1941-05-02

Hon. J. A. MacKINNON (Minister of Trade and Commerce):: Mr. Speaker, it was
suggested that I lay on the table a copy of instructions sent by the dominion statistician to the census commissioners in each constituency. I am now doing so.


Mr. BLACK (Cumberland):: Will that be
on Hansard?


Some hon. MEMBERS:: Order.



PRIVATE BILLS


[Stage Direction]
Mr. G. G. McGEER (Vancouver-Burrard). Mr. Speaker, I beg leave to move that Bill No. 27, letter B-2 of the senate, entitled an act respecting the British Columbia Telephone Company, be now considered for second reading.
Mr. SPEAKER:: Mr. McGeer moves,
seconded by Mr. Slaght that Bill No. 27, letter B-2 of the senate, entitled an act respecting the British Columbia Telephone Company, be now read a second time.


Hon. R. B. HANSON (Leader of the Opposition) :: I believe there can be no great objection to the passing of this motion at this stage of the proceedings, in order that the bill may
be advanced to a point where discussion may be held on second reading, it being distinctly understood that this bill is not within the class of unopposed measures as designated in the motion proposed yesterday. On the understanding that there will be full opportunity for discussion either now or at a later stage- and I presume the hon. member wishes to proceed with second reading this afternoon-
I believe there can be no possible objection to the motion.


Mr. A. W. NEILL (Comox-Alberni):: The motion is that it be put to second reading, not that it be read a second time.


Mr. McGEER:: It is debatable now.


Georges Parent: The motion is that Bill
No. 27, letter B-2 of the senate, entitled an act respecting the British Columbia Telephone Company, be now read a second time.


Alan Webster Neill: No.


Richard Burpee Hanson: No, that
was not the motion as ive understood it.


Gerald Grattan McGeer: It is debatable now. I
understood we would agree to introduce the bill now, debate it, and then have it sent on to a committee. But there is no restriction on the debate. I should like to make it clear to hon. members that yesterday, when I introduced the resolution I did, I understood that that was the formal procedure. If on the introduction of the motion of yesterday there was opposition to any of the bills named, I understood they could be debated later on second reading. Under the rules the bill could not go to the committee of the house which is to consider it in detail-in this instance the committee on railways-until it gets its second reading. As I understand it the bill is now debatable on second reading.


Richard Burpee Hanson: You are
moving second reading?


Mr. LAPOINTE (Quebec East):: The
motion should not be that the bill be now read a second time, but rather that the motion for reading the bill the second time be now considered.


Alan Webster Neill: Mr. Speaker said that the
motion was that the bill be now read the second time.


Georges Parent: The motion is that the bill be now read a second time.


Mr. GREEN:: Is this the proper time to debate the bill? I should like to have a ruling on that.
2500	COMMONS
British Columbia Telephone Company


Mr. NICHOLSON:: Before this is debated-


Howard Charles Green: I desire to speak on the
bill, and I should like to know if this is the proper time.


Georges Parent: The motion is that the bill be now read a second time.


Alan Webster Neill: On the point of order, I submit humbly that that is not the motion. As the Minister of Justice (Mr. Lapointe) has just said, the motion is that the bill be brought forward now for second reading. I understand that that was the motion moved by the hon. member for Vancouver-Burrard (Mr. McGeer). He is asking for permission to move the second reading; if that is given, he would move the second reading and then it would be open for debate.


Georges Parent: The hon. member will
correct me if I am wrong, but my understanding is that the hon. member has moved that the bill be now read a second time.


Richard Burpee Hanson: That is
not my understanding of the position. My understanding is exactly as stated by the right hon. gentleman who is leading the house (Mr. Lapointe). The motion is for leave to proceed to move the second reading. I am quite agreeable to that, on the understanding that when that motion is put there will be an opportunity for debate and hon. members will have a chance to discuss this bill.


Gerald Grattan McGeer: I presume technically the position is that the motion now before the house is for leave to introduce the bill. If that is carried-


Richard Burpee Hanson: The bill has been introduced.


Gerald Grattan McGeer: If that is carried, then I will move the second reading.


Richard Burpee Hanson: There
will have to be a motion because of the precedence given to government orders.


Mr. BLACK (Yukon):: Is this a private bill?


Georges Parent: Yes.


George Black: Why should it take precedence over the long list of private bills already on the order paper for second reading and which appear before this bill?


Ernest Lapointe: That is why the hon. member must make his motion.


Richard Burpee Hanson: The hon. member wants precedence given to this bill notwithstanding the fact that to-day govern-

ment orders have priority over all private bills. I think we have things straightened out now.


Georges Parent: This motion must receive the unanimous consent of the house. As that does not seem to have been given, I suggest that it stand.


Gerald Grattan McGeer: I think we are agreed.
There is no opposition to this. I have agreed with the leader of the opposition (Mr. Hanson) and other hon. members and there is no reason why the motion should not carry.


Richard Burpee Hanson: That is debatable matter also.


Mr. FOURNIER (Hull):: I move that
the following unopposed private bills which have been read the first time-


Georges Parent: I understand that this
motion is to stand.


Gerald Grattan McGeer: I ask that it be considered. I think everybody is agreed.


Georges Parent: I will read it again. It is moved that Bill No. 27 be now read a second time.


Richard Burpee Hanson: That is not the motion.


Alan Webster Neill: I think the hon. member will agree with me that he should move that the bill be now called for second reading.
Mr. MicGEER: I will amend my motion and make it that the bill be now called for second reading.


Georges Parent: The motion now is that the bill be now called for second reading.


[Stage Direction]
Motion agreed to.
Mr. G. G. McGEER (Vancouver-Burrard) moved the second reading of Bill No. 27, respecting British Columbia Telephone Company.
Howard Charles Green: Mr. Speaker, had it not been for the discussion of all these technicalities I would have been half way through my speech by this time. However, I take it I may now proceed.
While the bill deals with only one company doing business entirely within the province of British Columbia, it raises for consideration certain principles which are of vital importance to Canada at this time. Accordingly I feel justified in asking members of the house to give this bill the most careful consideration.
The principles involved are, first, under what circumstances should a company whose works have been declared to be for the general advantage of Canada, and which has been

British Columbia Telephone Company
incorporated by an act of this parliament, be given power to increase its capital at this time, and, second, should the powers of a public utility company, enjoying the monopoly of a public service, in this case the telephone service over most of British Columbia, be extended at this time.
The British Columbia Telephone Company was incorporated under the name "Western Canada Telephone Company" by a private act of this parliament in 1916, to be found as chapter 66 of the statutes of that year. The present bill seeks to amend the original act of 1916. As I have indicated already, the original act declared that the works authorized were works for the general advantage of Canada. Under that act power was given to the Western Canada Telephone Company to take over a company then operating a telephone service in British Columbia and known as the British Columbia Telephone Company Limited, and thereupon to use the name. This was done in 1919. At that time and for several years following the company was controlled by local people in British Columbia.
A few years ago, however, during the boom years, this control was acquired by the Associated Telephone and Telegraph Company of Kansas City and it is still held by that company. The control is through another subsidiary company known as the Anglo-Canadian Telephone Company, which holds all the common stock of the British Columbia Telephone Company, with the possible exception of a few qualifying shares for directors. The par value of the common stock is $4,500,000.
As I have said, the company is controlled in reality by the Associated Telephone and Telegraph Company. Also the parent company controls through Anglo-Canadian several smaller telephone companies in British Columbia-Chilliwack Telephones Limited, Kootenay Telephone Company, Limited, Northwest Telephone Company, and Mission Telephone Company Limited-all of them actually operated by the British Columbia Telephone Company, the company which is asking that this bill be passed. So that in essence the British Columbia Telephone Company has virtually a monopoly of the telephone business in British Columbia. I think there are two exceptions: The Okanagan Telephone Company of the Okanagan valley and the municipal telephone system in the city of Prince Rupert. The British Columbia Telephone Company is an efficient company, efficiently staffed and carrying on
business in an efficient way; it is doing a cash business and admittedly an exceedingly prosperous one.
Now the company comes to this house asking an amendment to its charter. First of all it asks under section 3 of the bill that power be given to the directors and shareholders to increase the capital stock from $10,000,000 up to a maximum amount of $20,000,000; in other words, power to double the capital stock. Section 3 also contains a subsection which provides that before the stock is actually issued or sold, approval must be obtained from the board of transport commissioners. But I submit to the house that the question whether or not power should be given to the company to increase its capital is one for this house to decide, that it is not a matter to be settled by the board of transport commissioners. That board has only to do with the details of when and how the new stock shall be issued. The bill also asks for certain extensions of the powers which the company already possesses.
I propose to deal first with the question of increasing the capital stock. By the act of 1916 the capital of the company was set at $5,000,000, with power given to the shareholders to increase that amount up to a maximum of S10,000,000. Throughout the years advantage has been taken of that provision until at the present time the company has issued stock to a value of $10,000,000,
SI,000,000 of which consists of 6 per cent cumulative preference shares, $4,500,000 of 6 per cent preferred shares and the remaining $4,500,000 of ordinary shares. In addition there have been bonds issued to a total of $12,500,000 bearing interest at 4J per cent. Now the company is asking for power to double its capital from $10,000,000 to $20,000,000.
I think that the house should consider the wisdom of granting or refusing this request from several different points of view, and in the first place from the point of view of Canada's war effort.
If power is given to make this increase it may mean the raising of $10,000,000 from the people of British Columbia or certainly from the people of Canada, in war time. I suggest to the members that such power should only be given under circumstances which are exceptional. The granting of such power now, in other words, should be the exception rather than the rule. I would remind the house of what the Minister of Finance (Mr. Ilsley) said to us earlier in the week. It will be found at page 2343 of
British Columbia

Telephone Company
Hansard. In outlining the task which is faced by the Canadian people in raising the money that will be required the Minister of Finance said:
It will require also the careful limitation of our commercial and industrial investment to such plant and equipment as will aid in carrying on the war and as is necessary to the maintenance of essential services.
He then, announced that the government was going to control investment for the first time, and he said :
This policy of controlling investment will have the important effect of providing a larger market for government bonds.
Surely this bill brings up this very question. Are we to follow the wish of the Minister of Finance or are we not? The raising of this additional capital by the company will be in direct conflict with the attempt of the Canadian government to raise money, and the terms will be far more favourable than any terms the Canadian government can offer. This company has been paying steadily six per cent to the preferred shareholders, and it has been paying eight per cent on the common stock issue of $4,500,000, with the exception of one or two years during the depression. Just imagine the effect on the sale of war savings certificates in the province of British Columbia if it should be announced that this company has been given power to increase its capital and eventually it puts new shares on the market! It may mean that there will be up to $10,000,000 less to be put into Canada's war effort. Besides that, it would be an example for other companies to follow in other parts of the nation. It does seem to me that this whole subject might well be left for consideration after the war.
So much from the point of view of the effect upon Canada's war effort. Now let us look at the company's request from the point of view of the necessity for issuing new shares and acquiring fresh capital. I can find no necessity ^hown for such an increase at this time. It is true that there has been an increase in the number of telephones installed by the company. I have here the annual statement for the calendar year 1940 and on the back there is a chart of the installations of telephones over the years. It was not until 1937, a little over three years ago, that the company once again had as many telephones in use as in the year 1930-in other words, got back to its position of eleven years ago.
Mention was made by the hon. member for Vancouver-Burrard, when he explained this bill on first reading, of the fact that some municipal authorities on the coast have agreed not to oppose this bill. But at the time they gave the bill consideration they did not have

before them this annual statement for the year 1940. It did not come out until the end of February. Nor did they consider the bill from the point of view of its effect upon the war effort, because they were under no obligation to do so.
In 1940, as this statement shows, 5,914 telephones were installed by the company, many of them for the fighting forces, for the various army, navy and air force headquarters in British Columbia. In other words, they are temporary installations; and while they are temporary, you can be sure they will be paid for; the telephone company will suffer no loss on these war installations. In 1941, I am told by the president of the company, the company expects to make around 5,000 installations, a decrease of 900 from the year 1940.
The hon. member for Vancouver-Burrard (Mr. McGeer), speaking the other day, said, as reported at page 2297 of Hansard:
The cost of the installation of such services-
Referring to new services at the rate of 5,000 to 6,000 a year.
-runs from $1,000,000 to $1,250,000 a year.
That works out at $200 per installation, which, I suggest to the house, is entirely too high, in fact is absurd. I believe that the real
reason why heavy capital expenditures have been made is set out in newspaper reports of March 1, 1941. In the Vancouver Province, the issue of that day, we find this statement:
f sheet discloses that nearly vAOOO.OOO of capital expenditure was made, chiefly in Vancouver in connection with the conversion from manual to dial equipment.
Nothing at all to do with the installation of new phones, but the change-over to the new dial system.
Additional outlay on this account will be made in the first part of 1941, after which it is planned to defer capital expenditure as much as possible until after the war.
I believe that the installation of this automatic equipment is what has called for the bulk of the capital expenditure, and most of this expansion has already taken place. At least as the newspaper report says, it is to be deferred, the change-over is to be stopped now until after the war. But, even with these capital expenditures which have already been made, the accounts for the calendar year 1940 show a net profit of $659,000 out of an operating revenue of $6,050,000. For the sake of clarity I am giving the figures in round thousands.


Richard Burpee Hanson: Is that
before dominion and provincial taxes?

British Columbia Telephone Company


Howard Charles Green: I will explain that as I go along. Depreciation of $998,000 is written off for last year-which is very heavy for one year, particularly in view of the fact that over the last twenty-four years the total depreciation, including what is written off for last year, is only $8,522,000. Taxes amounted to $627,000, being $209,000 more than in 1939. In other words, despite increased taxes and despite heavy depreciation, there was a net profit of $659,000. The balance carried over from 1939 was $537,000, and after paying dividends for last year of 6 per cent on preferred and 8 per cent on common stock, the balance on December 31, 1940, stood at $506,000. We find from the balance sheet that there was cash in the bank amounting to $461,000 at the end of last year and in going through the assets we find other assets which are fairly liquid; for example, bonds of the Northwest Telephone Company, amounting to $255,000, and bonds of the city of Vancouver -which I am sure the hon. member for Van-couver-Burrard will agree are liquid, since they were issued when he was mayor of our city- amounting to $53,000.
Surely some of this money could be used for expansion for war purposes. Surely the dividends on the common stock could be reduced. If the rate for this year were cut from 8 per cent to 3 per cent, $225,000 would thereby become available to apply on the cost of the telephone extensions which are necessary this year. Surely the parent company, the Associated Telephone and Telegraph company, could do a little sacrificing. They would get their money in the end- at any rate after the war.
Surely there could be a cessation of further heavy commitments by this company, for example, in changing over telephones from manual to automatic. It should defer such capital expenditures until after the war. In so doing the company would suffer little hardship, and could apply at that time, if it were so desired, for power to increase the capital.
I come to my final reason why power should not be given at this time, under war conditions, to increase the capital stock of this company. Many readjustments in our civilization will result from the present war. Make no mistake about it, there will be great readjustments in Canada, and almost certainly in regard to public services such as telephone service. The Canadian people may wish to have their governments take over such public services; in fact in some provinces the governments already operate the telephone service. Increases now of the capital of public utility companies will make such readjustments more difficult, and may even cause grave trouble.
So much for the request for power to increase the capital stock. Before I conclude I should like to say a few words with regard to granting extended powers at this time to a public utility company which enjoys a virtual monopoly. If hon. members will turn to section 2 of the bill they will see it has to do with the issue of preference shares. I have no objection to a company being given power to issue preference shares in the future under new tennis, but, as I read this section, it gives the company power not only to do that but to change the status of the present preferred shares. The hon. member for Vancouver-Burrard, when he spoke the other day, said that as the law stands at the present time the preferred shares which have been issued cannot be redeemed.
They have always had a good market value; the price has been above par practically all the time, and to all intents and purposes apparently they are perpetual shares. Sales have been made by one holder to another throughout the years; people have bought these shares with all the rights which now pertain to them, yet under paragraph (c) in section 2 of the bill we find that the company is given certain powers over those shares that have already been issued, including power to redeem them under certain conditions. In other words this is a provision which is a distinct benefit to the company and a distinct detriment to the holders of the preferred shares. It is not fair to ask this house to pass legislation of that type, in war time or at any other time.
Section 5 of the bill gives the company power to buy shares of a company carrying on business of a similar nature. When this company received its original charter it was given power to buy only the physical assets of another telephone company; it could not buy the shares of that company. Now in this section the company is given power to go out and buy shares; and, as I read the section, even to buy shares in a company operating a radio station, for example, thus going far beyond the original powers. The restriction was there before; why should it be removed by this bill?
Another section which should be carefully checked by members of the house is section 6, which gives the company power to carry on not only telephone and radiotelephone services-which latter is a very necessary service on our coast and which has been carried on very well by this company-but also services for the transmission of sound, pictures, writing, or signals by means of any device, apparatus, system or method of whatsoever nature, whether now in existence or which may be discovered or developed in the future. One
2504	COMMONS
British Columbia Telephone Company
printed explanation of the bill eipressly mentions television. This company is to have power to go into the business of television, and I think that goes too far. Before these wide powers are granted, particularly at this time, the whole question should be most carefully reviewed by this house. Television probably should be handled by the government of Canada; I do not know by what body, but presumably by the broadcasting corporation. Certainly before we give any private company power to handle television we should know exactly what we are doing and why we are doing it.
That concludes my remarks with regard to this bill. I have been greatly concerned about it because I want to be fair, not only to the people who sent me here, the other people of my city of Vancouver and the people of British Columbia, but also to the telephone company. I am convinced that this bill should not be passed during the war, that the position should not be changed at the present time; that if passed it will probably interfere with our war effort and give the company powers which it should not have, or which, in any event, should be given only in peace time and then after the most careful consideration.


Alan Webster Neill: The bill now before the house, Mr. Speaker, is second from the bottom in the list of private bills numbering some forty-eight appearing on the order paper for to-day. The British Columbia Telephone company is a very dominant influence in British Columbia, but. I did not know that it had sufficient influence to reach out three thousand miles and have its bill taken from almost the bottom of the list and placed at the top, and have it debated at a time when, under our rules, private bills should not be called at all.
The sponsor of the bill did not follow the usual custom-I admit that it is only a custom-of giving an explanation of the bill on the motion for second reading. Therefore we must depend on the few remarks he made when he introduced the bill; but I have no doubt he will take advantage of his privilege of closing the debate to answer all the objections that may be advanced up to that time. I would point out to hon. members of this house however, that under our rules the sponsor of the bill closes the debate when he speaks at that time, and there can be no further debate on the question, so that it will be impossible for any of those who oppose the bill to reply to any statements he may make, however willing or able they may be to do so.
I have been requested by some of my constituents to oppose this bill. I do so quite 
willingly, despite the fact that before this debate is concluded I am sure once more the accusation will be made which is so lightly thrown across the floor of the house these days, that we are holding up our war effort. But the bill has been brought in under these circumstances, and I think it is our duty at least to comment upon it. As I understand it, if this bill is given second reading it will go to the committee on railways, canals and telegraph lines. I hope on that committee there will be someone with sufficient determination to gain for us a great deal of information that we do not now possess and that we should have before we are asked to pass the bill.
I endorse, so far as my lay mind could follow them, the legal objections raised by the hon. member for Vancouver South (Mr. Green), and I wish to quote as well a resolution which has come into my hands. This resolution was passed by the Vancouver Community Council, the nature of which I will explain in a moment. The resolution states:
The Vancouver Community Council, an organization representing all the community associations 9f Vancouver, B.C., do hereby protest, along with the citizens' committee, to any increase in capitalization of the B.C. Telephone Company Limited during wartime, mainly because we are of the belief that this company will seriously deprive the government of enormous sums of taxes by such increased capitalization.
We are also of the belief that the B.C. Telephone Company Limited are taking advantage, at this time, of the public having their concerted attention centred on the all-important problem of winning the war, therefore expecting less opposition than at normal times.
The company are showing in their returns that they are paying six and eight per cent dividends which naturally sets up an opposition to the war savings stamps campaign, when the government can only pay less than three per cent.
We have examined their annual report and financial statement and are convinced that the application now before the board of railway commissioners of Canada is not of sufficient merit to warrant an increase in capital at the present time. No valid or substantiated reason has been advanced by the company as a basis for enlarging the capita] structure; that if there are reasons, the public should be notified as to the reasons-particularly in view of the tremendous increase petitioned for. The public, being vitally interested in the proposed increase, should know why the capital will be underwritten; by whom; when the cash capital realized will be expended, how so expended, and where expended.
We believe that any increase in capital would necessarily mean an increase in telephone rates, and the people of Vancouver cannot afford any increase and at the same time keep up with the demands of the government for funds to carry on the war.
I will now explain the nature of the Vancouver Community Council. It seems

British Columbia Telephone Company
that it is a council composed of delegates from a number of community associations, and they give the names of sixteen well known suburbs or parts of Vancouver. I think I am justified in saying that it is a large and respectable body; large, as indicated by all these sixteen associations, and respectable because of the men associated with them. The honorary president is Mayor J. W. Cornett of Vancouver. The mayor of Vancouver is not a man picked up in the gutter. Among the names of other vice-presidents I read that of R. Rowe Holland, B.A., a well known lawyer and Dr. G. M. Weir, a cabinet minister in British Columbia, and last but by no means least Mr. G. G. McGeer, K.C., M.P.
I believe he is the hon. member for Vancouver-Burrard, and I am prepared to accept implicitly 'his endorsation of this association from the fact that he is an honorary vice-president.
The objections, as they appear to me, are as follows: First, the amount is too large; certainly just now, as it undoubtedly will affect the campaign for the government loan soon coming on. I myself have $2,000 I was going to put into that government loan at three per cent or whatever it may be, but being of Scottish origin I may be strongly-tempted to put it into the six per cent bonds of this company. And I am sure there will be a great many other people subject to the same temptation; for a great deal of the $10,000,000 will be raised from the people of Vancouver or British Columbia. No sufficient reason has been given yet that I have heard why such a large sum is needed now. The balance Sheet does not indicate that it is more than at most partly necessary. That this is apparent to the bill's sponsors will be seen by the remark of the hon. member for Vancouver-Burrard on introducing the bill, as reported on page 2298 of Hansard.
This is a statement made by a talented lawyer who knows the value of words and what language is intended to convey.
I should like to make it clear that this amendment does not authorize an increase in the company's capital of another $10,000,000; it merely authorizes the company to make application from time to time to the board of transport commissioners as new capital issues are required to sustain the progress of its service.
Well, let us see what the bill does say. Section 3 reads:
6. (1) The capital stock of the company may be increased from time to time by such amounts as the directors consider requisite for the due carrying out of the objects of the company,
Is not that clear enough? And there is a limitation that it shall not exceed $20,000,000. Which statement is correct? I submit the one in the bill is the one that will be given effect to, perhaps in the law courts, in years to come.


Mr. SLAGHT:: Let the hon. member read subsection 2 if he wants to be fair.


Alan Webster Neill: I shall come to that. The sponsor said that it "merely" authorizes the company to go to the transport board. The word "merely" gives the whole show away. This is what subsection 2 says-and it is not the section, it is only a subsection of it, separate and distinct.
(2) The company shall not have power to make any issue, sale or other disposition of its capital stock or any part thereof, without first obtaining the approval! of the Board of Transport Commissoiners for Canada of the amount, terms or conditions of such issue, sale or other disposition of such capital stock.
What are they to give approval of? Of this bill? Not at all; we are giving approval of the bill. When this bill passes this house and the senate it is final; no one else can dispute or reject it, unless it is unconstitutional, and that is not even suggested. So that when we pass it it is final and irrevocable law, not subject to the approval of anyone else, man, god or angel. The details of the bond issue are subject to the approval of the board of transport commissioners; they can say, Oh, we think that at the present moment $8,000,000 or $6,000,000 is perhaps enough; or, we do not like the terms. But they have no control whatever over the authority to issue $10,000,000. And I venture to predict that the second paragraph of the application to the board will read something like this: "And whereas the Parliament of Canada has authorized this company to increase its capitalization by $10,000,000." I am no lawyer, but that is common sense, which sometimes is better than law.
The board cannot reverse our legislation and say to this company: You cannot issue $10,000,000. They might defer it, or say go slow, or change the rate of interest, but they cannot upset our legislation. And that is perfectly well known to these people who drew up this bill. So we can dismiss that argument, which at best means that they say: Give us power to increase to $10,000,000, but in case it sounds too rank we will sugar-coat the pill by saying: "We will take the amount in sections." And eventually they will get the whole $10,000,000. And they cannot be denied by anyone short of this parliament, and now is the time to do it. It may be alleged that they do not want the $10,000,000 now and do not intend to issue any of the bonds. Then why ask for the power? They have got along for twenty-four years with $10,000,000; if they do not need more now -why ask for more? If they are asking for it then you can take anyone's word that if they get the power they will use it.
2506	COMMONS
British Columbia Telephone Company
So that the question is, is it wise to allow them now, when money is so badly needed for war purposes, to issue $10,000,000 of new capital at six per cent, possibly to compete with the government issue at three per cent?
Much has been made of the statement of the council of the city of Vancouver and the council of municipalities. We are told that these councils have not opposed the bill. It appears from the statement which I have now heard for the first time-we have no evidence for it-that they had not even read the balance sheet. Yet they give their approval. It now appears that it was not an approval or authorization but merely a decision not to oppose. Rather weak support, isn't it? We would like our constituents to give us more definite support than that. The Society for the Prevention of Cruelty to Animals is not opposing this bill, but that does not say it approves the bill. If everyone is held to approve who has not said anything against it, that does not look very strong. I should like to see a copy of the resolution passed by the council of the city of Vancouver approving of this bill. I do not think it can be produced. And the same as to the council of municipalities. Perhaps the opposition of the council was softened by the assurance that, they could always oppose it before the board of transport commissioners. Yes, but they would soon get tired of going there; it costs money, and it would happen every few months. Did hon. members ever hear of Hitler s method ? Hitler is supposed never to do anything by ohance. He does not grab the whole hog at first; he grabs only a bit of it. You do not feel like fighting for that bit. Then by and by he wants more of it.


Mr.   IIOMLTH@: He starts on the hind
quarters.


Alan Webster Neill: But if he had asked for the whole hog in the beginning, you would object. They will take it all, I believe; I do not say they will do it now, but eventually they will get the whole ^ $10,000,000. But that will not prevent the city council and the council of municipalities from coming along in a year or two and howling their heads off if we allow this to go through. They will say they were misled, that they did not understand, and that it was our business to see that they were protected.
The hon, member sponsoring the bill has said that there are some other minor changes to be made. I turn to them now, because I am not so sure that these minor changes do not contain the nigger in the woodpile. Perhaps they are even more important than the actual capitalization provision. On introducing the bill the sponsor said th's:
There is an amendment-

And these are among the minor amendments-
-providing for the redemption of the preferred shares. The fact is that the preferred shares issued already by the company were issued in the terms of a contract which is redeemable. Technically-
"Technically"-
-the powers which the company enjoys under its present charter do not permit them to carry out the terms of that contract.
Hence, of course, it is to be amended giving them power to do so. Either it is yes or it is no. If the preference shares were issued long ago with power to redeem them, then this section is unnecessary. If they were not issued in terms by which they can be redeemed, then I say this section is unjust and unfair. This is an attempt to deprive preferred shareholders of privileges they possess. It deprives them of their rights. Because the shares were issued non-redeemable more money was obtained, and a better price was obtained when the shares were sold. No doubt more people were induced to invest, perhaps they invested more willingly and more money than they would otherwise have done. Now they are paying six per cent. The very fact that they are paying six per cent, and the perhaps more apparent fact that they were not redeemable- and we are told they were not-put the price up until the present market price is about 114. And they are going to be redeemed perhaps next month or next year at 100. Is that a square deal to the man who bought with the knowledge that they were not redeemable?
Had the company gone broke, the owners of the common stock would not have come forward, reimbursed the preferred shareholders and said, "You have had a raw deal." They would have said, "You have taken your risk and lost your money; there is no use whining about it." There used to be a day when investors who put money into an investment got an even break. If it turned out badly they lost all their money, and if it turned out well they made money. Nowadays investors are people who have been induced by prospectuses to put money into something. If it goes bad-well, it is just too bad; if it turns out to be a good thing, they are frozen out later on. Either they are redeemed out or, in the case of mining companies, there is another method which appears to be very effective. Who is going to reap the benefits from this deal of redeeming preferred stockholders? It will be the common stockholders, of course. And who are those W'ho hold the common shares? They are all held in the United States by people alien to us. The intention is to redeem these people who have

British Columbia Telephone Company
now a successful and profitable investment- indeed, so much so that they can get six per cent. So that these preferred stockholders are to be frozen out, and the benefit will fall into the maw or into the hands of the common stockholders-people who are not even resident in our country or our province.
Had the results been the other way round, had it lost money, would the common stockholders have taken it up? I do not think they would. The sponsor says that technically- "technically"-they cannot be redeemed. Now the purpose is to bring about a condition so that they can be redeemed. May I point out that the dial system is just being introduced to a large portion of the city of Vancouver. Most telephone companies, upon introducing the dial system, anticipate making money from that installation.


Mr. HOMUTH:: Yes, by laying off
employees.


Alan Webster Neill: That is the reason they do
it. Yes, the money is made by laying off the employees. They have no soul at all. They do not care when they have to lay off employees. They do it for one purpose and one only, namely, to make money. And the dial system having been introduced only a few months ago, they will certainly make more money. They are making eight per cent now on their common stock. There would be no harm done if they kept it at eight per cent, and allowed this surplus profit to go toward the capital they say they need so much.
Inevitably the increased capital will be used to ask for increased rates. They will say, "Now we have to pay an interest of eight per cent on $20,000,000." They will go to the board of transport commissioners and ask for that increase of rates; and no doubt when they urge that they ought to be allowed to make three per cent on $20,000,000 they will get permission. The larger capitalization is probably intended, in part, for that reason. The rates are now high enough.
I have no ill will against this company or any of its officials. It is a good company, and well managed. I believe it is managed almost too well for the common good. I have had transactions with it as an ordinary business man, and also as a member of parliament connected with government transactions, and I realize perfectly that the small business man had no look-in at all when it came to dealing with the British Columbia Telephone company in a matter of business. I would not take time to go into the painful details now, but it is sufficient to say that I have speedily discovered who paid the piper in that case.
So I believe it can be said that the company is shrewdly managed. I hold a few shares in the company, and I recognize with gratitude the regularity with which interest has been paid over a term of years. I am not afraid that the dividends will be reduced in the company -and, as I am a shareholder, I suppose I can say "our company." Our company will not lose by it, even if they are stopped from spoiling the market for $10,000,000 of government 3 per cent loan, or from robbing the shareholders by a forced redemption. Robbing is the word to use when you are taking away some one's rights, or a portion of them, by compulsion.
There are other objections to the bill which have been dealt with by the hon. member for Vancouver South. However I hope the committee will look into this matter, and I hope they will amend this bill so that if the company require a reasonable amount of capitalization it may be granted to them, but only a reasonable amount and without the other evils I have suggested.


Mr. ANGUS MacINNIS (Vancouver East):: Mr. Speaker, I should like to say a few words about this bill which has already been analysed by the hon. member for Vancouver South (Mr. Green) and the hon. member for Comox-Alberni (Mr. Neill). Before I left Vancouver in the early part of February I was informed by the general manager, I believe it was, of the British Columbia Telephone company, that it was their intention to have a bill introduced amending the British Columbia Telephone Company Act. I met him and he explained the various sections of the bill to me. I told him I would keep an open mind in the matter.
I then notified the mayor of the city of Vancouver that a bill to amend the telephone company act was going to be introduced, and drew his attention to what I considered the important sections of the amending bill. As I suspected, the matter had already been drawn to the attention of the city council by the telephone company. I have before me a copy of a letter addressed to the city clerk of Vancouver by the corporation counsel. The letter is dated February 20, 1941, and reads:
Fred Howlett, Esq.,
City Clerk,
City Hall.
Re: B.C. Telephone Company and proposed amendment to its charter authorizing increased capital.
Dear Sir:
When this matter last came before the harbours, utilities and airport committee it recommended that the Fraser Valley reeves' association be asked to submit the reasons why
2508	COMMONS
British Columbia Telephone Company
it was opposing the telephone company's application and it further recommended that the company be asked to undertake that any application to the board of transport commissioners for the issue of further stock should be upon notice to the city.
I understand that you have had no reply to the letter to the Fraser Valley reeves' association. On the question of notice to the city, after some negotiations with the general manager he finally agreed that the company should give such notice.
As a result I now have a letter from the president of the company, a copy of which is attached hereto.
Unless it is proposed to await further a reply from the Fraser Valley reeves' association I see no. reason why the matter should not now be concluded by a resolution that the city council do not in the circumstances take any steps to oppose the company's application now pending before parliament at Ottawa.
It will be understood, of course, that as applications are made from time to time to the board of transport commissioners, the matter can be examined afresh.
Yours truly,
D. E. McTaggart,
Corporation Counsel.
I believe I have in my file, although I am not definitely certain, the covering letter from the city clerk, which accompanied this letter and which stated that an approving resolution had been passed by the city council of Vancouver. I did not concern myself further with the matter. Some little time ago, however, I received a letter from the Vancouver communities council, of which the hon. member for Vancouver-Burrard (Mr. McGeer), the sponsor of this bill, is one of the vice-presidents. The resolution passed by that body was read by the hon. member for Comox-Alberni. It strenuously opposed the passing of the amending bill. It seems to me that the hon. member for Vancouver South has given sufficient proof that the interests of no one will be- injured by allowing this bill to stand over for the present time.
The company made application for a similar amendment in 1933. I believe the matter was allowed to stand over until 1934, and the bill was finally withdrawn. If the company found it could get along from 1934 to 1941 without this additional capital, it seems to me strange that an application should be made for increased capital at a time when the country stands so much in need of money for other purposes. Considering its strong liquid financial position, I am convinced that the interests of the British Columbia Telephone company will not suffer if this bill is withdrawn or its passage refused at the present time.
There are two procedures which we can follow. The house can decline to give the bill second reading, or it can agree to the

second reading and refer the bill to the proper committee where its supporters and those opposed may submit evidence to substantiate their claims. The other day the Minister of Finance (Mr. Usley) announced in the budget a proposal which will make it more difficult for the ordinary citizen to provide himself with certain essentials of life. I think that gives parliament sufficient reason for refusing at this time to give its consent to increasing the capital stock of this company.
The budget proposal to which I made reference will discourage the building of homes in Canada, despite the fact that there is an urgent need for better housing. I believe the need is more urgent for housing and for improved social conditions than it is for this, in the main, luxury service, although, of course, it has an important commercial side. I think we can very well refuse to give second reading to this bill and allow the company to bring it forward at a more opportune time.


Richard Burpee Hanson: Would the sponsor of the bill be good enough to lay before the house the terms of the resolution under which the present preferred shares of this company were issued? There seems to be some question whether these shares are or are not redeemable. The explanatory note opposite section 2 of the bill which deals with the redemption of preference or preferred shares seems to include a paradoxical statement. It reads:
The purpose of this subsection is to enable the company to redeem preference shares issued as redeemable shares.


Gerald Grattan McGeer: I have copies of the two preference share forms, the cumulative and the other. In both cases the provision for redemption appears on the share certificate. In one instance the certificate reads:
The company shall have the right to redeem


Richard Burpee Hanson: I was
referring to the resolution upon which the shares were issued.
Mr. MeGEER:	The resolution is incorporated in the share certificate.


Georges Parent: The house will realize that we are debating the motion for the second reading. If the hon. member for Vancouver-Burrard (Mr. McGeer) speaks now, he will close the debate.
Mr. KARL K. HOMUTH (Waterloo South): Mr. Speaker, we have been asked to take unprecedented action in putting this bill through in the way in which it is being put through. If the procedure is unprecedented, then I think hon. members should have a clear understanding of what the provisions of the bill mean. I realize that it may be difficult for

British Columbia Telephone Company
an hon. .member from another province to deal with something which appears to be a purely provincial matter and rather innocuous in form, but after listening to the hon. member for Vancouver South (Mr. Green) and the hon. member for Comox-Albemi (Mr. Neill), one begins to realize just how far-reaching are the provisions of this bill. During this war-time session several bills have been introduced which could well have been left in abeyance. There is still on the order paper one bill providing for the giving away of some park land in Saskatchewan. A whole evening sitting of the house was taken up in discussing that bill, but we got nowhere with it and I do not think we shall get anywhere with it this session.
Here is another bill which, at first glance, does not appear to be serious, but when one delves into it he begins to realize that this large corporation is trying to extend its tentacles and gain control over things in British Columbia over which it has no control at the present time. Furthermore it is not exactly a Canadian concern. We are being asked to give this organization an opportunity to expand its capital structure, but as the hon. member for Comox-Alberni has so well said, if we grant this privilege, this organization will go to the board of transport commissioners and, as has happened in this country before, will say to them: Here is our capital set-up on which we are entitled to earn at least such and such a dividend, and to do that we must increase our rates.
The explanation given to us was that the company was extending its service. The chart aecompanjdng the financial statement for 1940 shows how the service has extended, and I do not see how any company that has made the progress this one has, and with the earnings it has, can need to enlarge its capital. Just read the balance sheet of the company; see the reserves for depreciation and the depreciation written off every year; see the amount they provide for repairs and maintenance.
Again, just as the Bell Telephone company and other companies have done, this company is going to modernize its service. But all these modernizations of service mean laying off help. Public utilities never modernize their service unless it puts them in a position to make tremendous savings in power, staff and other matters that more than compensate them for the cost of modernizing. Modernizing its service is not going to cost this company anything because in the long run it will make tremendous savings. Throughout Ontario and other parts of Canada telephone companies have modernized
their service, and as a result thousands and thousands of employees have been laid off. The same sort of thing happens when an industrial corporation installs new machinery. It means that it is able to reduce labour costs and increase production.
Surely at a time like this, when there are other matters of much greater importance to Canada and to this parliament, we should not be asked to pass this bill increasing the capitalization of this company, particularly when, according to the company's own balance sheet, it is not necessary at all.
There is, further, this important consideration, that so long as we continue to make it possible for great monopolistic institutions such as this to issue new stock at six and eight per cent, we shall not be able to ask the people of this country to buy three per cent war bonds. If my industry or any industry in which any other member of this house is interested wishes to buy new machinery and extend its plant or do other things that may be necessary to the war effort we are making, we have not the right to do it, nor can we have a private bill introduced into the house in order to have it done. We have to go before the board that has been set up by the government, and this board tells us whether or not we may make the extension. Every private industry engaged in the manufacture of munitions or war materials is compelled to go before this board and get its approval before it can spend one cent on capital account. Yet here is this monopolistic telephone company, controlling the telephone business throughout British Columbia, in a position to come here with a private bill, which on the face of it looks as innocent almost as its sponsor, to increase its capitalization. I think this house should take a stand against this bill and refuse even to give it second reading.
I do not think the house should be asked to take other than the general course in dealing with bills of this kind. I do not know what the procedure in the House of Commons is with regard to such bills, but I know that in the legislature of Ontario a private bill must first go before the law officers of the crown. If the bill is contrary to government policy or to the best interests of a municipality or of the province, the government itself takes a stand and says: "This bill must not be proceeded with because it is against the interests of the municipality or contrary to the general law of the province and against its best interests, and we ask the sponsor to withdraw it because we think such legislation should not go through this house."
2510	COMMONS
British Columbia Telephone Company
The law officers of the crown might well give all private bills of this kind careful consideration, and if it is found they are contrary to the best interests of the country or any section of the country, the government should take a stand and say that the legislation should not be allowed to pass through the house.
This is a serious matter, Mr. Speaker, and I think the members of the house ought not to acquiesce either in this application or in the manner in which it is presented.


Mr. G. K. FRASER (Peterborough West):: Mr. Speaker, the hon. member for Waterloo South (Mr. Homuth) has mentioned that this bill is far-reaching. It reaches farther, I think, than any member of the house realizes because, if hon. gentlemen will look at section 6, starting at line thirty-four, they will find that it provides that this company:
. . . may operate wireless telephone and radio telephone services and services for the transmission of sound, pictures, writing, or signals by means of any device, apparatus, system or method of whatsoever nature, whether now in existence or which may he discovered or developed in the future.
If this bill should pass this house, it would mean that parliament was giving away the right to operate machines that might be developed in the future. What would have happened if radio stations had been given the right to operate like this before our broadcasting system was set up? We cannot tell what machines may be developed in the next few years. That clause should be thrown out; in fact, I think it is sufficient reason for throwing the whole bill out. We cannot tell what the future holds in the way of developments, and to grant this company these powers would be dangerous because, with the $20,000,000 behind it, it would have unlimited influence throughout the country and would be able to do almost anything under the sun. I agree with the hon. member for Waterloo South that we should refuse to give this bill a second reading.


Mr. G. A. CRUICKSHANK (Fraser Valley):: The Fraser Valley reeves' association has been mentioned. I happen to be their representative, or I was last year when they asked me to oppose the bill. I took the matter up with the association and asked on what grounds they were opposing it. They withdrew their objections after certain amendments had been made. I am very much interested in these amendments which have been submitted to the reeves.
When I was home at the Easter recess, to find how much poorer the farmers in my district were getting, I had the objection thrown at me, as representing a farmers' 
riding, that we could not get a bill before this house to effect the reduction in freight rates which we should have had forty years ago, and which the present sponsor of this bill fought so hard at that time to get for us. I say, we could not get that reduction, yet this magnificent United States company can come in by a back-door-I believe we in this house should describe it as that "other place". Apparently all that that "other place" is doing this session is to pass a bill for a telephone company and handle divorce proceedings. I do not happen to know anything about these stocks and shares. As a farmer I have never had enough money to buy a share. I bought a few war savings stamps. But how I am going to sell war bonds I do not know. The Minister of Finance (Mr. Usley) asks me to go home in June and endeavour to organize my riding to buy government bonds which must be sold to return three per cent, while other companies are going to be competing with me, selling bonds at six per cent.
The other objection I have to the bill is that, having been a municipal official, and knowing what happened to the British Columbia Electric company and the British Columbia Telephone company, I do not know who can guarantee that there will not be an increase in rates? I hope that the sponsor of this bill will use his influence with the British Columbia Telephone company to have conditions adjusted in my municipality, where, with some 5,500 people, we have three telephone exchanges-three long distance offices.^ Certainly we have a right to an adjustment in view of those conditions, exactly as we have the right to fight any increases, if we decide to do so, by appearing before the board of transport commissioners. But how could any municipality afford to send any of these famous Vancouver lawyers to Ottawa to fight? I know the lawyers would like to come. They have had plenty of fun fighting on behalf of the British Columbia farmers. But we cannot afford to send them. I believe the company should give us a guarantee that, at least for a period of years, there will not be an increase.
I may inform the sponsor of this bill that, although I had intended to vote for it, I am going to oppose it, and on one ground only, that I think the government of which I happen to be a supporter should reject it unless the company agrees to withdraw what neither this nor any other government has the right to legislate away-that which is now in existence or which may be discovered in the future. I certainly will not vote for any bill so long as it contains a clause of that kind.

British Columbia Telephone Company


Richard Burpee Hanson: There has been a good deal of misconception with regard to this bill; and, putting it fairly and not very strongly, I must say that from a legal point of view there has been some misstatement.
Evidently this company was a consolidation of a number of separate and existing companies away back in 1916. They received from parliament a charter which will be found in chapter 66 of statutes 6-7 George V, 1916. Although the company is one operating wholly within the territorial jurisdiction of British Columbia, it was evidently desired to form a dominion company by invoking the provisions of the British North America Act, because, under section 2 of the statute to incorporate the Western Canada Telephone company, afterwards changed to the "British Columbia" company, the works authorized were declared to be for the general advantage of Canada, which, of course, gives jurisdiction to this parliament.
Evidently the company went on and expanded, and it is now said that the authorized capital stock of $10,000,000 has been fully issued, subscribed and paid up. If I apprehend correctly, there are three distinct classes of shares-two kinds of preference shares, and the common or ordinary shares.
It is a matter of regret that the sponsor of the bill did not make an extended preliminary statement in moving the motion now before the house, because then we would have had from him a statement as to the exact position of the company with reference to the issue of its share capital. I attempted to get that information from the hon. gentleman, when Mr. Speaker intervened to state that, if he spoke at all, it would be by way of closing the debate; and we have not received the information.
What does the company ask for? One of the things it asks for is to be found in section 3 of the bill, which repeals section 6 of the original act dealing with the authorized capital stock of the company. Subsection 1 is purely enabling legislation; let there be no mistake about that. Parliament is asked to grant an increase of franchise authorizing the company, if it complies with certain considerations, to increase its capital stock from $10 million to S20 million; it provides the method by which the shareholders themselves may take the first ordinary steps with regard to that matter, and it puts a limitation of $20,000,000 on the total capital stock of the company to be issued.
If the company is expanding, of course there must be capital expenditure. One way of financing a public utility is by the issuing of
shares-not bonds, as some hon. gentlemen here have suggested. The company is not asking parliament to give any authority with respect to a bond issue. Under its charter it can issue bonds, by the authority of its shareholders, without coming to parliament. That, I believe, must be clear; at least, I would be very much astonished if it were not the situation. I have not seen the balance sheet, but I have no doubt it will show that there is an issue of bonds, which of course are the first charge on a company's assets. Let us be clear on that point.
A telephone company is a public utility; it cannot stand still. There have been in the last quarter of a century more developments, I suppose, made in scientific lines with respect to this great public utility than any other public utility that I know of, with the result that nearly evely community of any size or consequence has an automatic telephone system. What does that mean? It means that plant in which money was invested in days gone by has become obsolescent and, in many instances, is worth little more than scrap. It must be replaced, and it is for the purpose, in part, of replacing it that, under standard systems of accounting, telephone companies and public utilities of this kind are allowed, by the control bodies which have been set up in nearly every jurisdiction, such as public utilities commissions and, in the case of the dominion, by the board of transport commissioners, to set aside substantial sums, varying according to the category of the equipment.
The reserve that is set up-I do not know what it is in the case of this company, but it is characterized as a huge sum-is intended to take care not only of that but of all the unforeseen things that may happen to a public utility of this kind. Go down to the maritime provinces and go through a winter storm there. One storm may cost as much as $150,000. I have seen one storm cost the New' Brunswick Telephone company $100,000. That is paid out of the reserve which is set up for just such contingencies. There is nothing improper about that; it has to be done. You cannot call upon the shareholders to make good dead losses of that sort; you cannot ask the subscribers to increase their rate. These reserves are set up because business judgment, experience and foresight visualize these things, and there is nothing per se wrong about a public utility of this kind having set up, under the authority of law and under the judicial bodies that govern that sort of thing, substantial reserves for depreciation, obsolescence and so on. Let us have that clear.
2512	COMMONS
British Columbia Telephone Company
Therefore I suggest, Mr. Speaker, that any argument based upon the theory that over a period of twenty-four or twenty-five years this company has been able to set aside a large reserve for depreciation is not in itself a condemnation of the company. Let us be judicial about this. Because of that reserve the company is able to take care of certain things in times of stress; it is able to go on and adopt new and improved methods of telephonic communication, in part out of reserves and in part out of new capital. The capital expenditure of a company of this kind is never at a standstill. It is like any other big industry; every year some capital expenditures must be made in order to keep up with the demands on the company itself. If this company is growing at the rate of five thousand telephone outlets a year, I suggest that it is making great progress and is serving an increasing public.
In passing, may I suggest that the rates charged by a telephone company are based not on what the traffic will bear but on the service it gives to a community, subject to the imprimatur of a judicial body which fixes those rates. Primarily the telephone rates of any community are based on the number of outlets that a telephone company serves. In a community of ten thousand people with, we will say, three thousand telephones, one standard rate is fixed. In a community of fifty thousand people, with perhaps ten thousand telephones, a higher rate is paid, because that exchange serves a much wider purpose, and a subscriber is able to reach that many more people. Therefore let us have it clear that capitalization per se has nothing whatever to do with rates. That is a fair statement; and I do not think any hon. gentleman who has investigated the position will disagree with it. Capitalization has nothing to do with rates; and the fact that this company is asking for an authorization to issue stock under certain circumstances- not for the issue of stock-does not carry with it as a necessary consequence that the rates will be increased, as my hon. friend seems to fear. I think that is a fair statement to make, and I am prepared to substantiate it. But the company must go ahead; it must have new capital on which it can draw to take care of these capital expenditures, and that is one of the primary things for which this company is asking.
What are the safeguards with respect to this company? They are exactly the same as are set up in relation to the Bell Telephone Company of Canada. I remember, as I am sure my right hon. friend the Minister of Justice (Mr. Lapointe) will remember, the battles in this house and this city years ago 
over the applications made by the Bell Telephone company to increase its capital stock. This company, like the Bell Telephone company, is under federal jurisdiction; and before it can do anything in the way of issuing stock, aside from the ordinary corporate proceeding of getting the authority of its shareholders, it must make public application to the board of transport commissioners; it must give public notice to all concerned, and it must prove its case. I think that is a fair statement.


Mr. LAPOINTE (Quebec Easit):: That is right.


Richard Burpee Hanson: At least it must make out a strong prima facie case before it can get any authority at all. In addition to that, the board of transport commissioners have power not only to say that the company shall or you shall not issue new stock, but also to say at what rate that stock shall be issued by the company. I remember the great battle that followed the last application of the Bell Telephone company, with regard to the very question of the figure at which the stock should issue. If my recollection is right, the order was made that the new issue of Bell Telephone shares be fixed at $125 a share. Therefore it is not altogether true to say that people are getting eight per cent on their investment in connection with the Bell Telephone. I fancy that the rate of return on Bell Telephone common shares is very much less than eight per cent on the average, because in many instances the proprietors have put more than par into the new extensions.
All right. In addition to that, the board of transport commissioners has power to impose other conditions and obligations upon this company. For instance, in subsection 2 of section 3 of itihe bill there is this provision:
The company shall not have power to make any issue, sale or other disposition of its capital stock or any part thereof, without first obtaining the approval of the Board of Transport Commissioners for Canada of the amount-
They have to show absolutely, dollar for dollar, what they require to issue.
-terms or conditions of such issue, sale or other disposition of such capital stock.
I suggest to the house that under those circumstances, where we set up a judicial body to deal with these measures, aside altogether from the question of whether or not it is expedient to do this in war time, with which I am not going to deal, there are due safeguards with respect to the issue of new capital stock.
So far, perhaps I may be said to have been arguing my hon. friend's case, but I am afraid I must say to him that I really cannot go very

British Columbia Telephone Company
much further for him and still maintain a judicial attitude. There is something wrong; there is a coloured gentleman somewhere in this bill, with respect to this question of redeemable or irredeemable preferred stock, about which we have not been told. If the stock is redeemable in the terms of the issuing resolution as authorized by the original legislation and the corporate proceedings of that company, then I suggest that this portion of the bill which deals with the redemption of the presently outstanding shares is unnecessary. I do not know, for I have not been able to see the resolution.


Karl Kenneth Homuth: That is the nigger.


Richard Burpee Hanson: My hon. friend may be right; I am afraid of it. But what I think the company is attempting is to put itself for future issues of preferred stock in the comfortable position that the English Companies' Act gives them. If I were acting for the company I would certainly strive to get that. If this company were applying for the right to issue preferred shares at this time de novo, probably parliament would give them the rights of issue as laid down by the English Companies' Act of 1929. I see no great objection to it.
What are preferred shares? Preferred shares are a form of capital introduced into a company to finance that company's capital operations. I never knew of a case where a company sold preferred shares to take care of operating deficits. You just could not sell them if a company were in that position. Companies sometimes issue preferred shares rather than bonds, they are a form of loan to companies; loans, we will say, upon which it is not obligatory to pay dividends in certain instances, or the dividends may be cumulative or non-cumulative. But preference shares are a form of aid and assistance to a company which it, when it prospers, may pay off and redeem. When it does, it should have two or three options. If it redeems and cancels, then its share capital should be reduced accordingly; or it may have the right to refund by the same method only on different terms.
I do not know what the position is with respect to the preferred shares of this company; it has not been divulged to this house, and before this bill goes through, it should be abundantly clear that there is no breach of contract with the present holders of the preferred shares. If the shares are irredeemable, the company should not be given the right by legislation of this parliament to take away the contractual rights of these preferred shareholders, many of whom, I suggest the majority, were not the original subscribers for
these shares. They are bought on the public market on the theory that it is a perpetual stock upon which the company can, when it is earned-I assume that condition-pay six per cent interest. That must be made clear to me before I can support this bill. If the sponsor of the bill can show me that there is no breach of contract with these preferred shareholders, that the company is only exercising the original legal rights granted when their charter was issued-


Karl Kenneth Homuth: If they have the right
under the charter, why have it in this bill?


Richard Burpee Hanson: That is the question I have been asking myself. Observe this statement in the explanatory notes to sections 1 and 2 of the bill:
2. Subsection three of section five is new.
I have indicated why it is new; they want to take advantage of the existing provisions of the English Companies' Act; I think that is clear.
The purpose of this subsection is to enable the company to redeem preference shares issued as redeemable shares.
If that is the purpose, they do not have to come to parliament; at least I make that as a prima facie statement. There is some reason which has not been told for them to ask that authority, because if they have it under the original charter they do not need to come here for it.
Then, turning to the succeeding paragraphs, we find a number of them, all of which are quite proper if the authority is required and if the company is to be given a new power to issue new preference shares. For instance, if these shares are cancelled, then under the provisions of the Companies' Act, 1934, the parliament of Canada has provided that such shares shall be cancelled; the Secretary of State may issue a certificate confirming the reduction of capital, on such terms and conditions as he thinks fit, and the company does not have to come back for supplementary letters patent. That is merely a matter of procedure.
Then paragraph (b):
(b) no preference or preferred shares shall be redeemed unless they are fully paid and no premium shall be payable on the redemption of such shares except out of profits which would otherwise have been available for dividend.
That, of course, is a proper provision, that any premium on these shares must be paid out of profits, not out of capital; otherwise the capital of the company would be impaired.
The other paragraphs are not so important. Paragraph (d) leaves the right of re-issue unimpaired, and I think that is probably what they want.
2514	COMMONS
British Columbia Telephone Company


Howard Charles Green: Note the words "heretofore or hereafter'' in the .preceding paragraph.


Richard Burpee Hanson: (c) subject to the provisions of this section the redemption of preference or preferred shares, heretofore or hereafter issued by the company, may be effected in accordance with the terms on which such shares are or have been issued by the company;
That is enabling legislation, of course, and at the moment I do not just visualize what the implications may 'be. You cannot predicate a judgment on this whole question unless you know the terms under which these shares were originally issued, and we have not had it.
Then section 6 deals with the enabling provisions of seotion 3, to which I have already referred. I would have thought, in drafting this measure that would have been the first section in the bill, but apparently the draftsman did not think so.


Karl Kenneth Homuth: Look at section 6 of the 1916 act.


Richard Burpee Hanson: Yes, I am coming to that. I wish to deal for a moment with section 4 of the bill. I see no objection to this section; it provides that, notwithstanding the provisions of our Companies' Act which limits the number of the directors I think ito nine, they may have up to eleven. That is merely a matter of internal management.
Section 5 of this bill is an extension of a principle that was certainly not contemplated at the time this act was originally passed; and may I say that the provisions with respect to investments in the original act were exceedingly conservative, and to my view proper provisions to .put into a public utility company act. In the original charter -this company could only invest moneys of the company, including surplus and sinking fund money not immediately required for the purpose of the company, in trustee securities. That is absolutely sound. That .principle is reincorporated in section 5, but has a tremendous extension. They may do almost anything, so long as it is related to the electrical business. They may, for example, reach out and grab any of the broadcasting stations in British Columbia. I do not know that that is contemplated, but it is possible.
Mr. GREEN; The directors do it, not the shareholders.


Richard Burpee Hanson: Well, the directors must be acting for the company.


Karl Kenneth Homuth: Not necessarily.


Richard Burpee Hanson: Oh, I would think so. Section 16 of the original act defines the powers of the company.

I have made reference to paragraph (i) under section 5, which appears on the opposite page of the bill. This is the section which deals with the investments. Under the new proposed section the company-not the directors, but of course the directors are the moving force in the company with respect to these matters-are to "subscribe for, take or otherwise acquire and hold shares and securities of any other company which furnishes facilities for electrical transmission." They may own power stations, power plants, power transmission lines and so on. Then it continues, "of communications or intelligence by sound or signal," and so on.
In other words this section gives the company power to invest the surplus money of the company in any kind of scheme in furtherance of the business of the company. If I may be frank with the hon. member who sponsors the bill, I do not like that feature.
Under section 6 very far-reaching powers are sought by the company. In the discussion on first reading reference was made to radiotelephone, and there was the statement that it was now in operation. If it is in operation, then it is operating under the authority of the charter. That must be so, without question. If they have the power now, then they do not require it through this bill. I believe an important question is raised in section 6, because although the section is made subject to the provisions of The Radio Act of 1938, and subject to the provisions of other statutes in Canada relating to radio and radio broadcasting, and to the regulations made thereunder- of course the company must come under those regulations-the section goes on to ask for authority to operate "wireless telephones and radiotelephone services, and services for the transmission of sound, pictures, writing, or signals by means of any device, apparatus," and so on.
Parliament may want to give the company this right, but I do not think it is part of the business of a telephone company. I should assume that they already have facilities for radiotelephone service; if they have not, they ought to, because telephone companies are the only people who can give that service. But if they are placed in a new field of electrical transmission business, which may be projected in the immediate future, they will claim a prescriptive or exclusive right. They should not have that power.
That is about all I have to say in the matter.
I believe we ought to pass the part of the bill which involves the principle of providing enabling authority to increase the capital.

British Columbia Telephone Company


Mr. STIRLING:: Except to the Minister of Finance.


Richard Burpee Hanson: My hon.
friend says, "except to the Minister of Finance." That raises an important question. Are we to stop the growth of corporations of this kind by reason of the necessity of war? Each one of us will have to answer that question for himself. I do not think we can stop the progress of a public utility of this kind because of a war. As a matter of fact I would suggest that the increased facilities of a company of this kind might be very beneficial in time of war.


Mr. KINLEY:: It might bring in United
States money, too.


Richard Burpee Hanson: Yes, it
might bring new capital. My hon. friends assume that the new shares will be sold in British Columbia. I would suggest to the people of British Columbia that if this company is as well managed as is indicated in the balance sheet it would be a good thing for them to get in on it. In fact I would not mind having some of these shares myself, if they are as good as that.


Mr. CASTLEDEN:: Buy war savings
certificates.


Richard Burpee Hanson: Of course, that is a factor to be considered. But that means setting up the principle that there shall be no progress for the duration of the war in connection with the activities of a public utility corporation of this kind. It may be necessary; it may be that we shall have to come to that point. Perhaps it is a factor which might well be left to the board of transport commissioners-unless this parliament is going to establish now the principle that there shall be no expansion in any kind of industry. As has been pointed out by the hon. member for Waterloo South (Mr. Homuth), we have gone a long way by order in council under the War Measures Act toward controlling and curtailing expansion of capital expenditures in certain lines of industry. Whether or not we should do it in connection with a corporation of this kind, I cannot say. My personal view is that the company should have the enabling legislation asked for in connection with the increase of capital stock, but that every other portion of the bill should be scrutinized with the greatest care.


Ernest Lapointe: Mr. Speaker, this is a private
bill which, having been passed by the senate, has been introduced in this house. Having had the approval of that august chamber we
may assume that it has been thoroughly considered, because those hon. gentlemen usually complain that they have not enough work to do.


Richard Burpee Hanson: They mean public, not private bills.


Ernest Lapointe: Enough work in general. However, this is a private bill. The discussion on the second reading is merely as to the principle. The leader of the opposition (Mr. Hanson) has clearly stated, and it is set out in an explanatory note, that the principle of the bill is that of obtaining an increase in capital from $10,000,000 to $20,000,000. It is said that that amount is necessary to provide facilities adequate for the needs of the service in British Columbia. It is indicated that the company should have new property, and that it is particularly necessary to direct the development of the lower mainland and Vancouver island.
The rules governing second reading of a private bill are about the same as those for a public bill, but with this very great difference, that the approval is given conditionally. In this connection I shall read two annotations from Beauchesne's Parliamentary Rules and Forms concerning the second reading of private bills. Paragraph 865 is as follows:
The second reading of a private bill corresponds with the same stage in other bills, and in agreeing to it the house affirms the general principle, or expediency, of the measure. There is, however, a distinction between the second reading of a public and of a private bill, which should not be overlooked. A public bill being founded on reason of state policy, the house, in agreeing to its second reading, accepts and affirms those reasons; but the expediency of a private bill, being mainly founded upon allegations of fact, which have not yet been proved, the house, in agreeing to its second reading, affirms the principle of the bill, conditionally, and subject to the proof of such allegations before the committee. Where, irrespective of such facts, the principle is objectionable, the house will not consent to the second reading; but otherwise, the expediency of the measure is usually left for the consideration of the committee. This is the first occasion on which the bill is before the house otherwise than pro forma or in connection with the standing orders; and if the bill be opposed, upon its principle, it is the proper time for attempting its defeat.
And then, paragraph 867:
The house does not profess to decide upon the second reading as to the truth or otherwise of the allegations of fact upon which a proposed bill is based, and in conceding a second reading to a private bill the house is regarded as merely giving its sanction to its general principle on the hypothesis that the committee to which it is afterwards referred finds those allegations proved. It is usual, therefore, to allow the second reading, except when the bill enunciates some principle which the house is not prepared to affirm.

2516	COMMONS
British Columbia Telephone Company
The only principle which should be considered on this motion for second reading is whether the company should be granted the increase in capital for which it is applying.


Karl Kenneth Homuth: This bill is a general
amendment to an act which has been passed and there are other principles involved than the mere increasing of capital.


Ernest Lapointe: That was another private bill. All the sections of the bill may be struck out in committee, and that is where it should be considered. Are we in position to say that the improvement of the position of this company as far as properties and other developments are concerned will not be for the good of the province of British Columbia? I believe the promoters of the bill should have an opportunity of presenting themselves before a committee, and it should be for the committee to decide whether these rights and privileges should be granted to this corporation. I do not think we should take the stand of refusing this corporation the right to come and explain this matter before the railway committee. The hon. member for Waterloo South (Mr. Homuth) and another hon. gentleman have said that this bill looks innocent, perhaps too innocent. I cannot see what harm will be done by giving second reading to a bill which looks so innocent. If it is found to be bad after it comes before the committee, that will be time enough then to defeat its passage.


Mr. M. J. COLD WELL (Rosctown-Biggar):: Mr. Speaker, I came into the house this afternoon with an open mind so far as this particular bill was concerned, although I may have some bias in favour of public ownership. After hearing the various arguments, particularly the one advanced by the Minister of Justice (Mr. Lapointe) just now, I find myself in some disagreement with him. The minister quoted from Beauchesne to the effect that if the allegations upon which representations are made in support of the second reading of this bill are found in the committee to be unfounded, then the house need not subsequently accept the bill.
We are considering this bill under somewhat special circumstances. This week we had introduced the largest budget of expenditures ever introduced in this house. The tremendous amount of money which will have to be raised, either by loans or by other means, will require every dollar that is available in the country for investment. Therefore we ought to consider to what extent a bill of this kind will impinge upon public necessity and public policy. We must consider to what extent a public utility of this

sort should be permitted to go before the public to obtain funds which might otherwise be available for the necessities of the nation. This feature should receive the consideration of the house before the bill goes to committee.
The leader of the opposition (Mr. Hanson) has said that we should consider whether we are ready to adopt the principle that a public utility should not be permitted to expand its capital in war time. I listened carefully to the remarks of the hon. member for Vancouver South (Mr. Green) and I think he showed quite clearly that this company has paid what is to-day a high return upon its capital, a rate of eight per cent. He suggested, I think with reason, that if the company would reduce this rate of dividend or profit to three per cent, the difference might be utilized for capital expansion and the extension of facilities. It has been shown also that the company has an investment in city of Vancouver and other bonds, and that these are sufficiently liquid to be realized upon. I realize that that will interfere somewhat with the argument I advanced first.
Before this bill goes to the committee I think we should decide whether the circumstances of this company and the necessities of the nation are such as to justify the granting of this call for additional capital at this time. I have no hesitation in saying that my own reaction would be in the negative. I would oppose the bill on the grounds I have indicated, as well as on other grounds.
The hon. member for Vancouver South and the leader of the opposition referred to the wide powers in connection with television and so on being granted by this bill. They go far beyond anything that now -exists, because any further developments or discoveries in these fields will accrue to the advantage of the company if these powers are granted. These are things which might properly come before a committee and which need not be the subject of much debate at the moment.
But I do submit that the other consideration which I have advanced, the necessity of this country raising vast sums of money by taxation and the realization that there is a tremendous gap of over a billion dollars which is not covered by taxation or in any other way, ought to be considered. So far as I am concerned I feel that until the necessities of the nation have been provided for we have no right to give even tacit approval to a bill which will enable a company, which has other resources and which may not need the money, to go out and obtain from the public funds which we ourselves will need badly in the near future.

Labour Condilions-Government Policy


George Black: Mr. Speaker, I fail to see why there should be such haste in attempting to put through this legislation. It might almost be called indecent haste. This bill is No. 47 on the order paper and we are being asked to consider it ahead of forty-six other items of business which precede it on the order paper. The discusssion of this bill has held up the vote of S35,000,000 which we have been considering and the other general estimates of the Department of Agriculture.
As hon. members have properly said, this company, which has a monopoly of the telephone business in British Columbia, is asking for the right to offer most attractive shares to the public, shares which will bear interest rates of from six to eight per cent. These shares will be sold in opposition to government loans and war savings certificates which bear interest rates of only three per cent. The people are being urged to buy these war loans and war savings certificates and I am sure that no complaint would be raised if they did not receive even the low rate of three per cent. They will be lucky if they get their money back.
The present powers of this monopolistic company are now sought to be greatly enlarged so that they will become not merely a telephone company but may go into television, money lending, the moving picture business, and what-not if this bill goes through. There is one thing they certainly should do, and I say this knowing the city of Vancouver, and having lived there for a good many years and taken part in its private and public life. The city of Vancouver is beautifully situated, but it will never be a beautiful city while its streets are hampered and disfigured by a forest of hideous telephone poles and sagging, unsightly wires which a company with the wealth of this one could very well conceal underground in the modern way. If they came to this house and said they wanted money for that purpose, I would be more in favour of supporting their application. But in the meantime I -can see no reason why the time of the house should be taken up in discussing this legislation further.
On motion of Mr. Mayhew the debate was adjourned.



THE UKRAINIAN CATHOLIC MISSION OP THE MOST HOLY REDEEMER

[Stage Direction]
Mr. G. J. McILRAITH (Ottawa West-for Mr. Fleming) moved the first reading of Bill No. 28 (from the senate), to incorporate the Ukrainian Catholic Mission of the Most Holy Redeemer.
14873-159}
He said:' Mr. Speaker, this is a bill for the incorporation of a society or order of priests, the Ukrainian branch of the Redemptorist order. The Redemptorist order in Canada was incorporated, in 1900 by 63-64 Victoria, chapter 96, as the Congregation of the Most Holy Redeemer. The Ukrainian branch of the Redemptomsts was incorporated in Saskatchewan in 1917, by chapter 36 of the Saskatchewan statutes of that year. The headquarters of the order are at Yorkton, Saskatchewan, but their activities have extended throughout Alberta and Manitoba, and they are working now in Montreal, Ottawa and other parts of eastern Canada. By reason of the fact that -they are now quite numerous in provinces other than Saskatchewan, they desire dominion incorporation.
Motion agreed to and bill read the first time.


[Stage Direction]
On the orders of the day:
Richard Burpee Hanson: Mr. Speaker, in view of what took place this week in connection with the National Steel Car plant, when the government, under the authority of the War Measures Act, took over the plant on the plea that there had been a stoppage of production of war materials and supplies, and in view of the situation at present existing in relation to the Peck Rolling Mills in Montreal, will the Minister of Labour and/or the Minister of Munitions at an early day state the policy of the government in relation to the labour problem now confronting the country, and will the government afford an early opportunity for a discussion of labour policy and the whole labour situation?


Hon. N. A. McLARTY (Minister of Labour):: Mr. Speaker, my colleague the Minister of Munitions and Supply (Mr. Howe) is engaged in other business at present. In view of the broad questions which the leader of the opposition has asked, of Which he was kind enough to give me notice, I do not think I would be in a position at the present time to afford him a reply as to the time when the general problem of labour policy might be most appropriately discussed in the house.
He has mentioned the names of the Hamilton branch of the National Steel Car Corporation and of the Peck Rolling Mills of Montreal. There is an essential difference, Mr. Speaker, between the two companies. The National Steel Car Corporation at Hamilton had contracts from the government of Canada for the manufacture of munitions and
Labour Conditions-Shipping

war supplies. The Peck Rolling Mills of Montreal had none and have none from the government.
I might suggest, without going into a detailed discussion at the present time, whihh I think the leader of the opposition will agree would not be appropriate, that the dispute involving the National Steel Car Corporation was referred to a 'board, and that board brought in an interim report.
Advertisements have appeared in the papers addressed by the president of the company to its shareholders, and unquestionably that is his undoubted privilege. But I did not think that this was a matter in which any statement could appropriately be made in connection with the facts as stated in the advertisement because the matter is still under consideration by the board. The board's present report is purely an interim one. Certain statements are made in the advertisement, but I do not think this is the appropriate time to discuss them, except to say that the board was appointed for the purpose of determining the facts. My information is that certain statements made in the advertisement do not coincide with the evidence given before the board at its interim sittings. But it would be unfair for me to go into a statement of the allegations made, in view of the fact that the matter is before the board. To determine the facts and report upon them is the function of the board.
The government of Canada, however, has another function, namely, to keep the stream of war materials flowing without interruption, to keep the logs and the underbrush clear from that stream; and in taking the action which it did the government gave recognition to that extremely important function at the present time. May I suggest, however, Mr. Speaker, without going into too much detail at the moment, that whether that stream is clogged by employers or by employees, in either event the government of Canada realizes the importance of keeping the war materials flowing in its uninterrupted course.



SHIPPING INDUSTRY-ALLEGED ACTION OF GOVERNMENT AGENCIES IN DISPUTE WITH COMPANIES

[Stage Direction]
On the orders of the day:
Angus MacInnis: I should like to ask a question of the Minister of Labour (Mr. McLarty). I am in receipt of a letter from Mr. Dewar Ferguson, the acting president of the Canadian Seamen's union, in which he complains that government agencies are acting to the detriment of the union in the existing dispute with certain shipping companies. Mr. Ferguson states that

strike-breakers have been escorted through picket lines by members of the Royal Canadian Mounted Police, while at the same time a police guard prevents sailors on board these ships from conferring with officers of the union.
I think this is a serious charge, and I would like the minister, if he has the information, to make a statement.


Norman Alexander McLarty: The hon. member was good enough to notify me that he would ask the question. The reference to federal "government agencies" is so broad that I do not know what agencies are referred to, other than the specific one which is mentioned, the Royal Canadian Mounted Police.
The suggestion made in Mr. Ferguson's letter is one which he made some time ago, and at that time the Commissioner of the Royal Canadian Mounted Police made a definite statement, which, as I recollect it, was to the effect that there was no truth whatever in the assertion. When I received the notice from the hon. member for Vancouver East (Mr. Maclnnis) I asked the commissioner if anything had taken place since he had given that statement which would justify any such present suggestion on the part of Mr. Ferguson. He stated emphatically that nothing of the kind suggested had occurred.



CORVETTE CONSTRUCTION-TRANSFER OF LABOUR TO SHIP REPAIRING

Mr. CLARENCE GILLIS (Cape Breton South):: With reference to the same subject, has the attention of the minister been drawn to the fact that labour employed in corvette construction at Port Arthur has been transferred to ship repairing, particularly for the Misiner company, thus delaying the construction and launching of corvettes? Under these circumstances does not the minister think it necessary to demand that the remainder of the companies conform to the recommendations of the McTague commission, so that the whole question may be settled? Some of the companies have refused to accept the awards of the conciliation boards.


Norman Alexander McLarty: The information which the hon. member gives is something I am hearing now for the first time. I would not want to give any answer at present, without having an opportunity of checking the facts contained in the statement he has made.


Clarence Gillis: That information comes from union officials in Port Arthur.

Bacon Board



QUESTION AS TO PEGGING OF MINIMUM PRICE

[Stage Direction]
On the orders of the day:
Mr. ROBERT FAIR (Battle River):: According to this morning's newspapers the maximum price peg on butter has been removed, because, as stated by an official of the war-time prices board, it is no longer necessary. I believe the time has come when a peg is necessary at the other end-when a minimum price should be fixed; and I would ask the Minister of Agriculture, who has had the matter under consideration for some time, when we may expect the minimum price to be pegged.


Hon. J. G. GARDINER (Minister of Agriculture) :: Mr. Speaker, as I stated the other
day, the matter is under consideration and will be dealt with at the appropriate time.



BACON BOARD IN CREASED PRICES FOR EXPORTS TO GREAT BRITAIN

[Stage Direction]
On the orders of the day:
Hon. W. E. ROWE (Dufferin-Simcoe):: In
view of the statement in this morning's press that higher prices are to be paid by the bacon board for bacon shipped to the United Kingdom, I should like to direct a question to the Minister of Agriculture.
According to the press statement the bacon board will pay an extra $1 per hundred pounds to packers for bacon exported to Britain, making the price for grade A No. 1 Wiltshire sides $17.10 per hundred pounds, and the new price goes into effect on "all products put into cure for export from hogs purchased on and after May 2." The report goes on to say that the additional payment by the bacon board will increase prices in the domestic market and thus cut down consumption and have a stabilizing effect on prices within Canada. Hon. J. G. Taggart, Saskatchewan agriculture minister and bacon board chairman, said he could not say whether the additional $1 per 100 pounds would be carried by the United Kingdom or Canada. He said announcement in this respect would be made later by federal authorities.
The United States government announced it proposed to hold live hog prices near the $9 mark to encourage production.
I would therefore like to ask the Minister of Agriculture: (1) What steps are being taken to assure that this increased prjce will reach the Canadian producers? (2) Has the Canadian government any plans to hold live hog
prices similar to the United States government plan? (3) Will the extra $1 per hundred pounds be carried by the United Kingdom or Canada?


James Garfield Gardiner: Mr. Speaker, the hon. member was kind enough to give me a copy of the questions which he proposed to ask. I would reply as follows:
Owing to higher prices in the United States hog market, and increased demand in the Canadian domestic market for pork products, the bacon board has been unable to meet the request of the British Ministry of Food to forward larger weekly shipments of bacon to the United Kingdom. To obtain larger supplies for export the bacon board has increased the price of bacon by $1 per one hundred pounds, following an agreement with the British Ministry of Food that the price of bacon for shipment to the United Kingdom would be increased 5 shillings per 112 pounds at seaboard for the balance of the contract, with the understanding that any further advances which may be necessary to secure the required supplies will be met by the Canadian government, and that should lower prices obtain as a result of changes in the United States hog prices, the price of bacon to the United Kingdom will be adjusted accordingly.
It will be recalled, Mr. Speaker, that on reporting the agreement with Great Britain to the house, I indicated to the house that there was an undertaking that if the price of hogs went up in the United States to a point which endangered the shipment of bacon to Great Britain, the price would be reconsidered. The price has been reconsidered, and an offer in accordance with the terms I have just recited has been made to the bacon board by the British government and has been accepted by this government.
The hon. member's first question is: What steps are being taken to assure that the increased price will reach Canadian producers? The same steps as have been taken in the agreement up to date. That is, the matter is under consideration at all times by the bacon board; they are getting in contact with the different organizations which are purchasing from farmers here and there across Canada, and seeing that the prices do bear a proper relationship to the price being paid.


Richard Burpee Hanson: What about the stocks in storage in the hands of the packers?


James Garfield Gardiner: The stocks in storage that have to do with this trade have been put in storage on order of the bacon board.
Bacon Board


Richard Burpee Hanson: So that they have control?


James Garfield Gardiner: Yes.


William Earl Rowe: It is effective only after May 2, is it not?


James Garfield Gardiner: The order was made effective yesterday, May 1.


William Earl Rowe: But that is not to apply to bacon already processed, is it?


James Garfield Gardiner: No, not to bacon already processed.
The next question is whether the Canadian government has any plans to hold live hog prices similar to the United States government plan. WTell, as I understand the United States government plan, it is operated under the surplus purchasing 'board which has been functioning for some time in the United States, purchasing surplus food supplies and distributing them, I think on the issue of stamps, to persons who are on relief or otherwise unable to purchase, and in other ways to people who would not use as large quantities of these commodities. My understanding is that that same board is empowered at present to purchase certain food products, including hogs, on the different markets in the United States, and some of them may be distributed under the lease-lend act to the British market as well as to the United States market. That is the only control that I know of, and it is exercised only by purchasing off the market from time to time. We have had in effect exactly the same thing ever since the British agreement came into effect in 1939. That is, we have been purchasing all the surplus hogs off the Canadian market and shipping them to Great Britain under that agreement, which resulted, in the year 1940, in hogs standing at a level of an average of about three cents higher than the market price. The United States during that period were buying certain surpluses, but not sufficient to keep their price up; there was too large a production of hogs.
The next question is whether the extra $1 per one hundred pounds will be carried by the United Kingdom or Canada. That is explained in the answer which I have already given. Under certain circumstances it will be carried by Britain and in other circumstances it will be carried by Canada, as indicated in the statement I just made.


William Earl Rowe: It will be the same as a bonus?


James Garfield Gardiner: No, it will not be the same as a bonus. The price now paid by the British is five shillings higher than it was. Under the original agreement it was 80 shillings per 112 pounds; it is now 85 shillings
[Mr. Gnrdiner.?
per 100 pounds, which results in there being available about one cent a pound more, or $1 a hundred pounds. If the price should advance beyond 85 shillings on the United States market, the Canadian government undertakes to be responsible for that increased amount, and if it drops on the United States market, we have taken on ourselves the obligation of reducing the price to Great Britain by the amount of that drop below 85 shillings.


William Earl Rowe: I did not send a copy of this question to the minister, but perhaps I may ask whether we are to understand that if the price goes either up or down in the United States, our hog prices will be governed accordingly?


James Garfield Gardiner: I would assume so, Mr. Speaker. That has been the effect so far. We should then have to make the choice whether we were going to purchase supplies on this market at a price which would compete with the United States price and send them to Great Britain. If we did that, under this agreement with Great Britain the Canadian government would have to bear the expense.



SALVAGE CAMPAIGN


[Stage Direction]
On the orders of the day:
Mr. E. E. PERLEY (Qu'Appelle):: Within the last few days I have received two or three letters from officials of urban and rural municipalities in Saskatchewan who are interested in the salvage campaign. They appear to be somewhat confused, owing to reports appearing recently in the western press similar to the following statement which appeared in the Western Producer of April 17:
The national salvage campaign for the collection of scrap metal will not apply to the provinces of Saskatchewan, Manitoba and British Columbia because "prices and freight rates" are too high, according to a circular issued by Hon. T. C. Davis, deputy minister of national war services, Ottawa. Possibility of some adjustment in freight rates so that the campaign could be extended to the west was indicated, however.
My question is, has there been any adjustment of freight rates and prices, and has any information gone forward to the committees that are organizing and working on this salvage campaign in the provinces mentioned?


James Garfield Gardiner: The matter has been under discussion, but I will have to make inquiries in order to ascertain whether any decision has been arrived at.

Supply-Agriculture-Wheat Acreages



PRESS REPORT AS TO USE BY PRIVATE COMPANY IN BRITISH COLUMBIA

[Stage Direction]
On the orders of the day:
Mr. M. J. COLDWELL (Rosetown-Biggar):: I am Sony the Minister of National Defence (Mr. Ralston) is not in his seat. On April 8 I asked a question with regard to a statement by Mr. S. G. Blaylock, president and managing director of the Consolidated Mining and Smelting Company with respect to a tank which he said the company had in its possession, ready for instant use. The minister was not able to reply that day. He did give me a partial answer privately, but since then I have been asked several times as to the facts. I should be glad if this matter could be drawn to his attention so that he might give a considered reply at an early day.


Ernest Lapointe: I shall certainly do so.



CANADIAN WHEAT BOARD


[Stage Direction]
On the orders of the day:
James Angus MacKinnon: Just before the
adjournment last evening, while I was out of the house, the leader of the opposition (Mr. Hanson) made a statement which is reported at page 2498 of Hansard, and in reply I should like to make a brief comment. The statement was as follows:
I should like to ask the Minister of Trade and Commerce for some definite information with respect to the wheat board, which I think the country is entitled to know-that is, with regard to the amount of cash wheat being carried by the board, the amount of wheat carried in other ways, the obligations of the board to the banks, and what-not.
Then the hon. gentleman went on to say:
There is no such situation existing to-day as there was at the time of the McFarland operations-
That is just what prevents me from making an immediate reply.


Richard Burpee Hanson: All right.


James Angus MacKinnon: At the time of the appointment of the McFarland board and for some years after the secrecy that was maintained was a matter of concern, and a matter of dollars and cents, to many individuals and firms.


Richard Burpee Hanson: And to Canada.


James Angus MacKinnon: And to Canada. To-day it has to do with the feeding of the people of the United Kingdom, our allies. The information that would be given in answer to this question, were it answered fully, I am sure would be very valuable to the enemy, since it would have to do with the amount of grain in store not only in this country but elsewhere.


Richard Burpee Hanson: Surely the minister is joking. They know as much about it as we do.


James Angus MacKinnon: I am answering the question, and I do not wish any interruptions before I have concluded. In spite of that fact, which I think is very obvious, I propose to discuss the matter with the officials of the wheat board and with my colleagues.

The house in committee of supply, Mr. Vien in the chair.



DEPARTMENT OF AGRICULTURE

[Stage Direction]
J/22. Special. To provide for payments on reductions in 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, $35,000,000.
Mr. DOUGLAS (Weyburn):: There are two matters to which I should like to draw the attention of the minister with reference to the regulations which are now before the committee. Two years ago, when the minister brought in the bill providing for a bonus to be paid in cases of crop failures, the bill contained a clause providing that the bonus could not be attached. That was a very good provision; I think it prevented a great many people from losing all or part of their bonuses. Has the minister given any consideration to inserting a provision of that kind in these regulations? I know that when I was at home a number of municipal officials in the part of Saskatchewan from which I come asked me if something could be done along this line. They are afraid that if this is not done, many of the people whom the government wish to help will not receive this bonus. That is the first suggestion I should like to make to the minister.


James Garfield Gardiner: The regulations provide that the payments made to the farmers

that is, two-thirds of the amount in all cases and the total amount in cases where there is no claim against the land-will be paid directly by the government by cheque. It is not the intention of the government to acknowledge
2522	COMMONS
Supply-Agriculture-Wheat Acreages
any claims against those cheques; they will be sent direct. Anyone having any claim will have to collect after the money arrives.


Thomas Clement (Tommy) Douglas: Then there is no danger at all that this money can be attached. I wanted the minister's assurance on that point.
Then, without belabouring the point I made last night, I wish to reiterate my plea with reference to the setting up of a minimum wheat acreage percentage for each farm. I have the telegram which I mentioned last night, from the secretary of rural municipality No. 64, Mr. W. M. Iiehoe, in which he states:
Due to continued reduction of wheat acres over period of drought years large percentage of farmers here have low wheat acreage in 1939 and 1940. Present acreage reduction set-up spells financial disaster. Imperative that minimum acreage basis be established or some other change in plan for this area.
Council R.M. No. 64,
W. M. Kehoe,
Secretary.
I have also a resolution which was passed by the rural municipality of Fillmore No. 96, which states:
Whereas it is the opinion of the council of this rural municipality of Fillmore No. 96 that during the past ten years of drought conditions in southeast Saskatchewan, wheat acreage has been reduced from what was considered normal wheat acreage and
Whereas under the present wheat acreage reduction plan the small farmer is at a decided disadvantage and in a great many cases is not in a position to take advantage of the wheat acreage reduction scheme;
Therefore it is resolved by the council of this municipality that we petition the federal government to fix the wheat acreage at fifty per cent of the total cultivated acreage on each farm.
In our opinion this would eliminate a great deal of difficulties and inequalities in the administration of the scheme.
I am not prepared to suggest to the minister what the percentage might be. He is in possession of the figures. I realize that in the northern part of the province they do not put in' as large a percentage of the cultivated acreage in wheat as we do in the south, or have normally done until the drought hit us. Therefore it may be that fifty per cent is too high; last night I suggested forty per cent, but I should like the minister to give some consideration to the matter. I do not think he has given any reason yet why what has been suggested should not be done. I think it is more just now than ever, in view of the fact that he has now amended the regulations to provide for a maximum wheat acreage. It would seem that if the man with all his land in wheat is going to have only eighty per cent recognized, equally the man who had none in 
wheat last year should have thirty or forty per cent recognized. If that is not recognized, the value of this scheme is going to be almost negligible so far as the people represented by this resolution are concerned.


James Garfield Gardiner: Dealing with the last
point first, I was scarcely correct last night in giving the reply I did to the question of the hon. member for Weyburn in these terms, as reported on page 2487 of Hansard-.
Mr. Douglas (Weyburn):	Does that apply
only where they have 80 per cent of their cultivated acreage in wheat both years? If a man had 90 per cent last year, and 70 per cent the year before, would 90 per cent of his land be taken as a basis for last year?
Mr. Gardiner:	No. It is not higher than
80 per cent on any of them.
On reading yesterday's Hansard, I realized that my answer was not the correct one. The object of these regulations is to reduce the 1940 acreage seeded to wheat. Where a farmer has followed the practice of varying his acreage from year to year, it is our desire to encourage him to start at the top of his 1940 wheat acreage and reduce it as far as possible.
Provision has been made in another subsection of the regulations to take care of cases where the variation has been one-third or more, which would indicate that the farmer was doing something during 1940 which it had not been his custom to do. In the cases where the variation has not been greater than one-third, no matter what percentage of his cultivated acreage he may have had in wheat, it is not our intention to reduce the point at which he starts his reduction of wheat acreage. In other words, there is not a maximum set for the acreage of all farmers; it was only some particular cases. There is always the possibility and the probability that where a man's records do show ninety per cent last year and seventy per cent the year before, such acreage is associated in some way with land which has been newly broken up, and if the man actually did have the land in wheat last year it would not be fair to ask him to start at some other level.
On the other hand, it is not a reasonable thing for a man to sow all his land to wheat two years in succession. The only case I can conceive of where that would be reasonable would be in cases where a man had land broken up in 1938 and all seeded to wheat in 1939, back-set in 1939 after the crop was taken off and then seeded to wheat again in 1940. That is quite legitimate; that can happen.
We have stated in another regulation that we permit of only eighty per cent of new breaking being considered as wheat acreage in 1940. It is thought that since the only

Supply-Agriculture-Wheat Acreages
conceivable case where it would be the proper thing for ail a man's land to Ibe sown to wheat two years in succession is that associated with new breaking, eighty per cent should apply in the regulation which deals with the farm on which all the cultivated acreage is in wheat for two years in succession. If he has done it for any other reason it is hard to believe it would be for any reason other than to benefit by possible high prices since the war started, and therefore we are cutting the man who has all his land in wheat down to eighty per cent. But we are not interfering with the man who has been varying his acreage back and forth and who was sometimes above eighty per cent and sometimes under seventy per cent; we take his last year's acreage whatever it was, provided it was not increased or decreased by more than one-third.
To answer the other question, I have both the telegram which was read to the committee and the resolution. I answered both, one to the organization and the other to the secretary, and stated what I stated last night and had already stated to the representative of those communities when I was in Saskatchewan, namely, that to follow the suggestion which they made would in our opinion be impossible; it would have a tendency to encourage some people to go into wheat rather than encourage them out, and in other instances it would have a tendency to start to pay people at a level of acreage that they have never had in the growing of their wheat.
I would say further that unless there is something important that hon. members wish to discuss, I think we have had quite a long discussion on this matter. I am sorry we did not have more of the afternoon for it. I am afraid, however, there is some uncertainty in the minds of some people who are now seeding their crop. largely because of the fact that we continue discussing the question, whether or not the regulations are actually passed. As a matter of fact, the regulations are passed under the War Measures Act and are in effect, but the discussion going on seems to create some uncertainty, and people keep telegraphing and writing me as to whether it is certain that these regulations are going to be in effect. As a matter of fact, they are in effect now, they are the law now, and we are doing our best to convince people of that.
So far as this item is concerned, it is merely the vote that provides for the expenditure of money. The amount spent may be larger or smaller than the amount voted, but the regulations which became law under the War Measures Act provided that certain things are to be done and certain payments made, and the money will have to be found to 14873-160
meet these as the money is found under any legislation passed by the parliament of Canada. I should like to see this vote go through this afternoon if at all possible.


Mr. ROSS (Souris):: Would the minister agree to place on Hansard these regulations, in order that producers may be able to refer to them in detail and that they may have as much publicity as possible?


James Garfield Gardiner: I should be pleased to do that if the committee will permit.


Richard Burpee Hanson: I think it is desirable.


The CHAIRMAN:: With the unanimous consent of the committee that may be done, but no reference may be made other than by a question to the minister, because the regulations themselves have not been referred to the committee. The only thing that has been referred to the committee is the item of $35,000,000. But with the unanimous consent of the committee the regulations may be put on the record.


Ernest Lapointe: It is unanimous.


James Garfield Gardiner: The following are the regulations:



REGULATIONS

[Stage Direction]
Re payments in respect of wheat acreage reduction as consolidated by order in council P.C. 3047, April 30, 1941.
1.	In these regulations unless the context otherwise requires-
"coarse grains" means barley, oats, rye, corn, peas, flax and millet.
"farm" means the total land being operated as a unit.
"farmer" means an owner operator, or tenant operator of a farm.
"grass" means all grasses, clovers and alfalfa.
"landlord" means an owner of a farm operated by another person and includes a mortgagee or unpaid vendor who by contract or by law has a right to or a lien on or ownership in a part of the crop grown on a farm.
"minister" means the Minister of Agriculture.
"summer-fallow" means the cultivation of fallow land prior to and including July 31, 1941, in such a way as to conserve soil moisture or to prevent soil drifting, or both.
Wheat Acreage Reduction
2.	(1) For the purpose of these regulations the wheat acreage reduction on any farm shall be computed by deducting the number of acres sown to wheat on such farm in 1941 from the number of acres sown to wheat on such farm in 1940.
(2)	For the purpose of computing the wheat acreage reduction
(a)	In respect of any farm-
(i)	On which no land was sown to wheat in 1940 the land sown to wheat in 1939 shall be computed as the land sown to wheat in 1940,
[Stage Direction]
2524	COMMONS
Supply-Agriculture-Wheat Acreages
unless it exceeds 60 per cent of the cultivated acreage on such farm in 1940 in which case the number of acres sown to wheat in 1940 shall be computed to be 60 per cent of the total cultivated acreage on such farm in 1940.
(ii)	On which no land was sown to wheat in
1939	the land sown to wheat in 1940 shall be computed to be the land sown to wheat in 1940 unless it exceeds 60 per cent of the cultivated acreage on such farm in 1940, in which case the number of acres sown to wheat in 1940 shall be computed to be 60 per cent of the total cultivated acreage on such farm in 1940.
(iii)	On which 80 per cent or more of the cultivated acreage in 1940 was sown to wheat in 1940 and on -which 80 per cent or more of the cultivated acreage was sown to wheat in 1939, the number of acres sown to wheat in
1940	shall be computed to be 80 per cent of the total cultivated acreage on such farm in 1940.
(iv)	Other than any farm covered by any of paragraphs (i), (ii) or (iii) of this subsection on which there has been a variation of one-third or more between the number of acres sown to wheat in 1939 and the number of acres sown to wheat in 1940, the number of acres sown to wheat in 1940 shall be computed to be the average number of acres sown to w-heat in 1939 and 1940, provided that the acreage added under subsection (b) of this section shall not be computed as having increased the 1940 acres sown to wheat.
(b)	In respect of any farm on which the
number of acres under cultivation was increased during 1940 by breaking any part or parts thereof not previously broken, eighty per cent of the number of acres by which the number of acres under cultivation on such farm was so increased shall be computed to be included in	the number	of acres	sown to wheat	on
such farm in 1940, and the other 20 per cent be computed as coarse grains.
(c)	In respect of any farm on which no land
was broken prior to 1940, if any land was broken on such farm during 1940. 80 per cent of	the number	of acres	so broken shall	be
computed to be the number of acres sown to wheat on such farm in 1940, and 20 per cent thereof shall be computed as sown to coarse grains on such farm in 1940.
(3)	For the purpose of computing the number of	acres sown	to coarse	grains or grass	or
summer-fallowed in 1940,
(a)	In respect of any farm on which the
number of acres sown to wheat in 1940 is computed under section 2 of this regulation to be reduced below the number of acres actually sown to wheat on such farm in 1940, the number of acres sown to coarse grains, or	grass or summer-fallowed on such farm
in 1940 shall be computed by adding the number of acres by which the wheat acreage is computed to be so reduced to the number of acres actually sown to coarse grains or grass or summer-fallowed in 1940 proportionally to the number of acres actually so sown or summer-fallowed.
(b)	In respect of any farm on which the number of acres sown to wheat in 1940 is computed under subsection (a) of section 2 of this regulation to be increased above the number of acres actually sown to wheat on such farm in 1940, the number of acres sown to coarse grains or grass or summer-fallowed on such

farm in 1940 shall be computed by deducting the number of acres by which the wheat acreage is computed to be so increased from the number of acres actually sown to coarse grains or grass, or summer-fallowed in 1940, proportionally to the number of acres actually so sown or summer-fallowed.
(c)	In respect of any farm on which the number of acres computed to be sown to wheat in 1940 is the average of the number of acres sown to w-heat in 1939 and 1940, the number of acres summer-fallow-ed or sown to coarse grains and grass in 1940 shall be computed by averaging the number of acres so sown or summer-fallowed during 1939 and 1940.
(4)	When computing any number of acres in respect of any farm for the purposes of these regulations, a fraction of less than half of one acre shall be dropped and a fraction of one-half or more of one acre shall be taken as one acre.
Payments
3.	(1) The minister may, on or after July 1, 1941, in respect of any wheat acreage reduction on any farm, pay
(a)	The sum of $4 in respect of each acre which is summer-fallowed in 1941 in excess of the number of acres which are computed under regulation 2 hereof as summer-fallowed in 1940.
(b)	The sum of $2 in respect of each acre which is sown to coarse grains or grass or both in 1941 before July 1, in excess of the number of acres which are computed under regulation 2 hereof, as in coarse grains or grass or both before July 1, 1940.
(c)	The sum of $2 in respect of each acre which is sown to rye or grass or both after July 31, 1941, in excess of the number of acres of cultivated land which are computed under regulation 2 hereof to be sown in rye or grass before July 1, 1940.
(2) The minister may pay an additional sum of $2 in respect of each acre in respect of which any payment may be made under section (1) of this regulation, which was sown to grass or rye in 1941 and is in grass or rye on July 1, 1942, provided that such acreage in grass in 1942 is additional to the acreage computed to be in grass at July 1, 1940.
Applications
4.	A farmer to be eligible for any payment with respect to wheat acreage reduction shall make application not later than May 31, 1941, to the secretary of the municipality in which be resides or, in the case of unorganized areas, to the provincial government, on a form to be distributed by the municipal secretary or the provincial government as the case may be, and on fulfilment of one or more of the provisions of regulation 3, shall submit a sworn statement or statements of claim for payment.
5.	A landlord to be eligible for any payment with respect to wheat acreage reduction shall make application not later than May 31, 1941, to the secretary of the municipality in which the land in which he has an interest is located, or, in the case of unorganized areas, to the provincial government and on or before June 30, 1941, shall submit a sworn statement or statements of claim for payment on a form provided for this purpose.
Crop Share Leases and Agreements, etc.
6.	If by the terms of any contract, agreement or lease, any farmer is bound to sow to wheat any part or proportion of his farm, and if such farmer desires to become eligible

Supply-Agriculture-Wheat Acreages
for any payment under these regulations, such farmer shall be entitled to reduce the number of acres sown to wheat on his farm to such extent as he sees fit and to sow to coarse grains or grass or to summer-fallow such wheat acreage reduction, notwithstanding the terms of such contract, agreement or lease, but the provisions of this regulation shall not be deemed to relieve him of the performance of any other of the terms or provisions of the said contract, agreement or lease.
7.	Notwithstanding the provisions of any dominion or provincial statute or any regulations or orders made thereunder or anything done pursuant thereto, a landlord shall be entitled to a proportion of any monies paid under these regulations in respect of his farm as hereinafter set out, that is to say,
(a)	In the case of a farm in respect of which the landlord is entitled to a share of one-third or more of the crop returns on the whole of the farm, a proportion of not more than one-third of the amount so paid,
(b)	la	the case	of	a farm	in	respect	ofwhich	the	landlord	is	entitled	to	a share	of
one-third or more of the crop returns of a part only of such farm, a proportion of not more than one-third of such part of the amount so paid as is in the same proportion to the whole amount so paid as the number of acres under cultivation on the part of such farm which is owned by such landlord is in proportion to *the number of acres under cultivation on the whole of such farm,
(c)	In the case	of	a farm	in	respect	ofwhich	the	landlord	is	entitled	to	a share	of
less than one-third of the crop returns on the whole or any part or parts of the farm, a like lesser proportion of the amount so paid, calculated in a manner similar to that set out in the next preceding subsections (a) and (b), in the cases therein specified.
8.	(1) In any case where two or more persons make application to the minister for, and are eligible or are entitled to share in any monies payable under these regulations in respect of the same farm, payment of two-thirds of such monies or such greater proportion thereof as may be payable to the farmer in any case falling within the terms of regulation 7 (c) hereof, may be made to the farmer.
(2)	In any such case payment of one-third of such monies or such lesser proportion thereof as may be payable to the landlord or landlords under the terms of regulation 7 hereof, may be made to the landlord or landlords in accordance with his claim or their claims.
(3)	In any such case, in the event of a dispute as to the proportion of any such monies to which the landlord or landlords are entitled under these regulations, payment may be made to such person or persons as the minister may deem to be so entitled or in accordance with the terms of any agreement which may be entered into between the claimants thereto for the purpose of settling such dispute.
9.	Payment may be withheld under these regulations with respect to any farm which was operated by a tenant in 1940 and is operated by hired labour in 1941 unless the lease was cancelled by written notice served prior to March 12, 1941, or by written agreement between the landlord and the tenant after March 12. 1941.
10.	No payment shall be made with respect to reduction in wheat acreage on the following lands:
(a)	Parra lands operated as experimental farms.
(b)	Farm lands declared sub-marginal under the provisions of a provincial statute and not occupied in 1940.
(e) p'arm lands operated by provincial governments, government institutions, or universities.
11.	Every person shall be guilty of an offence under these regulations and liable on summary conviction to a fine not exceeding one hundred dollars, who
(a)	In respect of any information or return required by these regulations, submits false information or makes a false return thereto.
(b)	Falsely claims to be entitled to any payment under these regulations.
12.	The minister may require the operator of any country elevator to make available to him or his authorized representative all or any information which such operator has with respect to the farming operations of any person or persons in any year.
13.	The minister may, with the approval of the governor in council appoint such administrative and technical officers and employees as he may deem necessary for the purposes of these regulations and at such rates of pay as may be likewise approved.
If- Tjie minister may appoint such temporary, held, clerical or other assistance as may be required, the rates of pay to be approved by the governor in council.
15. The minister may pay, out of monies appropriated by parliament all administrative including travelling and other expenses incurred under these regulations.
Robert Fair: There was a change accepted by the minister on April 8 which I see is omitted in section 11 of the regulations. It is in connection with the provision for penalty. I suggest again to the minister that because of different methods employed by farmers of calculating their acreage, the word "knowingly" be inserted after the word "regulations" in subsection (a), and again before the word "falsely" in subsection (b). This might save a great deal of trouble. The farmers will not have 8100 to pay in fines anyhow.


Thomas Vien: The hon. member is trying to amend the regulations. I do not think this is proper in committee.


James Garfield Gardiner: Might I say I had that word "knowingly" inserted once, but I did it in opposition to opinions given to me by the draftsman who says it is already covered by the phrase "submits false information." It has to be done knowingly to be termed "false."


Richard Burpee Hanson: Absolutely.


James Garfield Gardiner: Apparently some draftsmen took it out and I did not notice it, but 1 did put it in.
2526	COMMONS
Supply-Agriculture-Wheat Acreages_____


Richard Burpee Hanson: I have no desire to detain the committee, but certain of our members, and I think a number of others are still in doubt about this question whether they, as members of parliament, are taking any risk if they apply for or accept this bonus. I read the opinion to which the minister referred the other night, but I have forgotten it; he did not place it on the record. I quite appreciate the point of view of the deputy minister of justice. I was wondering whether the minister had anything further to add to what he has already placed on record, and whether he can give us any further assurance. I do not think that there is the slightest question as to the legality of their taking it, or that they would in any way imperil their seats. But an assurance from the government might well be given.
These actions under the Independence of Parliament Act are usually by some ill-disposed person who may be looking for a portion of the penalty. I had one experience when acting for a friend of mine. These persons hope to get part of the reward. Could the government give some assurance that in the event of anything like this happening it would pass legislation protecting members, or would it give a straight opinion of the Department of Justice? Laymen are fearful about this matter. A member of parliament does not like to incur the odium even of a threat of trouble over a matter of this kind. It is not good publicity for any member to have to take.
My view is that the last paragraph of Mr. Edwards' opinion covers the matter. I W'ould concur in it, and I believe the Minister of Justice would, too. I should, however, like to know if he has anything to add.


Ernest Lapointe: I fully concur in the opinion of the deputy minister of justice in this respect. We do not think it is necessary or perhaps even advisable to amend the regulation, because we believe there is not the slightest danger that members could be exposed to a charge of infringing the Independence of Parliament Act by doing what has been suggested. I am giving my own opinion as Minister of Justice.


George Hugh Castleden: One matter I believe should be settled. There seems to be some difference of opinion between the Minister of Agriculture and the Minister of Trade and Commerce as to the quota.


James Garfield Gardiner: I have that here.


James Angus MacKinnon: I
thought wc rvould be spending the afternoon on this subject, and I had hoped to place on

Hansard certain information relative to that matter. If hon. members w'ould permit, I would place it on Hansard without reading it.


Some hon. MEMBERS:: Agreed.


Thomas Vien: With the unanimous
consent of the committee, it will be placed on Hansard.


James Angus MacKinnon: The information is as follows:
Officials of the wheat board are being continually asked by farmers to answer the question -"How much wheat can I market in 1941-42?" It is an extremely difficult question to answer in advance, that is, until we know the size and distribution of the 1941 harvest. Any figure given now may prove to he quite incorrect and the best answer is probably to be found by going into considerable detail.
The dominion government has authorized the Canadian wheat board to restrict marketings of w'heat in Canada to a total of 230,000,000 bushels. This means that wheat producers in the western provinces will be able to market about 223,000,000 bushels of wheat between August 1, 1941 and July 31, 1942.
In carrying out this restriction of wheat deliveries during 1941-42, the dominion government has authorized the Canadian wheat board to limit deliveries of W'heat from producers (to the Canadian wheat board, the open market or any other purchaser) in the w'estern provinces to wheat produced on 65 per cent of their 1940 acreages. This applies to individual producers.
For example: If a wheat producer had 100 acres of w'heat in 1940, his w'heat marketing quota will be calculated on 65 acres in 1941-42;
If a wheat producer had 200 acres of wheat in 1940, his wheat marketing quota will be calculated on 130 acres in 1941-42;
If a w'heat producer had 300 acres of wheat in 1940, his w'heat marketing quota will be calculated on 195 acres in 1941-42.
As a start toward calculation^ his marketing quota, each farmer can take 65 per cent of his sworn acreage on the 1940 permit book or if he has already surrendered his permit book, he can get the figure from the board. Certain exceptions to the 65 per cent rule have already been made for farmers with excessively large or small 1940 wheat acreage in proportion to the size of their farms.
Having the wheat acreage upon which the 1941-42 wheat deliveries will be based, the producer will then want some idea as to the number of bushels he can deliver. And here the difficulty arises because there is no way of forecasting the size of the crop in advance nor the distribution of the crop at the various yields, high and low.
If w'heat acreage in 1941 is reduced to 65 per cent of 1940 acreages, only a relatively high yield per acre could cause surplus wheat production to materially exceed the 223,000,000 bushels which can be marketed during 1941-42.
If, however, there is not a full reduction in wheat acreage in 1941, and if a high yield per acre is harvested, it will be necessary for the Canadian w'heat board to impose restrictions on the quantity of w'heat which can be marketed from 65 per cent of 1940 acreages. The extent of these restrictions w'ill depend upon 1941 sowm acreage and the average yield per acre harvested in 1941.

Supply-Agriculture-Wheat Acreages
If it is necessary to restrict marketings from 65 per cent of 1940 acreages, then the amount of wheat which must be held on farms over and above the 223,000,000 bushels which can be marketed will be distributed among all farmers on an equitable basis, excepting only those having very low yields per acre. Such farmers will probably be able to market all the wheat grown, except their seed and feed.
Except under abnormally high yelds per acre in 1941, the board believes that the major restriction in limiting wheat deliveries to
223.000.	000 bushels in the western provinces will result from the 65 per cent acreage basis for 1941-42 delivery quotas. This means that farmers can look forward to delivering from 65 per cent of their wheat acreage, either all their 1941 production from this acreage if the 1941 yield is light or moderate, or the average yield per acre in their district, less their proportionate share of the wheat which must be held on farms if the 1941 yield is heavy.
Wheat producers are justified in assuming that if there is a full reduction in acreage in 1941, and if an average yield per acre is harvested in 1941, they will be able to deliver in 1941-42 the greater part of the average yield per acre harvested in their district from 65 per cent of their 1940 wheat acreages. At the present time, it is impossible to say what the per-acre quota will be on 65 per cent of 1940 wheat acreage, other than the above general statement.
We repeat that any one figure for wheat marketings per acre, given at this time, is a pure guess. However, we can make this statement: If the full acreage reduction of 35 per cent, or more, is realized and if the general yield per acre is about average, then the producers will be able to deliver in 1941-42 a high proportion of the production on 65 per cent of their 1940 acreage.
The question as to what we would do if we had a crop the size of this year, is considerably more complicated, as we still feel that it would be impossible under a condition such as this to operate on a flat quota per acre basis. We feel that we would have to have a graduated scale based on the average yield for each district. This would still give an advantage to the low yield man as it would be unlikely that a farmer with a crop of ten bushels or less would be called upon to hold back more than a bushel or a bushel and a half per acre at the most. The heaviest burden would fall on the man with the high yield, but at the same time his rights would be recognized to some extent, which we feel is the fairest way it could be handled.
However, as mentioned above, this cannot be finally settled until probably August at the earliest, and with the probability of a material acreage reduction it would seem that the chances of the crop being much above
350.000.	000 are not very good.
In connection with implementing this policy, the Canadian wheat board announces the following decisions of special interest to wheat producers throughout the western provinces.
1.	Producers who seeded no wheat in 1940.
There are some farmers in the western provinces who, for one reason or another, did not seed any wheat in 1940 and therefore did not have 1940-41 delivery permits. Such farmers who desire to seed and deliver wheat in 1941 should make application to the board at their earliest convenience. Their cases will be considered, and if warranted, delivery quotas will be arranged for 1941-42. All applications must be made to the hoard prior to May 31, 1941. In his application the producer should give the legal description of his land and state his total farm acreage, the number of acres in coarse grains, summer-fallow, etc., and the delivery point to be used in 1941-42.
2.	Producers who seeded an abnormally small
proportion of their land to wheat in 1940.
There are some individual farmers who in 1940 had, for one reason or another, abnormally small wheat acreages. In these cases the Canadian wheat board will, on application of the producers concerned, review their wheat acreage position before establishing their delivery quotas for 1941-42. In making such an application each wheat producer must show that his 1940 acreage was substantially lower than his wheat acreage in 1939, and lower than the acreage which he usually sows to wheat. These applications for a review of 1940 wheat acreages must be in the hands of the board as soon as possible, and no applications will be received after May 31, 1941. Upon receipt of application, forms will be mailed to the producer upon which his case can be stated.
3.	Producers who seeded an abnormally large
proportion of their land to wheat in 1940.
An examination of 1940 permits issued by the Canadian wheat board shows that in most districts throughout the west, a few producers had abnormally high wheat acreages in 1940, compared with their total farm acreage. In so far as these wheat acreages are substantially higher than usual for the farms concerned, the Canadian wheat board will, in establishing 1941-42 delivery quotas for these farmers, make such adjustments in their 1940 acreage figures as will bring them into line with their usual practice and into line with their district as a whole. This means that wheat producers who unduly expanded their wheat acreage in 1940 will have their 1941-42 delivery quotas established on the basis of wheat produced on 65 per cent of their usual wheat acreage, and in arriving at the adjustment which will be made in these exceptionally large wheat acreages in 1940, the board will consider the practice of the other farms in the district, as reported to us.
As an example, a relatively few farmers in the western provinces had over 90 per cent of their total farm area in wheat in 1940. It would he obviously unfair to the great majority of wheat producers to extend delivery quotas to these few farmers based upon wheat produced on 65 per cent of 1940 acreages. In these cases delivery quotas in 1941-42 will be based upon 65 per cent of their usual wheat acreage and the average percentage of the farm land sown to wheat in 1940 in the district concerned.
The Canadian wheat board has adopted the foregoing policies in respect to the basis of 1941-42 wheat quotas in the interests of a fair distribution of quotas among wheat producers in 194142. The object is to adjust some of the wide variations from usual practice that occurred in 1940 wheat seeding.


Mr. MacKENZIE (Lambton-Kent):: I
suggest there are clarifications of these regulations which should be adopted in the house before the item is passed. I have no desire to hold up proceedings, but it is six o'clock-


An hon. MEMBER:: It is after six o'clock.
2528	COMMONS
Supply-Agriculture-Wheat Acreages


Hugh Alexander MacKenzie: -and I had expected the afternoon would be devoted to this discussion. However, it has not. There are questions upon which I should like to hear further discussion.


Thomas Vien: Shall the resolution carry?


[Stage Direction]
Item agreed to.
Richard Burpee Hanson: That is a pretty drastic thing to do. May I suggest that the Minister of Agriculture provide the hon. member with an opportunity to have further discussion? He has just been shut out, by silence, and I think the procedure was rather harsh.


James Garfield Gardiner: I shall be pleased to provide an opportunity at a later time in the discussion of my estimates.


Ernest Edward Perley: I had a number of questions which I wanted to have straightened out this afternoon. I thought we were going to have the afternoon to discuss the matter, and I would suggest that the Minister of Agriculture might permit us to ask further questions on the item for general administration.


Mr. McNEYIN:: An hon. member has stated that he had not finished discussing the matter before the committee, and suggested that it should be held over for further discussion. The chairman went ahead the same as if the item had been carried. That has not been done in this house before. I had risen in my place and was going to say something, and the hon. member for Qu'Appelle spoke. This whole discussion has not permitted hon. members from Ontario to say one word. We have not finished. When an hon. member rises in his place and says he has something to say, then the item certainly is not passed.


James Garfield Gardiner: The matter to which the hon. member is referring was not before the committee. I refer to the regulations. There was a vote 'before the committee. There is no reason why these regulations should not be as fully discussed on some other occasion. There will be another occasion to discuss them.


Thomas Bruce McNevin: I should like to point out that so far as the discussion of these regulations is concerned, it has been all out of order. They should have been discussed in committee of the whole, not in committee of supply.


James Garfield Gardiner: My hon. friend is out of order in saying that, because these regulations are really passed by governor in council under the War Measures Act.
Progress reported.
On motion of Mr. Lapointe (Quebec-East) the house adjourned at 6.09 p.m.

Monday, May 5, 1941.