1941-03-25

Hon. J. L. ILSLEY (Minister of Finance):: I desire to lay on the table a letter from Mr. W. H. Somerville, joint national chairman of the war savings committee, to which is appended a review of the operations and results from May, 1940, to March, 1941.
This is the first report I have made to parliament on the results of the war savings drive conducted last month.



ST. LAWRENCE WATERWAY INQUIRY AS TO CONSULTATION WITH PROVINCES BEFORE SIGNING OP AGREEMENT

[Stage Direction]
On the orders of the day:
Mr. J. H. BLACKMORE (Lethbridge):: I should like to direct the following question to the Prime Minister. Did the Prime Minister or the government consult the government of each of the nine provinces to ascertain its views with respect to the signing of the treaty between the United States and Canada in connection with the St. Lawrence seaway power project?


Right Hon. W. L. MACKENZIE:: KING (Prime Minister):	The answer is in the
negative.



REPORTED INCREASE IN PRICES OF CERTAIN GRADES IN NOVA SCOTLA

[Stage Direction]
On the orders of the day:
Mr. GORDON B. ISNOR (Halifax):	I
should like to direct a question to the Minister of Labour, as the minister having jurisdiction over the war-time prices and trade board. Is he aware that while prices of coal from Inverness, Bras d'Or, Indian Cove,
Drummond and other independent mines have not been altered, Halifax prices of all soft coals produced by the Dominion Coal company and subsidiaries have been increased by 25 cents per ton to Halifax consumers? This being so, what action if any does the minister propose to take in the matter?
Hon. N. A. McLARTY (Minister of Labour):: The hon. member was kind enough to give me notice of his intention to ask this question, and a few moments ago I obtained the information in connection with it.
I am not in a position to deal with the several mines referred to in his question, the respective coal operators and the variation of prices. But I believe the answer would be this. A little time ago a conciliation board granted wage increases amounting to a very substantial sum to the Dominion Coal company. I believe that now the operators are suggesting a proposal under which there will be some increase in the prices of certain grades of coal. This matter at present is receiving the consideration of the fuel administrator and the war-time prices and trade board, to determine whether such increases are justified.



YOUNG COMMUNIST LEAGUE


[Stage Direction]
On the orders of the day:
Hon. H. A. BRUCE (Parkdale):: I should like to direct the attention of the Minister of Justice to a circular letter entitled "Student Beacon" issued by the Toronto district young communist league, which is being mailed to university students and which contains subversive material intended to interfere with our war effort. Have the Royal Canadian Mounted Police been made aware of the activities of this young communist league and, if so, what means have been taken to suppress it?


Right Hon. ERNEST LAPOINTE (Minister of Justice):: I will give my hon. friend an answer to-morrow.



ARMY CANTEENS


[Stage Direction]
On the orders of the day:
Mr. F. D. SHAW (Red Deer):: Yesterday the Minister of National Defence stated that a committee is at present engaged in inquiring into the regulations governing the operation of army canteens. I believe he stated
War Appropriation Bill

also that he would make inquiries as to the date when this report might be expected and made available. In view of this I would ask the minister three questions:
1.	Has the minister any further information as to when the report may be expected?
2.	Has this committee authority to effect changes in the regulations as they at present exist?
3.	When the report is finally tabled will the regulations, as they are at present or as amended, be tabled together with the report?


Hon. J. L. RALSTON (Minister of National Defence):: As to the first question I must confess to my hon. friend and the house that I have not had an opportunity to ascertain what progress has been made. It will be necessary to communicate with Mr. Macdonnell, at Toronto, and the matter slipped my mind. With regard to tabling the report, of course the report will be received by the department, where it will be considered and the disposition to be made of it will be decided. My hon. friend will understand that the committee has power to recommend but not to make changes in the regulations until the matter has been considered by the government.


Frederick Davis Shaw: I believe the minister expected that I should make a decision with regard to the first part of the question I placed on the order paper.


James Layton Ralston: As to the present regulations. I asked my hon. friend to consider whether he desired the tabling of those regulations. I take it he does desire that the present regulations be tabled, and I shall see that they are tabled to-morrow.



WAR APPROPRIATION BILL


[Stage Direction]
The house resumed from Monday, March 24, consideration in committee of Bill No. 19, for granting to his majesty aid for national defence and security-Mr. Ilsley^-Mr. Fournier (Hull) in the chair.
On section 4-Loans authorized.
Mr. COLDWELL:: Mr. Chairman, when the resolution foreshadowing this measure was before the house last month we attempted to amend it so as to secure consideration for a compulsory non-interest-bearing loan, and for the acquisition by the government of the entire banking system of Canada, so that it might become during the war and afterwards an instrument of national policy.

The national ownership and control of the financial system has always been a fundamental policy in our proposals and in our programme. The amendment we made then was ruled out of order, and Mr. Speaker was good enough to indicate that at some future stage such a, resolution might be introduced. This I believe is the stage at which an amendment to the measure is in order. I believe an amendment to this section of the bill would be proper.
To-day we have before us a bill for the raising of $1,300,000,000 for various purposes, and in several ways, in connection with the war. Had we the opportunity now we would move to amend this section to include the acquisition of the chartered banks. But I understand that would not now be in order, because it would involve a further expenditure of public money and, according to the rules, private members may not move for such expenditure.
We must therefore confine ourselves to the amendment of the section to provide that such part of the appropriation as may be raised by way' of loan shall be raised without interest, and levied according to ability to pay.
I therefore move, seconded by the hon. member for Vancouver East (Mr. Maclnnis):
That paragraph 1 of section 4 be amended by striking out all the words after "raise" in line sixteen, and substituting the following therefor:
"under the provisions of the Consolidated Revenue and Audit Act, 1931, by way of compulsory interest-free loans to be levied according to ability to subscribe, such sum or sums of money, not exceeding in the whole the sum of one billion three hundred million dollars as may be required for the purposes of this act."
and that paragraph 2 of section 4 be amended by the deletion in line twenty-six, of the words "and the interest thereon."
The amended section would then read:
(1)	The governor in council may, in addition to the sums now remaining unborrowed and negotiable of the loans authorized by parliament, by any act heretofore passed, raise under the provisions of the Consolidated Revenue and Audit Act, 1931, by way of compulsory interest-free loans to be levied according to ability to subscribe, such sum or sums of money not exceeding in the whole the sum of one billion three hundred million dollars as may be required for the purposes of this act.
(2)	The principal raised by way of loan under this act shall be a charge upon and payable out of the consolidated revenue fund.
This does not of course prevent the government from raising all or a substantial portion of this amount by taxation, or by the use of the Bank of Canada for any direct issue of credit or currency which may at any time at any given moment seem desirable and necessary. Like the original section, it limits

War Appropriation Bill
the amount that may be raised by loan or otherwise to SI,300,000,000. As the minister explained last Thursday at page 1880 of Hansard, the actual amount to be borrowed will be stated when the budget is introduced in the near future.
On the same day the minister expressed himself as being opposed to the principle now included in the proposed amendment. He went farther and said it was not the policy of the government to promote the sale of interest-free bonds on a voluntary basis, as we now have it, by advertising and the like. He made the extraordinary excuse-I thought it was extraordinary-that such a campaign would cause the conscientious, generous and self-sacrificing people to buy the interest-free bonds while the more prudent and selfish would refrain from doing so.
Our amendment meets this very objection, for it would place the prudent and the selfish upon the same basis as the imprudent and the unselfish. Indeed the proposal in our opinion is eminently fair and eminently just. Moreover, what is the object of borrowing money? Is it to finance the war, and for no other purpose? Obviously not, for if we fought wars with money, then the government could issue currency and credit for all our needs. But wars are fought with goods, not with money. It was this truth which Dorothy Thompson had in mind in an article from which I quoted some time ago, and in which she said:
The allies had money, but failed to produce goods. The Germans had no money, but did produce them.
A few days ago I was taken to task by the hon. member for Calgary East (Mr. Ross) for quoting those words with approval. But they are true, and to quote them did not imply approval of the methods Hitler used to regiment and reduce the living standards of the German people, and thus to divert German resources almost exclusively to war production.
Money is not wealth; to think so is a delusion. All wealth is in goods, and no amount of money will suffice if we lack the goods and services which money may buy. This is obvious of course if we consider the position of a beleaguered city. It may have all the credit and all the currency it ever had, but if it lacks the materials of defence, food, munitions and so on, then the accumulation of currency and credit in that beleaguered city will be of no avail.
The real cost of this war must be paid for now in the sacrifice of the things we should like to have, because the raw material, the machines and labour are required for the production of war goods. Therefore to be 14873-116
realistic we must measure the material cost of this war, as of every other war, in things, not in billions of dollars. If we grasp this idea we shall see that no amount of money in our pockets will enable us to buy the luxuries which we must make it impossible to produce. However, in our profit economy the diversion of industry from peace-time requirements to war-time needs is admittedly a most difficult problem. Heavy taxation and the levying of gifts or of loans from large accumulations of wealth must be undertaken. Otherwise, to use the minister's words, the selfish and the prudent will invest their money in the wrong things and industry and labour will be diverted from our war effort, thus defeating the objectives of the conscientious, the generous and the unselfish members of our population.	.
Only to-day I came across an interesting illustration of what I mean. Reference was made recently in the Financial Post to two estates which had recently been probated in the province of Ontario. One estate totalled the enormous sum of $5,229,020. The main item was made up of stock in a mining company, of which the deceased had been the president, amounting to S4,565,000.	Book
debts and promissory notes totalled $540,931; life insurance, $112,182; real estate, $7,590 and personal effects, $3,317. Apparently there had been no subscription to any issue of government bonds. A week or two earlier the same paper published the details of the estate of one of the great industrialists of this same province, a man who had. been the president of one of our great producing corporations. That estate totalled $942,858 made up of stocks in more than thirty companies totalling $670,996; insurance, $166,228; real estate $73,000; cash, $11,965; 'bonds and debentures, $1,467 and other assets, $19,202. The gentleman in question had purchased one $400 war saving certificate and he held one $1,000 five per cent, 1945, Dominion of Canada bond.
I bring these details to the attention of the committee in support of the argument which I am making as well as the argument the minister made for us the other evening. It is contended that any form of loan, whether interest-bearing or non-interest-bearing, merely defers the evil day when the loan will have to be repaid. That is true to a degree. But when we make an appeal in war-time we ask the people in effect, not only to lend money but to forgo the building of new non-essential homes and plants, to defer the purchase of new automobiles or expensive radios, and even to do without some necessities. Our plea is that this should 'be done on a fair and just basis so that the poor, unselfish and sometimes imprudent people will not have to deny

War Appropriation Bill

themselves necessary food. Compulsion should not be exerted only upon the wage earner, the salaried masses and incidentally the farmers whose incomes are to be lowered by restrictions upon the deliveries of grain, tobacco and other produce.
A compulsory non-interest-bearing loan, levied according to ability to pay, is obviously a means of securing something nearer equality of sacrifice. Make those who have a large stake in the outcome of this war because of the wealth [DOT] and property which they control bear their fair share of the burden which the nation is being called upon to carry. There will be some who will say, "Why not a capital levy instead of a non-interest-bearing loan?" To my mind a capital levy should have been made after the last war in order to retire some of the money borrowed on the capital destroyed during the war. Perhaps that is the method we shall have to adopt in part when this war is over in order to retire a substantial portion of the debt we are now assuming.
The proposal which we now make is a constructive suggestion similar to that which was adopted in New Zealand. According to recent articles which appeared in the British press, the same thing is being considered by some people in the United Kingdom. If our war financing is undertaken realistically we shall be able to escape many of the difficulties which caused confusion after the last war. After all, if properly planned and used, the tremendous capital equipment we are now providing for our war effort ought to enrich us when this war ends. It is true that much that we shall have made during the war will be destroyed during its progress or made useless by peace. But we are learning now how to extract from the earth through man's skill and by proper organization much more than we ever extracted before. Thus if we have the sense to profit by this lesson we can enjoy more things than we have ever enjoyed before. In that sense we shall be actually richer as a nation.
War has taught us that the masses do not suffer poverty when there is work to do. It is unemployment which curses many thousands in our midst with poverty. War with its tremendous waste and demands actually ends or at least mitigates unemployment and through the provision of wages and salaries relieves some forms of poverty and distress. This is certainly a paradox, and it is an indictment of our present economic system. It is a problem which we must prepare now to solve when peace comes; for if we do not solve it we shall perish as we deserve to perish. It seems to me that now is the time to consider the

implications of the post-war period. The amendment offers a logical solution to one part of our war financing problem.
We propose that Canada borrow now without interest and on a graduated plan, according to ability to pay, the purchasing power we desire to transfer now from peace to war, and which can and must be transferred again in the future from	war	needs	to	peace-time
requirements. How that transfer shall be made eventually, and upon what kind of basis the loans now being made shall be repaid, the progress of the war and our post-war needs must determine.
One thing is certain. We must not allow this war effort to enrich the so-called prudent and the selfish.	We	must not,	as we aredoing, play into	the	hands	of	those whomonopolize wealth and	power	in this country.
The amendment would do much to prevent us from falling into such a net in the future, and would bring about a measure of that equality of sacrifice of which so much has been said in this house and throughout the country. We ask men to fight; we ask men and women to labour; we ask all to sacrifice. Equally we should ask wealth to place itself now at the disposal of the nation, without interest and without profit. I believe that if something of this sort were done, it would do much to remove from the minds of many of our people the fear that when the war is ended the great masses of the people will not be any better off, indeed will be worse off, and that a few people in the Dominion of Canada will be infinitely richer in accumulated wealth than they were before the war broke out.
In my opinion we have not yet been able to obtain that enthusiasm for the cause in which we are involved that we ought to have obtained. If this is a war, as I believe it is, for the preservation of our democratic way of life, then it seems to me that the nation has the right to ask those who, through fortuitous circumstances as well as by their own endeavours, have been able to accumulate this nation's goods, to lend their wealth freely to the nation. I am not even suggesting that we ask them at this moment to give it, though later we may have to ask them to give some of their wealth. But certainly at this time we have a right to ask them to lend to this nation in her hour of need their wealth without interest and without profit. I am urging the government to accept this point of view and to allow this clause to be amended in order that the portion of this appropriation which is to be raised by loan may be raised by a graduated loan based on ability to

War Appropriation Bill
subscribe, and that the money shall be loaned without interest at least for the duration of the war.


Mr. TURGEON:: May I ask the hon. member a question before he resumes his seat?


Major James William Coldwell: Certainly.


James Gray Turgeon: The hon. member said to-day what he said when making a similar amendment some weeks ago, that the particular form of loan he proposes was adopted in New Zealand. My reading, which might not be complete, is to the effect that while New Zealand has passed general legislation which would permit the government to levy an enforced loan, interest-free, in the same manner as our mobilization act permits this government to do many things which have not yet been done, New Zealand as a matter of fact has not yet taken action in the matter of interest-free enforced loans. Would the hon. member tell the committee what action, if any, New Zealand has taken in that matter? I am asking for information.


Major James William Coldwell: In the summer, I think it was, or in the fall, I quoted from the budget speech of the Minister of Finance of the Dominion of New Zealand, who made the definite statement that money would be raised in New Zealand this fiscal year by means of a non-interest-bearing loan. I have before me the Montreal Standard of March 8, 1941, which contains an article headed "New Zealanders Taxed for Social Experiments and on Top of That, War," in the course of which it is stated:
The government (of New Zealand) expects to realize an additional $26,000,000 from 15,000 individuals and 3,000 corporate taxpayers through a compulsory war loan on which no interest will be paid for three years.


James Gray Turgeon: What was the amount?


Major James William Coldwell: The amount stated in the Montreal Standard is $26,000,000. That sum does not quite agree with my recollection of the statement made by the Minister of Finance of New Zealand when he introduced his budget last June. As I recollect it, he stated then that New Zealand expected to raise in the neighbourhood of fifteen million pounds, which would be closer to $60,000,000, at current rates of exchange, than the sum mentioned in the Montreal Standard. I think it is clear, both from his budget speech and from the paragraph I have just quoted, that such a loan has actually been raised in the Dominion of New Zealand.


John Horne Blackmore: Before this amendment is voted upon I wish to make a remark or two. The last time the hon. member for Rosetown-Biggar (Mr. Coldwell) brought this amendment forward the Social Credit group supported it as the lesser of two evils. The present system of debt and taxation is a very grievous evil. Taxation, if it is persevered in as this government seems determined to persevere in it, will ultimately destroy the standards of living of the people of Canada. First it will decrease the production of the Canadian productive machine because it will heighten the cost of production; second, it will ultimately deplete the resources with which producers must produce, and, third, it will bring about a failing of markets both at home and abroad.
Furthermore, this system will develop grave dangers of inflation through irregularity of production. As matters now stand there is no way in which the governing power in Canada appears to be able to cause the kind of production it wants or to prevent or divert the very kind of production it does not want. The result is that we might have a dangerous scarcity of certain commodities in this country and a dangerous superabundance of other commodities. This is one of -the conditions which will bring about inflation.
Let us bear in mind that inflation is a rise in prices which results from a shortage of goods. The policy which is being followed to-day of a general, blanket taxation as heavy as the people can possibly stand is aggravating the tendencies to inequality and irregularity and unbalance of production, and will continue to do so more and more. There is altogether too little appreciation of just w-h-at inflation is and what causes it and -how it is to be overcome. As soon as there is a complete understanding of the matter on all sides, there will be no doubt of -the accuracy of the remark which I have just made, that the present system of debt and taxation is leading to inflation.
Furthermore, the system which is now being followed may ultimately impair Canada's credit-perhaps irrecoverably. It is one thing to make wise-cracks about certain governments that have declared themselves unable to meet their commitments with respect to debt; it is entirely another thing to face facts and to realize that the government at Ottawa, if it continues to plunge this country headlong into debt, will ultimately arrive at the point at which it will no longer be able to meet its commitments and to maintain its rate of interest.
These points which I have mentioned indicate the inevitable tendency and danger and result

War Appropriation Bill
of borrowing and taxation. Altogether the polity is a dangerous one. There are so many who seem to assume that the way we are proceeding now is the sound way. There was a time when farmers believed that the only sound way of travelling was by horse and buggy or horse and wagon, and that the only sound way of harvesting their crops was with a sickle and by means of hand binding. Today everyone -has outgrown such antiquated notions. The very devices which used to be sound came, as a result of the development of certain forces in the world, to be unsound. The financial system which we have traditionally followed is becoming unsound because of the development of great forces on the earth.
I have said this much to indicate that the present system is a great danger. We thought as a Social Credit group that for the time being it was safer to cause people to subscribe to interest-free loans than it was to go forward indefinitely with the present system of borrowing and taxation.
But times have changed. Forced loans, which the hon. member for Rosetown-Biggar has advocated in his amendment, are a danger. It matters not whether New Zealand or any other country in the world has resorted to them; they are a danger. They would be more subversive of Canada's economic wellbeing than even the system which is now being followed.
In the first place, the surpluses of money which had accumulated and which were to be found when the amendment was last presented have now, I believe, been largely dissipated as a result of rigid taxation and aggressive government borrowing. In my opinion, what surpluses now remain are needed for productive enterprise in this country. Forced loans tend to discourage people. I find in my contacts with men and women from day to day that there is developing in Canada a very unfortunate attitude of pessimism and uncertainty and anxiety and discouragement, because people feel that there is simply no use in striving. This is the logical result of the taxation we now are using. It will be, more still, the result of forced loans.


Mr. DOUGLAS (Weyburn):: The hon.
member means that they will not work unless they get big profits.


John Horne Blackmore: I am not saying that they will not work unless they get big profits. But if a man works twelve or fourteen hours a day and then has all he worked for taken away from him, he will ask, what is the use, why not work four hours a day, the way the other fellow does, and have what you accumulate taken away from you?


Thomas Clement (Tommy) Douglas: The soldiers
seem to fight very hard for very little.


John Horne Blackmore: We will grant that
the soldiers fight very hard for very little. But I do not think you will find farmers doing that, although they are loyal enough; I do not think you will find mine owners, oil producers, munition makers or clothing manufacturers spending their hours for nothing.


Mr. GILLIS:: Mine owners don't work!


Thomas Clement (Tommy) Douglas: Mine owners
do not dig coal; it is the mine workers who do that.


John Horne Blackmore: That may be so, but the mine workers will stop producing coal as soon as the mine owners stop.


Thomas Clement (Tommy) Douglas: They had
better take over the coal mines, then.


John Horne Blackmore: There is another
aspect of the forced loan to which I object. It is a step towards communism. I was a bit disgusted last evening, while the hon. member for North Battleford was giving what I regarded as a very fine speech, to hear four or five hon. members across the way come out with the word "communism." I wonder whether such people know what communism is.


An hon. MEMBER:: What is communism?


John Horne Blackmore: I am not sure that
I know; but this, I believe, is one of the concepts of it: that it stands for taking away from people what they have; it is based on state ownership. Now, if the state takes away from people the money they have toiled to earn and save, surely the state is making a step towards communism, unless I am entirely misinformed as to what communism is. In other words, we have just been hearing reasons advanced for a step towards communism; and no one used the word "communism" when the hon. member for Rosetown-Biggar was speaking! Yet when the hon. member for North Battleford was advocating better schools and further health measures and more of many things which every hon. member knows we ought to have, certain people were foolhardy enough to whisper "communism." I must say, Mr. Chairman, attitudes like that utterly confound me.
This really is a step towards communism. Whether the government or the hon. member for Rosetown-Biggar wishes to introduce communism, it is certainly, in my opinion, a move in that direction.
Moreover, it is a step towards totalitarianism, towards regimentation, towards cen-

War Appropriation Bill
tralization. Totalitarianism, regimentation, centralization are characteristics of the very foe we fight.
But, people will say, what are you going to do? Well, Mr. Chairman, that is just the question we should have begun to ask ourselves two years ago. If the system which we are using to-day is such that we face an inevitable break-down, as a result of which we are first advised and then urged to adopt measures which we all abhor, it should be evident that the system we are endeavouring to apply is at bottom fallacious, unsound.
The proposal for forced loans is a step towards reducing all to poverty instead of raising the people to prosperity. There seems to be an idea on the part of some people that some people are poor because other people are rich. I have never been impressed by the reasoning of those who hold so. We could take all the money and possessions away from the few who possess them and distribute them evenly among all the population and still have everybody poor. The solution certainly does not lie along that path, the path of reducing everybody to poverty. The solution lies in the direction of raising everybody to prosperity; and in a country like Canada that is unquestionably possible. Those who maintain that it is not possible have simply not thought far enough through the problem.
It is plain common sense that in a country like Canada, with such an abundance of resources, a country so varied, with such people as we have in Canada, with such industrial equipment, means of transportation and organization generally, there can certainly be prosperity for everyone even while we fight the most terrible war the world has ever seen. If the system we are following to-day denies this fact, then the system condemns itself.
The present proposal is only one of the devices which will be urged upon the governments of our land under the present system. If we continue making attempts to do the impossible, such as making an antiquated financial system work in a modern age to fight a modern war, a forced loan is simply one of the desperate expedients and doubtful experiments to which governments will be tempted to resort more and more as the days go by.
Some people will ask, "Well, what is your solution?" I have no intention of offering a solution; I am merely explaining the reasons why my group are not going to support the amendment. I will say though, in passing and in closing, that the solution lies along
the line of wisely using our national credit.
Such a use will -obviate the need of, and the urge towards, such extreme measures as this one.
To those who feel disposed to smile, let me put this question baldly: Is it not common sense that a country as wealthy as Canada is in resources should be able to fight this war and still have prosperity? Everyone will say, "Yes." Next, can the system we are following enable us to do that? Everyone will say, "No." Very well, then; there must be a way out. Now, where is the way out? If we set to work as members to find the way out we shall begin to do some effective thinking; -we shall begin to do the things we came here to do.
I am going to move an amendment to the amendment as follows:
That the amendment be amended by striking out all the words after "therefor" in the third line thereof, and substituting the following:
Under the provisions of the Consolidated Revenue and Audit Act. 1931, by way of interest-free money obtained from the Bank of Canada, such sum or sums of money not exceeding in the whole the sum of one billion three hundred million dollars as may be required for the purpose of this act. This method to be used only to the extent that government expenditures cannot be met from the receipts of taxation and the sale of interest-free war saving certificates.


James Lorimer Ilsley: Mr. Chairman-


The CHAIRMAN:: Before the minister speaks. I wish to direct the attention of the committee to citations 551 and 552 in Beau-chesne's Parliamentary Rules and Forms. Section 4 of the bill which is now under consideration is submitted by the government, and the proposal is to raise the amount necessary to carry out the provisions of the act by way of an interest-bearing loan. The amendment proposes to raise that money by way of a compulsory interest-free loan to be levied according to the ability to subscribe such sum or sums of money, not exceeding in the whole the sum of $1,300,000,000, as may be required for the purpose of the act. I quote:
551.	It is a fundamental principle that no resolution or amendment to increase a charge upon the people can be moved with the Speaker in the chair; it must be initiated in committee by a minister acting on behalf of the crown.
No. 552 reads:
552.	Though it is the function of the committee of ways and means to impose rather than to repeal taxes, example of the repeal of taxation effected in this committee are to be found upon the journals. Proposals for the variation or modification of taxation can therefore be made in the committee: but these
War Appropriation Bill

proposals must be grafted upon the financial scheme submitted by the government, and must not affect the balance of ways and means voted for the service of the year. Amendments, therefore, can be proposed to substitute another tax, of equivalent amount, for that proposed by the government, as, for instance, a proposal to substitute probate and legacy duty on real property as an alternative for an inhabited house duty, the necessity of new taxation, to that extent, being .already declared on behalf of the crown.
In my opinion the proposed amendment increases the burden upon the people and it does not lie -within the power of a private member to move such an amendment in committee. It should be moved by a minister acting on behalf of the crown.


Mr. COLD WELL:: May I discuss that ruling for a moment. I should like to have a further elucidation of the riding on the point that it increases the burden upon the people. In my opinion, it decreases the burden upon the people considered collectively and as a whole, the people being those who are taxed collectively, the people of Canada. I submit that in reality the amendment decreases the burden upon all the people of Canada and is therefore entirely in order.


Thomas Vien: In my opinion the amendment is out of order for the reasons I have stated. Is the committee ready for the question? The question is on section 4. Shall section 4 carry?


[Stage Direction]
Section agreed to.
On section 5-Orders and regulations.
Mr. CLAXTON:: Before this section carries I should like to say a word or two on the subject of information. I had hoped to be able to make these remarks yesterday but the minister of information was away on business, so I should like to avail myself of his presence here to-day to say just a word or two on this subject.
There is no need to emphasize to this house or any other body the importance of information during this war; it cannot be exaggerated. All I wish to do is urge upon the government that the very excellent work described in the minister's statement of March 7 should be carried on and extended with all the pressure and urgency that the minister, with his very great ability, can bring to bear. Obviously, early in the war this government decided that it would not be proper for it to issue propaganda in the United States. With that decision I think every hon. member of this house was thoroughly in accord; and when friends in the United States asked me why we Canadians were not telling about the things we were doing in the war I always answered by saying, "Is it not much better that we should

say too little than that we should say too much?" I think everyone who has thought about the matter was in thorough agreement with that policy, but we see where it brought us on several occasions. Representative Maas and Senator Nye, two of the leading isolationists in the United States, urged upon the United States congress and senate that Canada was not playing its part in the war, that we were not matching the United States lease-lend effort. In the United States our war effort was not thoroughly appreciated, and we did not have the flow of tourists backward and forward through which we might carry on those normal, friendly contacts we have always had with our neighbours to the south. In the New York Times of yesterday Mr. P. J. Phillips says that Canada's ban on publicity in the United States is to be lifted. I certainly hope that we are going to give more information in the United States, for a good many reasons which must be obvious to all. If we are to continue to have the close, friendly relations with the United States that we always have had and should always have, the United States must understand what we are doing, and we must express ourselves, our aims and our actions, to the people of that country.
This week, Mr. Chairman, there is an added reason for taking this matter more seriously. The London Economist in its current issue is reported to state that we in Canada should have a lease-lend bill like that of the United States. There again what we are doing is not properly understood, and with all respect I suggest to the minister that here is another opportunity for his department and the other branches of the government to increase the work they are doing abroad.
I suggest also that there is room for an intensification of information service at home. The fact that this debate has gone on for twenty-one days indicates that there is a lack of appreciation of what is being done. Had even more information been given, it is possible that the debate would not have lasted as long as it has. But I suggest that the way to give information, in addition to giving it here in the house, is through the press releases issued by the government in the ordinary course.
Within the last few days I had the very great privilege of visiting Halifax harbour and Sussex camp, and of seeing aeroplane factories and munitions works. I was immensely impressed with what I saw and with the appearance of the alert, fit men who are doing our jobs for us in those places. I suggest that if all the members of this committee had seen what there is to be seen of our war work in the various camps, ports and munitions works, a great deal of the

War Appropriation Bill
criticism that has been expressed here during the last few weeks never would have been uttered at all. There I saw men from all parts of Canada, men of whom any part of Canada might be proud. We cannot bring all the people to the Halifax and Sussex camps, but we can bring Halifax harbour and the Sussex camp to the people by means of the movies and broadcasting and the publications of the department of information. This department has been doing most useful work. The films that have been prepared are magnificent, but I think more can be done to bring home to the people of Canada a realization of the wonderful work that is being done and that is too often deprecated here and elsewhere.
It is exceedingly difficult in Canada to translate this figure of $1,300,000,000 into munitions, planes, tanks and trained men and women working eight-hour shifts, day and night, turning out things necessary for our security. Unless this can be visualized by the people and by this house, then it is apt to be felt that this sum represents just so much money or so much talk. What a story there is to tell! It is a story of which every Canadian should be proud. During the last eighteen months we have multiplied our air force tenfold, our army fortyfold and our navy tenfold. Each day we are raising and spending $2,700,000, while in the last war the figure was only $117,000. The expenditures for which we are providing in this appropriation, together with the amounts required for the repatriation of securities, are five times the expenditures during the corresponding period of the last war, and more than the entire cost of the last war. That is the picture the people need to see. That is why I say this figure must be translated into things they can see and words they can understand. That is the job the department of information has been doing, the job that I hope it will do more thoroughly as time goes on.
These are difficult times, Mr. Chairman. We are at perhaps the most serious stage of the war. These are times that try men's souls. We need, and the government need, all the support and help they can get from every source, and I suggest that the department of information has a task to perform in telling the story so that the government may get that support. The exploits of our men in the air, the indomitable courage of our merchant marine, the endurance of the people of England have won the admiration of the world and have called forth our gratitude day by day. In the air, on land and at sea the heroic age has returned to our race, and that is the story that should be told.


Mr. CHURCH:: The country has taken this huge expenditure with a great deal of good grace. But the business men of Canada do not wish to permit the functions of the House of Commons to be usurped by scores of orders in council. We have seen the effect of orders in council in connection with what has happened concerning the National Resources Mobilization Act. This huge war expenditure is what we are getting because over a period of twenty years parliament had become so strongly Geneva-minded.
In my opinion this section is unnecessary. Parliament meets from time to time, and there is no necessity to give the governor in council such vast, wide powers-powers which practically override the financial structure of Canada. They override our tariff provisions- and all this is done merely by order in council. It has the effect of adding further burden to the hard-pressed industries and businesses of Canada.
The artificial burdens, barriers and restraints of trade to which business men are subjected render it almost impossible for them to conduct their business. This bill smacks of the Marxian policy of the totalitarian states. It may also be a gesture to hon. members to my left. It may be the intention to give them a loaf in this way, and to decline to give it to them in the manner that has been described this afternoon.
If Hitler comes he will care nothing about our financial structure. He will not consider whether we have a government composed of Liberals, Conservatives, Social Crediters or members of the Cooperative Commonwealth Federation. Before this measure passes the government should tell the country to what extent its financial programme to be carried out by order in council will interfere with the normal peace-time 'business of the wholesalers, retailers and grocers. In my opinion the aim should be to add to the production of armaments without a shortage of non-defence consumption, and without unnecessary substitution of goods used in every day consumption.
As I said the other day this country' has unlimited resources. Our natural resources from coast to coast are vast. We have financial resources and, notwithstanding the measures brought down by the government in connection with war expenditures, I say we have a reserve of labour. There is still a large reserve force of labour, and especially of people over forty-five years of age. Those are men with technical experience, and well able to help.
The people of Canada are behind the war effort to the utmost extent, but I must object to giving the government of the day the vast liberties set out in this measure. In our experience in connection with the National
War Appropriation Bill

Resources Mobilization Act, we see what happens when we give power to act by order in council. We gave the government supreme power over the liberty of the subject, and over all other statutes which safeguarded our liberties.
What has happened in connection with conscientious objectors? With its power to pass orders in council, *what did the government do? Instead of giving those people work in military districts, or sending them to Iceland or to Greenland's icy mountains, by the time the government has finished I am convinced it will wind up, by order in council, by presenting every conscientious objector in Canada with a gold watch and an illuminated address. That is what happens when we have government by order in council.
Has the business community been consulted about this section? Have officials of the Bank of Canada been consulted? Have the so-called brain trusts, which appear to be doing very little at the present time, been consulted? Does the manner of proceeding under section 5 fit into the lease-lend bill? Does this section take into account the effect it will have on that bill? How will it affect the negotiations now pending with Washington concerning parity of the dollar? The United States has made some arrangements with other north American countries, and in my opinion there should be some explanation of the very wide powers conferred under this section. If we are to pass legislation of this kind, we might as well abolish any further control over the financial structure of the country.


Mr. MacNICOL:: I should like to ask a question in connection with paragraph (c) of section 5, which reads:
Prescribe administrative practices with respect to contracts and agreements for the execution of any public work or for the acquisition of lands-
And so on. If a munitions plant is to be erected on land expropriated by authority of an order in council, has the expropriating authority the right to pay the owner of the land anything it desires to pay?


James Lorimer Ilsley: This subsection has for its purpose the strengthening of the cabinet's control over departments. For example it might be felt desirable to lift war transactions out of the scope of the Public Works Act or the Department of Transport Stores Act. Likewise the desire might be to have a uniform practice with respect to purchases. At the present time a department, except that of Munitions and Supply, goes to council for a woi-ks contract involving $5,000, but it can buy S50.000 or more of equipment without coming for an order in council. Generally 
speaking the intent is to provide the necessary power to the governor in council to make such rules as are considered necessary. It also permits pool orders for materials and supplies. It gives the governor in council wide powers with regard to the acquisition of lands. I do not think that in the acquisition of lands the governor in council would be bound by the provisions of other acts, once this act is passed. That is the object of the measure.
This subsection was contained in a similar section of the last appropriation bill. The whole of section 5 is identical with that of section 5 in the 1940 act.


John Ritchie MacNicol: Perhaps the question I have in mind has no connection whatsoever with this paragraph. I shall ask it however, and if I am out of order the minister need only nod his head, and I shall not proceed farther. I have in mind a resident in my constituency who about twenty years ago purchased land in a subdivision which had been opened up outside the city of Welland. Many others purchased land in that subdivision but in the course of that twenty years much of it has become the property of the original owner, which I believe is now the city of Welland. As the minister is probably aware, recently a large munitions plant has been built on that land outside Welland, in Crowland township. The person I have in mind was from a thrifty Scottish family, and having paid something on the land he determined to continue paying until he received the title. This was accomplished. Including the original cost of the land, payments for interest, taxes and so on, he has put into that property more than $500. Along comes the purchasing agent of the Canadian National Railways and states to this person that he must take $50 or nothing, because that is all he will get for his land. "Other people are selling their lots for that, and the city of Welland are selling theirs," he said. This does not seem to be British fair play. I do not believe the government wants to have land needed for war work purchased under such conditions.


James Lorimer Ilsley: I do not know just what the facts are in that particular case.


John Ritchie MacNicol: I have stated them quite clearly.


James Lorimer Ilsley: I presume there are other facts which have not been brought to the attention of the hon. gentleman. I do not think the government would tell Canadian citizens that they can take a certain amount or nothing. This is the first instance I have heard of that kind of thing. I do not know

War Appropriation Bill
just how the government go about it; this would come under the Department of Munitions and Supply.


Mr. HANSON (York-Sunbury):: What is the general practice followed in taking over land for war purposes? Is it done under the general expropriation act or under the War Measures Act?


James Lorimer Ilsley: I am afraid I cannot tell the hon. gentleman.


Richard Burpee Hanson: Some complaints were made to me in connection with the taking over of land at Tracadie in the county of Gloucester for the new artillery range. After investigation and having the facts supported by affidavits I came to the conclusion that generally speaking the prices offered were fair and reasonable. I happened to know the right of way agent who was acquiring the land for the government and he promised to review all cases that I named. There were instances where there was a difference of opinion or perhaps a difference of judgment as to the value of the land. My own view is that the government was endeavouring to pay a fair price, not the large price that some people would like to get from the government in war time. In this case I think the land is being acquired by the Department of National Defence, but I want to say that I believe they are trying to protect the public treasury. After I had investigated a series of cases where exception was taken to the amount offered, they promised to review them. Perhaps the method followed was a little harsh. I understand that these people were told that if they did not take what was offered, the government would expropriate the land and if they did not get a court decision for more than had been offered they would have to pay all costs. Perhaps that was turning on the heat a little too much, but on the whole I think the job has been done in a decent way. This is certainly not carping criticism.


John Ritchie MacNicol: Perhaps when I said
"that or nothing," I should have said that they were told they would have to accept that, for they would get no more. I had some conversation with an officer of the railway company which was buying the land and he was quite emphatic that they would not pay any more than $50 for the lot. If my memory serves me correctly, these people had paid approximately $500 in purchase price and keeping up taxes and interest. That offer struck me as being rather arbitrary. I think they should have been given at least the original cost, and I believe they were willing to settle for that.


James Lorimer Ilsley: If my colleague were here
he could inform the committee as to the practice of his department. I think it is just what the leader of the opposition has said. A certain sum is offered and if a man does not desire to accept that, the land is expropriated and he must run the risk of the final decision by the court not being more than the offer, in which case he would have to pay the costs.


John Ritchie MacNicol: A humble working man
cannot engage a solicitor to contest an action in the courts. He is forced into the position of having to take whatever is offered.


Mr. ROSS (St. Paul's):: Many hundreds of millions of dollars have been advanced to companies to do war work. This money has been advanced in various ways. In some cases the government have built buildings, in other cases they have purchased machinery and in other cases the companies have bought machinery on government account. What is going to happen to this machinery after the war is over? I suggest that a permanent commission be set up so that proper records can be kept and a study made of what will be done with this machinery and these plants after the war. Now is the time to tackle this problem. We should not wait until the war is over.
When the Minister of Munitions and Supply went to England the men in the aeroplane industry were rather pleased because they thought that he would discuss matters with the British people and they would know when he returned just what was going to be done. But so far no policy for the future has been laid down, and no announcement has been made by the government as to what planes are going to be ordered or what planes will be required. Some of the men in the aeroplane industry are beginning to get to the end of their tether as far as work is concerned. Unless some policy is announced and orders given out they will not know where they are. In some factories men have been laid off. I just bring this matter to the attention of the government. For the sake of the industry I think some statement of policy should be made by the government.


Mr. MACDONALD (Kingston City):: With regard to machinery purchased by the government or by companies for the government, the title remains in the government. This is provided for in each contract. There is no doubt as to the ownership; this machinery will belong to the government when the war is over. As to aeroplanes, I do not think it is correct to say that the government has no policy with regard to aeroplane production. That policy has been announced in the house.

War Appropriation Bill


Richard Burpee Hanson: The hon. member means for the future, after the war.


Douglas Gooderham Ross: I realize that some of these companies have been given work to carry them to the end of the year, but it must be remembered that it takes a considerable time to bring an aeroplane from the blueprint to the construction stage. It will tail off at the other end. Men are out of work and they want to know how they can carry on. In respect to the machinery, I realize that the title is in the government. But has the government a tag on every piece of machinery? The records may be all there, but you have this building down here on Wellington street with thousands of people in it, with various subdepartments. Records are scattered all over. It seems to me that there should be a permanent commission to collect this information. I quite realize that the government has title to the machinery, but some plan ought to be worked out in connection with what is to be done with it after the war.
Mr. O'BRIEN: Yesterday I asked a question of the Minister of Labour in connection with the expenditures in New Brunswick upon vocational schools. I notice the minister is not in his seat, . and as we seem to be making rapid progress with this bill perhaps the Minister of Finance could give me the information. If it cannot be given now, it may be available later, after the bill passes.


James Lorimer Ilsley: I do not just remember what the question was.
Mr. O'BRIEN: The question was: How much has already been paid to New Brunswick, and has any amount been appropriated to that province for the future for vocational training?


James Lorimer Ilsley: I have not the information but I shall bring the question to the attention of my colleague. The hon. member would like the assurance that he will get the information at some later stage?
Mr. O'BRIEN: In the event of this bill passing.


James Lorimer Ilsley: There will be stages of this bill or of some other bill on which it can be given, perhaps on the supplementary appropriation bill. I will bring the question to the attention of the Minister of Labour.


Mr. CASTLEDEN:: Clause 2 of section 4 reads:
The principal raised by way of loan under this act and the interest thereon shall be a charge upon and payable out of the consolidated revenue fund.
Would the amount chargeable to consolidated revenue fund be less if there were no interest?


Thomas Vien: The question is out of order.


Major James William Coldwell: Surely, Mr. Chairman, the question is not out of order.


Thomas Vien: The question is futile, in my opinion. The question is, will the charge on consolidated revenue be less if there is no interest charge. The answer is obvious; therefore the question is futile:


Major James William Coldwell: What is the answer if it is so obvious?


Thomas Vien: I have not to answer the question. All I say is that the question is futile because the answer is obvious. If any hon. member asks whether the sun will rise tomorrow I would rule the question out of order because it was not a serious question; and asking whether a charge would be less without interest or with interest, is in exactly the same category. The question is futile and therefore out of order.


Major James William Coldwell: What becomes of your ruling of a short time ago, Mr. Chairman?


Thomas Vien: My ruling is not in question. The hon. member could have appealed from my ruling, but he did not do so. Therefore my ruling is not before the chair now.


George Hugh Castleden: I am willing to abide by your ruling, Mr. Chairman, and I will now ask what might appear to be a more serious question. Has the Minister of Finance given any consideration to pegging the rate of interest? A good many of these so-called selfish prudent people very often withhold from investing in a loan hoping that another loan will be offered later at a higher rate of interest. It would do a great deal to save interest charges on the consolidated revenue fund if the rate of interest on these loans was pegged right now.


James Lorimer Ilsley: I think the hon. gentleman is wrong. He may be right about one individual in ten thousand, but he just is not acquainted with what actually happens when a loan is floated. The second war loan was offered to the public, not at a higher rate but at a slightly lower rate of interest than the first war loan, and it was subscribed in very large amounts by institutions and wealthy individuals. The disappointment in the early stages of the second war loan was not with people with large amounts of money to subscribe, but with persons of small or moderate incomes. That was where the loan fell down in its early stages-not with the class of people to whom the hon. member refers. I have no brief or preference for one income

War Appropriation BUI
group rather than another, but since I have been in the Department of Finance I have never seen any real ground for an accusation against one income group rather than another. You will find selfish people as well as unselfish people in the low income groups, and you will find selfish and unselfish people in the higher income groups, and I could give the house a good many instances to substantiate what I am saying.
The hon. gentleman asks whether the government has given consideration to announcing that the interest rates will never be higher on any subsequent issues. Is that his question?


George Hugh Castleden: Yes.


James Lorimer Ilsley: I said the other day in answer to a question by the hon. member for Acadia (Mr. Quelch) that the government could not give an assurance about interest rates. But the facts speak for themselves. The interest rate has not gone up, and our securities have maintained their standing on the market. At the time we floated the second war loan, the first war loan bonds, if I remember correctly, were selling at par or slightly above, and I have no expectation that it will be necessary to pay higher rates of interest than we are paying at the present time. I can give no assurance further than that.


George Hugh Castleden: What was our experience in the last war?


Angus Lewis Macdonald: I submit, Mr. Chairman, that this discussion is out of order, because it has to do with clause 4, which has already been passed.


Thomas Vien: The point of order is well taken.


Mr. DIEFENBAKER:: I think my question will be in order under section 5, paragraph (d), which provides that the governor in council may, by order or regulation, "provide for the utilization, control and disposal of equipment, materials and supplies".
Under the heading of "supplies" I would ask the Minister of Agriculture to explain the anticipated expenditure of 87,877,550 in the war appropriation estimates for 1941-42 for the Department of Agriculture, and in particular what expenditures are anticipated "to provide assistance in disposal of agricultural products rendered surplus by war". That will be found at the bottom of page 1497 of Hansard.


Mr. GARDINER:: The first item, $31,000 for administration, is obvious. Next is "programmes to encourage production of essential war supplies, $100,000". That comes under the war supplies board, covering such things 14873-1174
as dealing with flax. The government has taken over the flax supplies and has designated a certain proportion of them for Ireland, some for Britain, and some here. The next item is for the "purchase, storage and distribution of agricultural supplies, $1,000,000". Those two items have to do with similar things, namely, the production of garden seed, flax, and certain substances which are required for fertilizers, the shipment of which out of the country has to be guarded against.
The commodity boards are the dairy board and the bacon board. For the bacon board the amount is $71,300; for the dairy products board, $14,950. There is a vote for assistance in the disposal of agricultural products rendered surplus by war: that is the large item, and has principally to do with apples. The expenditure under the apple and cheese agreement is indicated in the item above, "disposal of Canadian apples, 1939 crop, $1,503,108.89". There will be a similar amount required this year for apples. "Disposal of Nova Scotia apples, 1940 crop, $1,172,820.79." For the advertising of apples last year, $49,704 was required; a similar amount will be required this year.
For the other items which appear in the war appropriation of 1940-41, covering purchase, storage and distribution of fibre flax seed, a similar amount will be required this year. For bacon board administration, $33,618, a large amount will be required. For dairy products board administration, which was $5,434 in 1940-41, probably a larger amount will be needed this year, as the full year will be covered. A sum corresponding to last year's vote will be needed for scutchers, and for the purchase of seed potatoes. The final items are, agricultural supplies board administration, $23,576, and root vegetable seeds, $30; similar amounts will be included this year. These various items make up practically the whole amount in 1940-41.


John George Diefenbaker: Why the very large increase, approximately $3,000,000 over the expenditures of last year? What does the minister intend to do which will justify that extra expenditure?


James Garfield Gardiner: I am sorry that I have not the items any further particularized than in the figures which were given here. Not all the amount estimated last year was spent.


Richard Burpee Hanson: Of course the minister should explain why there is this increase in the amount. There must be a reason, and if he needs time to get the information we shall be glad to give it to him.
While I am on my feet may I ask why no consideration has been given to the plight of the potato farmers in Prince Edward Island
War Appropriation Bill

and New Brunswick? Potatoes are selling in Prince Edward Island at 24 cents a bushel, or 60 cents a barrel, without any appreciable market. The farmers of eastern Canada who grow potatoes as their principal crop are just at the end of their tether. They have had ten years of this sort of thing, with one on two exceptional seasons in between. They have used up their reserves and their resources. In addition, the price of their fertilizer has steadily increased, largely as a result of the legislation passed by this government in the baby budget last fall; the cost of exchange was increased, and the ingredients of the fertilizer have to be imported. The potato farmers see their neighbours in the Annapolis valley being bonused. They see that our friends the wheat farmers of the west have at least had their prices stabilized, no matter what the opinion may be as to the adequacy of the price to be received by them. Over and above that they observe this gesture on the part of the government, that men shall be bonused for non-producing. But not one word from this government with respect to the farmers of the maritime provinces, aside from the apple growers. If the government can provide a war appropriation of $6,600,000 to dispose of unmarketable agricultural surpluses, they can do something for the potato farmers of Prince Edward Island and New Brunswick.
I do not understand why these people are forgotten. The industry is an important one in the northern part of the Saint John river valley. I have often urged that these men get back into other varieties of production. They look across to the county of Aroostook in the state of Maine and they see that the potato men there make a strike one year in three or four. There is no doubt about it that occasionally over there they make a real strike. But it is a crop for which the soil of our growers is adapted. They have the machinery, they are able to produce, and they do not lightly yield their desire to do their own planning. I am more particularly interested in the growere of New Brunswick because I know their situation a little better. I have lived among them, gone around among them, and tried to assist them as an individual and in every way I could. I have put money in those farms, a good deal of which I shall never get back, nor do I expect to get it back. But they have a right to ask this government, when it has adopted the policy as a war measure of asking the general taxpayers of the country to put up $6,600,000 for surplus agricultural products, that it should give them at least some consideration. And it is denied them. That

position is not good enough for the potato farmers of New Brunswick. They want to know why they have been overlooked.


Thomas Vien: I do not believe that the remarks of the hon. gentleman are in order under section 5 of the bill. Section 5 is limited to orders and regulations by the governor in council. Shall section 5 carry?


Richard Burpee Hanson: I suggest that, before you get the bill through, the minister should give us an answer. We do not intend to delay this bill; I should like to see it get through before six o'clock.


James Garfield Gardiner: I have no objection to giving an answer with respect to potatoes, but I must bow to the ruling of the chairman in connection with a matter of this kind. There is a proper time to bring it up. As a matter of fact the particular subject raised has nothing to do with war expenditures at all; it has to do with agriculture as such.


Richard Burpee Hanson: But the minister is justifying the purchase of the Annapolis valley apple crop, under this section and in the bill; and surely the subject of potatoes is just as germane as that of apples.


James Garfield Gardiner: No, Mr. Chairman, it is not.


Richard Burpee Hanson: If the minister wants to leave it there, I am satisfied.


Mr. ADAMSON:: Under section 5, subparagraph (c), I should like to address a question to the Minister of National Defence for Naval Services. I received a letter to-day, from which I will omit names, but I believe it is symptomatic of what is going on in Halifax. It reads in part as follows:
My young nephew . . . was recently transferred by the Royal Canadian Air Force from Toronto to Halifax, and writes to his mother . . . in Toronto stating that air force men must live in billets in Halifax, and are allowed $5.95 per week for subsistence.
He states that it is extremely difficult to obtain billets and be considers he was lucky to land in with a former pal at an address given
as 

 Barrington street. He states that this
house is full of airmen and soldiers, and his landlady collects $4 per week each from them plus 35 cents per meal. He states that he is one of five living in one room, so that in this case the woman takes in $20 per week from one room only.
Would it be asking too much to request that the minister should have some person check-


Thomas Vien: Order. The remarks of the hon. gentleman do not fall within paragraph (c) of subsection 1 of section 5. The purpose of the section is to empower

War Appropriation BUI
the governor in council to make orders and regulations, but it has nothing to do with the subject matter with which the hon. gentleman is now dealing.


Agar Rodney Adamson: The question I wish to bring to the attention of the government is this. This is going to be a long war and this practice of billeting out men in the three services is extremely bad for their morale. Would the government consider at the earliest possible date the question of establishing camps in order to alleviate the present condition, which is reacting very badly on all the services.


Richard Burpee Hanson: May I
point out that the reason for the inadequate discussion of the question with regard to the $6,600,000 is the fact that the Minister of Agriculture (Mr. Gardiner) was not here yesterday when the discussion arose. I think some latitude might be allowed now that he is in his place. I have no doubt the minister was away on important public business. I would certainly advise that an opportunity be given the minister to make a statement on this particular point.


Thomas Vien: The minister has
stated that nothing with regard to potatoes was involved in the vote of $1,300,000,000 though there was something in connection with apples, and that when the estimates of the various departments are being dealt with in committee an opportunity will be given for full discussion. I should like to remind hon. members of the committee that, when an item is before the committee, if a general discussion foreign to that particular item is allowed, the discussion is started all over again when the proper item in the estimates is taken up by the committee. I have not made these rules. The rules governing parliamentary procedure have come to us as the result of wisdom and experience and it is the duty of the Speaker and of the deputy speaker in committee to apply those rules. Parliamentary institutions and parliamentary practice and procedure will fall into contempt unless the rules are adhered to. I should like to have parliament change the rules if it is desired to have some other method adopted of dealing with matters of procedure to be followed in committee. But unfortunately I am the slave of the rules and regulations of parliament and my function, as is the function of the Speaker, is to apply the rules. I should be derelict in my duty if I did not bring the rules to the attention of hon. members and point out the importance of
observing them, if we wish the public, as well as ourselves, to have any respect for our parliamentary institutions.


Mr. GRAYDON:: May I refer to a matter that was bi ought up yesterday in the house -and I hope I shall not be in the unfortunate position of the gentleman who was discussing the probability of to-morrow's sunrise. The question was discussed at some length yesterday and the minister in charge at that time was the Minister of National Defence. I believe he was taking for the time being the place of the Minister of National War Services. I would refer the committee to page 1826 of Hansard, in the first column of which three questions are raised. The first is with regard to newspaper reports concerning Canadian Vickers Limited; the next, a newspaper report concerning the Fairchild company; and the third, a report with regard to the Noorduyn company. As I understood, reports came to the minister with regard to the first two companies, and he received a memorandum from General LaFleche, deputy minister of national war services, at the foot of which, as will be seen at page 1826 of Hansard, appear these words:
I tried to reach Mr. Noorduyn but he waw out and not expected home until after eleven o'clock to-night. I asked his office to request Mr. Noorduyn to phone me to-morrow morning.
That indicated that to-day we might expecv an answer with regard to the Noorduyn company and the matters to which reference was made in the debate at that time regarding aircraft production and the question of the four months training plan. I should like to have some explanation.


Thomas Vien: Does the hon. gentleman suggest that that has anything to do with conferring upon the governor in council the power to make orders and regulations? I do not regard the question as in order at this point.


Gordon Graydon: We are all trying to get certain information of a public sort, and I submit that a little latitude might be allowed with regard to a matter as important as this particular communication purports to be. I should like the chair to give the minister an opportunity to answer the question.


Mr. MARTIN:: I do not like to take
serious issue with the hon. gentleman who has just spoken, but this house has sat for five weeks and ministers have been subjected to all sorts of inquiries, and the hon. gentleman was the one who rose in his place the other day and criticized the administration
War Appropriation Bill

because of the method then pursued. Every latitude has been extended to hon. gentlemen opposite, and the hon. member who complained against the administration is the very man who is now asking us to go back to the procedure which the other day he condemned.


Gordon Graydon: It is not very often that my hon. friend misses the point entirely, but on this occasion-


Thomas Vien: Order. I have intimated to the hon. gentleman that in my opinion the subject which he proposes to discuss does not come within the provisions of section 5, which empowers the governor in council to make orders and regulations. Unless he has the unanimous consent of the committee to suspend the rule, I must rule his question out of order.


Mr. HAZEN:: If I am in order, Mr. Chairman, and I trust you will call me to order if I am not-


An hon. MEMBER:: He will.


Douglas King Hazen: 
Angus Lewis Macdonald: A great deal of consideration has been given the question which my hon. friend brings before the committee. It is true that when you take the daily rate of pay of a certain officer in the navy, and the allowance which his wife and children may receive, and compare that with the pay and allowances received by an army officer of similar rank, you may find some discrepancy. In certain ranks the naval officer will receive less; in certain other ranks he will receive more. But naval officers have many allowances of one kind or another which have come down through the years, and which help t'o make up for that difference. I have not the figures before me at the moment, 'but I shall be glad to make a more complete statement to-morrow. I may add, however, that the matter of relative pay has been considered by a committee representing all three services, which has studied the matter for months and which struck what it thought was a fair solution, taking everything into consideration. That solution is being applied at the present time. My hon. friend has been very fair in his presentation, and I shall be glad to look into the matter.


Gordon Graydon: After I mentioned the Noorduyn question, Mr. Chairman, and before I obtained a reply, you were kind enough to suggest that perhaps the committee would give unanimous consent in order that I might obtain an answer to my question. I should be very glad if you would put that question to the committee now, in order that I might obtain at least some reply from the minister. It is a matter of only a very short answer.


Thomas Vien: What was the question?


Gordon Graydon: I do not want to repeat my whole statement, but we should like to know what sort of reply was received from the Noorduyn company in connection with the interference of the four months' training with the operations of that plant.


James Garfield Gardiner: The discussion which took place yesterday had not been brought to my attention, and I do not know whether a reply has been received as yet. If the hon. member would care to repeat his question on

TFar Appropriation Bill
the orders of the day to-morrow, I should be glad to have information available at that time.


Mr. NICHOLSON:: I wanted to ask the Minister of Munitions and Supply a question under paragraph (d); but since he is not here, perhaps the Minister of Finance could give me the explanation. My question has to do with the rate of profits available to corporations receiving government contracts.


Thomas Vien: The hon. gentleman is out of order in asking that question under section 5.


Alexander Malcolm Nicholson: Paragraph (d) states:
(d) provide for the utilization, control and disposal of equipment, materials and supplies-


Thomas Vien: This section only gives the government power to make orders and regulations.


Alexander Malcolm Nicholson: Paragraph (d) provides for the utilization, control and disposal of equipment, materials and supplies. What control has the government in connection with these materials? I have in my hand an article by Leslie Roberts stating that contracts are liable to continuous audit and that the figures may be revised in order to keep the manufacturer within his ten per cent profit zone. I should like to know whether this ten per cent profit zone is on the entire investment or, for example, if the company had a turnover of a million dollars a month in connection with materials purchased, whether or not this percentage would be on the total turnover.


James Lorimer Ilsley: There is no ten per cent profit zone of which I have ever heard. I would have to see the article to know what the writer is talking about. I know in some instances an arrangement is made to keep the profit down to five per cent.


Richard Burpee Hanson: With some companies it is three per cent.


James Lorimer Ilsley: Yes. I am quite unable to understand that reference to ten per cent.


Alexander Malcolm Nicholson: Even assuming that the profit is five per cent, would that be on the total volume for a given month? For example, if you bought a million dollars worth of material in the course of the month, would this five per cent profit be allowed on the materials purchased over a given period?


James Lorimer Ilsley: It would depend on the contract. There is no general rule.


Agar Rodney Adamson: I should like to ask the minister of naval services a question. I understand that officers of the Royal Canadian Navy are exempted from payment of income
tax. Is that so? With reference to the situation in Halifax, I understand that the navy is building a large new barracks there, but are the other services doing the same thing? Would the minister find out for me from his colleagues?


Angus Lewis Macdonald: I cannot answer at the moment, but I will ask my colleague, who will be back to-morrow, or his deputy, and find out for my hon. friend.


James Lorimer Ilsley: I suggest, Mr. Chairman, that the question with regard to income tax is not in order under this section.


[Stage Direction]
Section agreed to.
On section 6-Accounting record of commitments.
Richard Burpee Hanson: I should like to make a few observations on this section, which provides:
Upon the governor in council making an allotment of any part of the one billion three hundred million dollars ($1,300,000,000) granted by this act to provide for the cost of any service, the Minister of Finance shall cause an accounting record to be maintained in a form that will disclose the financial commitments entered into and the expenditure made as a consequence of the allotment being provided for the service concerned.
Predicated on that, there will always be available to the government, and should be available to the country at stated intervals, statements of the expenditures as made under the authority of this section, and in a form that will disclose exactly what expenditures have been made in consequence of the allotment. I have not looked up the record, but I think last year I appealed to the Minister of Finance to lay before parliament within a limited period-I am not sure whether or not it was after the end of the fiscal year-a statement of this accounting of expenditures. I suggest to him that that is a reasonable request, and that if we had had something like that before us during the last three or four weeks, we would have made much more rapid progress than we did make. Instead of a procedure of hit or miss, catch as catch can, as we know was the situation in connection with discussions in committee, we would have had by operation of law and by direction of the house a statement placed before us in convenient form before we began to discuss the appropriation for the coming year, upon which matter we have spent so much time.
I appeal to the minister, as I believe I appealed to him on a former occasion, to amend this section by providing that there shall be laid before parliament a statement of the expenditures based upon section 6. That is what ought to happen and what the trustees ought to be obliged to do. It seems to me
War Appropriation Bill

that that would bring about a great saving of time in the discussion of war appropriation bills. If we had had that a month ago, this bill would have long since been passed, and we would have had much more information than we have received up to the present time.
Why, Mr. Chairman, we have just touched the fringe of the expenditure of 8700,000,000 for last year and the proposed $1,300,000,000 for this year I In a great body of 245 members I doubt if it is possible to do a thorough job in the examination of expenditures made under last year's bill. This body is too large and too unwieldy. We have, as I say, only touched the fringe of the proposed expenditure of $1,300,000,000 to be made in the coming fiscal year.
I am not going to take any blame or responsibility for the delay in the discussion. That blame is on the administration because of its not having given us in the early stages of the discussions in committee a succinct break-down of the money which parliament voted so willingly in the months of June and July last. I suggest that in the interests of the orderly conduct of the business of the House of Commons it should be made incumbent upon the Department of Finance at the next session as early as possible to submit to the house at least an interim statement of the expenditures, we will say, between the 1st of April and the succeeding six months, at which time probably parliament will not be in session.
I offer this suggestion in the spirit of goodwill. Before the bill has received third reading, I hope the minister will give consideration to what I believe is a constructive suggestion and one which in the end will save parliament a great deal of time and money.


James Lorimer Ilsley: Mr. Chairman, the information asked by the hon. member will be given at the next sitting, if it is required.


Richard Burpee Hanson: Oh, if it is dragged out of you, it will be given.


James Lorimer Ilsley: There has never been the slightest hesitation or delay in complying with requests for information. We have given table after table and information in all forms just as soon as we could find out what the members of the house wanted.


Richard Burpee Hanson: We are
entitled to have it all.


James Lorimer Ilsley: And we are prepared to do this again.


Richard Burpee Hanson: Under this section the minister is commanded by parliament to cause an accounting record to be maintained in a form that will disclose the financial

commitments entered into-that is for the guidance of the various spending departments -and the expenditure made as a consequence of the allotment being provided for the service concerned.
All we are asking-and I submit it is a reasonable request-is that within a limited period of time after the next session of parliament begins, there shall be laid before parliament, without our having to ask for it, and without having to drag it out, the information I have indicated. That would be a statement of, we will say, six months of the fiscal year.
What do we get to-day, if we do not get it in this committee? We get an abbreviated statement in the auditor general's report which, to me, does not mean anything. Look at the auditor generals' report for this year!


John Ritchie MacNicol: A disgrace to any
country.


Richard Burpee Hanson: No; I
will not say that. I believe the auditor general has probably had in mind the purpose of abbreviating, if he could. But I do not think the annual report of the auditor general is satisfactory for this purpose. It may be that we are wedded to an old system, and that we do not like to depart from it. Probably if we have to, we will get used to a new set-up. But the present condition is not satisfactory. The report comes to us too late to be of any use in discussing current events or current expenditures.
I did submit this to the minister in the utmost of good faith, and he has rebuffed me. I do not know what more I can do. I suggest to the Prime Minister-and I now make my appeal to him

that he give consideration to what I considered last session and what I now consider to be a reasonable request on behalf of the people of Canada, who are paying this money, so that their representatives in parliament may know at the earliest possible moment what is being done with their money.
On many occasions I have said in the house that the people of Canada will give this government, or any government charged with the responsibility of our war effort, all the money required to carry on that war effort. I have no doubt as to the truth of that statement. But per contra they will demand at the earliest possible moment a just and true accounting of how those moneys have been expended. If we abdicate that function in Canada and in the House of Commons, then I suggest we are not performing our proper functions as representatives of the people.

Interim Supply
It is true that under the War Measures Act we are being governed by order in council, and that parliament has been reduced to the status of a body which passes votes of money and which hands over blank cheques to the government to be filled in, in the manner they see fit. That is more or less inevitable in war time; I do not think it could be done in any other way. But the corollary is true, that because confidence is placed in the administration, that administration should rise to the occasion and submit to the people a full accounting of how the money has been spent. Surely that is a reasonable proposition.
If the right hon. gentleman were sitting here and that principle were promoted, I am sure he would get in behind the demand for its support. I well remember his attitude and that of his colleagues in days gone by in connection with votes for relief-and quite properly so. This is war time, and necessities for greater expenditures, rapid expenditures, speedy expenditures are constantly arising. All I am contending for is the principle of trusteeship. This government, the trustees of the people, should render an accounting unto Caesar-and the people are Caesar.


James Lorimer Ilsley: On February 18 I introduced the war appropriation bill now under discussion. I stated that 8700,000,000 had been supplied last spring for the current fiscal year. I pointed out that up to January 31, 1941, approximately $538,000,000 of that sum had been expended. I broke that amount down into the amounts spent on militia services, naval services, and on the air force. Further, I gave a sub-breakdown for the amount allocated to the air force. I pointed out the amount spent on other defence services, in the Department of Munitions and Supply and in other departments. That break-down is to be found in Hansard for February 18, 1941, page 822. That was the day after the house reassembled.
The information I placed on record at that time was as to the amount which had been expended, and the purposes for which the expenditures had been made. I expected that if any further break-down were required, it would be asked for. Later, in the month of March, that further break-down was asked for, and I gave it. Hansard for March 10, page 1363, shows a further break-down of the $538,000,000. It was slightly inaccurate, because the amount was $536,000,000. I explained at every stage that there might be slight inaccuracies, but I offered at all times to give information if it was required. There has been the fullest accounting and the promptest conveying of information to the hon. gentleman and to other members of the house.
When the hon. gentleman says that information has been dragged out of us, that we have given information reluctantly and only when we were forced to, he is making a misrepresentation of the facts. We have given a strict accounting and have offered to give further information at every stage. We are prepared to do so again. We do not wish the impression to go out to the country or to members of this house that we have not been giving information just as soon as it was asked for and just as fully as it was possible to give it.


[Stage Direction]
Section agreed to.
Bill reported.
[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved that the house go into committee of supply.
He said: I should like to explain why I am moving that the house go into committee of supply to consider interim supply. The government is asking for one-sixth of the amount of the estimates for the year 1941-42. It is understood that no advantage is to be taken of agreement with this motion. It is more or less a routine matter, to permit the senate to pass the bill which will be based upon the resolution, so that the services may continue in the beginning of the new fiscal year.
Richard Burpee Hanson: The Minister of Finance (Mr. Usley) was courteous enough to speak to me yesterday about this matter. At that time there
was another question involved to which I felt I could not agree. We are prepared to agree to the granting of interim supply on the distinct understanding that it is without prejudice and that it does not supersede, if that is the correct term, the previous motion to go into supply. I suppose this procedure is necessary because the other chamber may not have sufficient work at the present time and may not be available at a later date to pass this supply. This is almost a routine matter when the supply bill has not been passed before the end of the fiscal year. I took occasion to check up, and I find that in 1934-35 interim supply was asked for by Mr. Rhodes on March 29; in 1935-36 Mr. Dunning asked for it on March 27, and in 1936-37 it was asked for on March 3. I was not here at that time and I do not know the peculiar circumstances that governed. With the undertaking the minister has given, we shall be glad to agree to this motion.
Motion agreed to and the house went into committee of supply, Mr. Vien in the chair.
1850	COMMONS
War Appropriation-Mr. Hanson (York-Sunbury)



INTERIM SUPPLY BILL

James Lorimer Ilsley: Resolved, that a . sum not exceeding $37,725,207.65, being one-sixth of the amount of each of the several items to be voted, as set forth in the main estimates for the fiscal year ending 31st March, 1942, laid before the House of Commons at the present session of parliament, be granted to His Majesty, on account, for the fiscal year ending 31st March, 1942.


[Stage Direction]
Motion agreed to.
Resolution reported, read the second time and concurred in.


[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved that the house go into committee of ways and means.
Motion agreed to and the house went into committee, Mr. Yien in the chair.
James Lorimer Ilsley: Resolved, that towards making good the supply granted to His Majesty on account of certain expenses of the public service for the fiscal year ending 31st March, 1942, the sum of $37,725,207.65 be granted out of the consolidated revenue fund of Canada.


[Stage Direction]
Motion agreed to.
Resolution reported, read the second time and concurred in. Mr. Ilsley thereupon moved for leave to introduce Bill No. 22, for granting to his majesty certain sums of money for the public service for the financial year ending the 31st March, 1942.
Motion agreed to, bill read the first and second times, considered in committee, read the third time and passed.


[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved the third reading of Bill No. 19, for granting to his majesty aid for national defence and security.
Richard Burpee Hanson: 
Paul Joseph James Martin: As a matter of curiosity, who signed the Rush-Bagot agreement?


Richard Burpee Hanson: Mr. Richard Rush was, I believe, the acting secretary of state of the United States, and Sir Charles Bagot was the British Minister to Washington.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: 
Major James William Coldwell: Mr. Speaker, I do not propose to-night to speak at any great length, because I covered the ground pretty thoroughly this afternoon.
I feel, however, that the amendment moved in committee this afternoon, which was ruled out of order by the chairman, has a considerable amount of merit, and contains a principle which should be decided by the house.
I have made an alteration in the amendment moved this afternoon, and I propose to move an amendment in new form, seconded by the hon. member for Vancouver East (Mr. Maclnnis):
That said bill be not now read a third time but that it be referred back to the committee of the whole with instruction that they have power to amend it by striking out all the words after the word "raise" in paragraph 1 of section 4, line 16, and substituting the following therefor:
"under the provisions of the Consolidated Revenue and Audit Act, 1931, by way of interest-free loans to be levied .according to ability to subscribe such sum or sums of money, not exceeding in the whole the sum of one billion three hundred million dollars as may be required for the purposes of this act."
and that paragraph 2 of section 4, be amended by the deletion in line 26, of the words "and the interest thereon."


Ian Alistair Mackenzie: Is that the same amendment as was moved this afternoon?


Major James William Coldwell: The same in substance, although there is a slight alteration in the wording.
I regret very much that I was unavoidably absent this afternoon when the hon. member for Lethbridge (Mr. Blackmore) spoke, and therefore I shall leave to someone else the duty of saying something regarding his remarks. Neither do I propose to discuss the point of order raised by the chairman's ruling, because I do not think that would be proper at this particular time.
As I said, however, I believe that the people of Canada who are making great sacrifices in connection with the financing of the war feel that we must endeavour to approach something of equality of sacrifice. As I said this afternoon, there are large accumulations of wealth in the country which, in our opinion, should at least be lent, free of interest, to the government during the progress of the war. in order that the country may not be overburdened with interest during the prosecution of this struggle.
With those few words I place the amendment to section 4 before the house for its consideration.


Mr. ANGUS MacINNIS (Vancouver East):: Mr. Speaker, this afternoon I had intended making a few remarks when the amendment was moved in committee, but the ruling of the chair made that impossible. However, before submitting the reasons why in my opinion this amendment should be accepted by the house, may I make it clear that in proposing the amendment we are not opposing the appropriation. We merely propose an alternative way by which the money may be raised, or at least that part of it which will be raised by way of loan.
I believe the house is unanimously of opinion that the appropriation should be passed-and more, as occasion demands. We are unanimous in that regard because we all realize that we are fighting nations which have glorified war and which have made deceit, force, fear and terror the methods by which they negotiate with other countries.


Mr. REID:: Plus brutality.


Angus MacInnis: Yes. There can be no peace for us or for the world until victory shall crown the efforts of those who desire that the democratic way of life and the rule of law shall prevail. I am satisfied that all hon. members in this group agree wholeheartedly with the sentiments I have just expressed. If there is any difference of opinion in the house, it is as to the most socially desirable method of financing our war effort. There are at least two definite reasons why our method of floating war loans should be accepted. First, it is the psychologically desirable method; second, it is the method economically desirable. I shall take only a few moments to support those two reasons.
It is psychologically desirable because, whether we like it or not, or whether we accept it or not, we are living in a class society, and there is a strong feeling in large sections of the country that only one class is being asked to-day to do the sacrificing. In other words, acceptance of the method we propose would go a long way toward bringing about equality of sacrifice. It may be answered that we have that now, that we are all making sacrifices, and that we are all in the front line. In the language of the street, I would say that that is all hooey. In Canada we have not even begun to make sacrifices- that is, except a very small fraction of the population. So far the only people who have made sacrifices are, first, the men who have enlisted and put their lives at the disposal of the country and, second, those who are in receipt of very small incomes and find their standard of living being lowered because of the increase in prices which has already taken place. These people with small incomes have a hard time to get along, but they are anxious

War Appropriation-Mr. Maelnnis
to do whatever they can. But they see other people going on as before just as though we were not engaged in a life-and-death struggle.
Let me give two or three examples of what I have in mind. I gave one example to the house some days ago. A woman in Regina in receipt of an income of $20 a month agreed to buy one war savings certificate a month. She pointed out to the young woman who solicited her subscription that to buy the certificate she would have to forgo one meal a day. The Montreal Gazette, that strong champion of things as they are, referred to this as a gracious gesture.
I should like to give another illustration, and if the old lady's act was a gracious one, this one is disgraceful. A few days ago some one sent me a page from the Vancouver Sun containing an architect's drawing of a beautiful home being built for a man in Vancouver, at an estimated cost of $100,000. It is to be 150 feet long and thirty or forty feet wide and will contain fifteen bedrooms; the basement is to contain a number of rooms for entertainment. There will be a room for moving pictures as well as rooms for other kinds of games. If the sacrifice made by the old lady in Regina was a gracious one, the lack of sacrifice on the part of the man building this home is a disgraceful example at a time when we are all said to be in the front line. In order that things like this may not continue, we suggest that people who can afford to build $100,000 homes should be compelled to subscribe to non-interest bearing war bonds.
I noticed the other day that Doctor Staple-ford, director of voluntary services in the Department of National War Services, was advising Canadians to be patriotic, to be proud to wear an old suit of clothes or to drive an old car. If it is patriotic to wear an old suit of clothes, then I have about the most patriotic people in Canada in my constituency. They nearly all wear old clothes because they cannot buy new ones, and most of them cannot afford to buy even an old car. The same can be said of the great majority of people in all constituencies. This is another reason why we should compel people to subscribe to the financing of the war effort according to their ability.
Last month we concluded a drive to get people to subscribe to war savings certificates. I noticed that as soon as the campaign was over, the chairman went on a vacation to the Bahamas or Bermuda in order to get over the effects of his strenuous work. But hundreds of thousands of those who subscribed for war savings certificates have to count every solitary cent. As an unemployed man in the old country said to a government agent some TMr. Maclnnis.]
time ago, even a pair of shoe-laces is important to an unemployed man. He said he had strings in his shoes instead of laces. We must remember that almost every man, woman or child beyond a certain age is able to read, and they know what is going on. They have nearly all the sources of information that those in authority have. They cannot be fooled any longer that there is equality of sacrifice when in fact there is no equality of sacrifice.
I have in my hand a compilation of the debt of Canada which was prepared by the former member for Huron North, Mr. Deach-man, who I understand is now director of publicity for the Department of Munitions and Supply. I should like to draw these figures to the attention of the house in order that hon. members may understand what we have in mind when we advocate the issuing of interest-free bonds. Mr. Deachman showed that the direct expenditures of the last war were $1,698,619,000. Since the war the cost of pensions has amounted to $770,563,000. The cost of soldiers' civil reestablishment has been $258,750,000. The cost of maintaining war graves has been $4,811,000. The cost of administration of soldiers' settlement has been $28,055,000 and the estimated loss on this work is $100,000,000. He then shows that the amount paid in interest from 1915, or when the bonds were first floated, to the end of 1938, was $2,153,465,000, and we still have the principal of $1,698,619,000 to pay.
I receive dozens of letters from widows of veterans complaining that their pensions were stopped when their husbands died. Here is the situation. A man enlisted in the last war and served overseas for whatever time was necessary. He may have been wounded or his health may have been impaired so that on discharge he was granted a pension. He dies, and the pension stops.
Another man stayed at home. He bought Victory bonds and drew the interest on them from the day he bought them until he died, and after he had passed away the interest on the bonds continued to be paid to his widow. Surely, when we are asking people to give their lives in this war, is it too much to ask people to give their money?
The hon. member for Lethbridge (Mr. Black-more) in his address this afternoon said that we would be taking this money away from people. Not at all. We are asking people to lend their money to the country because the country needs it; and when the war is over, if we are in a position to pay the principal back-and this applies, of course, whether the loan is with interest or without-the lender will be repaid what he loaned, without interest.

War Appropriation-Mr. Maclnnis
We are not taking anything away from him. All we ask is that every one of us should be willing to give what we have in order that we may help to win this war. We should be willing to do that or we are not sincere when we say that we want to win the war.
The hon. member for Lethbridge this afternoon made a number of observations that seemed curious to me. For example, he called this kind of compulsory loan more subversive than the ordinary way of raising money. I do not believe that even the present way of raising money: loans with interest is subversive. I am, however, quite satisfied that there is nothing subversive about a compulsory non-interestbearing loan. He went on to say he was of opinion that already the surplus accumulations of money in this country had been absorbed by taxation and through the war loans already floated. The hon. gentleman is not watching the accumulations of money as closely as he should be, because the returns made by the chartered banks show that on December 31, 1940, savings deposits in the chartered banks amounted to $1,641,000,000 in round figures. One month later, by January 31, savings deposits had increased to $1,668,000,000, or an increase of over $27,000,000 in savings deposits in one month. It seems to me that there is no excuse for an hon. member not knowing these facts.
As I pointed out when the resolution on which this bill is based was under discussion, war economy changes the normal situation. While in ordinary peace time, at any time between, say 1929 and 1939, it might have been desirable to have an issue of money, it is not desirable at the present time, and we might as well get that fact clear in our minds. The more we get our war industries into production, the greater the number of people who go into war industries, and the greater the number of men who join the armed forces, the more imperative it will be for us to increase our taxation enormously or to raise large sums of money by borrowing. An hon. member beside me asks me to explain why. The reason is that by the production of war supplies we are putting purchasing power into circulation, and we are also putting money into circulation for the ordinary consumers' goods, but only the consumers' goods appear on the market. The war supplies are taken by the government and they do not appear on the market in the ordinary way. Consequently, the more war production we have, the greater the competition there will be for the more limited amount of the ordinary consumable goods on the market, and prices will therefore rise.
Whether we like it or not, there is no way of dealing with that situation except by taxation at a terrific rate-and remember that taxation at the necessary rate would be confiscation-or by borrowing. We are asking that the borrowing be without interest so that when this war is over, we shall not have to pay over the next twenty-five years more in interest than the principal amounted to in the first place, and then have the principal to pay. In twenty years at five per cent each year we can pay off the whole of any loan, but we can never pay off the debts contracted in this war if we follow the old method. I believe it would be not only more sound economically but also more honest to do our war borrowing in the way we propose.
I was surprised to hear the hon. member for Lethbridge opposing our amendment because at the beginning of the war he and his party proposed total conscription: man-power, money and property. We are not by this amendment proposing conscription of money in the full sense of the term, but our proposal is a step in that direction and to that extent it should satisfy the hon. member for Lethbridge.
A great deal more could be said on this question, but I do not wish to detain the house further. I think I have proved, Mr. Speaker, that both from the point of view of sound economics and also for psychological reasons it is desirable that the government should offer compulsory non-interest-bearing loans.


Mr. SPEAKER:: Perhaps in view of what took place this afternoon in connection with the amendment moved by the hon. member for Rosetown-Biggar (Mr. Coldwell), I should say something with regard to the amendment which is now proposed.
The amendment as now proposed differs materially from the amendment which was proposed this afternoon in that the word "compulsory" has been deleted, and the position now is that an amendment has been moved that loans shall be issued without interest. If hon. members will refer to section 4 of the bill, they will find that it reads:
The governor in council may, in addition to the sums now remaining unborrowed and negotiable of the loans authorized by parliament, by any act heretofore passed, raise by way of loan, under the provisions of the Consolidated Revenue and Audit Act, 1931-
And so on. The amendment moved applies to subsection 1 of section 4 of the bill, but proposes an alternative method of raising the money. The purpose of the bill and the purpose of the amendment are the raising of money-in the case of the bill, with interest;
War Appropriation-Ruling

in the case of the amendment, without. In Beauchesne's Parliamentary Rules and Forms, citation 552, it is provided:
Though it is the function of the committee of ways and means to impose rather than to repeal taxes, examples of the repeal of taxation effected in this committee are to be found upon the journals. Proposals for the variation or modification of taxation can therefore be made in the committee; but these proposals must be grafted upon the financial scheme submitted by the government, and must not affect the balance of ways and means voted for the service of the year. Amendments, therefore, can be proposed to substitute another tax, of equivalent amount, for that proposed by the government, as, for instance, a proposal to substitute probate and legacy duty on real property as an alternative for an inhabited house duty, the necessity of new taxation, to that extent, being already declared on behalf of the crown.
In the citation which I have quoted, the pregnant words are:
. . . but these proposals must be grafted upon the financial, scheme submitted by the government. . . .
I point out to the house that the financial
scheme of the government is not now before the house. What we have is an ordinary bill for the raising of money; and in the reference at the beginning, mention is made as to the function of the committee of ways and means. This is not a committee of ways and means; it is a committee of the whole; and therefore, when exception is taken to any proposals that they must be grafted upon the financial scheme submitted by the government, it is my judgment on this amendment that we are not dealing with the financial system of the government.
In May, thirteenth edition, at page 510, it is stated:
As is subsequently explained, the constitutional principle which vests in the crown the sole responsibility of incurring national expenditure, forbids an increase by the commons of a sum demanded on behalf of the crown for the service of the state. This principle, however, is apparently disregarded when the recommendation of the crown is given to a resolution empowering the expenditure of public money which, framed in general terms, places no limitation on the amount of expenditure to be authorized by the resolution. As the resolution sanctions, without any specific limitation, the application of money to be provided by parliament to certain purposes, when the clauses in a bill founded upon such a resolution are before the committee, the freedom of action sanctioned by that resolution can be exercised. The committee is not bound by the terms of the provisions which the ministers of the crown have inserted in the bill; and any member may propose to increase the grants specified in these clauses or to extend the application of the provisions of the bill, whatever may be the cost resulting therefrom, so long as the power conferred by the royal recommendation is not exceeded. Acting on this principle, when, in 1812, a committee was considering a message from the prince regent recommending, in general terms, provision to be made for the family of 
Mr. Spencer Perceval, amendments were permitted for increasing the provision proposed by the ministers. This practice has been supported by rulings from the chair, though, on the last occasion, not without remarks which deserve careful consideration.
The principle that the sanction of the crown must be given to every grant of money drawn from the public revenue, applies equally to the taxation levied to provide that revenue. No motion can therefore be made to impose a tax, save by a minister of the crown, unless such tax be in substitution, by way of equivalent, for taxation at that moment submitted to the consideration of parliament.
And, on page 512 of the same edition:
The house can make amendments which diminish the amount of a reduction of taxation, or postpone the day when the reduction takes place, although the amendments may increase to that extent the charges proposed to be levied upon the people. So long as an existing tax is not increased, iany modification of the proposed reduction may be introduced in the committee on the bill, and is regarded ias a question, not for increasing the charge upon the people, but for the determining to what extent such charge shall be reduced.
Further on, the author gives another illustration:
As a final illustration of the way in which the reduction of public charges is dealt with, it may be mentioned that, as a "drawback" is *a fiscal arrangement made to facilitate the exportation of goods liable to excise duties, and is so far an alleviation of taxation, a provision creating a "drawback" can be considered without recommendation from the crown, or a preliminary committee resolution.
While it is true that none of the illustrations given are directly apropos of the question which is now before the house, yet the principle is the same and the fact is that if the amendment carries and becomes a part of the bill, the charge against the country will be lessened rather than increased. As I have already said, this is not the financial scheme of the government, in that we are not dealing with the budget, which really embodies the financial scheme of the government. In my judgment, therefore, the amendment is in order.


James Lorimer Ilsley: Mr. Speaker, before the question is put, I should like to make a few observations.
The amendment now before the house differs from the amendment proposed this afternoon and also the amendments or proposals suggested previously by the Cooperative Commonwealth Federation group, in that it leaves out the element of compulsion. That is, nominally it leaves out the element of compulsion, lout in reality that element is present. It is quite obvious, I believe, to any hon. member who gives the matter even slight consideration that if we were to attempt to borrow $1,300,000,000, or even a small part

War Appropriation-Mr. Ilsley
of that sum, from the people of Canada without agreeing to pay interest on that loan, we would not get the money on a voluntary basis. It would be necessary to levy the loan. As a matter of fact, the word "levy" or "levied" is used in the proposed amendment. The amendment is that:
. . . under the provisions of the Consolidated Revenue and Audit Act, 1931, by way of interest-free loans to be levied according to ability to subscribe such sum or sums of money, not exceeding in the whole the sum of one billion, three hundred million dollars as may be required for the purposes of this act.
Apparently what is proposed is the infusion into a voluntary loaning system of a compulsory loaning system, a system of forced loans. The first observation which I should like to make is that the two systems cannot exist side by side. Just as, I think, Lincoln saidi that a nation cannot exist half slave and half free, so I am sure we could not have here in Canada a system of loaning which was half compulsory and half voluntary. The effect of announcing that a substantial sum of money was going to be levied upon the people by way of forced loan would be that it would be practically useless for us to appeal for voluntary loans, because all the enthusiasm, all that spirit of democratic cooperation to which we appeal, and appeal very successfully at the present time, would dry up.
Mr. MaeINNIS: Only for raising money, but not for people to fight.


James Lorimer Ilsley: I do not want to be dragged off of my line of argument.
Mr. MaeINNIS: That is not dragging you off; it is setting you right.


James Lorimer Ilsley: The temptation is too great and I am going to be drawn away from my line of argument just to deal with that observation. The hon. gentleman who has just interrupted has frequently said that this government is fond of conscripting men but will not conscript wealth. I heard him make an eloquent appeal on that point here last November or December. I wish to examine it for one minute. It is true that we have conscription of men in this country, but it is conscription of men to a very limited extent. If one were able to measure the extent of the conscription of men in Canada in terms of the percentage of total conscription, one would find that the conscription of human beings is far less than the percentage of conscription of wealth. Let me adduce some figures in support of that.
I believe I told the house the other day about the amount of money we are taking in taxation, which is real conscription of wealth, because there is then no obligation to repay,
as my hon. friends think there should be, apparently, to a larger extent than I think there should be.
Mr. MaeINNIS:	All right, accept the
amendment, if that is true. We will go part of the way with you.


James Lorimer Ilsley: 
Mr. HOMUTH:: What percentage of the national income is that?


James Lorimer Ilsley: 
An hon. MEMBER:: What about Saskatchewan?


James Lorimer Ilsley: I can give the figures for
Saskatchewan. I have them here. They will be found in the budget speech of the then Minister of Finance on June 24, 1940, at page
War Appropriation-Mr. Ilsley

1027 of Hansard, setting out a table for all the provinces which have income taxes. To hon. gentlemen who think that we are running the government in the interests of the rich, I would recommend a perusal of that table.
What I was going to say when I was derailed by the interruption is that the blending of the two systems is impossible. We would be driven to a compulsory system. My hon. friends have been talking about inequities and injustices. The essential injustice of the compulsory system is that equity is impossible because of the differing circumstances, differing requirements and differing necessities of persons with the same income.
In so far as- equity is possible, in so far as we can determine equitably what each can pay, we determine that when we impose taxation. We impose taxation up to a pretty high level, and above that there will be some persons with a surplus who cannot, and in other instances, persons who should not, devote that surplus to the uses of the government. It might be far more advantageous to the country if they would put that surplus into capital investment and produce goods for war purposes or something of that kind, while alongside them might be another person with the same income whose surplus could not be devoted to that purpose but who should lend his money to the government. That is the reason why a voluntary system of taxation fits in equitably if there is the right spirit in the country, if the people have the right view of the matter, while the voluntary system of lending fits into the taxation system.
My hon. friends gave instances of slackers, men who got money apparently in some way or another in the war and did not show any conscience about it, who indulged in an ostentatious display in the expenditure of that money. These people are not very numerous in this dominion, and they are becoming less numerous with the growth of a proper public opinion. In England the degree to which public opinion has developed is considerable. A few weeks ago I heard Lord Kindersley on the radio, in one of the Sunday afternoon broadcasts in the interests of the war savings campaign, make the statement-I cannot remember his exact words-that public opinion had been developed to such an extent in Great Britain that the blatant spender was a social outcast. That is the state to which opinion will have to be developed in the Dominion of Canada. The compulsion is then the compulsion of public opinion, the pressure of what a man's neighbours think, what people all over the country think. That

is the system upon which we are relying, and we have been relying upon it with good results.
I do not believe I finished the thought I was attempting to develop about the impossibility of saying what one person should lend to the government and what another person should. I was dealing with the man with the big income, the man with a great deal of wealth; but when you come to people with small incomes and small amounts of wealth, and undertake to have the government say to them, "You should lend so many dollars to the government"-


Thomas Miller Bell: That is what is done
now with the small people; not by the government, but by employers.


James Lorimer Ilsley: My hon. friends have said a great deal about employers.


Thomas Miller Bell: Some employers.


James Lorimer Ilsley: There may have been some instances in which excessive pressure was exerted, but it must be remembered that in the war savings certificates drive we are not taking money away from people without interest; we are paying three per cent compound interest on the money. I should be much surprised if there were any real injustices in this connection. I think the percentage of cases in which any injustice has been done to any person, rich or poor, in this dominion, in the war savings certificates drive would be infinitesimal. On the contrary, when they have been persuaded to buy war savings certificates, in practically one hundred per cent of the cases they have been persuaded to do something greatly in their own interest as well as in the interest of the country.
As I say, I think it would be perfectly impossible for any government, by any system of compulsion or by any system of exemptions, to get substantial sums in this way with any degree of justice. We could perhaps do it up to a certain level, but if we were to get very large sums such as we get in our loan campaigns it would be impossible to say to Mr. A, "You should lend X dollars to the government," and to Mr. B, "You should lend Y dollars to the government". In one case there might be sickness in the family; there might be demands about which we would know nothing. There might be requirements, obligations a man had to meet, of which the government could have no knowledge, and for which there would be no possible way of making any allowance. That is why the ideal system is to have a healthy state of public opinion, upon which in a democracy one has to depend in order

War Appropriation-Mr. Douglas (Weybum)
to get the maximum war effort. That is what we have by our system of voluntary contribution.
I am a little surprised at that group, which is so strong on freedom and liberty, rushing so quickly to compulsion in this important matter. I am always very much interested in the views expressed by both groups in the far corner opposite, and I think if we could take the best views of each group we might have a pretty good policy. For instance, I agree with the hon. member for Vancouver East (Mr. Maclnnis) when he says that the creation of substantial sums of new money is a most foolish policy, particularly under present conditions. I also agreed with the leader of the social credit group this afternoon when he said a forced loan would be a bad thing under present conditions. If they would just take the best and discard the worst of the policies that emanate from that corner of the house, I think we might accept those hon. gentlemen as pretty safe guides. Unfortunately there is always a certain admixture of error with a considerable amount of truth in what they have to say.
The compulsion should, I think, be reserved for taxation for the time being. As I say, we are raising large sums by taxation. If it really were to be thought by the public of Canada that this house was to-night considering forced loans-and the government is not considering forced loans-I am afraid the results in the country to-morrow would be fairly serious. Any threat of a compulsory loan would be likely to create considerable uncertainty and fear among many people with small savings but without much understanding of financial matters. Certainly it would result in many small savings deposits being withdrawn from the banks and hoarded in the form of currency, in the hope that thereby they might be hidden and so escape any such conscription of wealth. Such action would be useless and foolish from the point of view of the individual, since in any event there is no question of confiscating bank deposits. It would mean that the owners of these small savings would lose the return on them by refusing to invest them. The well to do, on the other hand, with better sources of information, -would not be penalized by any such fears, so any fear of compulsion is apt to work damage on the poor rather than the rich. There is another type of hoarding which might result from fear of compulsory loans; that is, the hoarding of goods by those who might wish to spend their money before the government could commandeer it. This would be just as baseless a fear and as futile a reaction as the hoarding of currency, but it would be much more *contrary to the public interest. Any action of
this kind would tend to increase the scarcity of labour and materials needed for war purposes.
I think that pretty well sums up the reasons for which I would ask the house to reject this amendment. Something has been said about New Zealand. I am not familiar with the experience of that country, but I do not think they have gone very far with their proposal; at least I cannot find any evidence that they have done so. They took power to levy some compulsory loans in that country, but though I have been trying to find out what they have done I have been unable to get any information, and I doubt if the hon. member for Rosetown-Biggar (Mr. Coldwell) has anything more definite than I have. I should be very much surprised if that plan really has been tried there, or, if it has been tried, if it has been a success.


Thomas Clement (Tommy) Douglas: Mr. Speaker, I should like to take just a moment or two before this motion is put. It seems to me that the Minister of Finance (Mr. Usley) has put up an excellent straw man in order to knock him down again. In the first place the minister suggests that he is prepared to obtain money by taxation while we are suggesting that money obtained by this method should be given back; and the minister suggests that he wants to take money in much larger quantities than we are prepared to do. Of course he knows that the amendment now before the house would not in any way preclude the levying of taxes. What is suggested is that when all that can be collected out of current income is collected, the remainder must be secured from reserves. That is what we do now. The remainder must be obtained from reserves of wealth, and this motion only suggests that instead of getting that money from reserves by borrowing it at rates of interest, it shall be borrowed without interest, and that the levy shall be made on the principle of ability to pay.
In the second place I wish to point out that the minister has suggested that this government is following a policy of conscripting wealth to a much greater extent than it is conscripting men. I point out first that this conscription has been imposed upon one class to a much greater extent than upon other classes. Economic conscription has been brought to bear upon thousands of men in Canada, particularly unemployed young men and those in the distressed areas of this country, many of whom have flocked into the fighting services not only for patriotic reasons but also because of economic motives. What has the minister to substantiate his claim
1S62	COMMONS
War Appropriation-Mr. Douglas (Weybum)
that wealth is making its contribution? He quotes some figures which in themselves are fantastic. When the minister talks about incomes of $500,000, he knows very well that last year there were only 483 people in Canada who received incomes of $50,000 to $100,000 and up. That statement is contained in an answer given on March 17 by the Minister of National Revenue (Mr. Gibson) to a question asked by the hon. member for Red Deer (Mr. Shaw). So those people in the $500,000 income bracket, about whom the minister spoke, are simply non-existent.
The important matter, however, is not to read to this house or the country figures showing how much a man pays when he has an income of $100,000. I note just one or two of the figures. I notice, for instance, that, according to the minister, a man in Ontario with an income of $100,000 has to pay $56,000. That is not the important thing. The important thing is that he has $44,000 left. Does the minister suggest that any man who has an income of $44,000 a year, when this country is at war, is making the greatest possible contribution he could make to the winning of this war? At this time we ought not to ask what a man pays in taxes when he has $44,000 a year left to spend. That man does not know anything about conscription of wealth, or anything else.
The amendment now before the house asks for the introduction of two principles: First, that over and above taxes the money which the government must secure from reserves other than current income shall be levied on the basis of ability to pay. We are levying on reserves now; that is why we float loans. In the main they do not come out of current income. Taxes come out of current income, but loans come out of reserves or savings. Voluntary loans, however, are made on the basis that the person with the greatest sense of public duty subscribes. We collect our loans now from the people who have the greatest sense of public duty; and we entirely overlook, and allow to slack-and I use the minister's own expression-that person who has no sense of public duty.
The outstanding principle included in this amendment is that for the first time we shall begin to tax those reserves on the basis of the ability to contribute toward the winning of this war. The second principle is that we shall eliminate the payment of interest, because by the time this war is over, the major part of the bonds having been contributed to a very large extent by a minority of the people, we shall find that we shall have mortgaged Canada for a generation or two to come, and that at the present rate at the end of four years we shall have sold bonds which

will be equivalent in value to practically all the farm land in Canada. We shall find that we, our children and our children's children will continue to pay interest to those very people who are now in a position out of their reserves of wealth, apart from their incomes, to subscribe to the government's war effort. We are suggesting that the people who have reserves of wealth shall contribute on the basis of ability to pay, but having in mind that generations after us shall pay back contributions made without having to pay toll and tribute year after year, as we did after the last war.
I should like to close with this observation: The minister has said that if this policy were announced to-night it would cause fear from one end of Canada to the other. I tell the minister I believe it would cause confidence in many parts of Canada. It would cause many of our people to feel for the first time that we are really all in the front line, and that this government is now calling upon every Canadian citizen on the basis of his ability to contribute toward the financing of the war. It would give to the men in the fighting services and to those people across Canada who pay innumerable taxes and are already carrying a great load, a feeling that for the first time the government is calling upon those who have the ability to pay, to shoulder their fair share of the burden of carrying on this war.


Mr. VICTOR QUELCH (Acadia):: War Appropriation-Mr. Quelch
tvhy do we not obtain the money from our own bank, the Bank of Canada, instead of from the chartered banks, who will merely create the means of payment?
That is when the minister interjected that it would be inflationary. This is the reason the minister gave for saying that it would be inflationary. He stated that when money is issued by the Bank of Canada, that money eventually finds its way into the cash reserves of the chartered banks; that is to say, the cash reserves of the chartered banks will be increased by that amount. In view of the fact that they are operating on a ten to one basis; they would then be able to expand their loans hv ten times the amount of the increased cash reserves. This is exactly the same reason which Mr Dunning gave on previous occasions. What does this really mean? It means that we dare not use the Bank of Canada for fear the chartered banks will expand their loans and thereby bring about inflation. In other words, it proves conclusively that up to date this government has not established effective control over the issue of credit by the chartered banks. Yet time and again we have been told in this house that we have. The former Minister of Finance, Mr. Dunning, told us that we had absolute and effective control over the chartered banks. I should like to quote what the former Minister of Finance said in this regard on February 28, 1938. He said:
Parliament through instruments which it has created and which are now in operation does control currency and credit in Canada day by day, week by week and month by month.
And yet we dare not issue money through the Bank of Canada for fear the chartered banks will expand their credit. As I say, this shows conclusively that we have not obtained effective control over the issue of credit by the chartered banks. Is it not strange that we should have a national bank and yet not be in a position to use it because we are afraid of the action the chartered banks may take? Surely the first thing to be done, something which ought to have been done long ago, is to establish effective control over the chartered banks. When I spoke on March 20, I outlined three methods by which that control might be effected. I suggested the 100 per cent money system advocated by many leading economists and bankers. I pointed out also that it would not be necessary to go that far, that one could merely increase the cash reserve requirements of the chartered banks to an extent where they would not be able to utilize the new issue of cash for the purpose of expanding their loans. I suggested also that we might buy the shares of the chartered banks.
I maintain that any one of these three methods would give us control of the chartered banks so that we could issue money through the Bank of Canada without any danger whatsoever of the chartered banks increasing their loans. Until we do that, we shall never be in a position to finance the expenditures of this country without debt. That is my main objection, really the only objection I have to the amendment moved by the hon. member for Rosetown-Biggar. It would increase our debt, and I consider that in war time we ought to adopt a really pay-as-you-go policy. No one should desire or hope to benefit materially as a result of the war. I should like to read a statement made by the Prime Minister (Mr. Mackenzie King) on August 2, 1935. He said:
Until the control of the issue of currency and credit-
Very often the word "credit" is left out.
-is restored to government and recognized as its most conspicuous and sacred responsibility, all talk of the sovereignty of parliament and of democracy is idle and futile. To regain for the nation what has been lost and to secure a properly constituted national central bank will continue to be a first objective of Liberal effort.
Will anyone dare to suggest for one moment that this objective has been reached when we dare not issue money through the Bank of Canada without fear of the chartered banks creating inflation by expanding loans to ten times the amount of the cash issued by the Bank of Canada? That seems to me to be a rather unfortunate position for this government or this country to find itself in at the present time.


James Lorimer Ilsley: Do we not control credit when we refrain from issuing money through the Bank of Canada?


Victor Quelch: Yes; but that is saying that we will control credit by removing the basis for credit. That is a negative stand to take. I quote further from the remarks of the Prime Minister as to why this bank was to be established:
It stands for the immediate establishment of a properly constituted national central bank, to perform the functions of rediscount, and the control of currency issued, considered in terms of public need. A central bank is necessary to determine the supply of currency in relation to the domestic, social and industrial requirements of the Canadian people.
I do not think anyone can maintain that during the past five years credit and currency have been made available in terms of public need, to meet the domestic, social and industrial requirements of the Canadian people. When we had during that period a million

War Appropriation-Division
people on relief, a half million people unemployed, can anyone say that currency and credit were made available to meet the social requirements of the Canadian people? I should like to give the house the definition of inflation which was given by a former minister of finance to show that credit could have been issued safely at that time without danger of inflation. The hon. member for Lethbridge said this:
The minute you get more money in circulation, let me repeat, than enough to do the work of distributing goods and services which are abroad in a country to be distributed, then you have inflation, and not a minute before.
The then Minister of Finance, Mr. Dunning, said that he agreed. No one will suggest that there was enough money in circulation from 1935 to 1939 to exchange the goods and services available at that time. The minister admitted himself in 1939 that it was necessary to have a degree of carefully controlled monetary expansion in order quickly to put people to work, in order quickly to bring industry to full production. The same thing could have been done from 1935 to 1939. Yet every time that we urged the government to issue money through the Bank of Canada we were given the same excuse the minister gave on March 20, that we cannot do it for fear the chartered banks would create inflation by expanding their credit on the basis of the cash issued. This proves conclusively that we have not established effective control over credit. I remember that in the past the Minister of Finance said, when we suggested that $200,000,000 should be issued to build up a national works programme, that the issue of $200,000,000 would not in itself cause inflation; but when the chartered banks acquired that $200,000,000, he said, and expanded it to $2,000,000,000, he was old-fashioned enough to think that would cause inflation. But, Mr. Speaker, if any of the three proposals I have mentioned were adopted, it would be impossible for the chartered banks to expand their loans on that basis.
Now that this subject has again come up for discussion, I wonder whether the Minister of Finance could not give us a better excuse -perhaps I should say reason, but I think I am justified in using the word "excuse"- than the one he gave us the other day, that we cannot use the Bank of Canada because the chartered banks are likely to expand their credit on the basis of the cash issued through the Bank of Canada.


Georges Parent: With reference to the
amendment to the amendment, I would call the attention of the house to section 4, subsection 1, of the bill, which reads:
The governor in council may, in addition to the sums now remaining unborrowed and negotiable of the loans authorized by parliament, by any act heretofore passed, raise by way of loan-[DOT]
And so on. The principle of the bill is contained in that section, which is, a loan to be raised. The amendment to the amendment which is now before the house proposes to raise part loan, and part something else, which is not stated. If this amendment had been brought before the house on the second reading of the bill, When the principle of the bill was adopted, it might not have been out of order, but at this moment in my judgment it is out of order.



CITY OF OTTAWA AGREEMENT


[Stage Direction]
Hon. P. J. A. CARDIN (Minister of Public Works) moved that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to authorize the Minister of Public Works on behalf of His Majesty to enter into an agreement to pay to the corporation of the city of Ottawa the sum of $100,000 for the year ending July 1, 1941.
Motion agreed to and the house went into committee, Mr. Vien in the chair.
Mr. CARDIN:: This resolution precedes
the introduction of a bill providing for the renewal of the agreement between the federal government and the city of Ottawa by which
[Mr. Speaker.)
the federal government pays to the city the sum of $100,000 as compensation for water used for sprinkling purposes in parks and also for fire protection.
A number of years ago, as hon. members will recall, the city of Ottawa made a claim against the federal government on the ground that a number of properties had been taken over by the government, thus depriving the city of the taxes previously imposed upon these private properties. Several points of discussion were raised, but finally, after negotiation, an agreement was reached, I believe, about the year 1920. By that agreement the city was to be paid $75,000 a year for the services to which I have referred. A few years afterwards the agreement was extended for a period of five years on the understanding that the $75,000 would be increased to $100,000 a year. That agreement was in force up to the year 1930. Since 1930 it has been extended every year by a bill similar to the one which will be introduced if this resolution carries.
I do not know that I can add very much more by way of explanation. This is an old procedure which has been followed every year. Some people might suggest that it was about time we made an agreement which would last for more than one year, but that would reopen all the questions which were raised when the first agreement was negotiated, and certainly for this year, in the difficult times through which we are passing, I do not think it would be opportune to reopen the matter with a view to reaching a new agreement.
The criticism has been made that we are not giving similar compensation or payment to other cities. My reply is that Ottawa is in a peculiar position because the federal government controls a much larger number of properties in this city than in any other city in the dominion; and these properties being exempt from taxation, the city of Ottawa is exposed to the loss of a much larger amount of taxes than any other city in the country.
Judging from the favourable reception given to similar proposals in years gone by, I sincerely hope that the committee will support the resolution and allow the bill to be introduced.


Richard Burpee Hanson: I rise, not for the purpose of opposing the resolution-it is an old friend-but to ask for a little information with respect to the government's policy regarding property recently purchased by the dominion in the city of Ottawa. There is an outstanding instance in the purchase of the Jackson building, now occupied largely, if not altogether, by the Department of National Defence for Air. That building, of

City oj Ottawa Agreement
course, is a rather modern and improved building, costing the government a large sum of money-I have forgotten what it is, something around $1,000,000. The moment it becomes government property, it automatically goes off the assessment roll of the city of Ottawa. I should think the loss of revenue from a property of this kind would be a matter of great concern to the civic government, and I should like to know just what is being done with respect to that building. Of course I realize that if title has not passed, the property is still subject to taxation, and I am not quite sure that I know the exact position. I recall that the building was purchased on the instalment basis, with so much to be paid each year, so I presume the title would remain with the former owner until such time as the payments were completed.
There are, however, other buildings in Ottawa which have been acquired recently. I have some recollection of reading that a warehouse building on Nicholas street was purchased from somebody for $100,000. Automatically that would be taken out of the assessment of the city of Ottawa. Then I believe an expensive brewery property was expropriated recently, for what purpose I do not know. Perhaps, if the minister has the information, he would make a statement as to what property has been purchased and what has been the effect on the Ottawa civic revenue.


Pierre-Joseph-Arthur Cardin: I regret very much not having before me at the moment all the information with regard to properties which have been expropriated by the government. I might say general!}', however, that once the property is acquired, it ceases to be subject to the payment of taxes to the city of Ottawa. That was one of the claims made by the city, that in taking over properties which were paying taxes to the city treasury we were depriving Ottawa of substantial revenue, and that was one reason for asking the government for some kind of agreement.


Karl Kenneth Homuth: Does that apply to the Jackson building?


Pierre-Joseph-Arthur Cardin: Yes, it does. It also applies to the brewery to which the leader of the opposition has referred, and to all properties that we are taking over. The moment we take over these properties, they cease to pay civic taxes.


Mr. HARRIS (Danforth):: The property is still assessed, and the minister has before him the assessed value for the current year.


Pierre-Joseph-Arthur Cardin: Yes; we have the assessed value, but we pay no taxes.


Joseph Henry Harris: In that way we could get some idea of the loss in taxation.


Pierre-Joseph-Arthur Cardin: Oh, yes; that could be obtained.


Richard Burpee Hanson: If the
minister has not the information here at the moment, perhaps he could give it to us at a later stage of the bill.


Pierre-Joseph-Arthur Cardin: That could be given when the estimates of the public works department are being considered.


Richard Burpee Hanson: Or when this bill is in the committee stage.


Pierre-Joseph-Arthur Cardin: Yes.


Thomas Langton Church: The principle under which this grant is made originated some years ago, at a meeting of the municipalities of Canada. At that time it was pointed out that in Australia each province gave a cash grant to the capital city in exchange for municipal services. For example, the government of New South Wales helps to maintain the police and fire departments of the city of Sydney. I do not desire to oppose this grant to the city of Ottawa; far from it. But when you add this amount of $100,000 to the amount spent by the Ottawa improvement commission and the other large sums of money spent in this city-I think there was a year ago something like $8,000,000 for new buildings-it amounts to a very large sum. This $100,000 and the amount spent on other Ottawa parks work are equivalent to about two and a quarter mills in the Ottawa tax rate, and to that extent this government is lessening the taxes which otherwise would have to be paid by the people of this city.
The principle underlying this grant should be applied to the provincial capitals as well. It applies in the United States, where they give what is known as a subvention to the capital in exchange for certain civic services to the state such as police protection, fire protection, water, health regulation, street cleaning and so on.
That is the situation in times of peace, but this is a time of war, and the war has placed a very heavy burden on the municipalities. In the first place, the government comes along and appropriates their revenues. The income tax was the exclusive field of the municipalities from 1867 to 1917. That field has been taken over by the provinces and invaded by the dominion, and now hon. gentlemen opposite are threatening what they are going to do in the way of appropriating more of municipal and other provincial revenues. The result will be that our municipalities will starve, because all their money must come from taxes on real estate and they can get no help anywhere.
That is not a fair condition. Every vote must have a principle, and if the principle of
City oj Ottawa Agreement

this vote is sound, then I believe it should apply to the larger municipalities throughout the country. The city of Toronto, for instance, gets little or nothing no matter what government is in power. Why, Toronto has to pay the cost of guarding the hydroelectric power plants and other city property, and the distribution system covering the whole of Toronto, which furnishes all the power used by the munitions factories of that great city. We do not get a cent for that. During the last war the federal government paid the cost of guarding, by the militia in training, all federal, provincial and municipal property, but that is not so to-day. The province of Ontario came to Ottawa with regard to that matter, and this government last fall receded from its position and took over the cost of guarding the power plants in the Niagara district, but did nothing about the distribution power system of the municipalities; it let them pay for that work.
In my view this principle should be applied to other municipalities in addition to Ottawa. Some contribution should be made by this government in exchange for the services rendered as well by the larger municipalities. In Toronto the government has been given the use of the exhibition buildings and grounds, which cost $24,000,000 of the taxpayers' money on grounds, buildings and permanent exhibits. Those buildings and grounds were used for military purposes in the last war, and are similarly used in this one, and this government does not pay a cent for them. It does not even pay the cost of lighting the grounds.
This government has thus placed a very heavy burden upon the municipalities. Almost every statute passed by this parliament adds to that burden, but the municipalities are not given a dollar in subventions. That is inequitable and unfair. Here Ottawa is given a grant amounting to about two and a quarter mills in the tax rate, while the other municipalities can get nothing at all. Here we are voting about three billion dollars, presumably for war purposes, although a great deal of it is not for the war at all. It must be remembered that some war work is also being done by the municipalities, and they pay part of the federal burdens. Toronto has, in its tax rate, about two mills of purely federal burden.
Since I have been in this house I have urged that the government should heed the handwriting on the wall. I believe the principle under which this grant is made originated when I was president of the union of Canadian municipalities. We adopted a motion urging that the government should give subventions to the larger centres of population in exchange for municipal services, but so far that

principle has been extended only to the city of Ottawa. I believe some recognition should be granted the other cities that give a great deal more in the way of the services than is given by the city of Ottawa. I urge the minister to consider this point. Two years ago he said he would do so, but he has not considered it at all. In view of the heavy burden of taxation municipalities are paying, a contribution of two or three mills to the tax rate would look particularly good, especially in view of the fact that the government is taking large revenue from municipalities. We seem to have the principle of the law of the jungle-"to him that hath shall be given, and to him that hath not shall be taken away even that which he hath." I see no reason why the city of Ottawa should not have some recognition; but I must say, as I said last year when a similar bill was under consideration, that some consideration might be given to other cities in this connection.
It was pointed out by me last year that there is not sufficient room for all the war departments of the government, and I suggested that many of them should be moved to Toronto, Hamilton, Montreal and other points where housing and building space are available. I believe such a movement would effect great economies. When the minister replied, he said the matter would be taken up, but it has not been.
Where is the government going to get space? I suggest that great economies could be effected by a rearrangement of departments and their transfer to other cities and towns. I hope the minister will give us some explanation of this expenditure. Why is it that there is always discrimination against the city of Toronto? No matter what government is in office, we receive the same treatment. We contribute tax moneys to the extent of nearly $92,000,000, and we get nothing in return but pin-money. I say we are entitled to recognition. We have no post office. We had a new mail order building, but it was taken away and given to the military authorities for an ordnance department. Toronto paid one-third of the cost of the viaduct, a sum it had no right to pay, at all. It has contributed large sums of money to the federal exchequer; it is behind the government, and wants to help it. I hope, however, that after the representations I have made, the minister will give the matter some consideration. I believe that in other places they do receive better treatment. I hope other members of the Conservative party from Ontario will take a similar stand. I

City of Ottawa Agreement
would hope, too, that members on the government side might do likewise. The hon. member for Hamilton West (Mr. Gibson) a minister, is in his seat to-night, and I hope he will take that stand. I shall not plead their cases for them, but I do say they are entitled to just as much money as is the city of Ottawa. I should like to know the views of the hon. member for Hamilton West regarding this policy of treating cities in a different manner, because he is a member of the government.
Resolution reported, read the second time and concurred in. Mr. Cardin thereupon moved for leave to introduce Bill No. 23, to authorize an agreement between His Majesty the King and the corporation of the city of Ottawa.


[Stage Direction]
Motion agreed to, bill read the first and second times and the house went into committee thereon, Mr. Vien in the chair.
On section 1

Agreement with city of Ottawa extended for one year.
Douglas Gooderham Ross: I listened with
interest to the remarks of the hon. member for Broadview, and I should think the city of Toronto would very much like to have the capital at that point. As a matter of fact, I believe we would be willing to pay money to the government of Canada to have the capital in Toronto. I am not, however, opposing the vote of $100,000 to the city of Ottawa; probably that vote is needed.
I suggest, however, that this is war time, and that the vote is the same as it was in other years. It seems to me that in a time of war some of these expenditures might be reduced. I believe that economies are necessary, and I would recommend that on account of the war the minister do something toward reducing the amount of expenditures involved in this measure. That is my only reason for making the suggestion. We must economize in all quarters.


Gordon Graydon: I rise to protest that we have not a copy of the bill with which we are now dealing. Surely, if we are to follow the rules, we should at least have the bill before us.


Thomas Vien: I would point out that the bill is in language exactly similar to that in the resolution on the order paper. If hon. members wish, I shall read the bill.


Pierre-Joseph-Arthur Cardin: Certainly the hon. member has had some experience in these matters, and he has knowledge of similar bills which have passed through the house since he has been a member. As I pointed out earlier, since 1930 there have been bills each year
renewing the agreement, which dates back to 1920. This bill provides only for a renewal of the agreement for another year. At other times the house has been most generous in its treatment of similar measures; on some occasions it has proceeded from the resolution stage to third reading at one sitting.
When discussing the resolution the leader of the opposition pointed out that there were certain details I was not in a position to give at that time, and he asked me if I would give those details in committee on the bill. I would be ready, if necessary, to move that the committee rise, and that we consider the bill to-morrow. In order, however, that the other house may have some business, I would ask that the bill be permitted to proceed to-night, on the understanding that when the estimates of the Department of Public Works are before the committee of supply, I shall bring the information asked by the leader of the opposition and the hon. member for Danforth. The whole matter could be reopened, so far as property in Ottawa is concerned. If it is satisfactory, I would ask that the bill be reported, and that we dispose of it.


Gordon Graydon: I was not objecting in a critical way, but it is the right of every hon. member to have before him any bill which is being discussed. I had no knowledge that the minister had made an explanation to the effect that the bill was similar to that passed in previous years. I must maintain, however, that our ordinary procedure of having bills before us when they are discussed is one from which we ought not lightly to depart. I have no desire in any way to hold up the passage of the bill or the business of the house.


Mr. CRERAR:: There is no desire to press the matter against the wishes of the hon. member. I asked across the floor of the house if we would take second reading, and someone nodded. After all, it is a simple measure, and we might do well to get it out of the way.


Richard Burpee Hanson: There is no objection.


Gordon Graydon: No objection, at all.


Mr. McILRAITH:: With reference to the suggestion of the hon. member for St. Paul's, that the amount be reduced by reason of the war, I wish to make it perfectly clear to the committee that, as the member for Ottawa West I feel the amount is very much too small. I have refrained from raising this point before or from going into the matter because of the war situation and the urgency
City of Ottawa Agreement

of the need for money for war purposes. In no way, however, do I acquiesce in the suggestion that the amount is too large.


Mr. PINARD:: Mr. Chairman, I should like to say a few words to those who are objecting to this bill. Apparently the leader of the
opposition is waiting to hear what I have to say. Two or three years ago I objected to the amount paid to the city and asked for $200,000 instead of $100,000. Since that time many additional expropriations of property have been made. Property totalling millions of dollars has been taken off the tax-rolls of the city. If this bill is to stand over; if the objections are well founded, then the chances are that the Minister of Public Works and the leader of the opposition will be ready to agree to the amount being raised1 to $200,000, which would be quite reasonable. I think objections to this bill should be withdrawn. Hon. members should consider the amount of money contributed in many different ways by the civil service. They have done their bit. As far as the hon. member for Peel is concerned, if he is willing to spend a few minutes with me in my office I shall treat him right and I think I shall be able to show him that he is wrong.


George Hugh Castleden: What is the procedure with regard to the payment of taxes on properties acquired by the government?


Pierre-Joseph-Arthur Cardin: The federal government pays no taxes.


George Hugh Castleden: In other words, these properties come off the tax-rolls?


Pierre-Joseph-Arthur Cardin: Yes.


Douglas Gooderham Ross: How much will that amount to?


Pierre-Joseph-Arthur Cardin: I cannot say at the moment, but I shall undertake to supply that information.


Douglas Gooderham Ross: I am not objecting to the vote for the city of Ottawa because of any smallness of mind, but the committee is entitled to know more about the services rendered and what the actual situation is. If $100,000 is not enough under the circumstances, perhaps the city could be given a little more. If, however, it is too much, I know the people of this city would not want to take away from our war effort. I wish to know if the government has given sufficient consideration to this matter to be able to say whether some reduction might not be made. I do not want to be unfair to the city of Ottawa because I understand that they give fire and police protection and water service, but I think we should have the balance sheet.


Joseph Albert Pinard: If the hon. member will
accompany the hon. member for Peel, I think I can satisfy them both.


Douglas Gooderham Ross: I shall be glad to go to the hon. member's office to look over the situation, but that would mean that only two members would know it. The whole membership is entitled to this information. Perhaps, when the estimates come along, the hon. member will present this balance sheet. Probably he is more familiar with it than is the minister.


Gordon Graydon: We have gone a long
way in our procedure to-night. We are considering a bill which has not been brought down, and we are being asked to debate it in the room of an hon. member.


George Hugh Castleden: Could we have a
statement of the properties which the federal government has acquired in the last twelve months?


Pierre-Joseph-Arthur Cardin: I promised that information to the leader of the opposition, and I will give it when I am dealing with the public works estimates. It will be a long list running into many millions of dollars. If the committee will pass the bill to-night, I will undertake to give this information when the estimates are being considered. I am suggesting that we do this only in order that we may provide a certain amount of business for the other house; I am not doing it for the purpose of withholding any information. If I remember correctly, a complete list of expropriation was given a year ago, but a number of properties would have to be added because they have been taken over since war was declared.


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


[Stage Direction]
Hon. J. E. MICHAUD (Minister of Fisheries) moved the second reading of Bill No. 14, to amend the Meat and Canned Foods Act (fish and shellfish).
Mr. A. W. NEILL (Comox-Alberni):: Mr. Speaker, I should like to say a few words on this bill which deals with the canning and care of lobsters. It appears suitable for that purpose. Since I have only a limited knowledge of that matter, I shall leave it to hon. members from the maritimes to deal with the question in detail. There is, however, one small matter I should like to call to the attention of the minister. Perhaps he will

Meat and Canned Foods Act-Fish
be kind enough to look into this and change the bill when it is in committee. The old act required certain facts to be placed upon the label of each can, among them being the name of the place where the article was packed. That applied, not to salmon, but only to shellfish, but through some rearrangement of the wording of the section, quite inadvertently I am sure, it has been made to apply to fish salmon, or herrings and pilchards.
This brings in the salmon trade of British Columbia. It is required that this information be placed upon the labels of each can. Salmon is put up in one pound, half-pound, and, I believe, quarter-pound tins, and this will mean a lot of work. What is required to be put on the label is the place where it was packed, not where it came from, and that gives no information at all. Supposing a housewife buys a can of salmon and she wants to purchase another similar can; if the label simply states that it was packed in a place called Ivildonan, it gives no information as to where the salmon really came from.
Of late years there has grown up a system of transporting salmon from the place where it is caught to a central point. In the old days it was packed in the cannery at the place, involving large expenditures for hauling supplies back and forth and people, also houses, schools, doctors and so forth. But better transportation methods have allowed it to be done the reverse way, and now the tendency is to bring the salmon to where the centres are and where the population ensures that the cannery can easily get a supply of labour at a few moments' notice. The consequence is that while the fish might be regarded as being packed in Vancouver, it might have been caught a couple of hundred miles away. That gives a wrong impression as to the point of origin. These big companies in British Columbia often have a number of canneries, and some of the fish may be caught in one place and some at another place, and a precise statement of where they are packed is asked for.
The proposed method is inconvenient, expensive and unjust. Every intelligent citizen of British Columbia knows that fish of any variety are always caught in their best excellence in the district I have the honour to represent, and that applies to other things than fish. A fish might be caught at Kildonan or at Barkley sound or some other place on the west coast and be transported to Vancouver to be packed. It would be regarded as packed in Vancouver. But the same identical fish might be packed next week or next month at Kildonan. Also, of course, the history of a particular catch would have
to be carried out in its entirety, can by can. You might have 26,000 cases of sockeye sold to Britain, some of them packed in one place and some in another, and the same with any of the other main, known and acknowledged varieties-sockeye, springs, chums, and so on. The inspection of salmon in British Columbia is scientifically carried out, and when that test is passed and the stamp is put on certifying that the fish is No. 1 sockeye, or whatever the variety may be, from British Columbia, the public in Britain can be perfectly sure that they are getting a first-class article, no matter where it was packed.
What is really required is that, instead of putting on the name of the place where the fish is packed, the name of the province should be put on. That is the usual custom of the trade, and it is better for the customer as well as for the purchaser. Then the British housewife buying a tin of No. 1 sockeye can tell whether it was packed in British Columbia, but if she -asks about a particular cannery, they would not be able to tell her where it came from. The suggestion I make would be to the distinct advantage of the business and of the packers, and I do not think it would detract in any way from the object which the minister has in mind in bringing in this amendment. I hope he will agree to make it the name of the province.


Mr. MICHAUD:: Mr. Speaker, I entirely agree with the suggestions that have been made by the hon. member for Comox-Alberni. The purpose of this amendment is to enable the department to make regulations along the lines my hon. friend suggests, particularly with regard to canned lobster. If the amendment passes, it will enable the department to make rules and regulations to correct not only the anomalies pointed out by the hon. member with regard to canned lobster but anomalies with respect to other kinds of shellfish as well as salmon. That is exactly the purpose for which this amendment to the Meat and Canned Foods Act is sought.


Mr. J. J. KINLEY (Queens-Lunenburg):: Mr. Speaker, I should like to refer to section 1 of this bill, which gives a new definition. In the old act we referred to lobster as lobster meat. It takes quite a stretch of the imagination to call any fish meat. You would have a comprehensive definition of the word "meat" to label a can of lobster as "lobster meat."
I think the elimination of the words "dry lobster meat," in the present act is a most commendable change. The bill in its entirety is for the purpose of ensuring proper super-

Meat and Canned Foods Act-Fish
vision and inspection of the sale of lobster both in Canada and for export, and as such deserves the support of the house.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Vien in the chair.
On section 1-"Dry meat."
Douglas King Hazen: Are there two different
kinds of packed lobster meat-dry meat and meat that is not dry-or is it all dry meat?


Joseph Enoil Michaud: There is only one kind of lobster meat put into cans, and the trade description of that lobster meat is "dry meat." The purpose of the amendment is to eliminate the detailed description, "dry lobster meat," and to substitute the words "dry meat." I am told that the former detailed description was necessitated by the provisions of section 23, which is repealed by this amendment and a new section substituted therefor. The words . "dry lobster meat" will no longer be necessary. To avoid misunderstanding on the part of packers, dealers and sometimes brokers, it has been decided that it would be better to eliminate those words.
Since this bill was printed, it has been found that the definition of "dry meat" contained in clause 1 is a little ambiguous, and it is proposed to clarify it, without changing the meaning at all. I would ask my colleague to move an amendment accordingly. The new definition will read:
"Dry meat" means the meat of shellfish contained in a can which has been processed and allowed to cool thoroughly, and which is opened and upturned for not less than one minute and not more than one and one-half minutes so as to permit free drainage of the liquor therefrom.


Pierre-Joseph-Arthur Cardin: I move accordingly, Mr. Chairman.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 2 agreed to.
On section 3-Packs subject to inspection.
Alan Webster Neill: I move to eliminate the word "place" and insert the word "province" in paragraph (b), subsection 2 of the proposed section 18. The minister spoke about arriving at the same result by regulation, but this is a bill which we are passing, and you cannot or you should not be able to change by regulation what is passed by law. Besides, the regulations referred to in section 4 are in connection with a different matter altogether.
I ask the minister if he will not consider
[Mr. Kinley.l
allowing paragraph (b) of subsection 2 of section 18, which is covered by section 3 herein, to read:
(b) a true and correct description of the contents of the can, including the vernacular name and the name of the province where the same was packed.
The only change is that, for the reasons I have mentioned, I have put in the word "province" instead of the word "place." I believe this would be much more convenient to the cannery people and to the whole industry, as well as to the buying public, and would better carry out the purpose of the original act.


Joseph Enoil Michaud: I am satisfied to agree with what the hon. member has suggested, although I believe it will not make much difference, because the phrase, "the name of the place where the same was packed" is inclusive enough to cover the name of the locality and the province where the pack is put up. In my opinion, even though we have these words in the act, they will enable us to make regulations providing for placing on the can the name of the place, as in some circumstances may be required, particularly for lobster; and in the case of salmon it would not prevent us from making regulations provided that it is sufficient to have the name of the province on the can. With regard to the lobster there are packs put up in certain districts of the maritime provinces where the locality gives some trade value to the goods, and we want to be sure we have power to provide that the name of the place where the goods are put up is indicated on the can. I feel that the existing wording is broad enough to enable us also to make regulations covering the case of canned salmon, where the name of the province would be sufficient.


Alan Webster Neill: The section carries out that idea in part, but it goes on to say, "in the case of fish." "Fish," I take it, means, other than shellfish.
.	.	. in the case of fish the minimum
weight . . .
And so on.
. . . and in the case of shellfish, unless it is otherwise provided by the regulations . . .
I would say, with no offence at all to the minister-for I do not care who the minister is; the idea is the same-that I do not care for the idea of accepting assurances in this house that such-and-so put into an act is going to mean something other than it exactly does read, and of trusting that later on it will be so carried out. I well recall, in connection with a bill dealing with soldier settlement, pointing out an anomaly somewhat similar to this one, and saying that I was afraid that

Meat and Canned Foods Act-Fish
it might be interpreted later on by officials in a manner prejudicial to the settler. The minister in charge-he is no longer here^-said that I could accept his assurance in the presence of the whole house that it would not be so interpreted. Six months later I had occasion to protest against the treatment of a settler under the strict wording of the act, and I was told by the officials that they had nothing to do with the statement made in the house by the minister, that it did not bind them and that they did not propose to be bound; and in consequence of that, the settler suffered a grievance. The minister expressly stated in the presence of the house and the whole government that the interpretation would be such-and-so. That happened on more than one occasion, and that is why I am a little dubious about accepting the assertion that everything will be lovely.
I quite admit that to put all this pedigree that the act calls for, about the lobster, is perhaps necessary. It always has been so, and I am not seeking to make it different. I am only seeking to preserve the purity, so to speak, of the British Columbia salmon as regards the province it comes from, .without going into any ridiculous demand which might involve putting the exact spot where it was packed. In days gone by there used to be floating canneries where the packing was done wherever the boat happened to be. You would have to take the degrees of latitude and longitude every night in order to ascertain exactly where the boat might be at the moment certain packing was going on, and when a canner is putting up 50,000 cases every year, with six or seven varieties, he cannot keep track of every half or quarter-pound tin, or a lengthy pedigree of the source and origin and where the fish in each tin was packed; it would be a heavy expense, and expense at any time means poor business, because the product would cost more to the consumer and yield less to the fisherman. I will not press the amendment, because the government has a large majority behind it; I am merely putting in my protest. Expense and inconvenience will be caused, with no benefit to anybody at all.


Joseph Enoil Michaud: As regards what the hon. member for Comox-Alberni has said, to accept the amendment as suggested would make it almost impossible to comply with the trade practice in merchandising or marketing canned lobster, by indicating the place of origin, which is considered by the trade to be absolutely necessary. On the other hand, if the section is left as it is, I believe that the wording is broad enough to permit the making of regulations which, if applied to canned 14873-119
salmon, would require the name of the province only to appear on the can, and it would be open to the department to make regulations providing for the naming of the place as it may apply to canned lobster. So, by leaving the section as it is, without amendment, it will be broad enough to cover all cases and enable the department to make regulations covering such a case as is suggested by the hon. member for Comox-Alberni.


John James Kinley: It seems to me that the word "place" in the bill is quite enough to protect the industry. The hon. member for Comox-Alberni says that there may be a floating cannery, a ship outside the harbour. Well, the ship will come to port; it seems to me that the port where the ship is registered would be the place where, according to the intention of the bill, the fish would be canned, and the place where they are canned is, therefore, easily definable and should not cause any confusion, especially when the matter is covered afterwards by regulation in accordance with the act.


Mr. STIRLING:: Is it clear that these labels which are being discussed apply only to fish?


Joseph Enoil Michaud: Yes.


Grote Stirling: They apply only to fish?


Joseph Enoil Michaud: Fish and shellfish.


Grote Stirling: Would the difficulty indicated by the hon. member for Comox-Alberni not be got over if the words "place and province" were used? For instance, "Kil-donan, B.C."


Mr. POTTIER:: "Place or province"?


Grote Stirling: No; "place and province".


Vincent-Joseph Pottier: It seems to me that the difficulty would be overcome by inserting the words "or province", making it read, "place or province". There would then be the alternative, if the difficulty suggested by the hon. member for Comox-Alberni were encountered.


John James Kinley: Why say "place or province"? A province is a place, and the regulations would define what is a place under the act.


Alan Webster Neill: "Place" indicates a specific place. I do not think any stronger argument could be adduced in support of the amendment that I have proposed than the argument put forward by my hon. friend sitting behind me (Mr. Kinley) when he said that a ship would always be registered somewhere. It might be registered in Liverpool. Any of the proposals suggested, either by the hon. member for Yale (Mr. Stirling) or by the hon.



Meat and Canned Foods Act-Fish
member for Shelburne-Yarmouth-Clare (Mr. Pottier), would be satisfactory and would meet the case. "Place or province" would leave it open to one or the other. As regards fixing it by regulation, that is not satisfactory. We are passing an act, and in making the act we should not be told that it will be changed by regulation. When you provide by law that the place where a product is packed shall be indicated on the tin, it has to be done and no regulation will allow you to change that. I suggest that "place or" would meet the wishes of the minister.


Joseph Enoil Michaud: Suppose we compromise by inserting after the word "place" the words "and or," so that it would enable us, as regards canned salmon if desired, to print only the name of the province, and as regards shellfish to print on the label the name of the place as well as of the province.


Grote Stirling: Can the minister assure me that this does not apply to tomatoes?


Joseph Enoil Michaud: Not at all.


Grote Stirling: The other part of the act does?


Joseph Enoil Michaud: The other part of the act may provide for them, but we are not interested in that.


Angus Lewis Macdonald: Is it the understanding that you can use either the place or the province?


Pierre-Joseph-Arthur Cardin: I move the amendment.


Thomas Vien: The subsection as
amended will read:
(b) A true and correct description of the contents of the can, including the vernacular name and the name of the place and or province where the same was packed.


[Stage Direction]
Amendment agreed to.
Douglas King Hazen: The subsection goes on to say:
. . . and in the case of shellfish . . . the minimum weight in avoirdupois of the dry meat in the can.
Do the regulations cover clams, which are not packed in that way?


Joseph Enoil Michaud: Yes; there are already regulations that apply to clams.


Douglas King Hazen: Why on the label do you ask for the initials of Christian names? It might be possible that some man is packing not under his initials but under his Christian name and surname. I do not know what the provision was before, but I should like to

know the reason for the initials rather than the full name if a man wishes to use his full name.


Joseph Enoil Michaud: The reason is that in
some sections there are several packers with the same surname-several Macdonalds or Smiths-and they are all old-established packing houses. Their names have a trade value and they are distinguished only by initials. In order to protect them we must provide in the regulations that they should indicate their initials. Otherwise they would be infringing the rights of competitors.


Douglas King Hazen: Do none use their Christian names instead of their initials?


Joseph Enoil Michaud: There is nothing to prevent them from including their full Christian names so long as they use their initials.


Douglas King Hazen: It does not say that they may use their Christian names. It is peremptory. It says that "all such cans shall be labelled with (a) the initials of the Christian names." There is no mention of Christian names.


Joseph Enoil Michaud: But there is nothing to prevent the use of their Christian names-


Douglas King Hazen: Except the act.


Joseph Enoil Michaud: -so long as they use
their initials. If they do so, they comply with the provisions of the law, and that is all that is required. They may spell their names in full if they wish to do so, but the law compels them to use their initials.


Douglas King Hazen: Why not say initials or Christian names and make it clear?


Pierre-Joseph-Arthur Cardin: I would move that paragraph (a) of subsection 2 of section 3 be amended by striking out in the first line thereof, after the word "initials," the word "of" and substituting in lieu thereof the word "or," so that the paragraph will read: "(a) the initials or the Christian names."


Alan Webster Neill: It should be "initials of" or the Christian names. Now they have to show the initials or the Christian name. Suppose you said, "the Christian names or the initials."


An hon. MEMBER:: You would have to have the initials of the Christian names.


Alan Webster Neill: The Christian names or the initials thereof. I would point out that some of these tins are very small, not much bigger than a dollar, and there is a lot to be put on them. "William Adolphus Hoffenweit" would take a lot of space on a tin.

Questions


Pierre-Joseph-Arthur Cardin: I move that the paragraph be amended by striking out the words "the initials of" and adding after the word "names" the words "or the initials thereof."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 4-Confiscation.
Joseph Enoil Michaud: There is a slight change
in order to make this section clear. I will ask my colleague to move the amendment, which is as follows:
That section 4 be struck out and the following substituted in lieu thereof:
4.	Subsection two of section twenty-two of the said act is repealed and the following substituted therefor:
(2) Any unsound fish or shellfish found during the process of preparing and packing, and any unsound canned fish or shellfish found at any time thereafter, as provided by the regulations, may be seized and confiscated on view by any inspecting officer and dealt with as required by the regulations.


Pierre-Joseph-Arthur Cardin: I move accordingly.


[Stage Direction]
Amendment agreed to.
Douglas King Hazen: Might it not be possible for unsound fish or shellfish to be found prior to preparing and packing. The inspectors, in the course of their rounds, might find unsound fish prior to preparing and packing, so I think it should read, "found at any time before or thereafter".


Joseph Enoil Michaud: The section now provides for the confiscation of unsound fish or shellfish found during the process of preparing and packing. The whole process starts with the bringing of the fish to the cannery or place of packing. Then it is prepared for packing and placed in the can. This provides for seizing the fish at any time, from the moment they are taken into the cannery until they are put into the cans. Then follow the words, "and any unsound canned fish or shellfish found thereafter," which means after it has been prepared and put in the cans. The cans are sealed; then on second or third inspection they may be found to be unsound, and this provides for their seizure as well.


Mr. FRASER (Peterborough West):: The section reads, "any unsound canned fish". That would mean the fish would be in the can.


Joseph Enoil Michaud: Yes; but the amendment has been suggested to correct that.
Section as amended agreed to.
On section 5-Regulations fixing grades of canned lobster.


George Hugh Castleden: What is the purpose of this change?


Joseph Enoil Michaud: As it stands now, the regulations are statutory. The canned lobster trade is changing rapidly; we have to find new markets in the United States for a large part of the pack, and we find it necessary to make regulations different from those that existed in the past. We must meet the conditions with which we are faced when we market our lobsters, so instead of having the regulations statutory, we are taking power to make the regulations by order in council.


[Stage Direction]
Section agreed to.
Sections 6 and 7 agreed to.
Bill reported, read the third time and passed.
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Wednesday, March 26, 1941.