The first difficulty we had was that with only one trip to Moncton it was hard to satisfy both the passenger service and the air mail service. Obviously the best mail service to the maritimes should involve a late evening departure from Montreal, a departure after six o'clock from Toronto and an early morning arrival in Moncton, so that

the mail could be landed in the three large maritime cities in time for the first delivery. That would suit the mail very well, and we tried that service, but we found that the passengers did not care to travel at night. Therefore we took the alternative of satisfying the passengers. WTe have now a morning departure from Toronto, a departure before noon from Montreal and an arrival in Moncton which brings the mail to the maritime cities too late for distribution the same day. That is not satisfactory from a mail point of view, although it seems to be satisfactory from the passenger point of view. This year, however, traffic has developed to such a point as to warrant both services, and this year I think we shall be able to satisfy both the mail and the passenger requirements.


Richard Burpee Hanson: That is on the through service?


Clarence Decatur Howe: Yes. We have had difficulty with the short run from Moncton to Saint John. It is a difficult run. It is too short to warrant the exclusive use of an aeroplane, and it has been worked in on other services. I will admit at once that it is not at all satisfactory to the city of Saint John, but I would state also that when the Moncton airport can be put in condition, a much more satisfactory service to Saint John and Fredericton will be possible.


Richard Burpee Hanson: Does the minister mean the Blissville airport?


Clarence Decatur Howe: Yes. I would, however, point out to my hon. friend that to make a first-class field out of Blissville is a serious job. It is not difficult to make a runway in one direction, but it is difficult to get a runway of the proper length in the other direction. We are studying the matter.


Richard Burpee Hanson: I had
somewhat different information from that of the engineer.


Clarence Decatur Howe: No; parallel to the track it is not difficult to extend the runway, and that is the runway which would be most used. But to get across the runway 4,000 feet is very difficult, because you run back into a heavy excavation. I am hopeful that we shall be able to satisfy Trans-Canada with the improvements we can make this year, and get a stop there by autumn. If we can, it will improve the situation materially. But we have to let Trans-Canada be the judge as to whether or not they would be justified in making the stop. We hope to be able to satisfy them with the Blissville field.
Our difficulty in getting into Halifax was the conflict with the air force operational authorities. Some strenuous objection was

Trans-Canada Air Lines
made to our coming into their area of operations; but experience has shown that the two services do not seriously conflict. We have another problem in the maritimes, namely, the service to Sydney. Of all the maritime cities, probably air service would be more beneficial to Sydney than to any other, because it is a long rail trip from Moncton.


Richard Burpee Hanson: That is quite right.


Clarence Decatur Howe: We are studying that service, and we hope that before the summer is far advanced, we shall have a service from Moncton not only to Prince Edward Island cities but also to Sydney. These are problems we are working hard to meet. Of course it has taken a few years to build these air lines, and they are not perfect yet. But I can assure my hon. friend that we appreciate the problems of the maritimes and appreciate that our service is far from perfect at the moment. We will, however, improve it as rapidly as funds will permit.


Thomas Langton Church: Mr. Chairman, the work of the Trans-Canada Air Lines must be considered from the commercial aspect, whether it be for the carrying of passengers or mail. This is a luxury service. When we survey the figures for last year of $3,150,000 from the post office and $2,170,000 from passenger service, we see at once that, ever since the air service 'has been given, the Toronto post office has not been receiving the ordinary postal service it used to receive. All this arises as a result of giving this luxury air service.
After all is said and done, the average business man, the retail grocer, or the wholesaler, or the householder, is interested in the main function of the Toronto post office. I have had dozens of complaints since Trans-Canada Air Lines began operations, all to the effect that the other local services are being starved so that this luxury service may be given. For instance, Toronto, with its eight million postal receipts, should have one-cent drop letters, but we do not have that privilege. Then, labour conditions in the post office service at Toronto are deplorable, and should be changed and bettered. In fact, I have fifteen or twenty letters I shall show the minister which would indicate that the department has set up, in effect, a sweatshop, all as a result of starving the original post office services to carry out the functions of this luxury service, and use the receipts of the Toronto post office for outside purposes.
In the residential districts letters are not received until the first mail delivery at eleven o'clock or eleven-thirty in the morning. In the business district the department is not
giving the service it used to give. Whether it be the Trans-Canada Air Lines luxury service, or some other part of the service, the Post Office Department is a public utility, and it should give an up-to-date and efficient service equal to that given by the Bell Telephone Company, the Consumers Gas Company, or any other public utility. The Post Office Department should not live in the past. It should give us the proper service and permit its employees to work under reasonable conditions of labour, as to hours, holidays, overtime and work conditions. In fact, I would ask the Minister of Labour to look into labour conditions in the Toronto post office district I have indicated. They are deplorable, and there should be an inquiry into them. The men have to work long hours, and usually have to work at least part time for holidays. Then they work shifts, part at night and part in the day time. Some work at night all the year round, and have been doing that for several years. The schedules should be revised'.
I contend that the Toronto post office service has been starved for outside places. We cannot get the service because, by bookkeeping or otherwise, the revenues are diverted to another account known as the luxury service elsewhere. The heads and staff are excellent. I am not here to complain about air service; it is a splendid service, and I believe it will be better in the future. But I do wish that the money might be utilized so that the post office might give better work conditions and wages, and a better service to the residential and business areas in Toronto, so that we might have drop letters, and services along many other lines.
In my opinion, this Trans-Canada air service is a public utility, and should be run from the commercial aspect. The rates should meet all maintenance and operational charges, and if they are not doing that, some other older branches of the service are going to be starved, and labour conditions are not going to be what they should be.


William Pate Mulock: First of all, I should like to ask the hon. member for Rosedale if I understood him correctly: Did he advocate an increase in the air mail rate from six cents to twelve cents?


Harry Rutherford Jackman: I suggested that if Trans-Canada Air Lines was necessary for the carrying on of our war effort in Canada, it might be possible to eliminate some of the surplus passengers and mail now being carried by Trans-Canada Air Lines, and that this might be done by raising the rate. That is the ordinary way in which we eliminate all unnecessary things, and maintain those which
Trans-Canada Air Lines

are essential. Passengers could pay more, because the rates on Trans-Canada both for mail and for passengers are extremely low. The mail rate competes with the rate on ordinary mail, being only six cents as against three cents and the rates on railway trains are almost as high as they are on Trans-Canada. I suggest that if we must confine the operations of Trans-Canada Air Lines to important war services, this can be done by raising the rates.


William Pate Mulock: I suggest to the hon. member that he is accurate in one statement, namely, that he would eliminate air mail, or a great part of it. He would, however, add another problem; he would add a tremendous deficit to the Post Office Department. I might say that I should like to do something toward making it a paying department, rather than one which is losing money. I believe, if the hon. member would reconsider his suggestion, he would see at once that it is not one which would help the revenues of the department. Certainly it would not be of any great assistance in increasing the volume of business. It is the volume of business which makes it possible for Trans-Canada to operate. I hope he is not seriously suggesting that we should stop our air mail service at this time. If the policy of dismemberment which once took place were continued, I might say that we would not have the air fields available in Canada to-day, air fields which are available because of construction by Trans-Canada Air Lines. Those air fields are available for purposes of training, and for the defence of the nation. I believe the hon. member, in the interests of both air mail and defence, would do well to reconsider his suggestion, because it is the financing of this volume of business which makes it possible to run Trans-Canada Air Lines.
I would say to the hon. member for Broadview that I most definitely disagree with him in respect of his observations regarding service in Toronto. I have no doubt that in a city of that size there will be some complaints. Certainly there is not all the service he would like to have or I should like to have; but he knows very well there is a war on. Is he seriously considering that we should again increase the number of deliveries in Toronto at this time? I think not. There are already many deliveries, depending on the districts being served.
I explained to the hon. member some time ago that unfortunately some of our men were off work, because of sickness. They have been replaced by new men. It must be obvious that new men going over routes cannot carry out their duties as rapidly as men who have

been doing the work for a long time, and who have known their routes and their deliveries over a period of years. I would point out another thing to the hon. member, that many of the employees of the Toronto post office have joined the armed forces of this country, and new men have to be broken in to take their places. The men have to learn new routes. There is one other point I might mention, and here the hon. member may not agree with me, but the roads and sidewalks in the city of Toronto have not been conducive to quick delivery. I think it is generally admitted that this has caused delay.


Richard Burpee Hanson: Surely not!
Progress reported. '



SUPPLEMENTARY ESTIMATES, 1941-42

[Stage Direction]
A message from His Excellency the Governor General transmitting supplementary estimates for the financial year ending March 31, 1942, was presented by Hon. J. L. Ilsley (Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.

Richard Burpee Hanson: What will be the business to-morrow?


Thomas Alexander Crerar: The second reading of the war appropriation bill.


James Lorimer Ilsley: I understood that it was
considered desirable to have the wheat matter dealt with and that to-morrow we should go on with the estimates which I have just now moved to be referred to the committee of supply.


Thomas Alexander Crerar: My understanding was
that the Prime Minister desired to have the second reading of the war appropriation bill taken so that the bill might get over to the senate. Several weeks have been spent in discussing the resolution stage.


Richard Burpee Hanson: That will be the business to-morrow?


Thomas Alexander Crerar: In view of the long discussion there has been of the resolution, I venture to hope that the house will pass the second reading of the bill so that it can be sent over to the senate, and after we have disposed of that, we might take up the legislation to which the Minister of Finance has just referred. I think the house should be prepared to take anything on the order paper, which contains some measures that are not of great importance.

Business of the House


Richard Burpee Hanson: Before we adjourn to-night, can we have an understanding as to what the plan of the government is for proceeding with this whole wheat problem? I understand that the supplementary estimate brought down to-night is to take care of the proposed bonus, but that is only a very small portion of the whole question, and it seems to me that it should not be taken up piecemeal. Of course, I know the government can do what it likes.


James Garfield Gardiner: The supplementary
estimate is to provide for payments on reductions of wheat acreages under conditions prescribed by the governor in council, for administration expenses in connection therewith, and for temporary appointments that may be required notwithstanding anything contained in the Civil Service Act. When that estimate is up for discussion, the whole programme in connection with the making of payments on account of taking acreage out of wheat will be open for discussion, and that is the main part.


Major James William Coldwell: Do we understand that there is to be no legislation on the wheat acreage reduction plan, but merely an estimate, and that all the regulations regarding payments will be made by the governor in council? It seems to me that this very important matter should be the subject of legislation, so that the house will have before it in black and white the actual proposals of the government in relation to this great problem.


Richard Burpee Hanson: Hear, hear. Anything else will not be satisfactory.


Thomas Clement (Tommy) Douglas: Absolutely
not.


James Garfield Gardiner: There are ways in
which the regulations themselves can be brought before the house and discussed. I would suggest that to follow the course now proposed would in all probability result in there being nothing done this year, if we are going to follow the usual process.


Major James William Coldwell: I think there can be some cooperation in this matter, but certainly the house should have definitely before it the proposals of the government.


Richard Burpee Hanson: If you
want to get it through, bring down something definite.


James Lorimer Ilsley: My hon. friend is very fond of making just that kind of remark. He has made it on several occasions.


Richard Burpee Hanson: I am
giving a friendly warning.


James Lorimer Ilsley: It is not a friendly warning. It is a threat to obstruct if we do not proceed in a certain way.


Richard Burpee Hanson: You can interpret it any way you like. The method of procedure which the minister proposes shows the intention to legislate by order in council, and the country will not like it. I do not like it and no other member likes it. Members supporting the government will not like it; the members from Ontario will not like it.


James Garfield Gardiner: This is probably not the time to discuss it, but there are two or three ways open for dealing with the question. One w'ay, of course, was to deal with it under the War Measures Act. We did not desire to proceed by that method because it would not have made it possible to have the kind of discussion here that members would want to have. I am quite sure that we can arrange for the kind of discussion and just as full a discussion as hon. members would have if legislation were introduced; and if the house will leave it at that until we come to it to-morrow, or whatever day we do come to it, we can have a full discussion then.


Mr. PERLEY:: When the question comes before us, does the minister propose to make a statement himself outlining what we may expect if this goes through or will someone else have to make an opening statement?


James Garfield Gardiner: I would hope to have an opportunity of making a statement.


Mr. McNEVIN:: As a supporter of the government, I believe that this problem should be dealt with by legislation, which offers a much wider opportunity for a full review of the whole problem. It is a matter of great importance.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Friday, March 21, 1941.