1941-06-11

NEW MEMBER

Mr. SPEAKER:: I have the honour to
inform the house that the Clerk of the House has received from the Chief Electoral Officer certificate of the election and return of the following member, viz:
Of Mrs. Cora T. Casselman, for the electoral district of Edmonton East.



QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. CHURCH:: 1.	Is Mr. Lawrence Jack, referred to on page 3352 of Hansard, Monday, June 2, the same Lawrence Jack who lias been writing a series of articles, published in Saturday Night?
2.	Have the said articles the sanction of the superintendent of insurance, under the rules, regulations, and statutes regulating life assurance companies?


Mr. ILSLEY:: 1.	No information beyond the statement on page 34 of the issue of the said publication for April 26 last that the contributor of the articles in question is a statistical expert in the investment department of the company.
2.	The consideration of such articles for the purpose of sanction, approval or disapproval thereof is not one of the duties placed upon the superintendent of insurance by the statute.


THORBURN, N.S., RURAL MAIL SERVICE
Mr. BLACK (Cumberland):: 1.	Have tenders been recently called by the Post Office Department for the carrying of mails on rural route No. 1, Thorburn, Pictou county, Nova Scotia?
2.	If so, when, what were the names of those who tendered and the amount of their respective tenders?
3.	Has contract been let?
4.	If so, to whom, for what amount and of what term is the contract?
5.	If not, what are the reasons for delay?
6.	Was the contract awarded to the lowest tenderer? If not, why?
7.	Were tenders previously called for this contract?
8.	If so, what are the names of those who tendered and the amount of each tender?


Mr. MULOCK:: 1.	Yes.
2,	3, 4, 5 and 6. Tenders were due at the Post Office Department, Ottawa, on the 21st March, 1941. The awarding of contract was delayed by investigations into competency of tenderers. While action has been taken to award contract to lowest competent tenderer, it is not considered to be in the public interest to furnish information concerning the tenders submitted until such time as the contract has been executed.
7.	Yes-in January 1937.
8.	R. A. McDougall, $594.60; Chas. A. MacLean, $800; Collingwood Grant Ross, $840.
The tender of R. A. McDougall was set aside for cause, and contract was awarded to Chas. A. McLean at $725 per annum.


FOST OFFICE-COST OF CARRYING NEWSPAPF.R MAIL
Mr. CHURCH:: At what loss, from the commercial aspect, does the Post Office Department carry second class and other mail of the newspapers of Canada, per annum?


Mr. MULOCK:: The estimated loss to the Post Office Department in the carriage of newspapers is $4,595,300 per annum.
The department has no information respecting a possible loss in the carriage of other classes of publishers' mail, as it is not practicable to keep a record of the revenue derived from such mail and the cost of handling same.


THE MINISTRY
[Stage Direction]
CHANGE IN THE DEPARTMENT OF NATIONAL wAr SERVICES-TRAN SFERS AFFECTING BROADCASTING, FILM AND TOURIST ACTIVITIES
On the orders of the day:
Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, I intimated some few days ago that before parliament

The Ministry
adjourned I would have an announcement to make with respect to one or more changes in, or additions to, the ministry. I wish to state that the Hon. Mr. Gardiner has resigned as Minister of National War Services, in' order that he may give his time exclusively to the work of the Department of Agriculture, of which for some years past he has also been the head.
This morning His Excellency the Governor General has approved of the appointment of Mr. Joseph T. Thorson as a member of His Majesty's Privy Council for Canada and as Minister of National War Services. Mr. Thorson will be sworn into office some time this morning. I need not remind the house that not in point of years but in time of service, the hon. member for Selkirk is one of the oldest members of the House of Commons, having been returned to parliament first in 1926, and again at the elections of 1935 and 1940. Hon. members, I believe, are also aware that in the last war Mr. Thorson served with the British expeditionary force overseas. He was in France for some time, and distinguished himself in service in that country.
The Department of National War Services Act, 1940, provides that the minister may, with the consent of the Governor in Council, coordinate the existing public information services of the government, and originate or employ other means in order that the same may be used in the most efficient way for the obtaining of the utmost aid from the people of Canada in the national emergency which has arisen.
An order in council has been passed under the act I have just mentioned, setting forth that it is expedient to provide for more effective coordination of radio broadcasting, film activities, and the promotion of tourist business in Canada, with other public information services of the government. Therefore, with the concurrence of the Minister of Munitions and Supply (Mr. Howe), the Minister of Trade and Commerce (Mr. MacKinnon), and the Minister of Transport (Mr. Cardin), provision has been made under this act, and under the War Measures Act, for the transfer of some of these several activities to the Department of National War Services.
The powers, duties and functions conferred under the Canadian Broadcasting Act, 1936, with respect to broadcasting, and recently transferred to the Minister of Munitions and Supply, have been now transferred to the Minister of National War Services.
The powers, duties and functions of the Minister of Trade and Commerce, with respect to film activities, under the National Film Act, 1939, have been transferred to the Minister of National War Services.
The powers, duties and functions of the Minister of Transport, with respect to the promotion of tourist business in Canada, have been transferred to the Minister of National War Services.
The control and supervision of that branch of the Department of Transport known as the Canadian travel bureau have been transferred to the Department of National War Services.
Reorganization of the work of the Department of National War Services in the directions indicated will be entered upon actively and immediately as soon as parliament has adjourned.


CANADIAN ARMY
[Stage Direction]
On the orders of the day:
Mr. M. J. COLDWELL (Rosetown-Biggar):: Mr. Speaker, may I preface my question to the ministry by expressing a word of congratulation to the hon. member for Selkirk (Mr. Thorson) on behalf of this group. We wish him every success in the office to which he has been elevated.
My question is this: In view of the general war situation and disturbing stories of prevailing dissatisfaction in the forces and across the country with the progress of our war effort, will the government place before the house, before adjournment, a full and complete statement regarding recruiting, by percentages of provincial quotas already filled; also a complete statement regarding the provision of equipment, particularly as to whether we are maintaining schedules, and what the position is regarding aircraft, tanks, anti-aircraft guns, et cetera? If this information cannot be given publicly, then will the government arrange for a closed session of this house so that a complete understanding of the situation can be obtained by the members before we adjourn?


William Lyon Mackenzie King: The Minister of National Defence (Mr. Ralston) is keeping another engagement this morning, but he will be in the house this afternoon at three o'clock. I would prefer to delay a reply until the minister returns, but I will seek to see that an answer is given early this afternoon.


POLICY WITH RESPECT TO FREE RAILWAY TRANSPORTATION AND SYSTEM OF INSURANCE
[Stage Direction]
On the orders of the day:
Thomas Langton Church: I
should like to ask the Prime Minister (Mr. Mackenzie King) if some decision will be arrived at before the session closes with regard
37S2
Canadian Army

to soldiers' fares and soldiers' insurance as a matter of national policy. These are two most important matters. The other day the Prime Minister said that there would be an opportune time to take them up. Surely we do not need all eternity to get an answer.
Hon. IAN A. MACKENZIE (Minister of Pensions and National Health):	The
committee which was set up to study pensions and war veterans' allowances is still sitting. I cannot forecast its report, but I believe there will be some reference in it to soldiers' insurance.


Thomas Langton Church: What about soldiers' fares? That i5 what the minister said last year about insurance.
Hon. ANGUS L. MACDONALD (Minister of National Defence for Naval Services):	I
think the Minister of National Defence (Mr. Ralston), when he returns to the house this afternoon, or at some time before the house adjourns, will be able to make a statement on soldiers' fares.


PROVISION FOR CIVIL EMPLOYMENT REINSTATEMENT OF DISCHARGED OR DEMOBILIZED SOLDIERS
[Stage Direction]
On the orders of the day:
Hon. N. A. McLARTY (Minister of Labour):: Mr. Speaker, it is felt desirable
that all persons who have left employment to enlist should, in as far as possible, be relieved of worry about their reinstatement on their return. The government accordingly has approved of the principle of legislation to provide for civil employment reinstatement of those who have enlisted in his majesty's forces during the present war. When the house reconvenes the government will submit this legislation for the approval of parliament. It will provide that employers of those who enlist for service in his majesty's forces shall reinstate the employees in employment at the termination of that service in as far as practicable, under conditions not less favourable to the employee than those which would have been available to him had he not enlisted.
Conditions will necessarily be contained in the bill which will relieve the employer, under certain circumstances, of his obligation to reemploy as, for example, if the employee fails to apply for such reinstatement within a given period after discharge or demobilization, or having been offered reinstatement by the employer the former employee fails to present himself for employment.
The legislation will be generally modelled on legislation existing in Great Britain as to

its terms and conditions but will be subject, of course, to the necessary variation in industrial conditions between the two countries.
The draft bill has been supported by the labour coordination committee, the national labour supply council and the committee on employment of the general advisory committee on demobilization and rehabilitation.


Mr. ANGUS MacINNIS (Vancouver South):: May I ask the Minister of Labour whether the principle of the proposed legislation which, he said, will be given effect to when the house again meets, will also be made effective, so far as that may be possible, between the adjournment of and the time the house resumes? There will be, I believe, great need for it.


Norman Alexander McLarty: I did not get the significance of the question.


Angus MacInnis: Will the principle of the legislation which the minister has outlined apply until parliament again meets? Will the government take some steps to apply it in principle in the meantime, so far as that may be possible?


Norman Alexander McLarty: The matter is one which as yet has not received the entire consideration of council. But I take it that the act, when applicable, will be applicable to all the forces and not merely to those who join after the act is passed.


Angus MacInnis: Will it be retroactive?


Norman Alexander McLarty: I want to speak with this reservation, that it has not received detailed consideration by council, but I think it would be only fair if it were made retroactive, with no discrimination among the various forces.


REPORTED SHIPMENTS FROM BRITISH COLUMBIA TO THE FAR EAST IN JAPANESE BOTTOMS
[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: Mr. Speaker, I should like to say a word with respect to the export of wheat from Canada to Japan, supplementing what was said in discussion a day or two ago and also to correct any possible misconception.
First of all, may I make it quite clear that as long ago as February 13, 1941, an order in council was passed requiring exports of wheat and wheat flour to be subject to permit. From that time on no permits have been granted for any export of wheat or wheat flour to Japan other than with respect to certain shipments which had been purchased prior to the time at which the order in council prohibiting exports without licence was passedv

Wheat Shipments to Japan
It was represented to the government that to prohibit shipments that had been provided for prior to the passing of the order in council was proceeding contrary to international usage. The Japanese government felt that an act of the kind, unless it could be justified on the grounds of grave necessity, would be provocative in character and liable to give rise to serious misunderstanding in that country as to the underlying motive. The Japanese position was made the more clear to our government in view of the fact that no such export permit was required in connection with shipments of wheat or flour from the United States, nor were such export permits required by the government of Australia. Both countries were and are continuing to export wheat to Japan.
On considering the representations of the government of Japan and realizing that Canada by her action might be seriously embarrassing relations between Great Britain and Japan, as the Japanese would not distinguish between an act by this government and what they would interpret as a direction or desire on the part of the United Kingdom, we felt it was obviously right to follow customary international usage, and to allow permits to be issued for the export of the shipments that had been arranged for prior to February 13. The question came up later as to how these shipments were to be made, whether in British bottoms or in Japanese bottoms. It was felt that we should conserve all our shipping for our own purposes. The Japanese were given the right to take these shipments, provided they took them to Japan in their own bottoms.
Before permitting the shipments the government took great care to ascertain where they were going. We acted in. the matter, not only upon the advice of our own minister in Tokyo but also on the counsel and advice of the British ambassador. Our actions were not only fully known to the government of the United Kingdom, but they were in accord with the wishes of the government of the United Kingdom. I think that presents the matter in the true light. I have only this to add-. On April 29, realizing that there might be a possible misunderstanding as to how these export shipments came to be made, I asked all hon. members from the province of British Columbia, irrespective of party, to meet me in my office in this building. I gave to them1 full information and imparted it to the leader of the opposition (Mr. Hanson) as well-


Mr. HANSON (York-Sunbury):: I beg
your pardon; you imparted nothing to the leader of the opposition.


William Lyon Mackenzie King: My hon. friend
has not allowed me to complete my sentence.
I imparted it to the leader of the opposition through his colleague who sits beside him, whom I asked kindly to see that the leader of the opposition was informed. I spoke subsequently to the leader of the opposition, saying that I had asked his deskmate kindly to pass on the information to him, and he told me that he had it and quite understood it. That is what I meant by saying I had imparted the information to my hon. friend. The only reason I did not ask him to leave the house to come to my office at the time was because he was leading the opposition. The meeting took place while the house was in session, and I felt that if the situation were made perfectly clear to his colleague, there would be no doubt in the world about his being fully informed as to the situation, and I believe he was.
At any rate the entire British Columbia personnel in this house was fully informed on April 29 of the intention or rather of the reasons which had actuated the government in permitting the shipments. Explanations were fully made and I went so far as to read dispatches from the British government and our own government to those who were assembled in order to make the situation perfectly clear. I think these facts should be made known in order that it may be made clear that at the present time the government is in no way reversing the policy which it adopted on February 13 of requiring export permits for shipments of wheat to Japan, but is simply taking in this matter a step which we felt was not only justified as being in accordance with international usage, but one which in the very critical situation that exists at the present time it was in the interests of the United Kingdom and all parts of the British commonwealth for us to take.


Hon. GROTE STIRLING (Yale):: May
I ask the Prime Minister how near we are to an end of shipments of wheat to Japan to which he has referred, and will the policy of the government be not to issue such permits in the future?


William Lyon Mackenzie King: I cannot say
how near we are to an end of having the orders filled which had been placed prior to the date I have mentioned, but with respect to all future shipments they will have to be considered by the government before any permit is granted.


Mr. E. E. PERLEY (Qu'Appelle):: May I make my position clear in this matter? I had no knowledge of and no intimation from the members of British Columbia of the
Wheat Shipments to Japan

meeting mentioned. The only knowledge I had of the matter was long distance telephone calls and air mail letters that I received with respect to the deal, and with the knowledge I had of the whole affair I thought I was justified in making my reference to it.


William Lyon Mackenzie King: I am not
criticizing my hon. friend.


Mr. GREEN:: I am not quite sure whether I heard the Prime Minister correctly or not, but I thought I heard him say that at this meeting to which the members from British Columbia were invited dispatches were read from the British government in regard to this matter. I was present at that meeting, and I heard no dispatches read from the British government. Certainly some members from British Columbia, myself at least, if the Prime Minister will remember, took the stand that we did not think we should be bound at all by being called in to the meeting and that we were not to be taken as agreeing to the policy of the government, which after having placed an embargo on this wheat and on hemlock logs and on pulp earlier in the year subsequently turned round and changed that policy and let these commodities bo exported. The Prime Minister should say in fairness to those who protested at the meeting that such was the situation. I think he will also agree that no dispatches were read from the British government.


William Lyon Mackenzie King: May I say to my hon. friend with respect to the matter of dispatches from the British government that it all depends upon the manner in which my words are construed. I think I did read a communication from our own minister, or rather Charge dAffaires in Tokyo, in which he stated the view of the British ambassador in Tokyo, and the views of the British ambassador in Tokyo are the views of the British government. They are so expressed and so intended. I am quite sure I placed that communication before the members who were present.
With respect to concurring in the policy of the government, may I say that I made it quite plain to the members whom I asked to meet me that the government had already taken the action of agreeing to allow a permit to be given for these particular orders which had been given prior to the passing of the order in council requiring permits. I expressly stated that I had waited until the government had acted in the matter before explaining to the members present the action of the government, in order that they would not be embarrassed. I said the government would take the whole responsibility in the matter.

But what I did desire to do and the purpose of the meeting was to place before the members from the province most immediately affected a full statement of the position so that they would understand it and understand the international implications and considerations of which in the present situation it is all-important to take full account.


Howard Charles Green: I take it that it is agreed that the only dispatch read was a dispatch from Mr. McGreer, the Canadian Charge dAffaires in Tokyo.


William Lyon Mackenzie King: That is the dispatch to which I have reference.


Howard Charles Green: Will the Prime Minister tell us the present position with regard to hemlock logs?


William Lyon Mackenzie King: I may say to my hon. friend that there have been other communications that I did not read. I gave I think the general interpretation. At any rate I should like to make it perfectly plain at the moment that the action which this government has taken in this matter is an action which the government of the United Kingdom itself was anxious to have taken at this time. My hon. friend has mentioned another commodity. In passing the order in council compelling a permit to be obtained before any commodity could be exported our government went the length of making that order in council generally applicable. In other words our government, realizing the situation particularly on the Pacific coast, has, as respects Canada, gone a length in this matter that no other part of the British empire has gone in its trade relations in Japan. There was a shipment relating to the commodity to which my hon. friend has just referred which came in the same category and which was permitted for the same reason.


Howard Charles Green: Are hemlock logs being
permitted to go out now?


William Lyon Mackenzie King: I think I have perhaps said all that it is desirable to say at the moment. May I make this further statement which probably I ought to have made at the outset: that the action of the government, taken in the way it was, and in the complete measure in which it was, was taken in order to prevent the . possibility of any unfortunate occurrence arising in British Columbia through any shipment. We wished to avoid all possibility of any provocative incident. It was not taken because the United States was not taking a similar course or because Australia was not taking a similar course or because of any enmity on the

Scrap Iron
part of this country against Japan. It was taken to prevent the possibility of any disturbance arising in British Columbia in connection with shipments of commodities to Japan which disturbance, if one took place, might create a very serious situation in Japan. I made that plain to the Japanese minister here and to the Japanese government, that our action has not been aimed at Japan as an enemy but that we are anxious to avoid any incident arising in Canada which could be construed in Japan as an act of an offensive character towards that nation, thereby placing Canada in the position of taking an attitude towards Japan at this very critical time different from that which is taken by any other part of the British empire and making Canada responsible for consequences of which might come to be regarded as an unfriendly act.


Richard Burpee Hanson: Mr. Speaker, I would like to have it understood that I did not raise this question in the house because of any understanding as a result of the conference held with the British Columbia members. No conditions were imposed on me, and I said that there were none. I had received many communications about this matter but I did not raise it in the house until there was a press release from the Prime Minister's office. Then I asked my question, and only then, after I had been bombarded by many requests from the Pacific coast and western Canada.
Mr.' MACKENZIE KING: May I supplement what my hon. friend has just said? He went farther than that. He wrote a letter to the Minister of Trade and Commerce (Mr. MacKinnon) before he asked the question and said that he would not ask it if it would prove embarrassing. If I had seen the letter in time myself I would have suggested that no question be asked.


Richard Burpee Hanson: My conduct is all right.


William Lyon Mackenzie King: Yes.



MUNITIONS AND SUPPLY


[Stage Direction]
On the orders of the day:
Hon. H. A. BRUCE (Parkdale):: Mr. Speaker, may I address a question to the Minister of Munitions and Supply, based on a press dispatch from Montreal, on May 28 last, to the Financial Post, which states:
Work was started last June and the first tank, complete in most major details, rolled off the assembly line May 22. Officials, however, do not
anticipate that regular production on assembly line style is to follow immediately.
Will the minister tell the house whether this is an accurate statement and, if so, when regular production on the assembly lines may be expected?


Hon. C. D. HOWE (Minister of Munitions and Supply):: The production of tanks at the Angus shops is proceeding favourably. We expect a considerable number of tanks to be delivered in the month of June. The intended production is three per day, and we expect that will be reached in due time. This is a most complex business. We have proven now that all the details have been taken care of. Of course, the great task in all complicated mechanisms is to get the first complete mechanism. All I can say is that production there is proceeding well.


RAILWAY ACT AMENDMENT
[Stage Direction]
On the orders of the day:
Thomas Langton Church: A month ago the Prime Minister (Mr. Mackenzie King) said he would name an opportune day for consideration of Bill No. 2, to amend the Railway Act with reference to soldiers' fares. I would ask the Prime Minister, would he name a day, or shall I have to move for leave of the house to proceed with the second reading of the bill? I did move for leave, on May 8, and the Prime Minister then asked that it be postponed, and said he would name an opportune day.


William Lyon Mackenzie King: I understand that the Minister of National Defence (Mr. Ralston) will make a statement on that matter before the house adjourns.


SCRAP IRON
[Stage Direction]
On the orders of the day:
Mr. C. E. JOHNSTON (Bow River):: I wish to direct a question to the Minister of Munitions and Supply. On May 22 I asked a question with reference to the Dominion Bridge company's plans to move its furnaces and rolling mills from its Calgary plant to Vancouver. A return was ordered, and after a question asked on June 6, the return was made. That return contains only one letter, which the Dominion Bridge company wrote to the government,. and there is no answer. I am informed that there was more corre-
Supply-Diversion of Water

spondence. I wonder whether the minister would clear that point up. Surely the government must at least have answered their letter.


Clarence Decatur Howe: I was told that that represented the complete file as of the day it was tabled. I shall be glad to check it and1 see if there is some further information.


Charles Edward Johnston: I am
informed that there is. I think there must be some mistake there.


Clarence Decatur Howe: I cannot understand why the full file would not be returned, but I shall be glad to look into the matter.


STATEMENTS ON MOTION OP MINISTER OP FINANCE FOR COMMITTEE
[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved that the house go into committee of supply.
Mr. J. R. MacNICOL (Davenport):: Before Your Honour leaves the chair I wish to make some comment on the agreements tabled on May 29 by the Prime Minister (Mr. Mackenzie King) in reference to the diversion of waters from the Niagara river at Niagara falls.
Before doing so may I, as the first to speak to-day, extend my compliments to the new Minister for National War Services (Mr. Thorson) ? There is one thing about his appointment which makes me glory in British institutions, and that is that he represents a race other than British, because he is descended from those who came from Iceland. I remember being at a great banquet in London during the coronation festivities, a banquet which was attended by the present Minister of Justice (Mr. Lapointe) and other distinguished statesmen from various parts of the empire. One of the principal speakers was Colonel the Honourable N. C. Havenga, a statesman from South Africa. He made what struck me as a very patriotic British speech, and he was of Dutch origin. The Minister of Justice also made a speech; he is of French origin. It is one of the glories of the British empire, Mr. Speaker, that races coming into our empire bring to it their strength, their education, all that they stand for, and assimilate it with that for which we stand. That is what makes the British empire the greatest in the world. That is why the British empire will win in the conflict in which we are now engaged.
With regard to the agreements tabled by the Prime Minister, I intend to be brief, and I am not going to oppose them. But I believe, having given perhaps as much study

to this matter as any other hon. member, and having travelled thousands of miles in and around the watershed west and north of the Niagara river, that I might be expected to say something on this subject. I know the problems with which the Prime Minister has been confronted, and I am not rising in an attitude of combativeness or opposition.
The agreement states three things. First, on the United States side of the line 5,000 additional cubic feet of water per second may now be or at present is being diverted from the Niagara river south of the falls. Second,
3,000	additional cubic feet per second may be diverted from the Niagara river on the Canadian side of the falls. Third, works will be erected-I assume as promptly as possible- on the Niagara river south of Niagara falls, somewhat of the character of those so exhaustively planned and detailed in the report of Colonel-later I believe General-Warren, of the United States army, chief engineer of the United States division of great lakes, during his term of office.
In addition to the two diversions to which I have just referred, and which are mentioned in the agreements tabled recently, there was the agreement of March 19 which permitted the province of Ontario, the government having obtained the consent of the United States, to divert from Niagara river an additional 5,000 cubic feet per second on the understanding that the province would at once divert into lake Superior, from the flow of the Kenogami river, 1,200 cubic feet per second, and proceed to erect works, to divert from the Albany watershed a flow of 4,000 cubic feet per second into the great lakes.
It was necessary to have these two agreements to which I have referred because the diversions in question would violate the international treaty of 1909, which distinctly states that on the United States side of the line they shall have the privilege of diverting from Niagara river a maximum of 20,000 cubic feet per second, and on the Canadian side of the line Canada was to have the right to divert 36,000 cubic feet per second These two diversions are referred to in article V of the boundary waters treaty of 1909. It became necessary therefore, as I understand, to pass these two agreements to which I have referred. They are not laws, nor are they treaties; they are merely agreements and are subject, I presume, to abrogation or change at some future time.
The white book which was tabled some time last October refers in article IX to the diversion of 5,000 cubic feet per second by the province of Ontario as a result of their pouring water into lake Superior to that amount,

Supply

Diversion of Water
either now or later on. What are the diversions at Niagara falls to-day? I feel constrained to make these remarks so that during the recess any hon. members who are interested enough to study the question will have at least some data before them on which to base their studies, and in 1942, when the recent agreement tabled on May 29 comes up for revision, hon. members if they so desire will be in a position to add something to any debate in connection with the further extension of the May 29 agreement.
The United States has the right to divert
20.000	cubic feet per second, and Canada can divert 36,000 cubic per second. But from the 36,000 cubic feet per second that belongs to Canada, for very good reasons which I will not go into now, having done so on previous occasions, the United States receives the power from 10,000 cubic feet, which really brings their taking up to 30,000 cubic feet; and then, from the Ontario Hydro-Electric Power Commission, they receive power produced by a further 3,600 cubic feet per second, bringing the amount now diverted, either on our side of the line or on their own side but for purposes wholly on their own side, up to 33,600 cubic feet per second, which therefore reduces the amount used on our own side for power in Canada to 22,400 cubic feet per second.
The agreement of May 29 permits the United States to divert immediately another
5.000	cubic feet per second out of Niagara river, which brings their taking out of the river on their own side, or from our side, for their purposes, up to 38,600 cubic feet per second. Under the agreement of May 29 we too shall be permitted bo take another 3,000 cubic feet per second, which will bring our taking for our own purposes up to 25,400 cubic feet per second, apart from the 5,000 cubic feet referred to in the March 19 agreement, that belongs to us, since we are to divert from our own purely Canadian watershed into the great lakes watershed the equivalent of 5,000 cubic feet per second. Altogether, therefore, at the moment, there is being taken out of Niagara river south of Niagara falls a total of 69,000, plus 3,800 which is still to come from the Albany watershed, or 72,800 cubic feet per second.
On Sunday last I drove over to Niagara Falls to confirm rumours I have been hearing for some time with regard to the effect of this diversion of water on the great scenic beauty of the falls, at least, the former glory of the falls, which made it perhaps the greatest scenic wonder in the world. I drove over to ascertain the effect of the diversion of this 69,000 cubic feet per second, plus another
3,800, or, to be exact, 72,800 cubic feet per second. If hon. members will drive over they will be struck, as I was, that as far as the falls are concerned the effect upon their majestic beauty is a tragedy. The diversion of over one-third of the possible flow, which amounts normally to 210,000 cubic feet per second, though it does fall as low as
190,000	cubic feet per second, has had a marked effect on the beauty of the water flowing over the falls.
However, as I said before, I am not opposed to the present agreement, because it is stipulated in the agreement that this is for emergent war purposes. I have my own knowledge of these things. What I dislike about all these diversions is that they are asked for because -of the war, though anyone who knows anything about Niagara falls, the watershed behind it and other watersheds, knows very well that all that power required could have been provided for during the last few years if either this government or the United States government-they would have had to do it jointly-had proceeded with the work south of the falls, which would have permitted a considerable additional diversion without affecting their scenic beauty. Why this government and the United States government have not done that I do not know.
In addition to what is diverted out of the river at Niagara Falls there is another deterrent effect on the flow over the falls, namely, the 3,900 feet diverted at Chicago. Chicago takes 1,500 cubic feet for dilution purposes, according to the order of the United States supreme court, and is permitted to take up to 2,400 cubic feet per second for domestic purposes, making a total of 3,900. That too has an effect on Niagara falls. The water taken at Chicago is diverted wholly out of the watershed into another watershed. However, I am not going to discuss that at the moment.
I now want to give the house some information about the power developed at the falls. These are not the latest figures; they are from the report of 1920 of General Warren. I believe that on our side of the line there has been a change in the amount of flow at Queenston which has altered these figures, but as I have not the authentic figures of to-day I give the ones which were authentic up to the time of this report. They are subject to change in reference to the increase of flow to Queenston resulting from the nonuse of any other Canadian plant at the falls. I give the figijjes because I want to show that the water at the falls is not being used for power to the extent it should be. And someone is to blame for so much water being
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used to produce so much less power than could be produced were the water properly used.
For example, at the plant of the Canadian Niagara Power Company on our side of the line, all of whose power development goes to the United States side of the line, the diversion according to General Warren is 9,600 cubic feet per second, from which they produce
100,000	horse power. The head is only 173 feet and the horse-power developed per cubic foot per second is 10-4.
At the Ontario Power Company plant a diversion of 11,200 cubic feet per second produces 163,000 horse-power. The head in this case is 215 feet and the horse-power produced is 14-6 per cubic foot.
The Toronto Power Company I believe has been merged with the hydro power, but according to these figures it diverted 12,400 cubic feet, producing only 125,000 horse-power, with a head of 183 feet or 10-1 horse-power per cubic foot.
The Ontario Hydro Electric Power Commission at Queenston via Chippawa at that time was using 10,000 cubic feet per second. I believe it is now using 16,000, and the power produced at the time of General Warren's investigation was 294,000 horse-power from a head of 313 feet, or 29-4 horse-power per cubic foot.
The Niagara Falls Power Company, with a diversion of 9,450 cubic feet, produced 100,000 horse-power at a head of 219 feet, or 10-6 horse-power per cubic foot.
The next major power production plant there, the Hydraulic Power Company, using 7,840 cubic feet per second, producing 145,000 horse-power at a head of 219 feet, with the most modern equipment, apparently more modem than used in some of the other plants for it produced 18-5 horse-power per cubic foot.
Someone has been to blame during all these years in not modernizing the power plants at Niagara Falls. It is apparent from the figures I have given that if the maximum height of 313 feet on both sides of the line, at Queenston via Chippawa in Ontario, and I believe it is Fort Schlosser on the United States side, an ancient fort site of long ago, the power produced at Niagara could be almost doubled. Someone should be responsible for the neglect to take advantage of the power resoures at Niagara Falls. These piecemeal agreements for diverting water are robbing us of the great heritage of power and are not the proper methods. Some other plan should be used.
I suggest to the Prime Minister, since he has added a new minister to his cabinet this

morning, that perhaps the time has come to have a minister of power to control the development of the water power resources of this great country. I tell the Prime Minister that many of the power resources of this country are in danger of seizure by power barons, and the government should take command of all these vast resources that will last forever. There is nothing like water power for maintaining itself forever. In our great northern territory where I am going this summer, away up the Mackenzie river valley, I expect to see on the Slave river vast power resources north of Fitzgerald. I do not know who possesses those powers to-day, but perhaps the Prime Minister might consider some way .of conserving them for Canada before the power barons seize the incomparable natural power resources still belonging to this country.
The agreement also states-and I am strongly in accord with this:-
It is also proposed that the engineers of the two governments be directed to take in such steps as may be necessary with a view to initiating forthwith the construction of works designed to distribute the flow of waters over the falls in such a manner as to preserve their scenic beauty.
I am one hundred per cent behind that, and would urge the Prime Minister at the earliest possible moment to associate this country with the United States in arranging for those works. General Warren gave a very exhaustive statement on these works as a result of his survey. I myself have followed the -watershed to its remotest confines to fix in my mind and visualize the tremendous power behind Niagara falls. Later the engineering board of review, in 1924, I believe, amended General Warren's plan and improved it. On Sunday I made a careful investigation at Chippawa to see what will be the effect there of the adoption of the plan of the engineering board of review. I believe to adopt it in full would raise the height of the Chippawa pool from 561 to 571 feet, meaning that the Chippawa power canal intake would have to be raised-and not only raised, but be dredged out. There would have to be dykes at Tona-wanda and elsewhere, where the shore does not reach ten feet above the present level of the river. That of course would be a small matter.
The argument used, in support of the new plan is that only one works would be required, consisting of a monumental bridge and control works, which would be situated approximately a mile or a little over a mile south of Niagara falls. It would be a controlled dam operated by gates which would -rise and fall at will, and it would entail works and a weir immediately south of the brink of Niagara falls.

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37S9
I doubt very much if on Sunday the depth at the notch in the Horseshoe falls was more than three or four, or perhaps five feet, at the outside.
The new plan proposes that a weir be built immediately south of the falls for the even distribution of water over the brink. The Minister of Munitions and Supply (Mr. Howe), being an engineer, will understand that the evening up of the water immediately south of the brink of the falls would to a great extent retard erosion, which now amounts to quite an item at the falls. Indeed, unless erosion is arrested before long, the two cities of Niagara Falls, possibly not within our own time, but within one or two hundred years will be away down the river from the falls. The falls will be farther up the river. I believe the average erosion is about seven feet annually to the south.
In my judgment it is imperative to preserve the scenic beauties of that majestic, natural wonder. As speedily as possible this government and the government of the United States should have works constructed to conform with the best engineering features the two governments can devise. We are now told that after the works are completed a further diversion of 10,000 second-feet on each side of the line can be taken, without in any way affecting the scenic beauty of the falls. My own judgment would be in accord with that, namely that more water could be taken by an even distribution of the water across the brink of the falls on both sides of the river without affecting their beauty. Provided that these proposed works would preserve the falls, why not use the additional horse-power, if we can get it? After all, God placed it there for the benefit of this country and the United States. A further 10,000 cubic second-feet on each side would mean a very great increase in the production of power. I hope- I am sure we all hope-that that power will be greatly needed after the war for purposes of rehabilitation in this country. I expect it will be rehabilitated.
In my judgment, therefore, the first consideration the government should have in mind is to proceed with the works proposed in the agreement. Do not delay. Do not let another twenty years elapse between the proposal and the time the work is done, as has happened in the past. We must make every effort to preserve scenic beauty which is unequalled anywhere else in the world, a beauty which each year brings vast sums of United States dollars to our side of the line. The beauties of the falls are best seen from the Canadian side. The works suggested Tould not only permit an increase of power,
but would raise the level of lake Erie. Everyone knows that the level of that lake is sadly depleted.
I have before me the monthly report issued by the hydrographic map service of this government. It shows that in May of this year the average stage of lake Erie is 1-41 feet lower than the average stage in the past eighty-one years. The level of lake Erie would be raised on the completion of the works proposed in the agreement. Those who have investigated the levels of lake Erie-and I have done a good deal of it myself-know that at present the shore line of lake Erie extends out along the lake a quarter of a mile or more, and that some years ago those same points were under water. So that I will support any proposal to preserve the beauty of Niagara falls, and raise the water level of lake Erie. The raising of the Chippawa pool to 571 feet would retard the flow out of lake Erie. When the flow is retarded the lake itself rises. So that, as I understand it, no other work would be required, except this at Chippawa, to the height I have indicated.
I should like to present another angle of this whole subject to the government, in connection with its discussions of these matters with engineers from the United States. I would suggest that they try to persuade the United States to bring about the diversion of water from their own side of the line, into the great lakes. I fought like a tiger against the diversion from the Albany river watershed. That is past. I cannot do any more in that regard, and there is no use wasting more time on it. But we can compensate for what was done at that time by bringing about a diversion from the United States side of the line.
I spent considerable time in making extensive travels in the thousand lakes area of north Wisconsin. There are said to be a thousand lakes-there may be two thousand so far as I know. The whole country is dotted with lakes, and from those lakes several great rivers start. The water scarcely knows which direction to flow. Those lakes provide the source of the Wolf river, which flows into lake Michigan, the St. Croix, which flows into the Mississippi, and the Wisconsin, which flows into the Mississippi.
After making my own survey as to the possibility of diverting water out of the Wisconsin river along part of its ancient course via the Fox river, I went to Madison and discussed a proposal with the state engineer. I am happy to say that since that time the state of Wisconsin has taken into serious consideration the matter I talked over with their engineers. I pointed out the advantage to be ga'ned from damming the Wisconsin river
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south of Portage, where its current ends, and from which point, until it reaches the Mississippi, it is often a nuisance to the state. It is a large, flat river, with little current in it west of Portage, and it frequently overflows its banks. One and a quarter miles east of Portage the Fox river flows north, in the opposite direction. The Wisconsin river flows south and west. The water level of the Fox river is six feet below that of the Wisconsin, and the Wisconsin would overflow into the Fox. For years there were great floods around Portage, making lakes miles long in the state of Wisconsin. All along the Fox river are vast coulees dug out by the overflow of the Wisconsin river in years past. To prevent further action of the kind the state government has built at Portage a dyke fourteen miles long and twenty-five feet high. This prevents the waters which ordinarily and naturally would flow into the Fox river at flood time and into the great lakes. I believe the engineers are now satisfied that they can divert out of the Wisconsin a flow of 1,500 second-feet.
Their first statement is that they could divert 1,500 cubic second feet for 120 days per year. That is based upon the erection of two large reservoirs at Big Eau Pleine and Little Eau Pleine. All they have to do is to erect other reservoirs in that district and they would be able to maintain a flow of 1,500 cubic feet per second from the Wisconsin into the Fox and then into the great lakes. They could then produce another
20,000	or 30.000 horse-power of electrical energy from the flow of the Fox, east of lake Winnebago from which the river descends a hundred feet, more or less, to lake Michigan via the Fox; there is an old natural course where in years gone by there was a large flow of water out of the Wisconsin river. But they have stopped that. On our side of the line we have been most generous. At the present time we are diverting out of the Kenogami watershed, which is wholly Canadian, 1,200 cubic feet per second, and are considering diverting another 4,000 cubic feet per second. I should like to see the government try to persuade the United States engineers to do just what I have suggested; dam the Wisconsin, take the surplus flow and send it into the great lakes. That would help their trouble at Chicago. It would be wholly their own water; they could do what they liked with it. They could do what they are permitting us to do with the Albany waters. They could use it as it flows down; they could divert another 1,500 cubic feet per second without injuring the lake level at Chicago.

This district is quite historic. Nicolet, one of the early French explorers, went up the Fox river in 1634, and Fathers Marquette and Joliet went through there in 1673. I spent some time along that river going into the history of the district.
I should like to refer to one or two other diversions. I referred to Chicago a moment or two ago, but I want to place it in order on the records. At the moment Chicago can divert up to 3,900 cubic feet per second, all lost to the St. Lawrence system. The agreement states that this proposed diversion at Niagara Falls will terminate in 1942. I have not much confidence in such promises. We have a bold example of the failure to live up to agreements at Massena, where
25.000	cubic feet per second are being diverted from the south branch of the St. Lawrence river. This was originally the main course of the river. This water is being diverted across New York state to generate 90,000 horse-power at Massena. Half of that, or 12,500 cubic feet per second, belongs to us. I am afraid that when the St. Lawrence waterway treaty comes into this house it will be found that the power barons may claim compensation for the loss of the use of this 12,500 cubic feet of Canadian water. I hope that when that treaty is being considered other hon. members will be prepared to vote against compensation being paid for the use of Canadian water diverted at Massena.
That agreement was made in 1918, and we heard the same story, that it was for war purposes. It was stated in the agreement that if and when the war ended, the diversion would be stopped. But that was not the case. The war was over before the diversion weir in the St. Lawrence had been completed. They were diverting some water before, but the agreement was to permit the erection of a weir which would raise the water and permit a greater diversion. Unless the signatories of this agreement will live up to it, what is the use of making it? We will live up to it, but our cousins south of the line must be educated to living up to agreements. They are sharper than we are. I do not find any fault with that. I like to see sharp people; I like to see people who are able to defend themselves and who get what is coming to them.
Under the present agreement they are to get 5,000 cubic feet per second and we are to get 3,000 cubic feet, but when we want another
2.000	cubic feet, we can have it. I hope that is correct, because it is only fair that we should have that. I have another case in mind where we lose everything, that of the St. Croix river between New Brunswick and

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Maine. Immediately south of the junction of the main branch of the St. Croix river and the west branch, a dam has been built to hold back the flow of the St. Croix river. The whole river is diverted into the state of Maine to produce power. Of course the water is returned to the river lower down. We get absolutely nothing out of it; at least I am not aware that any power which is developed is sent back to our side.
I am afraid of any further raids. Recently I read carefully a report of the engineering board of review in the United States, which stated the advantages of diverting 5,000 cubic feet per second out of lake St. Francis. I doubt if that will ever take place, but they pointed out the advantage of diverting that water to lake Champlain. Their engineers are on the job. This same report contains a plan for the diversion of the Black river in New York state, which now flows into lake Ontario at Sachets harbour. The proposal is to divert water from the Black river into the Fish river and Mohawk river. Any diversion of water from the lake Ontario watershed would violate the 1909 treaty. I hope it will never be permitted.
I think that is all I have to say. I am not opposed to the present diversion, since it states in the agreement that it is to be reconsidered in 1942. I hope the government sees to it that these works are constructed on the Niagara river in order that the lake Erie water level may be raised and the scenic beauty of this great natural wonder preserved.
I repeat what I said a moment ago. I hope, the Prime Minister will take into consideration the appointment of a board or a minister or a departmental branch which will assume control of the undeveloped water-powers in territories which are still under the control of this government, preserve them for the people of Canada and prevent their exploitation by the power barons who may try to get possession of these great water powers in our vast hinterland, over a great deal of which I have travelled. I think I have covered all of Canada south of the sixtieth parallel and I should know something about its water resources. I hope the Prime Minister will consider preserving for the people of Canada the still vast water powers of this country.


Thomas Langton Church: Mr. Speaker, I shall not detain the house from going into supply for more than ten minutes but inasmuch as for many years between 1921 and 1930 I have protested against the Chicago diversion and have taken part in the debates from February 26, 1929, on the
various diversions in the Niagara river, I wish to take a few minutes to protest against the principles involved.
Prior to the statute of Westminster being passed a similar matter came up in this house on February 26, 1929, by way of a debate on a convention or protocol with Washington, and on that occasion I raised this important question of the further diversions of water in the Niagara river for power on both sides of the line. Ten thousand feet then on this side belonged to Ontario and half way out to the boundary line, including the water and the banks of the river and rapids, subject to the rights of navigation. The other half at that time belonged to New York state and the United States. This matter then came before the house in a convention or protocol for the preservation of Niagara falls by the construction of remedial works and for the experimental withdrawal of additional water from the Niagara river. There was a treaty before the house on that date on the very question; it was signed by His Majesty the King of Great Britain, Ireland and the British Dominions beyond the Seas, Emperor of India; and on behalf of the United States of America by the President. The terms of the whole convention as to 10,000 horse-power for each country, now reduced to 5,000 and 3,000, are set out in the statutes of Canada for 1929, at page xiii of the prefix. I am in favour of the further diversion for immediate power purposes, as I was in 1929, but I object to the new way of doing it.
What has happened since that time, and how are these matters done now? Just by a note of our executive, whereas at Washington the senate must approve. There were imperial conferences in 1926 and 1930. Up to that time Great Britain and the British empire did not have any written constitution or strict rules of law. The constitution of Great Britain consisted of a number of usages, customs and conventions which have bound the empire together by ties of race and blood and of other principles unwritten except by Canada to the 1867 British North America Act. But at these imperial conferences they changed the whole constitutional structure of the British empire. They passed the statute of Westminster, which made Canada a separate dominion, so that we can now make our own treaties over the head of the mother country and we had our own seat in the league and many other things. I should like to quote a few sentences from Wheare's "The Statute of Westminster and Dominion Status." He says at page 3:
This constitutional and international position may he set out partly in rules of strict law,
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such as statutes, passed by the United Kingdom parliament or by the parliaments of the dominions, and judicial decisions, and partly in non-legal rules, such as constitutional conventions. The most important of the rules of strict law which define dominion status at present are to be found in a statute of the United Kingdom parliament, the Statute of Westminster itself. The most important of the non-.legal rules are to be found in the constitutional conventions between Great Britain and the dominions agreed Upon and declared at the imperial conferences of 1926 and 1930, and set out in the reports of these conferences.
Then at page 5:
It is asserted, for example, that Great Britain and the British empire have an "unwritten" constitution. A constitutional statute is regarded therefore as something alien to the spirit of the constitution. On such a view of the nature of the British constitution, and of the constitution of the British empire, it was inevitable that the passing of the Statute of Westminster should appear to be a mistake. Some members of parliament, in the United Kingdom and in the dominions objected to the proposal to pass the statute, not because of the terms it contained, but because it was a statute. Lord Buckmaster, .an ex-Lord Chancellor, put this point of view in the House of Lords during the second reading of the Statute of Westminster bill. He said that he intended to support the bill, but that he felt it was a mistake.
It is not-he said-that its actual terms offend any of the relationships existing between ourselves and our dominions. It is that it is, as I believe, for the first time, an attempt made to put into the form of an act of parliament rules wThich bind the various component parts of the empire, and that I regard as a grave mistake.
There is a footnote which says:
In Australia Mr. W. M. Hughes reiterated the view he had already expressed at the imperial conference of 1921 that it was unnecessary to write down the constitution of the British empire in black and white.
As a result of that empire-wrecking statute, the statute of Westminster, we are now a separate country and here now by a note of Canada's executive power we part with this heritage. Although the senate and house of representatives have to agree in Washington to what is done there by the text of a treaty, here in this country the Prime Minister of Canada, over the head of this parliament, even while it is in session, can by a stroke of the pen give all this away on terms instead of, as in the past, having it done by a protocal or treaty. We in this country can be gold-bricked in connection with this and future diversions, which they say is for emergency purposes. It does not need parliament's consent at all; we get it only for information and can do nothing about it.
Under the Boundary waters treaty, as I pointed out on February 26, 1929, the United States is entitled to 20,000 cubic second feet of water a second and Canada to 32,OCO second

cubic feet, of which Canada exports 12,000 cubic feet of water a second of her allotment by export to the United States. So that we receive 32,000 less 12,000, or a net 20.000 second cubic feet; now we are getting 3,000 additional second cubic feet and the United States, by this new diversion, 5,000 more. It is only 23,000 second cubic feet that Canada retains. What will the United States get? By the Boundary waters treaty the United States is entitled to 20,000 cubic feet per second. So that the United States will have 20,000 plus 12,000 of our 32.000 second cubic feet exported to them. The United States will now get an additional 5,000 second cubic feet as an emergency measure, making
37,000	in all as against our 23,000 up to date.
This new method of dealing with international questions upsets the whole constitutional practice. We are going to be gold-bricked sooner or later. Once that waterpower is given in this manner, it is gone forever, no matter what this note says. I object to this. I believe this is the greatest principle that has been raised in parliament since the war started. The last time, in 1929, the mother country had to sign the then convention; now it is different. If we are going to conduct business in this way and make our own separate treaties, I object on the principles that I objected to two others without the consent of parliament. Canada had no right to bind this country to the proposals there set out or to the Ogdensburg agreement and the Hyde Park agreement, good though they were, except by convention. The principle is all wrong; it upsets ail our relations with the mother country. Under the lease-lend act Canada will be committed for munitions and supplies for Great Britain, over the head of this parliament, running up to an amount it may be of one billion dollars this year. This is done on the principle that we are a separate country and can make our own treaties over the head of the Canadian parliament and of the mother country. Someone will have to pay for all this after the war, Britain or Canada, or both, as it is only a lease and a lend to be paid later.
The power situation in the Niagara district was only redeemed for the province of Ontario by the establishment of the hydro-electric power system for the people at cost. True, my leader does not believe in public ownership, he says, but Ontario does. I should like to say right here that I did not say that the Calgary Power company, which was before s this house the other day. had any affiliations with the Beauharnois or Montreal Bight, Heat and Power company. Far from it. What I said about the Calgary Power Company was

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that there is a forward movement of aggression by this and other companies for extra power, to grab it for private ownership. The state of New York insisted on private ownership in 1929, but in Ontario we have established public ownership of electric power. I did not say the other day that the Calgary Power Company was tied up with Montreal Light, Heat and Power. I was referring to the proposition in 1926 and 1927 in commenting on the history of the company.
I have said that I believe Ontario has been gold-bricked before and Canada may in the future be goldMbricked in connection with any additional diversions. I need only refer to the Stormont Power company, which purchases power direct from Montreal Light, Heat and Power at $10.50 per house-power, while the same company sells the same kind of power at less than one-third, the rate it now charges at Cornwall for the same direct current, and commercial and domestic lighting to its Quebec customers for the very same class of 'service. The Hydro-Electric Power Commission of Ontario purchases power from the Beauharnois company for $12.50 per horsepower under a revised agreement which was formerly $15 per horse-power, and financially the Beauhamiois and Montreal Light, Heat and Power are one. What I am objecting to is this particular way of doing business. No plans or specifications have been filed under the provisions of the Navigable Waters Protection Act. I wish to support what has been said by the hon. member for Davenport (Mr. MacNicol), as to the principle involved here and the mistakes of the Chicago diversion.
Back in 1929 there was a debate in this house, which lasted for many days, in which the preservation of the scenic beauty and other works at the falls was much discussed. At that time the additional number of second cubic feet of water to be diverted was 10,000 to the United States and 10,000 to Canada; under the present arrangement it is 5,000 to the United States and 3,000 to Canada. We should know more about the plans and specifications and the weirs and1 remedial works. We should be informed what is to be the effect upon the scenic beauty of the falls, and know of the erosions in escarpment. In my opinion, it is going to be absolutely destroyed if this measure goes through unless we have properly constructed remedial works.
No doubt both sides need power, but there is a better method foy treaty of getting it, as was shown during the course of the debates in 1929, in the speech of the Hon. J. D. Chaplin, reported in Hansard ait page 469 where he supported the views I expressed there. As I said in 1929 a special international board was appointed' when this matter came up in that year. It was appointed by hon. gentlemen opposite and was known as the special international Niagara board, for the purpose of finding how the diversion could be carried out so as not to ruin the scenic beauty of the falls. The American falls are slowing down and are beginning to run dry; for years there has not been the same volume of water there; far less water goes over them today than ever before. The Horseshoe falls will also be affected somewhat from lower lake levels as a result of the Chicago and other diversions. The board set up under the 1929 convention consisted of:	J. T. Johnston,
director of dominion water power and reclamation service; Doctor Charles Camsell, Deputy Minister of Mines, and Doctor J. Horace Macfarland, past president of the American Civic Association. Mr. Johnston and Major Jones were the members of the international board of control established in 1923. Why are not the successors of this board called together in connection with this present diversion? I wish to protest against this way of doing business. This diversion was proposed away back twelve years ago, in the form I have indicated. Why was nothing done about it until now in the dying days of this session, when more power has been wanted since 1929 from this very diversion by both sides?
I wish also to protest against any more export of power; 12,000 cubic feet of water a second going over there, and now 5,000 more added, while we in the province of Ontario are in darkness as a result of daylight saving all the year round. It is not necessary. What did the chairman of the Hydro-Electric Power Commission of Ontario, Hon. W. L. Houck, say at Buffalo yesterday, referring to this diversion?
Daylight saving has not been a necessity in Ontario during the past year, but it was needed in Quebec, where there was a power shortage, and with its usual cooperation the Ontario government acquiesced with the suggestion of the federal government concerning daylight saving.
This extra development, 12,000 plus 5,000, represents 17,000, whereas Ontario gets only an additional 3,000. Does that mean that we shall have to continue daylight saving merely to save 150,000 horse-power for some alloys in connection with aluminum company plants which Quebec and Montreal and other companies could provide for by a readjustment and by their own power conservation? Consider on the other side of the account that Ontario is required to conserve power and turn over export and get less than its share by contracts while from six to nine in the morning the use of commercial and domestic

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lighting is twice what it should be, especially for domestic purposes. There is no saving for industry.
I warn the house that, without any reports from officials, without reports from this board, without reports from officers of the department under the Navigable Waters Protection Act, or any plan, we are going to sanction this diversion in a fashion which has never been done in principle before in this legislature or any provincial one. I can only say that, if we are going to do things this way, let us get some public ownership men in charge of daylight saving, and not one of those who helped to put the Abitibi company in the condition it is, a lawyer and other agents for the grain exchange, the Calgary Power Company, the Canadian National Railways, the Beauharnois company and the companies which I mentioned the other day, and who is or was listed as one of the directors of this Calgary Power company.
I protest against this principle, whether in peace or war, or giving away by this principle of a note our natural heritage, the waterpower of this country, in the manner it has been done by this parliament.
Yesterday we were talking about a select committee, and that committee has found out nothing. I was one of those who helped to dig up the Beauharnois scandal and wake up parliament about it, and I was pretty nearly driven out of parliament because I proposed to support the policy of the province of Ontario in conserving its natural heritage, the water powers and natural resources for the use of the people of this country. As Theodore Roosevelt said of the United States, in twenty-five years that country may run out of coal. There may be a shortage in the next twenty-five years, with the result that power for industry, for commercial and domestic lighting, for labour and for the farmer will be hard to get. Considering the scarcity of coal which is bound to face us this winter, as well as [DOT]the impending scarcity of oil and other substitutes, we should go slow in this kind of legislation. I object in principle to these agreements without the authority of parliament. While I am satisfied with the policy of immediate diversion, I am not going to consent to this going through in a way which violates the whole constitution of this country since confederation on boundary waterways matters, and which changes the procedure regarding our international relations with our great friends and neighbours from what it has been since 1844, when Sir John A. Macdonald made the great speech he did at Kingston City on our need of relations with the mother country who were parties to this diversion in 1929.
I hope we shall have more details about this matter. It is true we are told that it is only for an emergency. But everything that is put before us is supposed to be for a war emergency. As the hon. member for Temiscouata (Mr. Pouliot) aptly said the other day, you cannot blow your nose in this house without its being said that it is for the war effort. Every time a deputation goes down to Washington it gives away something or agrees to something over parliament's head. I protest against this procedure of conducting our relations by means of notes instead of treaties and conventions and protocols. There are notes about everything. Every time our officials go to Washington or the joint defence board or any other board meets, we hear about a new note which doesn't get us any place. People will wake up one of these days when their water power has been given away and when we are short of power, coal and oil. Look at the price of fuel as charged by this Cornwall company. The Stormont company purchases power of the Montreal Light, Heat and Power at the price of $10.50 per horsepower, which is about one-third of the price at which the company sells it to workers in the province of Quebec. The reason they are in that position is that parliament sanctions and passes some of these private and public bills without knowing what is involved in them.
If conventions of this kind are to be the result of our status as a nation separate from the mother country, if we are to divert in this fashion the waters of the Niagara, it wrill be a sorry day for the people of Canada.


Clarence Decatur Howe: The Prime Minister (Mr. Mackenzie King) asked me to express to the hon. member for Davenport (Mr. MacNicol) and the hon. member for Broadview (Mr. Church) his regret that he was not able to remain in the house to reply to their remarks. He had an appointment at 12.30 which had to be kept, and he has asked me to make a few remarks in reply.
WTe are all greatly indebted to the hon. member for Davenport. He seldom rises to speak in the house on power matters without placing on Hansard valuable and accurate information. I am sure that all those who are interested in power developments in the St. Lawrence watershed will find, in his reported speeches, valuable material for their studies on this subject.
I would only take exception to one suggestion which he left with the house, and which I am sure he did not intend to have taken very seriously. I refer to his remark that there was sharp bargaining connected with

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the recent diversions of power on the St. Lawrence. I think that our present-day relations with the United States are such that no question of sharp bargaining can be allowed to intervene in relation to anything we are doing in discharge of the common effort. As you know, this country is in an all-out effort to aid Britain, and the United States is developing an all-out effort in the same direction. The needs for power in the United States are for the purpose of aid to Britain, just as are our power expansions in Canada. In recent months it has become more and more important for the two neighbouring countries to sit down together to see how the resources of north America can best be utilized to give that immediate aid to Britain which is so urgently required. As a matter of fact, for the last two or three years diversions at Niagara falls have not been a matter of sharp bargaining. We all recall that the United States, voluntarily and without pressure from Canada, offered to anticipate the Ogoki diversion by at least two years by permitting Canada immediately to divert equivalent water at Niagara before the diversion works at Ogoki had been built, and in spite of the fact that after the works have been completed it will be a matter of many months before the effect of the diversion will be felt at Niagara falls. In other words, the United States has ahead}' permitted Canada to divert
5.000	cubic second feet in addition to the diversion allowed Canada by the treaty, and that with no corresponding compensation to the United States.
The recent diversions were a matter of utilizing available facilities rather than a question of bargain based upon previous diversion permitted to Canada or upon any consideration except the maximum output of immediate power. The United States, on its side of the falls has installed equipment which can be immediately utilized to transform 5,000 cubic second feet of water into electric current, and Canada on the Canadian side has installed capacity to make immediate use of 3.000 cubic second feet.
This additional power is very urgently needed in Canada and in the United States. As hon. members know, June is the month when we should have adequate power reserves. The peak load comes in December and January, and usually the minimum load of the year comes in June. As a matter of fact, owing to the requirements of war production, every kilowatt of power that is being generated in Ontario and Quebec to-day is being utilized this day. This may not be true of the smaller developments in the more remote sections of Ontario, but it is true of the main
network of Ontario and of the complete Quebec network. What is happening is that all surplus power that can be generated is being sent to the Saguenay district for the manufacture of aluminum. An effort is being made to store the waters of the Saguenay against the requirements next winter and to use water power that would otherwise be wasted to protect the Saguenay water power in order that the output of aluminum, so badly needed for aeroplanes for Britain, manufactured in the United States and in England, may be kept up to the highest possible maximum.
The hon. member mentioned the distribution of powrer from Niagara as between Canada and the United States. I think it is only fair to add to that with the development of 5,000 cubic second feet additional there will be a return to Canada of "at will" power. That has been sent across the border at Niagara for several years. When the time comes this "at will" power will be returned to this country where it will be urgently needed for the purposes of Ontario.


John Ritchie MacNicol: I am glad to hear that. Has an agreement been made to that effect?


Clarence Decatur Howe: That is understood in the
documents that have been tabled. It is a matter between the Ontario hydro and customers in the United States, but the Ontario hydro have served notice that this block of power must be returned, and I think the application from the United States for additional diversions at Niagara provides for picking up the load that could not otherwise be taken care of when that block of power is returned to Canada.


Grote Stirling: What quantity will be
returned in that way?


Clarence Decatur Howe: Forty thousand horse-power,
as I remember it. This power has been going across at Niagara for some years.
So far as the scenic beauty of Niagara is concerned, that question was looked into by the international board of engineers. Water conditions in the Niagara river are better this year than they have been for some years past, and it is felt that the scenic beauty of Niagara would not be impaired beyond the point which that impairment had reached in earlier years, owing to low water conditions in the river. Coupled with the proposal to divert is the proposal to build remedial works immediately. The effect of these works will be a more even distribution of the flow of water over the falls. The proposed work will increase the head on the Canadian power plants, and to some extent increase the output
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of power from those plants, and it will also have the effect of making possible a greater diversion of water on both sides of Niagara without impairing the beauty of the falls.
My hon. friend has suggested that the remedial works should have been built some years ago. He is aware of course that Canada has been pressing for an agreement which would have permitted the construction of these works earlier. The treaty of 1932, which was signed by Canada but was not ratified by the United States, provided that the remedial works should be built as part of the St. Lawrence development. The fact that the remedial works at Niagara falls were tied in with the entire St. Lawrence development has been the retarding factor that has prevented earlier undertaking of this work. However, coupled with the exchange of notes, as my hon. friend has observed, is a provision that Canada will join with the United States immediately in undertaking these works for the purpose of having them constructed by autumn of this year.
The Canadian part of this work i3 being undertaken by Ontario, by agreement between the province and the dominion, and I know that active preparations are being made for its construction.
I do not know that anything more needs to be said on my part except that we are working out our war problems with the United States in an endeavour to reach the closest possible cooperation for maximum output.
The United States has called upon us to assist in the production of greater quantities of aluminum, which will be the limiting factor in the production of aeroplanes for Britain. To that end the Aluminum Company of Canada is building on the Saguenay river a new power development which will generate
700,000	horse-power, of which 500,000 will be a net increase in the resources of that area. Every kilowatt of that power will be used for the manufacture of aluminum at Arvida, and no great relief will accrue to the power situation in the province of Quebec. It is to conserve water, until the new source of power comes in, that the power controller is sending to Arvida, Sunday power, daylight power, every kilowatt that is to spare at any hour of the day or week, in order to conserve the flow of water in the river until the new development comes in. What has been done at Niagara is simply in furtherance of that purpose to devote every possible kilowatt of power to the production of war materials for aid to Britain.
Mr. JEAN-FRANQOIS POULIOT (Temis-couata):	The president of the Canadian

National Railways, Mr. Hungerford, was asked a question which reads as follows:
Mr. Pouliot:	I have a question to ask Mr. Hungerford and then I shall be through. Mr. Hungerford, I hold in my hand a copy of the statement that you made before the senate committee and it is entitled "Railway unification opposed by Canadian National president, 1939." You still hold the same view?
Mr. Hungerford: I do.
This is from pages 169 and 160 of the proceedings of the standing committee on railways and shipping of Thursday, May 22, 1941, No. 3.
Here is the statement made by Mr. Hungerford before the senate in 1939. It is a reprint from the text which had been published in the Canadian National Railways Magazine. It is impossible for me to read it all this morning; I shall read only the part which is in larger type and which summarizes the statement made by the chairman and president of the Canadian National Railways against the amalgamation of the two railway systems:
On these pages will be found the full text of the statement presented by S. J. Hungerford, chairman and president of the Canadian National Railways, to the special committee of the senate inquiry into railway problems.
Pointing out that never since 1923 had the Canadian National Railways failed to meet its operating expenses, that it had a very great earning capacity under normal traffic conditions, and that, serving almost exclusively the rich northern mining area of Canada, it had greater potentialities than its rival, Mr. Hungerford opposed unification of the two Canadian railways.
Most of the economies envisaged under unification schemes were unrealizable, he contended. Any that were practicable and in the public interest could be realized under cooperation, he said, holding that if the railways did not show a will to cooperation compulsion would be justifiable in the public interest.
Mr. Hungerford recommended a public body of three, consisting of representatives of each of the railways and a chairman representing the public interest, which would explore and develop cooperative measures and bring the railways together in implementing them.
Of course the question of amalgamation of the railways was never considered seriously by any political party except in later years. When Mr. Bennett spoke during the election campaign of 1930 he said, "Cooperation ever, amalgamation never," and that had always been the attitude also of the Liberal party. After that the Canadian Pacific had some favoured treatment from the then Prime Minister, Mr. Bennett, by a loan of $60,000,000, but it was refunded as soon as the Liberal government came into power. After that we did not hear about railway business until a committee was formed in the senate to study the question of cooperation between both railways. There were many senators who expressed their views, and to the great sur-

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prise of members of the House of Commons there was a majority of the senate in favour of unified management of the railways. It was the policy of Right Hon. Arthur Meighen in the senate; he strongly recommended that. He had changed his views. I remember having read in Hansard-I was not then a member-that Mr. Bennett, who was also a private member, called him the "gramophone of Mackenzie and Mann." At that time he was strongly for the C.N.R. and after that he changed his views and went over to the Canadian Pacific, as everyone knows.
At one o'clock the house took recess.
The house resumed at three o'clock.


Mr. POULIOT:: I hold in my hand a copy of proceedings before the railways and shipping committee, and would direct the attention of hon. members particularly to the evidence taken on May 20 of this year. At page 79 I find this:
Mr. Pouliot:	It is said here there was an
order made by his majesty's treasury of the United Kingdom dated October 26, 1940, stating that such portion of the said debenture stock

Of the Grand Trunk Railway.
-as was held by residents of the United Kingdom was transferred to the treasury, which means that the United Kingdom treasury took hold of the stock that was held by people living in Great Britain.
Mr. Cooper: Yes.
Mr. Pouliot: And the vesting order was made upon the condition that the Canadian National Railway Company would purchase the stock from the treasury under the vesting price. Well, then, did the order apply to the Canadian National Railway or was it done willingly?
Mr. Cooper: It was an arrangement between the finance department here and the British treasury in London.
Mr. Pouliot: Over your heads. Speak frankly, as you have done since the beginning, Mr. Cooper.	.
Mr. Cooper: Well, of course the repatriation of securities is not a matter which any corporation to-day has anything to do with or say about; it is a matter entirely in the hands of the government concerned.
Then, at page 80:
Mr. Cooper:	Can we express it this way?
The British government have from time to time named the United States and Canadian securities which became subject to their vesting order. These companies were not consulted.
Mr. Pouliot: No, it was done between governments.
Mr. Cooper: Yes.
Mr. Pouliot: And as I said, over the heads of the company.
Mr. Cooper: The British government, I think, does not even need to consult the Canadian government. They were taking away from their own citizens the property of those citizens.
Mr. Cooper is the accountant of the Canadian National Railways, and a man familiar with the business of the company. It is true that Mr. Hungerford stated the matter was approved by the directors of the company, but he did not state whether it was done before or after.
I read with astonishment in the press a statement made by the right hon. leader of the Tory party in the senate on the occasion of the celebration to the memory of Sir John
A.	Macdonald in Kingston. This is the passage:
Never at any time did he lose sight of, or subordinate to selfish Canadian purpose, the oneness of our interest, the oneness of our security and the oneness of our destiny with the British empire.
I strongly protest against that statement by the Tory leader in the senate, that being a Canadian means being selfish. It is only the natural and national point of view which must be respected. I respect his views-the views of an imperialist. He is entitled to hold them, just as I am entitled to hold mine. But he has no reason to call me selfish because I hold deep convictions, convictions as deep-rooted as his own.
Hon. members may look at any newspaper issued on April 4. I hold in my hand a copy of the Windsor Daily Star, and I find in it the statement made by the Right Hon. Malcolm MacDonald when he set foot first on the soil of the capital of Ottawa. Speaking of those who defend the British isles at the present time, he said: "Even if they were fighting alone, they could not be beaten." That was the way he appreciated the help given to Great Britain by Canada.
And now, sir, I hold in my hand a quotation from British Hansard, which appeared in the Ottawa Citizen a few days ago. This is from a speech by Sir Archibald Southby:
It cannot be right, when we are fighting for democracy and the right of free peoples to express their views, for the government to come to a major decision of this kind, which will have most far-reaching effects, without giving the House of Commons the opportunity, which is their right, of expressing their views. It is not a bit of good eoming to the house when everything is signed, sealed .and delivered, and saying, "Here it is; take it or leave it." We are a council of state. Of course, we shall support the executive in anything they do; but they also have a duty towards us and that is to allow us, as far as in their power lies, to express our views, .and to make helpful suggestions.
Not only was that said by Sir Archibald Southby, but it was the tenor of the first sentence in the speech delivered this week by no less a person than the Right Hon. Winston Churchill, Prime Minister of England, who said that he welcomed criticism. Of
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If that is not enough, sir, I have another quotation from no less a man than Lord Beaveibrook. This is from the New York Herald Tribune of Sunday, June 8:
Adolf Hitler has "given youth its head" in his plans and preparations, and Britain now found itself confronted "with a mentality which makes rings around many of our old ideas."
One may ask me, why are you speaking of these matters? I speak of these matters because we are on the verge of having in this country what I feel would have taken place if Mr. Manion had got into power, at the last election, and it is this: a formidable trust holding every commodity in Canada and ruling this government. That is my fear. My fear is that I may see some prominent business men in control of the commodities of life so that they can dictate their views, dictate their say, to the Canadian people. I am not going to start to discuss the Bank of Canada, and the still more absurd foreign exchange control board, which are no less than a hymn to bureaucracy. I have no time for that now. But I will say this, that in this country we must 'be very careful to remember that those who preach fascism and who organize it are not all, like ex^Mayor Houde, in concentration camps, because we may find two of them on the treasury benches. They have so much jitters that they are afraid of the coming ideas of socialism and communism, and they think they can put a check on it by installing fascism in this country. We had an example not long ago in the creation of the Department of Transport. It was an incorporated department, organized on corporation lines, on fascist lines. Sir, we must think of the future. At the present time those people have the jitters and they are colonials. They are not real Canadian citizens. They are just colonials who are afraid to speak on behalf of Canada. I was bom here and my forefathers for many years 'back were born here. I am a Canadian citizen. But I do not exclude those who were born in the British Isles and who have decided to make Canada their own country, and who are better Canadian citizens than some who were born here. I have the utmost respect for them. I could name some members of this house who were born in the British Isles and who have true Canadian feelings.
Just a word about something of great importance. We should treat every country, Great Britain just as any other country, as equal. That was stated by the present Prime Minister (Mr. Mackenzie' King). I am not a political heretic when I say that because I am just repeating what my revered leader has said many a time, perhaps a hundred times. But there is something else. It is

that here in this country we should not forget our past; we should not forget our traditions, which up until this past year have been equal in glory to those of Westminster. I will say now, sir, that the British parliamentary tradition is kept by you here, sir, and by the speakers of all the legislative assemblies in this country, as well as it is in Westminster itself. But I do not think that we should have policies that will destroy the unity of Canada and will destroy the financial system of Canada. I do not mean by that the system that we have temporarily now. I refer to destroying the wealth of Canada which has accrued over the centuries.
I have here an extract from the Ottawa Journal of July 3,1940, quoting what Mottistone has said in England-that he would put the Canadians everywhere. I do not see the use of that. I want the government to keep its pledges of the past. I do not want them to change from time to time. I remember that on the last day of last session, or a day or two before the last day, the Minister of National Defence (Mr. Ralston) said that we would need to send no more men to England, that all those we were to send had reached there. But a few days or a week afterwards I saw that another contingent of Canadians had just arrived in England. No more to go-all those who were to go had left-and yet a day or two or three days afterwards, not long afterwards in any event, another contingent arrived in England.
No less a man than Philip Kerr, afterwards Lord Lothian, said that England needed food and needed munitions but did not need men. He is dead now, but what he said is recorded in the press. I want this country to be defended. I see the Minister of National Defence is taking notes. It is his habit. I think he would die if he had not a pencil in his hand. But let me continue as he takes notes. I want him to inform the house about Jardine McKerlie, that man who said he served in the British army and never proved that he was there, that man who was promoted from $200 a month to $5,400 a year within a few months, and is now inspector of accounts in the minister's department, a man who has a Ph.D. from a fake university, the McKinley-Roosevelt university. I will quote two letters, one from Walton C. John, senior specialist in higher education, federal security agency, United States Office of Education, Washington, dated March 17, 1941. It is not necessary for the minister to take notes: it is on record in the files of his own department:
The McKinley-Roosevelt university is a correspondence school which offers a wide variety of courses and grants degrees for work done by the correspondence method. We have had numerous complaints from different parts of the

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world regarding its activities. I find that it is not on any list of approved correspondence schools. In this country no reputable institution grants degrees of any type by correspondence, consequently the degrees of this institution have no academic recognition in the United States.
Is it enough? If it is not enough, I have another one. I send the original to Hansard.
Illinois State Examining Board for Teachers' Certificates
C.	H. Engle, Secretary.
March 11, 1941.
In reply to your letter of February 26, I am sorry to state that the McKinley Roosevelt university located in Chicago, is not recognized by any of the regional accrediting agencies or by the office of Superintendent of Public Instruction in Illinois. Work completed in this institution receives no recognition whatsoever in Illinois.


Hon. J. L. RALSTON (Minister of National Defence):: Mr. Speaker, my hon. friend is
quite right: I did take a note or two, because he covered quite a number of subjects, and it was pretty difficult to keep them all in mind. However, I think there are only one or two to which I need refer.
First, the reference of my hon. friend to Mr. Dunning. I have no knowledge whatever of the matter of the Canadian Pacific railway stock to which he refers, except, that as I remember it, my colleague the Minister of Finance (Mr. Ilsley) stated the other night that there had been no mention or suggestion of a purchase of Canadian Pacific stock. It would seem to me that probably that was a sufficient answer.
At the same time, I do feel that this practice which my hon. friend has adopted, of making this house the sounding board for any grievances which he has against citizens of Canada, must be taken notice of, at least to the extent of one saying a word for those who cannot speak for themselves.
All I want to say in this connection is, that, regardless of what is my hon. friend's opinion of Mr. Dunning, and regardless of the insinuations which he has made, I believe I shall receive general approbation from the people of Canada when I say that no citizen who has been in public life was held in higher esteem by the people of Canada generally than the gentleman whom he has attacked this afternoon. Through many years of fine public service, in the legislature of Saskatchewan, as Minister of Railways, and as Minister of Finance in the government of Canada, Mr. Dunning stands in need of no encomiums from me. My purpose is simply to take notice of the fact that he has been attacked this afternoon. I know that citizens generally will feel, as I do, that the attack is entirely
unwarranted, is quite out of place, and that the subject regarding which Mr. Dunning's name has been introduced is not a matter with which the time of this house need be taken up, especially at this particular stage of the session.
The hon. member asked a question with regard to my trip overseas. May I tell him that I did not go over there to settle financial questions. I do not recall that a single financial question was discussed when I was in Great Britain, although there may have been one or two financial matters incidental to the subjects with which I was dealing. What I did go to England for, as I endeavoured to tell the house when I came back, was to see the troops over there, to consult with the commanders in the field, to meet General McNaugbton and his officers and men, to discuss the matter of organization with Canadian military headquarters, and to ascertain what further we could do in connection with our pledge to help in the war to the limit of our ability. I endeavoured to carry out these purposes. In doing so I interviewed from time to time quite a number of members of the British government and staff officials, and discussed fully what Canada might do to render further assistance. I have given, I believe, quite a full account of that to the people of this country and to the house, and I do not propose to take up time this afternoon in rehearsing it.
The hon. member mentioned another gentleman who is not here to answer for himself- Colonel Magee. He suggested that Colonel Magee was taken on the staff of the Department of National Defence as a financial adviser. Let me tell him that I occupied the position of Minister of Finance for about nine months. If I had wanted financial advisers, I can think of very few whom I would rather have had, from the point of view of finance and business, than Colonel Magee. But I do not recall having even talked with Colonel Magee when I was Minister of Finance, because assistance of that kind was not what I wanted. I may, of course, have met him on the street, but that is all. When I came to the Department of National Defence, however, last fall, I looked around for a citizen of Canada who had had some experience in connection with military matters, and who could be relied upon as having the confidence of his fellow citizens, and I found him in Colonel Magee, a man who had raised a battalion, who had taken that battalion overseas, and who had rendered sterling service in England and in France with the fourth Canadian division. Following that, Colonel



Supply-The War-Mr. Ralston
Magee came home and took a special interest in connection with training: I believe he is one of the men who was chiefly responsible for the success of the officers' training corps in Montreal. The result was that I asked Colonel Magee to come to Ottawa in the capacity of executive assistant. He accepted, and I was glad of it. I believe I shall have the approval of hon. members generally when I say that no man could have filled that position more worthily and unselfishly or more acceptably to members of the house and to all the people with whom he has come in contact. He has not been called upon to advise upon a single financial matter of any kind or description in connection with the Department of National Defence. His services have been exercised purely in connection with matters of military administration training and the many details which come up from time to time in the department in connection with which his experience and knowledge of military matters can be of advantage.
My hon. friend made some remark to the effect that I have said that we were not to send any more men overseas. I do not know where he gets that statement. It does not appear in Hansard nor in any other published statement of mine, and I am satisfied1 that I can say without reservation of any kind that I never made such a statement in my life. The argument, therefore, which my hon. friend based on that is totally fallacious. I stated when I came home that we would be sending men overseas. I have stated frequently that we have been sending men overseas. When my hon. friend asserts that somebody said that Britain did not need men but needed munitions, any statement of that kind was based on the knowledge that Canada had pledged the various formations whose dispatch overseas this house has approved as part of Canada's contribution and that that pledge would be kept.
With regard to this man Mr. McKerlie: I never saw him. As a matter of fact I know nothing whatever about him, except that two long questions were asked concerning him in the house, and the department got the answers from the files. My hon. friend may make any statement with regard to that which he sees fit. But I know that Mr. McKerlie was recommended to the responsible officers concerned by Colonel Sherman, who I understand was in charge of the ordnance training centre at that time. He was recommended first with relation to the job which he at first filled, and the title of which I have forgotten, and afterwards to be director of training at the new trade training school because he was regarded as having the technical knowledge necessary for the position. The officers who

had charge of that organization are the officers responsible for making that recommendation, and Mr. McKerlie took up his new position in connection with that work. I do not believe that he is with the department at the present time. As a matter of fact-this will probably bring another outburst from my hon. friend

I think he is in the department of my colleague the Minister of Munitions and Supply (Mr. Howe) at the present time-I do not know just in what capacity.
I had not intended to speak at this length, but I felt it was due to these gentlemen that I should say what I have said.


Richard Burpee Hanson: Before the minister takes his seat, may I recall to him that he made one notable omission. A very savage and bitter attack was made on the Right Hon. A. B. Purvis by the member for Temiscouata. Mr. Purvis is not here to answer for himself.


Jean-François Pouliot: I rise to a question of
privilege. The leader of the opposition has no right to use the word "savage," and I want him to withdraw it at once.


James Layton Ralston: As a matter of fact I
did notice it but I really could not tell from what the hon. member was saying whether it was Mr. Purvis that he was attacking or Mr. Dunning. I thought it was Mr. Dunning.


An hon. MEMBER:: Both.


James Layton Ralston: Mr. Purvis did happen
to be in England when I was there-


Jean-François Pouliot: Hear, hear.


James Layton Ralston: That proves something.
I did not know that he was going to be there and he did not know that I was going to be there. As a matter of fact, I had dinner with him on one occasion-


Jean-François Pouliot: Hear, hear.


James Layton Ralston: -and at that time he was good enough to give me a statement-by the way, my colleague the Minister of Munitions and Supply was not there. That was a notable omission. Mr. Purvis was good enough to give me, in the way in which he can give it quickly, concisely and comprehensively, the fullest statement possible with regard to production in the United States and with regard to the needs of Britain with respect to munitions and supplies. I do not know when I have spent an evening which was more useful in connection with the work that I was doing, and it gave me an idea of how we could integrate our production with that of the United States and our needs with the needs of Britain. I kept that information for my

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friend the Minister of Munitions and Supply when he came. I need not say more than this, that Mr. Purvis, notwithstanding the hon. member's opinion of him, just before he left England received a full recognition from the British government by being made a right honourable member of His Majesty's Privy Council-


Jean-François Pouliot: I rose to a question of privilege, Mr. Speaker.


James Layton Ralston: -and that was done, as I understand it, because under a resolution of this house it was not thought desirable to offer him an honour of a different description. That honour was done him in tribute to the work which he had accomplished for the cause of Britain and for those who are associated with her in this war. I do not think that anyone stands higher in the opinion of the British government, or indeed of the people of Canada, than Mr. Purvis for the work he has done and is still carrying on.


Jean-François Pouliot: Not in mine.


James Layton Ralston: I understand that this is-


Jean-François Pouliot: I rose to a question of privilege.


James Layton Ralston: I understand that this is an instance in which one can speak of other things than the immediate matter under discussion. This morning two questions were asked when I was not here, and I might be permitted to reply to them now.
One question was asked by the hon. member for Rosetown-Biggar (Mr. Coldwell) with regard to recruiting. Let me give to the house the figures I received this morning. Up to date 32 per cent of the number required have been recruited and actually attested. The total is 10,344, and that does not include those that enlisted prior to the actual date on which I made a public appeal for recruits.


Mr. HOMUTH:: When the minister says,
attested, does that mean those who passed A-l?


James Layton Ralston: Yes. That does not
include a large number-I will not give it- who had been enlisted on account of the quota, which is one of those provided for in the 32,000 for whom I called. I still believe, and I have spoken to the hon. member about it, that it is not in the public interest, nor would any good purpose be served by doing so at the present time, to publish the figures for each particular district. As I intimated to the house the other day, however, the figures are going to all districts so that they know exactly what their standing is. I find on
14873-240}
examination that in some districts the local committees are just getting underway now. I attended a meeting which one of the members was good enough to call the other night in one particular district where they were making plans less than a week ago. Yesterday was the biggest day we have had in recruiting since the call was made, and I am advised that the momentum is increasing. That is as regards recruiting.
The other question was asked by the hon. member for Broadview (Mr. Church) with reference to transportation of soldiers. I intended to make a statement in this regard on my estimates, but since the question was asked I would request the house to listen to the statement now.
A request was made in this house some time ago when the war appropriation bill was discussed that consideration be given to some amelioration of conditions in connection with fares charged soldiers, particularly on embarkation leave. That is what was referred to especially, although the request in some instances went so far as to include free transportation for soldiers on all leave. As an alternative to that there was a discussion with regard to the possibility of giving free transportation for a limited distance; that is to say, giving a zone rate or free transportation within a certain area so as to cut down expenses for those who have to travel long distances. There was a third suggestion which I promised to take up, and that was consultation with the railways to see if some substantial reduction could not be made in fares for soldiers, at least for embarkation leave, and possibly annual leave as well. I stated then, and I think I am correct, that the only occasion on which free transportation was granted in the last war was when troops were proceeding on harvest leave, and that was granted only in 1915 and 1916, and affected only the first three hundred miles.
I said at the time that the pay and allowances of soldiers was larger in this war than in the last, that the value of the dollar was greater in this war than in the last, and that these circumstances had to be taken into consideration in connection with the question of transportation. I undertook to consult the railways, however, and we have consulted them. All three ministers representing the defence services have been in consultation with the railway executives with the result that, I believe, an arrangement has been arrived at which the house will regard as meeting the situation.
There has been a misapprehension with regard to the present rates which men pay

Supply-The War-Mr. Ralston
when going on leave. The public in travelling on the railways get a return fare not for a single fare, not for fare and a half, but for double fare less 10 per cent. Under the present rates the soldiers get a return fare for a single fare. The popular conception is that the return fare is based on three cents a mile one way or one and a half cents a mile both ways, a soldier paying one fare to make the trip there and back. That assumption is not correct. The railway fares are based on competitive rates, and there are many instances in which the fare is not three cents a mile one way or one and a half cents return. Moreover, the soldier can take advantage of excursion rates the same as anyone else.
Let me give a sample or two of the mileage rates in force at the present time available to soldiers. From Halifax to Vancouver the rate is not one and a half cents; as I have said, the soldier would get a trip to Vancouver for a single fare. That does not amount to one and a half cents but to 1*03. From Montreal to Vancouver it is 1-03 and from Debert to Montreal l'Ofi a mile. Debert to Winnipeg is 1-1 a mile; Sussex to Quebec, 1-03; Sussex to Toronto, M0; Montreal to Winnipeg, 1-18; Borden to Winnipeg, 1 -05. The only case I see on this partial list in which the full one and a half cents is payable is from Borden to Montreal.
These are some examples to show the rates paid by the soldier for railway fares at the present time. I have here table after table showing what the rates are from almost any point to any other point. But I think I can say that the average charge to soldiers under the present arrangements is not more than one and a quarter cents for the whole mileage there and back, or two and a half cents for the one-way mileage.
In the discussion with the railways we had particularly in mind the matter of embarkation leave, but we felt we should take up annual leave as well. We had a consultation with the railways by the ministers of the three service departments and their officers, and this is the arrangement which has been arrived at, which will give a very substantial benefit to sailors, soldiers and airmen. As I have said, the rates average about one and a quarter cents; some are below one cent. Speaking generally the effect of the arrangement which has been made is that in respect of annual leave and embarkation leave the soldier will pay only one-third of that low rate; the remaining two-thirds will be contributed equally by the government and the railway. That is the general arrangement. The railways are knocking off one-third, the government pays one-third and the soldier pays

one-third, which means that in the case of a fare of 1-03 cents a mile the soldier pays about a third of a cent a mile.


Mr. NEILL:: When will that come into effect?


James Layton Ralston: It will come into effect at once. The administrative arrangements are being made now.


Mr. ROSS (St. Paul's):: Will the men of the forces have the advantage of reduced fares for sleeping berths?


James Layton Ralston: No change has been made in connection with that matter. I could give the hon. gentleman a schedule of that, comparing the three services; it is a very long and complicated subject, depending on size of party, length of trip, and the ranks concerned.
May I read this memorandum with respect to the arrangement which has been reached. As a result of the discussion the terms of the proposal are as follows:
1.	Personnel of army, navy and air services proceeding on embarkation leave will be granted transportation at one-third of the existing reduced rates which are, round trip at the price of single fare.
2.	If embarkation does not occur within six months of the date of enlistment, personnel entitled to ordinary leave or furlough in accordance with the regulations of the three services will be granted the same reduced fare concession, that is, one-tliird of existing rates, when proceeding on such ordinary leave or furlough, provided that when embarkation leave is eventually granted to such personnel they will be entitled to such one-third fare for such leave, if the date of such embarkation leave is not less than six months after the date of such ordinary leave or furlough.
3.	Such one-third fare will apply in all other cases of ordinary leave or furlough where the date of such leave is not less than one year after the next previous embarkation leave or ordinary leave or furlough in respect of which such one-third fare has been granted.
4.	The one-third fare concession will not be available under any conditions to personnel having less than six months service except for embarkation leave.
If it should happen that a man is going overseas within even less than six months after enlistment he gets his embarkation leave on the one-third fare.
5.	Personnel granted leave or furlough under any other conditions will continue to pay existing mileage rates.
6.	The one-third fare will apply only from the location of a man's unit, ship or establishment, to his bona fide home as defined in the regulations of his own service.
I put this on record so that hon. gentlemen may see it. I think it represents a very substantia] and I hope acceptable concession to our sailors, soldiers and airmen in connection with transportation fares on leave.

Supply-The War-Mr. Howe


Jean-François Pouliot: On a question.of privilege, Mr. Speaker, I ask the hon. leader of the opposition (Mr. Hanson) to withdraw the word "savage" that he applied to me.


Georges Parent: I have had this under consideration. Under standing order 41 there are a number of words which have been held to be words which should not be used in debates in the house. It is true that among these words listed in paragraph 298 both in connection with this house and the British house, the word "savage" does not appear. It is perhaps of a milder type than some of those which do appear, yet this list has some similarity to the word used. I think the word should not have been used and I am quite sure that the hon. leader of the opposition will withdraw it.


Richard Burpee Hanson: Mr. Speaker, I did not say that the hon. gentleman was a savage. That is an adjective which I used to describe his attack on a certain gentleman outside this house. If it was not strong enough I will substitute something else for it. If it was too strong and Your Honour says I should withdraw, I bow to Your Honour's judgment. I am not yet conscious of having been guilty of any violation of the rules of the house.


Clarence Decatur Howe: In rising to answer the questions asked by the hon. member for Rosetown-Biggar (Mr. Coldwell) this morning, perhaps I should make one or two remarks about the speech of the hon. member for Temiscouata (Mr. Pouliot). The hon. member has taken it upon himself to raise the bogy of railway amalgamation. Just why he found it necessary to mention my name in that connection and to slander a few of the officers in my department, I cannot imagine.
I occupied the positions of Minister of Railways and Minister of Transport for more than five years. I think there is nothing in my record in that office that would indicate that I had then or have had since any sinister plot for amalgamating the Canadian Pacific Railway with the Canadian National Railways, or for paying out the shareholders of the Canadian Pacific Railway from Canadian funds.
When I entered the government in 1935 I had certain business interests in this country. In order to qualify for the position I accepted, I disposed of all those business interests finally and irrevocably. Since 1935 I have had no business interests whatever in this country other than the job I have occupied as a member of the government.
My trip to England was for the purpose of carrying out certain business of the Department of Munitions and Supply. My hon. friend placed a sinister interpretation on a newspaper article which stated that I went to England for a personal reason. I do not mind telling the house what that personal reason was. It had to do with the timing of my departure on the trip. I timed my departure as I did in order to spend Christmas with my oldest boy w'ho was graduating from Naval College.
I did not meet Mr. Purvis in London. He had been there and had departed before I arrived. The fact that he had been in London had nothing to do with my trip to London. While in London I discussed the affairs of the Canadian Pacific Railway with no one whatever. The discussions I had there had nothing to do with any matter of finance pertaining to Canada. I particularly resent the slander against Mr. Purvis. Mr. Purvis, at the beginning of this war, at the request of the British government severed all connection with his business interests in Canada, retired from the presidency of the company for which he had been responsible prior to the war, went to Washington and has, I think, devoted all his working hours to the interest of the government of Great Britain. I know of no one who has had a more profound effect on the defence of Great Britain, as it is carried on in the United States, than has Mr. Arthur Purvis, and I very much regret that any hon. member of the House of Commons would gratuitously use his name as it has been used to-day. I also resent the fact that men who give their time and their service to my department should be subjected to slander in this house.
I do not know what the hon. member for Temiscouata has given up in order to serve in this war effort, but I do know something of what the men he has mentioned here have given up in order to give their time to the work of my department.
The suggestion has been made that there is something sinister in the department, and that I have bargained with the chairman of the committee on war expenditures to leave the affairs of my department alone. I may say that if anyone has a suggestion as to anything sinister in my department, the doors of the department are open for any proper investigation; but until something of a sinister nature is brought to light, I very much resent the implication that something sinister actually exists.
After all, it is part of my job to build up across Canada the thought that munitions of war are being bought honestly, efficiently and at reasonable prices. I doubt very much if any man is doing a patriotic duty who, with-
Supply-The War-Mr. Howe

out any foundation in fact or any foundation whatever upon which to base his statement, spreads the story across Canada that the buying of war munitions and the war business generally of this government are not being conducted honestly and efficiently. I make that suggestion to all hon. members in the house.
If there is reasonable evidence that that is not the situation, then I am prepared to meet any charge in that direction. I suggest, however, that those who depend upon insinuations are not performing any real service in the war effort of Canada. I apologize for having taken the time of the house to make these few remarks. I doubt if they were really called for, but as I have occasion to be on my feet for another purpose, I have taken the opportunity to make them.
This morning the hon. member for Rose-town-Biggar (Mr. Coldwell) asked for a statement as to the position of armament production. I have before me a brief statement which was prepared for another purpose, but which perhaps will place before hon. members the information desired, and I shall proceed to place it on Hansard. This summary was written for the purpose of comparing the position of Canada one year ago with the position of Canada to-day with respect to the production of armaments.
One year ago armament orders in Canada totalled less than $60,000,000. War production consisted merely of a few types of shells, together with a modest output of small arms ammunition. During the past twelve months we have built up a gigantic armament industry in Canada. Over $400,000,000 has been spent in constructing crown properties for the manufacture of shells, guns, tanks, automotive equipment, bombs and machine tools. Total war orders placed in Canada to date exceed $1,700,000,000.
To-day we are turning out Bren machine guns in great quantities; trench mortars are being turned out by a plant in one of the smaller manufacturing cities of Quebec; two types of anti-aircraft gun barrels are in substantial production, and both types of complete anti-aircraft guns will be in production by September; 500-pound aerial bombs are being manufactured and filled in our own shell-filling plant; naval anti-aircraft gun mountings, highly intricate pieces of equipment involving the manufacture of 2,000 separate parts, are in production.'To-day I can tell the house that Canada has already produced her first 25-pounder artillery gun, and this gun has passed all its firing tests. Before this month is out, these guns and carriages will be produced in considerable numbers. I can also announce for the first time
(Mr. Howe.]
that in another plant our production of 2-pounder guns has been commenced, and that the first consignment of these guns is being shipped overseas. This month has also witnessed the initial production of depth charges and mines.
A week or two ago Canada produced her first infantry tank, and this production i3 rapidly stepping up to considerable volume. Before the month is over, we shall have produced our first Canadian-made cruiser tank. It may be of interest to mention here that whereas the United States, Great Britain and Canada united to produce each its own version of a common type cruiser tank, Great Britain has already adopted the Canadian version, and the United States has asked for a sample Canadian tank for test purposes, with the likelihood that United States will also adopt the Canadian design.
Canada is now producing small arms ammunition at the rate of many hundreds of million rounds annually. We are also producing ten different calibres of shell, at the rate of millions of rounds a year. We are also producing the explosives required to fill these shells, together with cartridge cases, primers, fuses and all the shell components. Hon. members will appreciate the magnitude of the job when I state that each month we produce about 25,000,000 individual parts of shells. These shells are being produced in Canadian plants.
A new government plant has recently poured the first optical glass ever produced in Canada, and is in substantial production on optical and other instruments, and on secret radio devices. We are also manufacturing antisubmarine nets and equipment and minesweeping gear. By September we shall be in substantial production in practically every type of gun used in this war, from rifles to the largest type of anti-aircraft guns.
A year ago Canadian orders had been placed for some 9,000 automotive war vehicles, of which less than one-third had been delivered. To-day we have already delivered over 120,000 vehicles, and still have on order another 80,000 vehicles. The automotive industry is also delivering universal carriers in substantial quantity.
A year ago Canada had a small production of explosives from existing plants, and one major explosives plant was under construction. To-day nineteen plants are either in operation or nearing completion, involving a programme of $110,000,000. Ten of the nineteen plants are already in operation, and in another month the entire programme will have been practically completed. To give hon. members an idea of the physical size of this programme.

Supply-The War-Mr. Caldwell
I may say that several of our major plants each occupy an area of from one to two square miles. Our output of military explosives for this year will exceed the entire output of Canada during the period of the last great war.
A year ago our aircraft industry was turning out about two aircraft a week. To-day the industry is producing more than forty planes a week, of which about twenty are fighting craft, and the remainder, training planes. The industry is also servicing aeroplanes and engines used in the air training schools, which is in itself no small project.
A year ago Canada had converted a few smaller vessels to naval use, and ship contracts had been placed to the extent of about $50,000,000. To-day, of eighty corvettes on order, fifty-nine have been launched. Of the sixty mine-sweepers on order, twenty-four have 'been launched. Three merchant vessels have been converted into auxiliary cruisers, and twenty-seven other boats have been converted to naval needs. In addition, we are building twenty-four patrol vessels and twelve mine-sweepers of a special type. Work is under way on a cargo vessel programme, involving an expenditure of over $200,000,000. We have also in progress a substantial small boat programme. Seventeen major shipyards and forty-five smaller shipyards are occupied on this programme. The major shipyards are being substantially enlarged to accommodate the cargo vessel programme.
Our industrial expansion and other war activities have involved a very large building programme. My department has placed construction contracts involving an expenditure of over S120 million for the erection of some 3,000 buildings. More than 100 aerodromes have been constructed.
We Canadians are accustomed to think of Canadian industry as being on a small scale compared with those of Britain and the United States. We need have no inferiority complex in the matter of armament plants. To illustrate, we have in Canada the largest factory in the world producing machine guns. We have the largest plant in the English-speaking countries producing field artillery, and this is the only plant anywhere manufacturing field artillery from scrap iron to the finished product. One of our government arsenals has the highest output of small arms ammunition in the English-speaking countries. Our chemical and explosives plants are among the largest to be found anywhere. Our war production has been organized on a vast scale, but we have not overlooked the small shop. Our "bits and pieces" programme has brought work not only to the small commercial machine-shops, but to machine-shops built for
the private use of newsprint, mining and other domestic industries. We are constantly in search of new productive capacity, and if any has been overlooked, my officers would like to be advised of it.
To sum up the situation, I think we can be reasonably satisfied with our armament programme. Generally speaking, the plants have come into production as anticipated. I had thought that we would reach our production peak this summer, but as the months have gone by we have been called upon to assume additional responsibilities for new types of armaments. So far as we can see now, we shall still have an expanding programme running into the spring months of next year. I may say, however, that to-day production is up to any anticipation that I have ever had, taking the programme as a whole, and I believe that Canadian industry is capable of still further expansion. Steps are being taken to bring our output up to the new maximum that we can now visualize.


Major James William Coldwell: Mr. Speaker, I had not intended to say anything on the motion to go into supply, but since the ministers have been good enough to make statements regarding the questions I propounded this morning, I shall take this opportunity to bring to the attention of the government some of the reasons why those questions were asked. They were not asked to provoke the kind of statements that we have received. I did not intend to ask questions in a manner which would merely invite an answer to the - query regarding recruiting, or invite the kind of statement which the Minister of Munitions and Supply (Mr. Howe) has just made. As a matter of fact, I think we have had too many of these statements. Statements of this type have not given to the house, and to the country through hon. members, the kind of information the country is seeking. What prompted my questions this morning was the fact that across Canada there is growing a feeling that all is not well with our own war effort. People read the newspapers, and they see the frank confessions of failure, if you will, that are made from time to time in the British House of Commons by Mr. Churchill and his colleagues. Then they pick up our own papers and read that all is going well with our own war effort. In my opinion public confidence in the government and in this house is being undermined. We are running the risk of losing that very essential thing needed to win the war- and we are going to win it-known as morale. The purpose of my questions this morning was to get a complete statement of our wai

Supply-The War-Mr. Caldwell
effort in such terms, if they could be given publicly, as would give our people a more exact understanding of Canada's effort and vital needs than they now have.
From time to time there come to me, and I am sure there come also to other hon. members, opinions as to why men are not joining the army in larger numbers or why production lags. I believe a different type of educational campaign should be used across Canada in order to keep our young men and workers filled with that idealism which is necessary to carry on a struggle of this description. That is not being given to them. In Great Britain the morale of the people has been built up; they have been convinced that this war is a struggle for something worth while, that they will not return again to the pre-war conditions of unemployment, of want, of riding the rods as we say in this country. In my opinion these things have not been stated with sufficient definiteness to imbue our own people with a similar challenge. We are remote from the bombed areas of Great Britain, and that may have something to do with the present feeling that exists across the country.
Young men who attempted to join the army in the early days of the war were told that their services were not wanted. That confirmed the opinion that there was no immediate need for the recruiting of men. Those of us who believed that Canada's part in this war ought to be the providing of munitions, supplies and other aid without profit to this land, hoped that the government would organize this country so that we would be able to plan on the basis of a maximum output of those supplies, so that we would be able to give the people an idea of what was actually required in the way of equipment and manpower. To-day many people know that the men who have been enlisted have not been equipped in a manner which would lead us to believe that we have sufficient equipment for all the men whom we have placed under arms. This interferes with recruiting.
Some men were recruited and, after being in the army for some months, were returned to civilian life on account of some physical disability. Many found themselves again in the bread-line; others found that the job they had relinquished in order to join the army had been filled by somebody else. This condition will be partly remedied by the legislation which the Minister of Labour (Mr. McLarty) announced this morning.
Then we read in the paper or hear over the air the statement that the first heavy tank has come off the assembly line. People
\Mr. Coldwell.]
are asking how many more tanks are coming off the assembly line, because there is a belief, well based or otherwise, that the production of the tank was a special effort and that we are not turning out the equipment which we ought to be turning out for our men. In fact, it is said that the tank did not come off the assembly line at all; that it was made specially for the occasion. That has been widely said across the country.
What I wanted to-day was not a general statement such as the minister has made that "production has come up to our expectations," but to ask that, either in a closed session of this house or otherwise, we should be given specific information with regard to our production of war equipment. I believe this is the only parliament within the British commonwealth which has not had a closed session in order that the government might inform the representatives of the people as to exactly what is going on. I know there is to be one in New Zealand to-morrow. That was announced over the air from Great Britain at noon to-day. I think I express the feeling which is held by many hon. members, and, I know, by the members of our own group because we have discussed it, that we as members of this house know no more of the actual position with regard to the war and our war effort than does the ordinary man in the street who reads newspaper and magazine articles regarding it. In fact, as we have not the time to read them, perhaps we know even less than the man in the street who reads these articles. Frankly I am disappointed that no arrangements have been made for a comprehensive survey of the present war position both overseas and in this country, and that this house has not been taken into the fullest confidence of the government in relation to the supply of equipment and the necessities in the way of supplies for the next few months.
We are facing, as we all know, probably the most dangerous period that our commonwealth of nations has ever faced, and yet we in this parliament of Canada have not been informed of the situation as it exists across the ocean and as it exists in our own country, or to what extent it is expected that we shall be able to provide the maximum aid possible in our war effort during the next three to six months.
The purpose of my question was not mere curiosity. I did not particularly wish to know where recruiting was slack. I asked my question in that form so that we as members might be given a comprehensive view of what was going on all across the country. Nor did I ask about production out of mere idle

Supply-The War-Mr. Coldwell
curiosity, but because I am convinced that the country feels that all is not well with our war effort and that this house should be informed so that our members may be in a position, when they go back to their constituencies, to render the greatest possible service in this dominion by assisting to maintain the morale of our Canadian people.
I said a few minutes ago to the Minister of National Defence (Mr. Ralston) that in my opinion the morale of this country was not as good as it ought to be, and I am firmly convinced that one of the reasons for that is that we have not been put in a position to place before the people of Canada our war effort in the terms which they had expected.
Having said that much about the material side, let me repeat my opinion that we have not maintained the morale of our people to the fullest extent. If I may again refer to Britain, where some of us still have friends and relatives who write to us, again and again they tell us that when the war is over, a new and better England, or Britain in the larger term, will be born. The people of England are thoroughly convinced of that, and for that they are prepared to sacrifice and to fight. But we in this house have not given our Canadian people the same assurance. I said a few days ago, and I repeat, that I should like to see this House of Commons pledge itself unanimously and solemnly declare that when this war is over, every power that lies within this parliament-and all power finally rests within this parliament-will be used to ensure that every Canadian shall have the right to a job, and if he is sick or cannot find a job, shall have the right to an adequate and decent living. If we made that simple pledge in this parliament, our people would understand better what we hope for when this war is won.


Mr. HANSELL:: But instead they are preparing the people for a depression.


Major James William Coldwell: As my hon. friend says, the people are constantly being told that when this war ends there will be a great depression; in fact, some of our advertising for war savings certificates has been of that very nature- "Save now in order that you may protect yourself when the war is over." That kind of thing is not good for the morale of our people.
I had hoped that we should have been given a full statement regarding our war effort, that we might know the exact situation regarding the number of tanks that are being turned out; the number of anti-aircraft guns that there are in this country and the number that are being made in this country; the number of aeroplanes that are actually being completed 14873-241
in this country; how many fighter planes, how many bomber planes, and so forth; and the number of every other type of war equipment that is being produced in this country. If we cannot be given that information in an open session, I think we might be given such information in a closed session of this house.


James Layton Ralston: I think my hon. friend is missing some information. Some of the information he has asked for has been given. The matter of tanks was dealt with in the MacMillan report, and the minister of munitions has stated to-day what the production of armaments is. My hon. friend also mentioned aeroplanes. In the statement that was read by my colleague it was set out that twenty service planes and twenty training planes were being made a week.


Major James William Coldwell: Yes, I know.


James Layton Ralston: And those were two of the items my hon. friend mentioned.


Major James William Coldwell: I mentioned both those items, yes, but there is still a feeling in the country that the production of essential equipment ought to have been speeded up in view of the lack of it overseas at the present time. As a matter of fact, in the House of Commons in Great Britain yesterday the Right Hon. Winston Churchill appealed for greater production of equipment. He pointed out that the loss of Crete was due to the fact that we could not cover our operations there because we lacked planes and were insufficiently supplied with tanks. We may be living up to estimates which were made several months ago; we may be maintaining our schedule, but it seems to me that every effort should be made to produce in advance of that schedule. I mentioned particularly the matter of tanks because, as I have said, there is a belief, which I think is well-founded, that we are not producing heavy tanks, as many people suppose, "from the assembly line." Perhaps the Minister of Munitions and Supply can clear that up.


Clarence Decatur Howe: Yes. There seems to be a popular misconception of what is meant by "assembly line" as applied to tanks. The impression appears to be that there is a belt running down a huge factory, with parts feeding in and tanks coming off it every two minutes. Tanks cannot be built on that kind of equipment. They are tremendous affairs; I believe that each tank contains something like 2,800 separate parts. Those parts flow in from a considerable number of factories to a central assembly plant, where they are put together. Perhaps they will be placed in a line to be assembled, but certainly they



Supply-The War-Mr. Johnston
will be assembled one at a time. There is nothing of the nature of the automobile assembly line. We fully expect to turn out three tanks a day, but my hon. friend will at once realize that the process is not that of a travelling belt or anything of that sort.
The victory of getting the first tank together is that we know that the parts are complete, that they fit, and that all adjustments have been made. That is the significance of the assembling of the first tank. The others will follow more rapidly, because we can proceed with more confidence. I may add that we expect to have by the end of this month eight of that particular type of tank out of the Angus shops, and during next month we should be up to our full production.


Major James William Coldwell: That is just the kind of information which I think the house should be receiving.


Clarence Decatur Howe: [DOT] There are so many types of production that it is hard to cover them all. If hon. members have specific questions, I shall be glad to answer them if I can.


Major James William Coldwell: I have not seen these tanks in production. I confess, having seen belt lines in the making of other vehicles, my mental picture was exactly what the minister says it should not be: in other words, that of an assembly line. The purpose of my question this morning was to ascertain the difficulties which the government is facing in order that we may explain those difficulties to the people and assist the government in every way to maintain morale, interest and enthusiasm for what, after all, is a just cause. That, I fear, is what has not been done this session. For example, I am sure that the debate we had yesterday does not assist in that regard at all. It was a discussion of the war effort from an angle which is not informative, and may, indeed, be defeatist in its effect upon our people. I urge the government, even after these two statements have been made, to take the house, through the Prime Minister, into its confidence regarding the progress of the war, and have the ministers supplement, before we leave, what they have already told us with more specific and detailed information than we have had up to the present time.


Charles Edward Johnston: Before this question is finally dropped, I wish to say a word or two. It is certainly true that we are facing a very serious crisis, and I do not believe there was ever a time in the history of the British empire when the assistance of every one was more urgently needed. One of the greatest dangers is that the people will be lulled into a false sense of security.

As the hon. member who has just resumed his seat has observed, we are giving the impression that we are doing everything humanly possible to produce all sorts of munitions and supplies, limited only by the full capacity of our ability. Personally I do not believe that impression is correct, and none of us should leave a stone unturned if it will aid in the increase of our preparations.
There is a possibility, as the hon. member for Rosetown-Biggar (Mr. Coldwell) suggested, that some of us have a wrong impression about these tanks. I have never visited a plant which makes tanks; but when I heard the expression in the house that they were "coming off the assembly line", I connected it with the experience I have had of visiting automobile manufacturing plants where cars are assembled by a process which is so described. I believe that is the general conception of the term, and with that impression in mind, people build up confidence with such statements as this, "Well now, we are just pouring these tanks off, and certainly we are doing a wonderful job."


Clarence Decatur Howe: May I interrupt a moment? I do not think I ever used the expression "coming off the assembly line". I have seen it in the press, and the hon. member for Parkdale (Mr. Bruce) used the expression this morning in asking a question. But I never referred to tanks "coming off the assembly line".


Charles Edward Johnston: That is what the papers have said.


Clarence Decatur Howe: No doubt.


Charles Edward Johnston: It was not my intention to accuse the minister of doing so. What I am pointing out is the danger of our people being lulled into a false sense of security. I believe that such a state of mind constitutes one of the dangers we are facing, one of the reasons why we have to go out so strongly for the war loan, and to appeal so much for recruits. When one goes to the movies and sees pictures of machine-shops with everybody working at full capacity, one can understand how people get the impression that that is typical of the way in which our production is proceeding. They become overconfident, and say among themselves, "Just let Hitler come over here, and we will show him we are prepared."


James Layton Ralston: Will my hon. friend allow me to interrupt him? If he will read what I said in this house on March 31 last, he will not find any justification for an attitude of that kind. I have looked up to-day the report I made to the house in connection with equipment, and I am sure it is far from lulling

Supply-The War-Mr. Johnston
anybody to sleep. I indicated that there were serious shortages in equipment, and I related how we were trying to improvise in the meantime. My hon. friend has missed that; perhaps it is so long ago.


Charles Edward Johnston: I may have missed the minister's statement to-day, but I remember what he said on that particular occasion and used his very words when I was speaking to the public. Therefore I have not overlooked that phase of the matter.


James Layton Ralston: The hon. member used which "very words"?


Charles Edward Johnston: The minister's words with regard to lack of equipment and supply. I think he used the expression that the time would come when we would need more.


James Layton Ralston: Yes.


Charles Edward Johnston: I am just speaking from memory; but when the Minister of Munitions and Supply (Mr. Howe) made the statement just now that everything was up to expectation, or at least was as much as he expected, I must confess that it is not as good as I expected. I also visited some of the camps, and I was not satisfied.


Mr. KIRK:: Was the hon. member in a position to judge?


Charles Edward Johnston: I was there. Were you?


James Ralph Kirk: Yes.


Charles Edward Johnston: I can name some of the things with which I do not believe the hon. member will be satisfied.


James Ralph Kirk: The question is, are we in a position to judge?


Georges Parent: Order.


Charles Edward Johnston: I am not going to bring up these matters, but I have them vividly in mind. So long as we lack equipment and the materials for that' equipment, everything humanly possible should be done. I shall never be satisfied so long as there is in this country a plant not working twenty-four hours a day that should be working, and so long as there is an able-bodied man not working who should be working. Only then shall we have reached our maximum capacity.
Let me discuss for a moment a question I mentioned to the Minister of Munitions and Supply some time ago. I refer to the return for which I asked, which was passed, with reference to the Dominion Bridge company and its connection with the rolling mill in Calgary. For some time past, ever since the national war services department was started, 14873-2414
there has been a great drive to get scrap iron in the prairies for use in the manufacture of munitions and supplies of various kinds, and this question of the Calgary rolling mill was brought to the attention of the government many months ago. I could not understand why that mill was not opened. There were all sorts of excuses. It was said that the plant had been there for a number of years and that it was not economically sound to open it, and other reasons were given. That is what led me to ask for the return. I was positive; in fact, I had been informed on good authority, that the matter had been drawn to the attention of the government by the company itself. When I received the return there was only one letter. The minister has promised to look into the matter further. I would have waited for a more complete file, but I did not know when I should have an opportunity to discuss the subject apart from this.
I wish to direct the attention of the house to certain parts of this letter. I shall not read the whole letter because hon. members can see it for themselves. The letter was written to the government on April 14, 1941, and so far as I know, it has not been answered. I say that because this is supposed to be a complete file.


An hon. MEMBER:: Who is the writer?


Charles Edward Johnston: The
manager of the Pacific division of the Dominion Bridge company, Mr. A. S. Gentles. I quote:
We understand that your committee is investigating the possibility of the establishment of a bar mill on the coast to utilize available scrap-steel, and are considering suggestions to this end.
I did not know that the house was considering any suggestions to establish a bar mill on the coast.


Clarence Decatur Howe: To whom is the letter
addressed?


Charles Edward Johnston: To. L. W. Killam, British Columbia committee on war production, Vancouver. This communication was tabled as part of the correspondence between the dominion government and the company. It is dated April 14. The first intimation that the company had was that an arrangement had been made for the establishment of a bar mill at Vancouver. They say:
Our company, through a subsidiary, has for a number of years successfully operated a bar mill at Selkirk, Manitoba, converting scrap and pig iron using open hearth furnaces. We also have at Calgary a similar type rolling mill which, due to economic conditions, we have not operated for some time-
This is the important part.

and which is available for immediate production at that point.

Supply-The War-Mr. Johnston
Here we are in this house declaring that we need these materials now. We started a campaign to get scrap iron, advocating that members go out and assist the organization in getting scrap iron from all the provinces for conversion into steel so that we might have immediate production. It was very urgent, the Minister of National War Services told us. If he told us that, he must have been right; I would not contradict him. But let us take his statement in conjunction with what the company says. Speaking of this mill at Calgary, the writer of the letter says, as I have quoted:
. . . and which is available for immediate production at that point.
There is no mistaking that. We could have used that scrap from the prairie provinces at the Calgary mill immediately. The whole thing was well established. The writer goes on:
In 1933, we fully investigated the economics of moving our Calgary mill to Vancouver. It is adaptable either to open hearth or electric furnace operation.
There was no difficulty in either of these because we have the electrical power at Calgary, and we also have open hearth appliances. But the government did not take advantage of that. If we needed steel we should certainly have started immediately; if we did not need steel, then the Minister of National War Services was deceiving the country. I cannot see any way out of it, and I believe the minister was quite sincere, because as the results have shown, there is an abundance of this scrap iron at Calgary. But the Minister of Munitions and Supply was going to allow this company to move their plant from Calgary to Vancouver. I do cot know whether that is still the intention or not; the Minister of Munitions and Supply could answer that question. I hope he has changed his mind in that regard. Let me quote further from the letter:
Owing to the temporary conditions created by the war and as a war measure, our company, subject to ratification by our directors, is prepared at our expense to move rolling mill equipment from Calgary to the coast, set up and operate a steel mill at or near Vancouver on the following basis.
I understood the minister to say the other day that no cost to the government would be involved. Let us see the conditions under which the mill was to be set up at the coast. First:
That the government policy in regard to scrap be such as to assure a continuous supply of steel scra,p on the coast of from 30,000 to 10,000 tons per year.
They had to guarantee that, and my information is that they can do it. About 50,000
[Mr. C. E. Johnston.!
tons of steel are already at Calgary, and I believe the estimated amount that could be collected was over 200,000 tons. There is no reason why that mill should not be operating to-day at Calgary.
The second condition was:
That the government permit the complete write-off of the new capital invested against the mill profits or the consolidated profits of our company, within a period of not more than three years, preferably two years.
The Minister of Munitions and Supply told us there was no charge to the government; true, there was no capital outlay.


Clarence Decatur Howe: To keep the record clear, may I point out that the letter was not addressed to myself. It was addressed to a gentleman on the Pacific coast who had a temporary assignment to act as chairman of a committee to recommend sources of production in British Columbia. I said that the government had made no commitment, and the government has made none. If the company want a write-off, there is the war-time depreciation *board to which they must make application. It does not come under my department. If the company has war contracts, it is entitled to go to the board and get consideration. So far, however, as my department is concerned, we have no commitments to the Dominion Bridge company in connection with the Calgary rolling mill. It is the property of the Dominion Bridge company; no other concern in Canada has larger war contracts than the Dominion Bridge company, and if they could use this steel I assume they would. If they wish to move the mill to Vancouver, it is their business. So far as I know, that mill is no good to me in the making of munitions in this country. If anyone else can find a use for it, I shall not intervene in one way or another.


Charles Edward Johnston: The minister speaks of it as being a business proposition and no concern of his department; but if this country needs steel, it is this government's business.


Clarence Decatur Howe: We do not need that particular steel.


Charles Edward Johnston: If we do not need the steel, why are we fooling with this national war services scrap campaign? If we do not need the steel, it is time the people knew it, instead of asking the farmers to bring in scrap iron which is of no use and only making a profit for the railways and the junk dealers. I am glad that the minister said that, because I am not going to ask the farmers in my constituency to bring in scrap if we do not need it. I think the point is

Supply-The War-Mr. Johnston
well put by the minister, and I am not going to say any more about it because I understand now that we do not need the steel.


Clarence Decatur Howe: I said, we do not need that steel.


Charles Edward Johnston: I understand now that the minister means that we do not need this scrap iron which it is the purpose of the salvage campaign to gather because we do not need the steel which would be produced from that scrap iron.


Clarence Decatur Howe: I said nothing of the kind. I said that we did not need that steel. I have already spent much time and had many interviews regarding that steel mill at Calgary, which is in the position of a good many other steel mills in this country; it is not a modern piece of equipment. If anyone can operate it at a profit, there it is; they are quite welcome to it. I know of no one better able to operate it at a profit than the Dominion Bridge company, because they are the users of the finished product. There it is. As I say, it is not a modern mill; I have no particular interest in it as Minister of Munitions and Supply. If I needed a mill, I would want a modern mill that could use power efficiently and turn out material efficiently.


Charles Edward Johnston: That may be true, but this company says that it is immediately available for production.


Mr. MAYHEW:: As a member of that committee I think I could answer some of the hon. member's questions.


Charles Edward Johnston: I think the minister is better qualified to answer. Then, if the hon. member wishes to add anything afterwards, it is within his right. I take this attitude. The minister says that so far as his department is concerned, they do not need the steel which would be made from that scrap iron. Then I can justly say to myself that the salvage campaign is just a bunch of rot; that is all it is; it is just deceiving the people, and I do not intend to be a party to it. There is not a thing that I will not do to help win this war, but I certainly am not going out to ask our people to give this scrap iron if it is not necessary. If we do not need that steel, then I am through so far as that part is concerned.


Robert Wellington Mayhew: So many references have been made to the rolling mill at Calgary that I should like to say a few words. To my understanding, the rolling mill where it is located is not of value because there is no place to use the output of that particular type of mill.


Charles Edward Johnston: The company says something different.


Robert Wellington Mayhew: As the minister says, it is not a rolling mill of such type as I am sure is in the mind of the hon. member, a mill to roll sheets of any size. It is a small mill to roll bars and small angles. In British Columbia they have a very large programme of shipbuilding, and this mill will make the rivets for those ships. Each boat requires large numbers; the total is, I think, some 15,000 tons a year. They have also a nail plant in Vancouver, and it will make the wire for the nail plant. It will also make steel for reinforcement and small wares of that kind.
I happen to know Calgary and Alberta probably as well as the hon. gentleman. I am probably as loyal to it as he is and would be one of the last to attempt to move any factory from the city of Calgary to any other part of the country. But that piece of equipment has been idle in Calgary for a number of years. In Vancouver it can be put to valuable use at the present time.


Charles Edward Johnston: Where is the scrap coming from?


Robert Wellington Mayhew: From British Columbia mainly. Some scrap from Alberta may go that way, but I think if hon. members investigate the idea of 200,000 tons of steel- steel, remember, not scrap iron-they will find it is very much exaggerated. I should be surprised if the scrap steel in Alberta amounted to more than 12,000 to 15,000 tons a year.


Charles Edward Johnston: That is different from the information I got the other day from the city of Calgary.


Robert Wellington Mayhew: Let me go back to the beginning of this. It was the first year I was in this house when the estimates were brought down by the then Minister of National Defence, the present Minister of Pensions and National Health (Mr. Mackenzie). I suggested to him at that time that we put a complete embargo on scrap steel leaving this country, because if the equipment for which he was then asking the government was going to be needed, they would need the steel with which to make the bombs, shells and guns. That was how long ago this started. I have kept at it religiously ever since. When the committee was in Vancouver at the suggestion of the minister to outline a programme, I advocated electrical steel furnaces working twenty-four hours a day to produce approximately 50,000 tons annually. That amount would consume in three years the present

Supply-The War-Mr. Johnston
available supply plus the annual accumulation over the three-year period. After that, it would have to go probably on an eight hours a day basis and the scrap steel accumulation in British Columbia, according to the information I have been able to gather from reliable sources, is nearly three times the accumulation of scrap steel in Alberta. We have at the present time in British Columbia a definite use for that steel. It is going to conserve the steel that will be made in eastern Canada, and, as the hon. member knows, steel is essential.
The President of the United States the other day asked the people of that country to increase their steel capacity by ten million tons. They have already increased it since the beginning of the war by about twenty-five million tons. We in Canada have increased our steel production by about 1,500,000 tons, and we are importing very large quantities.
The hon. gentleman now says that the gathering of scrap steel is not necessary. He says that he is not going to ask his people-


Charles Edward Johnston: I did not say that; the minister did.


Robert Wellington Mayhew: -to gather scrap iron. I say that if he does not do so, he is making a mistake.


Charles Edward Johnston: Why?


Robert Wellington Mayhew: In the provinces of
Alberta, Saskatchewan and Manitoba this is a basic commodity-


Charles Edward Johnston: The minister said that it is not necessary.


Robert Wellington Mayhew: -and it should be accumulated, and eventually put to use. Anyone who says that it is not necessary to gather scrap iron and scrap steel is missing the point.


Charles Edward Johnston: Page the
Minister of Munitions and Supply, then.


Robert Wellington Mayhew: He asked it for a certain reason.
While I am on my feet I should like to make one or two further observations, because I have kept particularly quiet during this last part of the session.
I believe that the government and the people of Canada have made one mistake in this present war, namely, that they have underestimated entirely the capacity of the Canadian people to produce. A year ago we were saying that we did not have enough uniforms for our soldiers. What have we to-day? We have sufficient plants to supply all our men with uniforms, and to spare. We could double the amount. Two years ago we had thirteen boats; to-day we have over 	j
200 naval boats in operation, all built in Canada. For a time we were turning boats off the ways at the rate of one a day. Would any person in Canada have said that we could have done that?


An hon. MEMBER:: Yes.


Robert Wellington Mayhew: Would any of us have
realized that we could turn out 190,000 transport vehicles to be sent all over the country?


Charles Edward Johnston: And we
must do better than that.


Robert Wellington Mayhew: If anyone in this house
has listened patiently, then certainly those of us on this side of the' house have listened to you. Now you are going to keep your seat and listen for a moment or two to us. I am not objecting to your policy. I am quite prepared to sit and listen-and at times it is pretty tough to do so-but I have the floor now.
It was not estimated that we could build 200 vessels in Canada, plus all the rest of the equipment we have been turning out. Anyone who thinks that Canada is not producing should visit the harbours of Halifax, Saint John and Montreal; there he will see the assembly of goods produced in Canada, goods which are being shipped in enormous quantities.


Mr. GILLIS:: To whose credit is that?


Robert Wellington Mayhew: It is to the credit of
the workmen and to the credit of the manufacturers that the programme has been lined up as it is to-day.


Mr. JAQUES:: Why was it not done before?


Robert Wellington Mayhew: We never had occasion
to do it before.


Norman Jaques: , There were a million people on relief.


Georges Parent: I must ask hon. members to address their questions to the Chair. The hon. member for Victoria, British Columbia, has the floor.


Robert Wellington Mayhew: In matters of production we have done wonders in Canada. We have underestimated our ability to produce. I am not saying that we are doing all we can do. In what I have said I am not suggesting that we should not have a programme which would be inviting and inspiring to the people of Canada, and one which would challenge them.
I say: "Tell us what you want. Tell us the things you think we cannot do, and you will find there is engineering ability and backbone in our people, and resources sufficient to do it." I say, "If you want a bridge across the Atlantic built from boats, then tell us

Supply-Agriculture
what type boat you want, and the Canadian people will give it to you." We have a boatbuilding programme now, and it can be enlarged. Probably it cannot be enlarged in steel, because we are short of steel; but we have plenty of wood on both Atlantic and Pacific coasts, and we can turn out more wooden boats. It is not a case of whether a piece of equipment is the cheapest we can get; it is a case of what we can give to the manufacturer, and what kind of equipment we can put on the ocean to carry our stuff from Canada to England.
I do not care how proud we may be of what we have accomplished; we have lost practically the whole of the last four weeks talking nonsense in this House of Commons, instead of getting down to planning about what we actually can do.


Ernest George Hansell: No, not four weeks-four years.


Robert Wellington Mayhew: I do not know whether it is four years or not; but we have lost four weeks, anyway.


Ernest George Hansell: Ten years.


Robert Wellington Mayhew: I can tell you this. In my opinion it was not the budget, or the amount of taxes our people have to pay, or the war loans they have to buy, which scared the people of Canada. There is, however, something quite evident in this chamber that tells us, "You must not do this"-or that we must not do something else. There is something about us that is tightening us up so that we do not know exactly what we are supposed to do.
During the Easter recess I was talking to manufacturers in my home city, and I said this, "Streamline every bit of equipment you have. If your plant is obsolete or obsolescent, renew it and put it into a position where it will give the best service, because you will need it after the war. You need it now, and you will need it after the war." However, I came to Ottawa, and I found that if one wants to streamline his plant he must have a permit to do so. That is not a good thing. I do not think we can win this war or save this country on a stingy programme. We must go ahead. I, for one, am not prepared to sit down; I am not prepared to sit idly by. I have piled up round my own plant at the present time over $100,000 worth of equipment. My boy wrote me the other day, saying, "Dad, what do they want us to do? Do they want us to go ahead and develop our plants, make them better so that we can pay more taxes, or do they want us to quit?" That situation must be cleared up. We must
decide whether we are going to win this war by stingy methods, or whether we are going to win it by working and by production.


Mr. ROSS (Calgary East):: I understood the hon. member for Bow River to say that there are 200,000 tons a year of scrap iron and scrap steel within reach of Calgary?


Charles Edward Johnston: I was
speaking from memory, but the figures are on Hansard. I placed them there the other day.


George Henry Ross: Would the
former Minister of National War Services or the Minister of Munitions and Supply give us the information.


Charles Edward Johnston: That was the information I got from the Dominion Junk company at Calgary.


Georges Parent: We are not in committee.


Some hon. MEMBERS:: Question.


[Stage Direction]
Motion agreed to, and the house went into committee of supply, Mr. Fournier (Hull) in the chair.

[Stage Direction]
SO. Special. Prairie Farm Assistance Act, $500,000.
Mr. NICHOLSON:: Would the minister inform the committee whether last year a crop failure area was declared in Saskatchewan?


Hon. J. G. GARDINER (Minister of Agriculture) :: No. No crop failure areas were declared in any of the provinces last year.


Alexander Malcolm Nicholson: I have before me sessional paper No. 110M, produced on motion of the hon. member for Weyburn, and dated May 15, 1941. In this document I find a telegram dated July 8 from Mr. J. G. Taggart to the minister, in the following terms:
Review of crop conditions to-day indicate heavy deterioration and certainty of more than 135 townships under five bushels. Believe it urgent to proceed with proposed amendments which I am sure will greatly improve workings of act. '
I shall not read all of the communications. There is one from the Minister of Agriculture to Mr. Taggart under date of July 31 advising that an amendment had been passed and that it would be necessary to raise the number to 171 townships. There is a further communication under date of August 1 from the minister of agriculture of Saskatchewan to the effect that the number of townships having a yield of less than five bushels to the acre would substantially exceed 171. Then there is a list of the townships, which I have not counted. But there are thirteen pages each
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containing from thirty-five to fifty townships, and therefore the total would be well over 500. These are the townships which, in the opinion of the provincial department of agriculture, would have a yield of less than five bushels to the acre. Last night, when this matter was being discussed, the minister pointed out that where the act states that the governor in council may upon the application of the province make this mandatory, the "may" had the same effect as "shall". Would he be good enough to explain to the committee why he did not declare a crop failure area last year in view of the evidence submitted by the provincial department of agriculture at Regina?


James Garfield Gardiner: The act requires that before the federal Department of Agriculture will even investigate to see if there is a crop failure area, the province must state that they believe there is a sufficient number of townships under five bushels to the acre to meet the requirements of the act. At the present time that figure is 171 townships; at the time the first application was made the figure was 135 townships so far as Saskatchewan was concerned. The minister of agriculture of Saskatchewan made application early in the season and declared that he believed there were more than 135 townships, all that was required at the time, and designated the municipalities which he believed were under five bushels to the acre. As is indicated by the return, I, as the minister in charge, communicated to him the fact that the required number had been increased from 135 to 171 townships. He came back with an application stating that he still believed there was a sufficient number of townships in Saskatchewan under five bushels to warrant the application being made, and he gave a list which, I assume, is the one referred to by the hon. member for Mackenzie (Mr. Nicholson). With that list in our hands we made an investigation, but this showed that there were not 171 townships which were under five bushels to the acre, and therefore we refused to declare a crop failure area.


Alexander Malcolm Nicholson: Will the minister
explain the wide discrepancy between the opinion of the department of agriculture of Saskatchewan and that of the minister's own department?


James Garfield Gardiner: There is not a wide discrepancy. The department of agriculture of the province does not make an investigation. All it has are the reports from the municipalities or other authorities that the crop yield is expected to be under a certain figure. We expect that they will make application for

all those townships which they have reason to believe will drop below five bushels to the acre. When that is done, we keep a check on the townships until the crop is harvested. After the crop is harvested we make a report as to whether or not the yield was five bushels to the acre. We found that there were not 171 townships in Saskatchewan with a yield of under five bushels to the acre.


Alexander Malcolm Nicholson: How many were there?


James Garfield Gardiner: I think the number was 156 or some such figure.


Alexander Malcolm Nicholson: Mention was made
yesterday evening of the cost of administration. Last year I made representations to the minister that municipal authorities should be used more extensively. The minister stated that there would be difficulties, that in administering funds where the dominion had so much at stake, they could not very well give ' responsibility to the municipal authorities which naturally would be concerned about having payments made to as many people in the municipality as possible.


James Garfield Gardiner: I was going to put on the record certain figures in connection with the Prairie Farm Assistance Act, 1940 crop year. These figures are as of May 31, 1941. The records may not be complete, but they are almost complete.. The figures are: Townships dealt with by the board
	of review Yield in	No. of
	bushels	townships
Manitoba			5
	4-1 to 8	38
	8-1 to 12	128
Saskatchewan ..				 171 146
	4-1 to 8	345
	8-1 to 12	780
Alberta					 1,271 25
	4-1 to 8	72
	8-1 to 12	127
				 224
Grand total for the three provinces	 1,666
Number of individual awards paid to
May 31, 1941	 49,835
Amount of awards	 $6,410,890 71


Mr. QUELCH:: How many applications
were turned down because they had not been sent in by October 31?


James Garfield Gardiner: I cannot give that at the moment. The number is not large in comparison with the number of application? made, but I am not in a position to give the exact figures.


Victor Quelch: The number may not be large, comparatively speaking, but the minister realizes that there were quite a number

Supply-Agriculture
turned down on account of that fact. Many applications were late because the municipalities believed that the yield would be above twelve bushels to the acre, but upon the completion of threshing operations it was found that the yield was below twelve bushels to the acre. Will the minister object to a certain action that I am taking? I am writing to all the municipalities in my constituency reminding them of what happened in 1940 and suggesting that they make application before September 15, should it appear that the average yield is going to be less than twenty bushels. Apparently last year they tried to estimate whether the yield in the township would be less than twelve bushels, and many of them fell into the error of overestimating the yield. This is the action that should be taken if Ottawa is going to stand by the hard and fast rule of refusing to accept applications because they are sent in too late. A farmer in a municipality should not be discriminated against because the municipality has tried1 to do the right thing. I think the minister will appreciate what I am talking about.


James Garfield Gardiner: The desire of the department is that the provinces and municipalities notify the federal authorities of any township which they believe will, on the average, go under twelve bushels to the acre. We have also intimated to the ministers of agriculture in the provinces-this probably was not done in sufficient time to take care of last year's crop-that we would much prefer them to err on the side of asking for those townships which we might turn down upon investigation to their erring on the other side. Any western member, indeed any hon. member of the house, will realize that it is difficult in the early part of July to say just what the crop yield may turn out to be, but we have been hopeful that some authority will notify us fairly early in July as to what they believe the crop yields will be in those townships. I think the government of Saskatchewan have probably been more active in that connection than governments of other provinces, probably . because they have had more costly experience; for there have been much larger drought areas in Saskatchewan than anywhere else, and they have probably a more complete organization to check conditions all over the province. For these reasons perhaps they have put in more applications and got them in at an earlier date.
There was a difficulty, I must admit, in Alberta last year in view of the change through the death of the provincial minister of agriculture who was carrying on in the early part of the season, but we did intimate finally to them that we preferred that they
would err rather on the side of indicating to us that a township should be examined which might not come within the area upon investigation to their erring on the other side. There were not very many townships that were passed over, if we are to judge by the number that came in afterwards and said that they had not been aware of the fact that they were under twelve bushels to the acre until after November 1. I have the figures here of those that were examined in the different provinces and will add them to the figures I have placed on the record in order to give hon. members some idea of the number of applications made in the different provinces.
In Manitoba we examined 316, and we passed 171; in Saskatchewan we examined 2,126, and we passed 1,271; in Alberta we examined 431, and we passed 224. It will be noted that there is not any great difference in the proportion of those passed, compared with the number examined in the three provinces. In all three provinces we examined 2,873, and we passed 1,666. I am informed that the number which have written in later from all three provinces and questioned whether they should not have been in, stating that they had not made application because they did not have information sufficiently early or for some other reason, is considerably less than 100. Therefore, out of over 2,873, it would be a comparatively small number. Applications were made in the case of these 2,873 before November 1, and they were all examined. I realize, of course, that that does not help the people who were in those districts which found they were under twelve bushels to the acre, and they have reason to complain that someone did not take action in sufficient time. I must say, too, that we do not absolutely rely on these applications that are sent in. Our inspectors do check some of the townships when they are in areas where they realize that a township may be making application later on. They will check some of these townships which have not asked for it, but we do not feel that we are expected to act unless a municipality or a province makes application.


Victor Quelch: But after the inspector finds out that the yield in such a district is below twelve bushels, does he not notify them to make application, or does he wait for them to find out? I think it is up to the inspector to tell the municipality that the district will be eligible for the bonus, without waiting to see whether they make application.


James Garfield Gardiner: The inspector is not in a position to give anyone definite information. He checks a certain proportion of the farms
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in the district and gives his opinion that a certain township may come in, to the officials in the office, not to the municipality. There is somewhat of a check kept. We always expect that the municipalities will keep a check.


Alexander Malcolm Nicholson: To return to the question of personnel, I have done a good deal of business with the department in Ottawa and with the office in Regina, and I think the minister is fortunate in having such an efficient personnel at headquarters. I am sorry I cannot say the same of the personnel in the country. Looking over the list of inspectors operating in my constituency, given in the return brought down for the hon. member for Qu'Appelle (Mr. Perley), I have been struck by the expense accounts of some of the inspectors. This is the first year the act has affected the northern part of Saskatchewan where I live. I should like the minister to state, first of all, how the personnel in the country is selected. I notice the name of John Davies, for instance, of Farmingdale. How does the minister find out that John Davies, living away up in the bush, is a suitable person for this work?
Second, I should like to know what sort of check the department makes of the expense accounts of these inspectors. The hon. member for Lake Centre pointed out last night that one inspector working out of Melville turned in an expense account averaging $11.50 a day, and looking over the list of inspectors and their expense accounts I find a wide discrepancy. In my constituency most of the inspectors run up an expense account of nearly $10 a day. The cost of living is not as high there as in other parts of the province, and I notice that some other expense accounts are for $5 a day, and that some inspectors draw less for expense accounts than in salary. A great many are paid $5 a day in salary and run an expense account of around $10 a day. In my constituency I stayed with a friend at a hotel at Easter time. We had supper, bed and breakfast, and in the morning I asked for the bill and was told they were charging us two dollars. I asked, "Two dollars each?" and they said "No, for the two." True enough, the hotel was not in the style of the Chateau Laurier, but it was the best and only hotel in the village, and I cannot understand how these inspectors doing their work in the field can run up such large expense accounts. Would the minister tell the committee how these men are selected, and what check is made on their expense accounts?


James Garfield Gardiner: In selecting the men, we try to find some one who is not looking for a permanent job.


Alexander Malcolm Nicholson: There are plenty of them in the country.


James Garfield Gardiner: Yes, but I think there are more who are looking for permanent jobs. Generally we try to find someone, to put it in another way, who is not in absolute need of a permanent job, who has some other employment. If we can find a good capable farmer who has had considerable experience and is in a position to give us probably two or three months of his time during the summer, and if he thinks it will not interfere too greatly with his own farming operations, we like to have a man of that type. Or we might choose a man in a village who has been accustomed to dealing with farmers, either through being in some branch of the grain trade perhaps or through making collections, and who knows farm lands and can estimate crop yields when he sees them, even as standing crops; he understands farming operations, and at the same time is prepared to devote to the work part of his time during the summer. We make some inquiries to assure ourselves fairly well that the man has either a business or a farm to return. That is the type we hope to get. We do not wish to call men away for anywhere from two to three weeks or two to three months, and have them say to us afterwards, "We expect you to find work for us for the remainder of the year."
This is one check we do apply. We make inquiries of municipal men, of members, of persons here and there over western Canada in order to find suitable types. For example, the first man who was put on, I believe, is one of the best-known municipal secretaries in Saskatchewan, a man who is known by every municipal official in the west; I refer to Mr. Truseott. I understand that he attends all the municipal conventions, and has done so for many years. He was given the task of going over the block of country of which he has charge at present, and selecting half a dozen men to go out immediately as' inspectors. He made recommendations, and the names were placed on the list. In most districts we have asked for at least double the number of men whom we expect to use, and we leave it with the officers at Regina to select men from that list. They use a man for a period of time. If they find that he is efficient in the work they continue to employ him, and probably they will call him up the succeeding year. If they find that the man does not do the job as they wish to have it done, he will probably not

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be called up the next year; they will try someone else. But the lists are made up in the manner I have explained, and they are submitted to me as minister for my endorsa-tion. Some of these men I know; many more I do not know, and I simply have to take the word of those of whom we inquire, who know these men, as to their abilities, and try them out.
The other question was what?


Alexander Malcolm Nicholson: About their expense accounts.


James Garfield Gardiner: The expense account, naturally, is made up of their board and sleeping accommodations while they are away from their homes, and the cost of operating their cars. A car operates on a basis of seven cents a mile until 4,000 miles have been covered, when it becomes six cents a mile. The cost in connection with the car is made up from that calculation.
As to how some of them might run up large expense accounts, that depends upon the type of work a man is put on. If a man is put out in a district the greater part of which is in a crop failure area or in which the crop is obviously under twelve bushels to the acre, he does not need to make the number of inspections which have to be made by a man who is working in the borderline areas. For example, a man can drive rapidly through a township which has three bushels to the acre, and say, "That is under five bushels" or "under four," as the case may be. But he cannot drive nearly so rapidly through a district which is on the boundary line between eight bushels and seven, or eight and nine, or twelve and thirteen, or twelve and eleven. The man who operates for the greater part of his time in the area of which I first spoke can earn much more on mileage, because he would cover probably double the area, entailing double the expense in mileage, and consequently might build up a large expense account. Burglund is one of the main checking men who has made inspections and checked areas which have been gone over. He is one of the men in the district who are sent out to check areas, and in many instances to recheck areas.


Ernest Edward Perley: The hon. member for
Mackenzie has, I think, touched a vital point. I had some experience last year and the year before in our district with these men. I talked with them, and found that the man who was inspecting the municipality in 1939 was driving home to Windthorst, about forty miles, every night and running up his expense
account. I may say that he was checked up on this, and then he stayed in about the centre of the municipality.
I brought this matter up yesterday, and I contended that men who had a knowledge of the municipality should be reemployed if they are doing good service. In the instance I have in mind, a change was made last year. Another man, who, as the minister states, is a farmer in the district, did this work, and while I believe he was conscientious in many respects, he made what I would term a still quiet hunt. He inspected every quarter-section, driving round quietly, and put in an expense account considerably greater than his salary, and I would venture to say that nine nights out of ten he was at his home. I have here the list to which the hon. member has referred, and it shows that at least 70 per cent of these men have expense accounts which run over their salaries.


Alexander Malcolm Nicholson: Twice as much.


Ernest Edward Perley: Yes; some of them twice as much. I venture to say that the minister could make a great saving if these men were checked up in that respect. If the same man continued to do the work this year in that municipality, he could complete it in one-fourth of the time, because he has knowledge now of every quarter-section and of every farmer. In consequence, his expense account would be materially less.
As regards this matter of individual inspections to which the minister referred, the system followed last year amounted practically to individual inspection of every farmer and every farm in the areas to be inspected where they thought that the crop was such that the producers would come under the bonus.
I am not going to hold up this matter any further, other than to say this, that it is under this act, and under this branch, I understand, that the minister is to carry out the regulations with respect to the reduction in wheat acreage, the summer-fallow bonus, and so forth, this year.


James Garfield Gardiner: Yes.


Ernest Edward Perley: How many additions does the minister expect to make to the staff to do that work this summer? What increase has there been in the staff in Manitoba, Saskatchewan and Alberta, with respect to this particular branch of the work?
The minister will recall that in 1939 there were quite a number of overpayments of bonus, and I believe he took steps to recover some of those payments. What success has he had in that direction? I have in mind four or five cases; I am not going to mention
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names, but I think the minister knows some of them. I know he was undertaking to make recoveries, and if there have been overpayments there should be some method of obtaining repayment. I believe also that there are a number of cases yet unsettled, still more or less in dispute, with respect to last year. How many are there, and what does the minister propose to do? Will there be some settlement of these cases?


James Garfield Gardiner: There are about one-third of the questionable payments-I would not say it has been definitely decided that all of these questioned payments should not have been made-that have been collected. About two-thirds of those in respect of whom payments were questioned have not yet paid back the amounts. We have not been so much concerned about persons who were actually on farms and received overpayments or received payments when we afterwards found out that probably the land should not have been paid for on account of some of the regulations we have. Knowing the districts particularly in areas that have been on a number of occasions in the drought zone, we figure that if that farmer is due a payment later on we can withhold the amount out of succeeding amounts to be paid him. We have not been so persistent in pursuing these persons. There are some difficulties in compelling the repayment of moneys where persons have turned out not to be farmers, but all doubtful cases have been turned over to the Department of Justice, and they have been examining into these cases and trying to determine those that may be in a classification under which action can be taken. Up to date, however, no actions have been taken in court to collect. The result is that we have collected one-third of the money which we think should be repaid.
To give an idea of the amount which is involved-because a general discussion of this kind could leave the impression that with the payment of between $9,000,000 and 810,000,000 in the first year there might be a considerable part of that money about which there was some question-I might point out that the total amount questioned by the treasury department and ourselves is $13,156.73, and the recovery has been $4,736.22. In paying out a sum of money that is considerably over $9,000,000, under a plan that is entirely new, over such a wide area, and to some 58,000 people, we were fortunate not to have more cases than we actually had, and we are also fortunate to have been able to collect back about one-third of the amount. Most of the persons who returned the payments sent back

the money quite voluntarily as soon as they found they had received payments to which they were not entitled.


Alexander Malcolm Nicholson: How much was collected from the farmers for the last fiscal year, and what is the amount of payments made under the act in the same period? I wish to refer to a letter from the secretary of the United Farmers of Saskatchewan dated March 25, 1941. Copies went to the various political parties from Saskatchewan, and no doubt the minister has seen the letter. I promised that I would try to get an explanation, because there have been certain complaints about the board of review. I quote:
I am enclosing a copy of an appeal which we have presented to the board of review, under the chairmanship of Professor E. C. Hope of the Saskatchewan university. Here we find a rather strange situation, in that I first of all presented the first two cases referred to in the appeal to A. R. Maekie, superintendent in charge of administration of the act. He refused the bonus because of a "ruling of the treasury board in December, 1940". I then referred these two cases to Hon. J. G. Gardiner, Minister of Agriculture, and he replied that he could not change the ruling.
They cite some nine or ten cases that came before the board of review. Could the minister make a short statement in connection with these problems to which attention has been directed by the United Farmers of Saskatchewan?


Ernest Edward Perley: First, I would ask the minister to be good enough to give an answer to the question I asked. What was the increase in staff to carry out the regulations with regard to summer-fallowing?


James Garfield Gardiner: I have not the exact
figure here, but I understand that the increase in inside staffs will be about a dozen in the three provinces.


Ernest Edward Perley: How about the field staffs?


James Garfield Gardiner: There has been no
increase in staff in the areas in which we were operating and the more southerly areas where there have been crop failures or low crop yields, but we have had to add to staffs in the northern sections, through the northern part of Manitoba, the. northern part of Saskatchewan and into the northern part of Alberta, and we have had to make appointments in the Peace River section of British Columbia. The numbers on the outside staff will not make any material difference. The persons added on are added to the lists I have indicated. People are selected from these lists to do the work, and if double the number are selected they will do it in half the time,

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so that the figures in that regard are not as important as the total amount of money paid out in doing the work.


Ernest Edward Perley: I understand that there
were quite a number of men who went lecturing and attending farmers' meetings.


James Garfield Gardiner: Very few of these men
were employed. The provincial departments of agriculture offered the services of all their district agricultural men, and they went and held meetings. Many of the municipal secretaries, although we were paying them only for office work, held meetings in different divisions of their municipalities voluntarily, and they are paid on the basis of fifty cents a farmer who applies for a reduction in acreage, for all the work they do throughout the area in connection with the applications. They did make it convenient for farmers by holding public meetings and having the farmers come to the schoolhouse, or wherever the meeting was held, and sign their applications for wheat acreage reduction, but nothing was paid for these particular meetings.


Ernest Edward Perley: What about those cases still in dispute, not yet settled? The minister knows the ones to which I refer.


James Garfield Gardiner: I understand there are about a dozen individual cases before the board still for consideration, and there are a number of townships or applications from individuals that are before the Department of Justice for decision as to whether they are entitled to payment.


Ernest Edward Perley: Will this be the final regulation with respect to the summer-fallow bonus and acreage reduction?


James Garfield Gardiner: It will be final unless there are unforeseen developments. An undertaking was given here regarding a matter about which certain questions have been asked a number of times by hon. members in the last two or three days. I believe I am correct in saying that an undertaking was given by the Minister of Justice and myself that in order to make provision with regard to the right of members to apply, if it becomes necessary to do so, an amendment can be made to the regulations. Amendments of different kinds may have to be made, but in substance the regulations are as we intend them to operate.
The answer to the other question is this. In 1939 the number of townships was 1,923; payments, $9,904,300.77, and the levy $2,421,507.37. For 1940, to date, the number of townships is 1,666-this figure is a little larger than the one I put on record because it is of a later date. The payments amount
to $6,500,217.18, and the levy-we have not the exact figure-is approximately $2,500,000, or almost identical with that of last year. It was $2,421,000 last year, and it will be in that neighbourhood now.


[Stage Direction]
Item agreed to.
473. Marketing Service. Subsidies for cold storage warehouses under the Cold Storage Act, in the amounts detailed in the estimates further amount required (revote), $12,332.48.
Grote Stirling: What does "revote" mean in that sense?


James Garfield Gardiner: It is money which had been provided for before.


Grote Stirling: Had the work been begun?


James Garfield Gardiner: Yes, and this is to
complete it.


[Stage Direction]
Item agreed to.
475.	Special. To provide for assistance to encourage the improvement of cheese and cheese factories-further amount required, $395,000.
Alexander Malcolm Nicholson: Will the minister break this down, the amount for equipment and the amount for cheese?	.


James Garfield Gardiner: That is made up of the estimated cheese production for this year, 155,000,000 pounds; the premium averages 0-9 cent a pound. That makes a total of $1,395,000. Last year we estimated the total at $1,000,000, and we have to have an extra $395,000. That is largely due to the increase in production, the increased volume of high grade cheese compared with the estimate.


John Ritchie MacNicol: Which is a good thing.


Mr. TUSTIN:: Will the other bonus be paid out of the war appropriation?


James Garfield Gardiner: The 1-6 cents will be paid out of war appropriations.


Alexander Malcolm Nicholson: It refers to assistance to encourage the improvement of cheese and cheese factories. Have we a vote to go on capital equipment?


James Garfield Gardiner: That is the name of the vote.


[Stage Direction]
Item agreed to.

[Stage Direction]
476.	To provide for compensation to provinces which agree to vacate the personal income and corporation tax fields for the duration of the war, the annual amount thereof being computed in accordance with and subject to the terms and conditions of agreements approved by the governor in council and entered into with such provinces by His Majesty the King in the
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[Stage Direction]
right of Canada represented by the Minister of Finance and on a basis which will produce substantially the equivalent of either:-
(a)	The revenues which the province and its municipalities obtained from these sources during the fiscal year ending nearest to December 31, 1940, less the amounts collected after the close of such fiscal year by the province and its municipalities in respect of personal income and corporation taxes levied upon incomes of 1940 or prior years or based upon the status or operations of the taxpayer in 1940 or prior years; or
(b)	The net debt service paid by the province during the fiscal year ending nearest to December 31, 1940 (not including contributions to sinking funds) less the revenue obtained from succession duties during that period and less the amounts collected after the close of such fiscal year by the province and its municipalities in respect of personal income and corporation taxes levied upon incomes of 1940 or prior years or based upon the status or operations of the taxpayer in 1940 or prior years
and for the payment of fiscal need subsidies to such of said provinces as enter into such agreements, and can demonstrate to the satisfaction of the governor in council that these are necessary:	an amount not exceeding.
Alexander Malcolm Nicholson: Since this is a fairly large vote will you call it six o'clock, Mr. Chairman?


Mr. MACKENZIE (Vancouver Centre):: I move that the committee rise, report progress and ask leave to sit again this day.


[Stage Direction]
Motion agreed to.
Progress reported.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.

[Stage Direction]
Mrs. Cora T. Casselman, member for the electoral district of Edmonton East, introduced by Right Hon. W. L. Mackenzie King and Hon. J. A. MacKinnon.
[Stage Direction]
The house in committee of supply, Mr. Vien in the chair.

[Stage Direction]
69 Departmental administration, $128,480.
Alan Webster Neill: Mr. Chairman, when we were discussing this item some weeks ago, the minister made a statement in connection with the sale of the salmon pack of British Columbia. He stated at that time what had been done up to date. Since then, I believe there have been some further negotiations in the matter. Prrhaps he would be willing to make a further statement.


Hon. J. E. MICHAUD (Minister of Fisheries):: Mr. Chairman, I shall be pleased to comply with the request of the hon. member for Comox-Alberni and make a statement supplementary to that I made on May 26. Additional information has come to my attention since, and I shall inform the committee as to the further developments in connection with the matter of supplying the canned salmon requirements of Great Britain.
Last week the British food controller stated definitely that he was desirous of purchasing the canned salmon pack of the British Columbia fisheries for the present year. Immediately the Department of External Affairs, the Department of Trade and Commerce and the Department of Fisheries set machinery in motion not only to give the assurance that this request would be met, but to give an undertaking that everything possible would be done to get together those large quantities of fish required to supply British needs, and to see that shipments were properly coordinated and shipped overseas in an orderly fashion.


Alan Webster Neill: Will the Canadian government buy the fish direct from the British Columbia people?


Joseph Enoil Michaud: No. We believe the industry on the Pacific coast will take care of those requirements, as it has done in the past. We have advised the British food controller, through the British mission, that a maximum pack of 1,700,000 cases of salmon could be properly put up this year, if our expectations are realized, without impairing the future of the industry. Not only have we said that we would do everything possible to see that it was put up and delivered, but we have pointed out that home requirements and a certain share to go to other markets would be taken care of. We have assured the British government that we expect the industry to deliver 1,200,000 cases of canned salmon this year to the British market and, in order to make that possible, we shall have to curtail by 40 per cent the usual quota for home consumption and for markets other than British, or reduce the amount to 60 per cent of that packed for export to markets other than British and for home consumption.
This means that we shall keep about 500,000 cases for our requirements in Canada and for export markets other than those in Great Britain, and that we shall make available to the British consumer 1,200,000 cases.


Alan Webster Neill: How does that compare with last year's catch?


Joseph Enoil Michaud: To give the committee an idea of the magnitude of the undertaking, may I point out that the average export to

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Great Britain in 1936, 1937 and 1938 amounted to 380,493 eases of canned salmon, while last year's shipments amounted to 568,441 cases. It is obvious, therefore, that our commitments this year are about double last year's shipments.


Alan Webster Neill: It is estimated that the pack mentioned by the minister as 1,700,000 cases can be produced this year. How does that compare with the amount produced last year?


Joseph Enoil Michaud: It is between 350,000 and 400,000 cases more than the production of last year. In order to assure these British requirements, we shall have to take every precaution to see that priority is given.


Alan Webster Neill: Priority will be given to the
British orders?


Joseph Enoil Michaud: Yes. Members of the
committee may be interested in knowing the basis of this sale of salmon to Great Britain. The pack is divided into three grades: grade No. 1, comprised of sockeye; grade No. 2, comprised of cohoe and red spring, and grade No. 3, comprised of pinks and chums. The prices are to be from 10 to 15 per cent higher than those received last year, to take care of the additional cost of production. The prices for this year are $13.75 a case for No. 1; $10 for No. 2 and $6.25 for No. 3; the prices last year were $12.37 for No. 1; $8.65 for No. 2 and $5.60 for No. 3. These prices are for a case of 96 half-pound flats.


Alan Webster Neill: Is there any indication that
these prices, apparently set by the British government, will be satisfactory to the fishermen and the canneries?


Joseph Enoil Michaud: So far as I have been
able to ascertain, they will be satisfactory to the canneries, and I have no reason to believe that they will not be satisfactory to the fishermen. The fishermen must consider themselves fortunate in having an assured market this year for this large quantity of fish, with conditions as they are. Had the British government not consented to take this large quantity, I doubt if the home market and the markets other than British would have been able to absorb such a large quantity. Since this year's prices take into consideration the increased cost of production, I think the fishermen ought to be satisfied with these prices.


Alan Webster Neill: This seems to be an excellent arrangement provided that the required quantity can be obtained. Unless this happens to be a big run year, it will be rather difficult to get this quantity. However, the canneries will have an assured market, which they had not last year. The same condition will apply to
the fishermen. I think the government ought to be congratulated for whatever part they took in bringing about such an arrangement.
The statement was put out to the press a few days ago by the department in connection with canned herring. I understand that the British government have agreed to take 35,000 long tons of canned herring, whereas last year they did not take more than 8,000 or 12,000 tons. This is an increase of over four times, a tremendous increase.
I hope it will be found possible to supply this quantity, but I doubt it. This bears out the argument which I have been advancing for many years and which I mentioned last week, that the Canadian government ought to stop the reduction of herring into oil and other products. It might be easy for me to say, "I told you so." For all these years I have been telling the government that they should not permit the reduction of herrings into comparatively low-class articles like oil and fertilizer. In that way we get the least possible out of the fish; we curtail spawning, and we reduce the amount of salmon food which is most essential. When a crisis comes along and there is an enormous demand at a profitable price for herring, we find that we shall not be able to supply anything like the quantity required.
We have out-fished these herring in years gone by, and enormous quantities have been reduced. The departmental reports show that the supply has been steadily going down. There is one step the minister could take, a step which he has the power to take, namely, to prohibit any reduction of herrings this year. It may be said that the more profitable price to be received for canned herring will bring about this result, but that does not necessarily follow. A plant may be equipped for reducing only, and it will go on reducing only, first pilchards and then herring, if allowed to do so. Great Britain does not want herring in the reduced form because she can obtain what oil she requires from whales, cod, et cetera, but she does want herring in this form. Apparently it is intended to have these put up in half-pound tins in order that they may be part of the men's rations, part of what they call the special ration. The minister should fall in line with the expressed wishes and needs of the British government. This will be to the advantage of the fishermen and canners because more money can be obtained from a ton of canned herring than from a ton of reduced herring.


Joseph Enoil Michaud: The British food controller has expressed a desire to be supplied with a large quantity of canned herring this year. As a matter of fact, I think it is the first
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time in the history of the British Columbia fisheries that canned herring has been demanded in such a large quantity. Thirty-five thousand long tons is what they ask to 'be supplied with. This will mean 1,630,000 cases of ninety-six half-pound cans to the case. In this connection, priority will be given to meeting these requirements. I am inclined to believe that when they are taken care of, there will be little left for reduction purposes.
Without committing myself definitely to a policy of prohibiting altogether the reduction of herring this year, I can assure the hon. gentleman that so far as I know, reduction will have to be prohibited in many sections. There is always a certain quantity of fish caught which are not suitable for canning or any other purpose than reduction for fish meal. There are fish caught which cannot pass the inspection and cannot properly be put into cans and offered to the consumer. Nor can they be thrown back into the water and be wasted, and we shall have to see that they are used to the best advantage and supplied possibly to other interests, particularly agriculture, for use as food rations for poultry, cattle and so forth. I think I am safe in saying that unless we have an overabundant supply of herring this year, we shall have to stop the reduction of herring at least until the requirements of Great Britain are assured.


Alan Webster Neill: Thank you.


Mr. FRASER (Peterborough West):: The minister promised on May 26 to give a breakdown of the expenditure on lobster control.


Joseph Enoil Michaud: I am pleased to give the hon. member the information which he requested, and which I hope will correct the misapprehension under which he was labouring on a former occasion, on May 5, when we discussed the [DOT] expenditures for the canned lobster industry.
The season for canning lobsters opens generally in May. Last winter, after the government of Great Britain had placed canned lobster on the luxury list, the fishermen as well as the canners thought they could not operate with a market as limited as the Canadian and United States markets, judging from the volume of former exports. They appealed to the government, and we had to give them the assurance that the usual pack would be taken care of and that we would help to market it. The average annual pack of canned lobster for 1934, 1935, 1936, 1937, 1938 and 1939 amounted to 97,000 cases. Last year we amended the regulations and prohibited the canning of lobster smaller than six and a half inches in length. We knew that that would tend to reduce the pack and

also to conserve the species. We also knew that a number of people who formerly gained their livelihood through lobster fishing had become engaged in other employment which they thought more profitable, and that the number of lobster fishermen would, therefore, be much smaller. It was, in fact, much smaller, but we anticipated a pack of 70,000 cases, and we gave our undertaking to the fishermen and the canners that we would see that this pack would be marketed.
We referred the matter, based on these figures, to the different boards advising the government as to production and marketing, and we adopted a plan which we thought would be helpful. We had no alternative but to try to develop the United States market and the home market. The consumption in the domestic market up to last year had amounted to 3,000 cases annually, and our average annual exports to the United States were around 12,000 cases, making a total of about 15,000 cases consumed on this side of the Atlantic ocean. The rest of the pack was exported mainly to Great Britain and some to the continent, where France, Germany and Sweden were the most important markets.
In order to influence the Canadian consumer to give some consideration to this commodity, we adopted the plan of advertising the goods on a wide scale, bringing to the attention of Canadian housewives the advantages of using canned lobster to a greater degree. Second, we canvassed the most likely purchasers in the United States, the large distributors of foodstuffs through large chain stores. The department, in order to give every assurance possible to the industry, decided that we would purchase whatever the industry itself could not sell. In other words, we agreed to be in the market to take up the slack. The results of the advertising were beyond our expectations. It is true that last year the pack was much smaller than we anticipated due to the factors I have mentioned and also to the fact that the weather last fall was much against lobster fishing, on account of several storms that raged on the coast during the fishing season in which many lobster fishing traps were carried away and much time was lost during the height of the fishing season. The actual pack was 58,898 cases. The department was offered 10,000 cases by the packers, who could not find a market for it themselves. These offerings were subject to inspection, and we could not place our seal of approval on some of the offerings. We refused to grade 4,757 cases, and we marketed 5,365 cases for the industry. The rest were marketed by the industry itself and by those who have been

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for some years in the brokerage business and have made it their business to market this commodity.


Gordon Knapman Fraser: Who were the brokers?


Joseph Enoil Michaud: The brokers on government sales? We had no brokers. We sold through the controller. The deputy minister had been appointed as controller under this scheme. He employed Mr. Akins of Toronto, who consented to act without pay and who received only $1,300 approximately for expenses.


Gordon Knapman Fraser: But he belonged to an advertising firm in Toronto, did he not?


Joseph Enoil Michaud: Yes.


Gordon Knapman Fraser: Then his commission would be got on the advertising?


Joseph Enoil Michaud: I do not know what he would get on the advertising. The firm was paid $50,000 to carry on the advertising campaign we had mapped out.


Gordon Knapman Fraser: Well, then, the firm would get about 15 per cent of that, would it not?


Joseph Enoil Michaud: I do not know, because we do not pay the commission to the advertising firm.


Gordon Knapman Fraser: They get that from the magazines?


Joseph Enoil Michaud: They get that through the newspapers or publications which carry on that work.


Gordon Knapman Fraser: Well, then, it was really paid through the advertising from the firm?


Joseph Enoil Michaud: Yes. Accordingly we
spent $50,000 on advertising, and the cost of marketing was $12,471.22. We had prepared for marketing 30,000 cases. At the opening of the season we had undertaken to take care of 55,000 cases, and we started to establish a structure and get the machinery to take care of that amount. After the spring season was over, we found that the quantity would not be as large as we anticipated, and we reduced our set-up considerably. We had labels and cases on hand to take care of about 30,000 cases.


Gordon Knapman Fraser: The price per 8-ounce can was pegged at twenty-seven cents, was it not?


Joseph Enoil Michaud: No. That price represented an agreement among the retailers of the fish; it was not the price set by our
department. The average price at which we sold was, on the Canadian market, $16.15 per case; on the United States market, including exchange, $19.40. Those are wholesale prices. The retailers agreed among themselves as to the retail price.


George James Tustin: How many cans are in a
case?


Joseph Enoil Michaud: Ninety-six half-pound
cans.


Gordon Knapman Fraser: There are only two months in which lobsters are harvested. What do these control men do during the rest of the year?


Joseph Enoil Michaud: The controllers?


Gordon Knapman Fraser: Yes. Are they kept on pay?


Joseph Enoil Michaud: No; they are not
employed by us during the rest of the year. Two persons were employed in Halifax by the salt fish board, and during the lobster season we engaged them-an accountant and a bookkeeper-to keep track of the goods. We had nobody employed during the year except during the time that we took to gather the surplus which was offered to us and dispose of it.


Gordon Knapman Fraser: The minister said, when he rose first, that I was under a misapprehension on May 5. I do not think my mind is at all changed yet.


Joseph Enoil Michaud: Yes. From a reading of a statement of the hon. member, I gathered that he seemed to be under the impression that all the money we spent, $62,471.22, was expended in marketing 5,365 cases.


Gordon Knapman Fraser: No; 4,410 fths cases.


Joseph Enoil Michaud: At the time those were the figures, yes. But I am now giving the statement for the whole year, the final figures having been revised by the treasury. The controllers sold 5,365 cases; the cost was $12,471.22; but we had a set-up at the beginning of the year to take care of 55,000 cases; we had a warehouse in Charlottetown, one in New Brunswick, and one in Nova Scotia. When we found out what would be required of us, we closed two of them and kept open the one in Halifax, assembled all the merchandise there, and disposed of it from the one warehouse.


Mr. POIRIER (Translation):: Mr. Chairman, during this discussion of the administration of fisheries, I wish to review the federal-provincial relations with respect to the Fisheries of Quebec. Though long discussed, the question has not yet been definitely settled. However as I shall show further on, it is almost settled
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in reality. Indeed, there remains practically only to give the form of a permanent agreement to. what has already to all intents and purposes become an accomplished fact. There can therefore be no better occasion to bring the question to the fore, in the hope that both governments will this time arrive at a definitive settlement. Certain aspects of the matter lie beyond the scope of those of us who are neither lawyers nor experts in constitutional law. I shall therefore approach the matter solely from the point of view of the development of the fisheries of Quebec and particularly of the improvement of the fisherman's lot, which after all are the main things. Following a brief review of the discussions, I shall look into the bill paid by the fishing industry and the fishermen of Quebec and the basis of the permanent settlement advocated.
The question is far from new. It has its roots in the confederation pact itself. Confederation laid the foundations of a dispute between the dominion government and the various provincial governments. This dispute is still going on, at least in so far as Quebec is concerned. Taking its stand on the subsection "fisheries" of the British North America Act, the dominion government assumed both jurisdiction and ownership in respect of fisheries, not only deep-sea but also inland, save as regards small rivers and lakes. The dominion government, therefore, issued the licences, permits, leases, etc., for both commercial and game fishing. The provinces soon took the matter to the courts. The first litigation concerned inland fishing and the first province to institute proceedings was New Brunswick. As far back as 1883, in the then famous case of Robertson vs. the Queen, the Supreme Court of Canada invalidated the lease granted by the dominion government on the Miramichi river, thus recognizing the provinces' property rights in their territorial waters.
Following this judgment, the province of Quebec began immediately to exercise the prerogatives proceeding from the recognition of its property rights. Ottawa, however, did not renounce its judicial power and, consequently, its legislative power, which, in any case, no one had ever contested. It continued and still continues to make laws and regulations respecting the conservation of fish in the St. Lawrence and our other rivers and our lakes. In the interests of harmony, Quebec has supplied and paid, though in no way obliged to do so, the personnel required for the effective administration of these laws and1 regulations.
In 1898 the provinces challenged the dominion's jurisdiction over fisheries in tidal

waters. The case, that of Quebec and Nova Scotia against the dominion, was heard by the privy council. In his judgment, Lord Herchell rejected the dominion's claim by establishing clearly the fundamental difference between legislative control and property right and affirming that one did not necessarily derive from the other. In 1914 the case was resubmitted to the privy council, this time by British Columbia, and again in 1921 by Quebec alone on account of the special situation in which it found itself in that regard. In the judgment which ensued, Lord Haldane held that the province, as a result of its ownership of the land, was entitled to ownership of any fishing gear attached to the land in any manner whatever, not only in the river estuaries, but anywhere along the coast. Our province was therefore entitled* to issue permits and licences. But, as the right to fish in tidal waters is a public right, Lord Haldane denied to the province the right to issue exclusive leases or fishing rights therein.
Its rights having thus been clearly established and defined as regards its deep-sea fisheries, the province of Quebec set about exercising them by requiring, from 1921 on, a licence for salmon-fishing and for fishing-gear attached to the land along its coast.
But as the dominion government enjoyed, for purposes of legislative control as well as of revenue, the same right, though to a lesser extent because it did not in its case proceed from the right of ownership, it likewise required a licence. Our fishermen thus found themselves obliged to pay two licence fees. Furthermore, a fisherman holding a provincial licence but unable to obtain a federal one for the same purpose, or vice versa could only fish at the risk of breaking either a provincial or a federal law.
Such a situation could not last. Out of it arose an agreement with respect to our deep sea fisheries, along the lines of the one that had been concluded some thirty years before in connection with our inland fisheries. The dominion authorities retained the legislative power previously vested in them, as I said, and Quebec undertook to supply the staff required for the administration of those federal acts and regulations.
An agreement like that of 1922 could only effect a temporary settlement. Its full operation, with the inference drawn therefrom, could not and did not satisfy our province.
Consequently, as early as 1931, that is eight years after the agreement, a movement was launched in Quebec with a view to bringing once again that matter to the attention of the public. An editorial published in Le Soleil on March 24, 1931, stated the case.

In February 1932, the legislative assembly passed a resolution to the effect "That it was expedient that dominion-provincial cooperation be effected so that the development of our fisheries might be better ensured." That resolution found an echo in the House of Commons where all members recognized the benefit that our fishermen would derive from the cooperation of the two governments.
The question having thus been raised, the papers in turn took a hand in it. A delegation requested his Lordship Bishop Ross of Gaspe to lead the movement. He agreed on two conditions the wisdom of which cannot but be commended: (a) The matter should be considered solely from a social standpoint, outside all party considerations; (b) the newspaper campaign should cease. With his customary sense of duty, Bishop Ross set out upon his task. He met with the best reception on all sides. However, he wanted a complete agreement, with a complete programme. Honourable Messrs. Duranleau and Laferte had an interview and as a result the fisheries station of Grand River came into being. That was something, but it was merely one item on the programme. Consequently, in a letter to I'Action Catholique which that paper published with his permission, in its issue of April 18, 1933, the worthy bishop of Gaspe expressed his disappointment and authorized that paper to take up once again the campaign it had formerly waged so vigorously.
In 1934, the matter of cooperation between the dominion and the province with respect to fisheries was raised again in the Quebec legislative assembly by the then member for Gaspe, Mr. Alexandre Chouinard. Among those who took part in the debate were Mr. Pierre-Emile Cote, member for Bonaventure and now Minister of Lands and Forests, and Mr. Edgar Rochette, member foT Charlevoix-Saguenay, now Minister of Fisheries.
The late hon. Mr. Kelly, who had raised the question in the legislative council, took it up again in 1935 and a substantial extract from his speech can be found in the February 28, 1935, issue of 1 'Action Catholique. That was the end of it.
That the agreement of 1922 entailed a great loss for the Quebec fisheries and indirectly for the fishermen is now generally recognized. Let us consider these two points, among others: industrial development and federal grants.
The war of 1914-18 greatly depressed the fisheries of Canada and, as ever, the dominion government, being so vitally concerned, launched a reform and expansion plan. The fillet industry along with the salt and smoked fish industry took a great expansion. Great strides were made in the use of fish waste and
Supply-Fisheries
inedible fish, and in the matter of cold storage. The maritime provinces benefited from all that. The dominion government helped in every possible manner that expansion of fisheries along industrial lines, and in order that the fishermen from the maritime provinces might benefit from it, they even organized a fleet of fish-collecting boats.
Let me clear up one point right now, Mr. Chairman. In contrasting our position with that of the maritime provinces, we are not prompted by envy or jealousy, and our hon. friends who represent that part of the country in this house should not take offence. We have a respectful admiration for them. When they want something from the dominion government, they ask it with such strong and persuasive arguments that they never fail to succeed. Our task would be all the easier if we could prevail upon them to teach us their methods.
The best standard for ascertaining the development of the fishing industries is the marketing of fillets, a modern product in great demand among housewives. These fillets are sold fresh, frozen or smoked. Here are the figures for Nova Scotia and Quebec, according to official statistics:
Fillet Production Nova Scotia
1918	 1,519,700
1928	 12,904,300
1938	 22,996,800
Quebec
1918	 Nil
1928	 Nil
1938	 792,500
However, I must say that during these last few years the fillet industry has progressed enormously in Gaspe. But, until 1938 Quebec had had no share in that development. Until the depression, the situation was not very bad because the dried cod market had quickly improved and become quite good between 1922 and 1929. However, the depression would have been less severe in 1932 if, as early as 1921, we had organized our production so as to secure our share of the national market. Since the depression, our fisheries have hardly regained 10-7 per cent of the lost ground, while Nova Scotia registered a gain of 45 per cent. And the reason is. that the dominion government have not dealt with Quebec as they should have done. The whole industry has suffered from that arrangement. The bill has been paid by the fishermen. And from the amount paid in direct relief by both governments since 1932, one can see that the bill was pretty stiff. What makes it all the more distressing is the fact that, in 1921, the dominion was to begin in earnest to develop the Quebec fisheries.
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In 1921, the dominion was ready to develop the Quebec fisheries according to a plan, which was set aside as a result of the 1922 agreement. That plan included the four following items: (a) building up of a competent technical staff; (b) higher salaries, in order that the members of this staff might devote their entire time to their duties; (c) establishment of a divisional fishery office at Quebec; (d) setting up in the Gaspe peninsula of an educational centre destined to become a combined biological and experimental station.
It should not be forgotten that Quebec's contribution to the national income is almost one-quarter of the total. It is only fair, therefore, that Quebec should obtain from the fishery appropriations a share somewhat proportionate to its contribution to the national treasury, or at least according to the number of its fishermen. Such has not been the case. Even before the agreement of 1922, Quebec did not receive its share; far from it. Take, for instance, the years 1904 and 1914, in connection with administration and fish-culture :
Year
1904.
1914.
Amount to which Quebec was entitled
Total
appropriation for both purposes $254,385 00 583,122 29
On the basis of its contribution to the
national revenue $ 67,687 00 145,630 00
On the basis of the number of its fishermen $38,088 00 74.639 00
Amount received by Quebec $16,542 32 33,129 80
In 1904, on the basis of our contribution to the national income, we should have received 29-4 per cent of the appropriation, and on the basis of the number of our fishermen, 16-6 per cent. The share we did receive amounted to only 6-5 per cent. For 1914, our share should have been 25 per cent in the first case and 12-8 per cent in the second. We received only 5-7 per cent.
May I quote a few further figures taken from the appropriations for fish-culture and administration expenses in the years immediately preceding the agreement.
Fish culture Year 1918-19
Total appropriation	
$341,211	61Quebec's share	
11,562	52Per cent	
4-8
Year 1919-20
Total appropriation	
$305,476	75Quebec's share	
13,125	21Per cent	
4-3
Administration Year 1919
Nova Scotia	 $ 90,959 48
New Brunswick	
88,818	22British Columbia	
65,955	79Prince Edward Island	
16,184	11Quebec	
7,199	95Quebec's share, per	cent	2-7
More figures could be given, but these should suffice. Our fisheries and our fishermen are still feeling the effects of this parsimonious policy. In 1906, when our lobster-banks were being overfished, the Gaspe peninsula had only one inspector of fisheries, whose territory comprised the entire lower St. Lawrence right up to and including the county of Bellechasse.

The same year Cape Breton alone, in Nova Scotia, had 27 inspectors. To-day, as everyone knows, our lobster fisheries are petering out. The average intake per lobster-trap has diminished from 66 pounds in 1890 to 8-2 pounds in 1932.
While prior to the agreement the province of Quebec received far less than its rightful share of the appropriation, its situation in that respect became much worse afterward. All grants, all contributions to administration costs ceased. Would it be possible to estimate Quebec's loss on that score? Doubtless the exact figures could be arrived at by setting down for each year either our contribution to the national income or the evolution in the number of our fishermen. That would be a long and unnecessary task, as the ratio would probably be the same as for the two years given above-1904 and 1914. The federal fishery appropriation for the twelve years following the agreement has averaged $2,000,000 a year. On the basis of our contribution to the total national income our rightful share would have amounted to $500,000 a year, or $6,000,000 for the full period. On the basis of the number of our fishermen we should have been entitled to something between $2,500,000 and $3,000,000. Wre received practically nothing, on the ground that the administration of the fisheries was a provincial matter.
To this amount must be added what Quebec had to pay directly for the administration of its fisheries and the development of fish-culture, some $150,000 a year, which in the other provinces is paid by the dominion government, and rightly so. While administra-

Supply-Fisheries
tion expenses are necessary, the fisherman cares little whether they are paid by Quebec or by Ottawa. But what he does care about is that Quebec, the provincial government which has done the most for its fishermen, is forced to divert to the administration of laws which Ottawa continues to make an amount of $40,000 to $60,000 a year which could be usefully employed directly for the development of fisheries and the improvement of the lot of the fishermen. If the dominion had, from the first decade, sought to make compensation by devoting an equivalent amount to the assistance of the fisheries of Quebec, the balance would have been restored and the question solved.
As far as fish-culture is concerned, the dominion government assumes the costs in the other eastern provinces and allows the provincial governments to draw the revenues, by means of licences and leases, derived from its restocking of their rivers and lakes. The fact of Quebec having the administration of its deep-sea fisheries in no way frees the dominion government from this responsibility.
What connection is there, indeed, between the administration of deep-sea fisheries and the artificial breeding of rainbow trout and speckled trout for the restocking of lakes and rivers? Yet, the dominion government assumes responsibility for the latter in the other provinces.
Therefore, to the above mentioned losses, must be added the sums appropriated for the administration of fisheries and pisciculture, and of which the development of the fisheries of Quebec has been deprived.
The fishermen and the fisheries of the province of Quebec have thus been fleeced. However, I do not wish to blame anybody in particular. I just wish to expose the facts in an impartial manner and assist in correcting a condition that nobody wanted, I am sure.
Could our fishermen be thus legally despoiled through the agreement of 1922? I am not competent to appreciate fully the juridical effects of that agreement, but if the federal government admits its obligation to help improving the condition of the fishermen, the contribution must be the same everywhere, and it is unjust to favour one section while discriminating against another. In my opinion, as members of the Canadian community, our fishermen can not be left out of the distribution and if they have been deprived of their natural rights by the agreement of 1922, it is through a biased interpretation unforeseen by its authors. In a democratic country, the government has no right thus to despoil an entire class of the population
of one province. Jurisprudence, if I may use that word, agrees with my assertion. To extend the help that the present Minister of Fisheries has given to our fishermen during the last few years-for which I express my sincere gratitude, on behalf of all the fishermen of the Gaspe peninsula-it has not been necessary to rescind the agreement of 1922.
As a matter of fact, the two governments have done good work. During the first decade, that is from 1922 to 1932, the progress was rather slow; in Ottawa, because of the wrong interpretation given to the agreement, and in Quebec, as a result of a lack of organization inherent in such a succession. During that period, the province of Quebec, nevertheless, did some fish-culture, organized cooperation among fishermen, helped the cold storage industry, started to train specialists, established her administrative service, promoted the classisfication of fish and encouraged through grants the building and outfitting of fishing boats. During the last eight years Quebec has increased and diversified her aid, and covered the coasts with a wonderful network of cold storage plants. She has taken the leadership in endeavouring to gain for her fishermen a place on the national fish market, and she has promoted hydrobiologic research and established a fisheries school.
During the same period, the dominion has discarded its former policy. It has established an experimental fishery station in the Gaspe peninsula. It has paid grants to indigent fishermen, extended to our province the benefit of the salt fish board and, last but not least, it has contributed to the development of education among our fishermen. Thus cooperation between the two governments is not only possible but is actually taking place.
Here is the increase in the dominion grants to the Quebec fisheries:
Year	Appropriation
1935- 36	 $ 56,465 00
1936-	37	
135,379	111937-	38	
120,288	301938-	39	
212,799	591939-	40	
360,306	17
Thus, a definite and final agreement is but the logical result of the work now being done; it will be the means of dealing with many matters that are not yet settled. Among the numerous tasks that devolve upon governmental authorities, there are some over which the dominion alone has jurisdiction and executive power; others might properly be assumed by Quebec and, finally, there are many where joint action, if carried on properly, might be twice as productive.
Among the tasks about which the dominion cannot delegate its powers to the provinces,
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may be mentioned sea patrolling and market protection. Both have an international character and it is difficult to see how the provinces could act efficiently in that respect. To those tasks could be indirectly added the classification of products. In the field of deep sea fisheries, the province of Quebec has dealt alone with that. But with respect to export products especially, would not a national classification impress importers more than a provincial one?
The proper function of the province of Quebec is to obtain a place on the national market, to promote production and to develop new industries. Finally, the two governments can actually cooperate, though not equally, in bringing about the general expansion of markets, in the development of scientific methods and their application to industry, in the extension of educational facilities and in the organization of cooperative societies. An agreement in that common field would have the advantage of preventing a duplication which, though non-existent at this time, is nevertheless, possible.
To those activities might be added fish culture. In our province and in British Columbia, the provincial authorities assume complete responsibility for it. However, cooperation by the federal government would be welcome and easily justified. In our province, in spite of the two administrative agreements concluded, the federal government has kept absolute jurisdiction over all our species of fish, without exception. I think that this should naturally entail the duty of restocking our waters. That is the case for the eastern maritime provinces and the local governments are even allowed to derive revenues from fishing licences and leases in the waters restocked at great cost through the federal government's own fish hatcheries. Quebec would be satisfied with less. Our province is doing a considerable amount of work in that field each year, but the size of the job offers plenty of opportunity for federal cooperation.
Quebec and Ottawa are fully cooperating in the development of our natural resources, especially mines and agriculture. The two governments have definite agreements in relation to youth training, unemployment, old-age pensions. Why not in regard to maritime fisheries? A few improvements in the present conditions, as I have just suggested, the defining of each one's part in the fields where the two governments cooperate, and everything would be definitely settled. In my humble opinion, it is time to give a character of permanence to this tacit but too fragile agreement, which is, however, essential to the success of the work undertaken.

I am under the impression that the agreement concluded between Ottawa and Quebec in relation to the fisheries is not complete. In order to get rid of us, the officials at Ottawa appear always ready to answer that Quebec has entire jurisdiction over her fisheries and that she has to look after their needs.
What about our share of subsidies, Mr. Chairman? We pay our share of taxes to the federal government, far more than the three maritime provinces combined. It is true that this government, as I said before and as the Minister of Fisheries explained the other day, has done more for the fisheries of Quebec than the Conservative party ever did. However, I maintain that during the war the estimates of the Department of Fisheries should not be reduced. I am convinced that the fishermen will suffer from this reduction in the estimates. The fishing industry is a national industry, just as much as agriculture, and it is during the war that we should try to obtain the best returns from it.
Mr. Chairman, I must add that I have full confidence in the present Minister of Fisheries and in the government of the Hon. Mr. God-bout at Quebec. I sincerely hope that the two governments may conclude a permanent agreement through which the province of Quebec shall obtain her legitimate share of grants.


Mr. HAZEN:: Mr. Chairman, I should like to call to the attention of the committee an injustice, which has been done certain residents in the counties of York, Carleton and Victoria in New Brunswick, whose lands front on the non-tidal waters of the Saint John river, by reason of an order in council passed on May 9, 1940, and now embodied in section .9 of the special fishing regulations affecting that province. The effect of this so-called regulation is to take away from those people rights in property which legally belong to them, without any compensation whatsoever.
To take away from a man what he owns, without his permission and without compensation, is a theft, and I charge the Minister of Fisheries and the government of this country with the theft of property, by reason of this order in council. I realize, in saying this, that I am using rather harsh language, but I use it deliberately. I charge the Minister of Fisheries and members of the government with the theft of property, and I believe the only defence they can offer is that when they passed this order in council they did not realize what they were doing. That defence,

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after all, is a very poor excuse. It does not justify their action, and it does not correct the wrong that has been done.
The regulation in question reads as follows:
The use of nets in non-tidal waters, except under a permit from the Minister of Fisheries, is prohibited.
That sounds innocent enough; but owing to the fact that no permits are ever granted, its effect is, as I have already stated, to deprive these people of their legal rights in property, without any compensation whatsoever.
In order that the committee may understand the position, I shall refer to it in some detail. At the conclusion of the revolutionary war-


The CHAIRMAN:: The language used by the hon. member is strictly out of order, according to citation 298 in Beauchesne's Parliamentary Rules and Forms.


Richard Burpee Hanson: It is all right to say that the government is committing the theft.


Thomas Vien: Order, please. The leader of the opposition should know that when the Chairman is standing he should keep quiet.


Richard Burpee Hanson: All right.


Thomas Vien: The leader of the opposition is also out of order. Will the hon. member for St. John-Albert please sit down? The hon. member stated that he used the language deliberately, language which was very strong. In so many words he charged the Minister of Fisheries with theft. That is strictly out of order, and the hon. member must withdraw.


Douglas King Hazen: I suggested they had a defence.


Thomas Vien: Order. There is no discussion permissible on the point. The language is out of order. There is only one thing for the hon. member to do, and that is to withdraw.


Douglas King Hazen: I withdraw the remark, then.


Richard Burpee Hanson: Your ruling, Mr. Chairman, is with respect to the minister, is it not?


Thomas Vien: I do not understand the hon. gentleman.


Richard Burpee Hanson: Your ruling that the charge of theft was out of order was with respect to the minister.


Thomas Vien: Oh, yes, surely.


Richard Burpee Hanson: But not with respect to the government?


Thomas Vien: With respect to the government, yes, because the government is composed of hon. members. This ruling would not apply to any other person than members of the government and members of this house.


Douglas King Hazen: In order that members of the committee may understand the effect of these regulations, it is necessary for me to explain the situation. At the conclusion of the war of the revolution the United States government passed edicts of banishment against the person and acts of confiscation against the property of those men who had been loyal to and who had fought for their king during that war. In consequence, these men, their wives and their children, who were known as united empire loyalists, were obliged to leave comfortable homes and a well-established form of living, go to the British colonies in the northern part of the continent and there, amidst great trials, hew out for themselves new homes in the wilderness. About 70,000 persons left the United States at that time and laid the foundation for a great nation in the northern part of this continent.
Some of these loyalists settled along the banks of the Saint John river in the province of New Brunswick. As a reward for their services they received grants of land from the crown. These grants conveyed not only a certain acreage of land, but, if the description of the Saint John river as given by the Minister of Fisheries on August 3 last, as reported at page 2449 of Hansard, that the waters in the summertime are very shallow and narrow, is correct, then there is no doubt that these grants extended to the centre of the stream, and that the owner of the soil was the owner of the fishery above it. There can be no question about that. I might add in passing that if the Minister of Fisheries intended by that remark to convey the idea that the river was non-navigable, I am in agreement with him. I agree with him that the river is shallow in many places, but I must take issue with him when he says that the river is narrow. I cannot give its average width, but in many places it is over a thousand feet wide.
The important point, however, is that the grants to these loyalists conveyed not only a certain area of land, but also, and I quote from one of the grants:
All . . . fishings, fishing waters . . . profits, commodities, appurtenances and hereditaments whatsoever thereunto belonging or in anywise appertaining.	*
Now grants of this kind convey what is known in law as several fisheries, and in the case of these grants they convey a corporeal hereditament. They gave the exclusive right
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of fishing to the grantees, their heirs and assigns in the waters fronting on their land to the middle thread of the river, or, as some text books say, ad medium filum aquae. If the Minister of Fisheries has any doubt about this statement, I would refer him to Hals-bury's "Laws of England," second edition, volume 15, commencing at page 42.
The most important fish that frequent the Saint John river is the salmon. There is only one way in which that fish can be caught in these several fisheries, namely, by netting. They will not rise to a fly; they will not take bait, and they cannot be caught by trolling. In consequence, from the time these grants were given about the year 1785 until last year these loyalists and their successors in title have exercised their legal right to net these fish in their several fisheries. It is hardly necessary for me to point out to this committee that netting is one of the best known and one of the oldest methods of catching fish. It was probably an old method when Simon and his brother Andrew cast their net in the sea of Galilee. It is the only way in which salmon can be caught in these several fisheries and, in consequence, the effect of this so-called regulation is to prohibit the owners of these several fisheries from exercising their rights to catch these fish in their several fisheries in the only way in which they can be caught. It takes away their rights and property; it amounts to a theft of property. It is a wrong which cannot be allowed to go unchallenged. It is an act of injustice which must sooner or later, and the sooner the better, be corrected.
The statement made in this house by the Minister of Fisheries on August 5 last, when he said, as reported at page 2454 of Hansard:
It is possible for them-
That is, the riparian owners.
-to catch by angling if they want to use that method.
-was, I regret to say, misleading and incorrect. As I have said already, these owners cannot catch these fish by angling. In all the 120 odd miles of the fiver in question, there are only four or five pools in which salmon can be caught by angling. I ask the minister to keep in mind the fact that these pools are not publicly owned. They are owned by private individuals; and if they are fished by the public-and I believe they are- it is only with the permission of the owners.
For several years prior to last year the government has required the owners of these several fisheries to take out fishing licences before they put out their nets. When this matter was before the committee last year the Minister of Fisheries stated that these

owners had never claimed that their rights had been encroached upon by their being compelled to take out these licences. In making that statement the Minister of Fisheries showed a lack of knowledge of the law. There is no question, that the government has the right to impose a licence under the British North America Act. Under that act the dominion government has .the right also to make regulations for the conservation of fish. The regulations provided that the nets used in this river should be thirty fathoms, or 180 feet in length. The practice had been for an owner to place stakes on his land and on his land under the water for a distance of from thirty to fifty feet out into the stream. The net was hung from these stakes, and then from the last stake the net was carried down river. Since the river in many places was a thousand feet wide, a net extending into it for fifty or sixty feet did not prevent the salmon from finding their way up the stream to the spawning grounds.
There is no doubt that the government has the right to make regulations. But it is one thing to regulate, and it is another thing to prohibit. It is one thing to make regulations as to how a person shall use his property, but it is an entirely different thing to say that he shall not use that property at all. The right to regulate implies the continued existence of that which is to be regulated-in this case, fishing in these several fisheries. But a prohibition takes away a right that previously existed. The effect of this regulation is not to regulate at all, but to take away absolutely this legal right in property, and that is why I have referred, as I have gone along, to this regulation as a so-called regulation. It is not a regulation at all. It is an absolute prohibition.
By orders in council passed on February 23, 1894, and February 23, 1895, the dominion government submitted to the Supreme Court of Canada a number of questions for the purpose of setting at rest differences of opinion which had arisen between the dominion government and the provincial governments regarding rivers, harbours, lakes and fisheries under the British North America Act. The riparian owners, I might say in passing, were not parties to this litigation. The case is reported in 26, Supreme Court of Canada Reports, at page 444.
The Supreme Court of Canada answered some of the questions submitted to it adversely to the dominion government, and some questions adversely to the provincial governments, and, in consequence, both parties appealed to the privy council. The privy council held that section 91 of the British

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North America Aot gave the dominion government the right to make fishery regulations, and that the provincial governments had no jurisdiction to make such regulations, but it pointed out that the aot did not convey to the dominion government any proprietary rights in relation to fisheries but gave it certain legislative jurisdiction. The privy council in the course of its judgment said:
It must be remembered that the power to legislate in relation to fisheries does necessarily to a certain extent enable the legislature so empowered to effect proprietary rights.
The words "to a certain extent" in this sentence cannot be overlooked. They are of the greatest importance. It was never expected nor was it ever intended that the power to make regulations would be exercised so as to deprive citizens of this country of what legally belonged to them.
During the course of the presentation of their case before the privy council, it was submitted on behalf of the provinces that if the power to make regulations was vested in the dominion government, the power might be abused so as to amount to a practical confiscation of property.
Dealing with this argument the privy council said:
The suggestion that the power might be abused so as to amount to a practical confiscation of the property does not warrant the imposition by the courts of any limit upon the absolute power of legislation conferred. The supreme legislative power in relation to any subject matter is always capable of abuse but it is not to be assumed that it will be improperly used; if it is, the only remedy is to appeal to those by whom the legislation is enacted.
The fear expressed by the provinces when the case was before the privy council that this power if placed in the hands of the dominion government might be abused so as to amount to a practical confiscation of property has now been realized. Section 9 of these regulations has the effect of practically confiscating private property without any compensation whatsoever. It is an abuse of legislative power which must be abhorrent to any court of British justice and to all British subjects.
The questions which the privy council was asked to answer in this case had to do with differences that arose between the dominion and the provinces over their respective powers and their respective jurisdictions under the British North America Act. But there was another question which the privy council was asked. It was asked as to the rights of the riparian owners. These riparian owners were not before the court to present their case and, 14873-242
in consequence, the court refused to pass on their rights without hearing them. The privy council said:
Their lordships must decline to answer the last question submitted as to the rights of riparian proprietors. These proprietors are not parties to this litigation or represented before their lordships, and accordingly their lordships do not think it proper, when determining the respective rights and jurisdictions of the dominion and provincial legislatures, to express an opinion upon the extent of the rights possessed by riparian proprietors.
It might be noted in passing that these judges observed a fundamental principle of British justice, namely, that when a man's rights are in question he has a right to be heard before judgment is passed. Their grasp of fundamental principles of British justice is in marked contrast to the manner in which the Minister of Fisheries dealt with these people when without hearing them, he passed a so-called regulation confiscating their property.
When I brought this matter to the attention of the house in August last and pointed out the injustice that had been done to these people, the owners of these several fisheries on the non-tidal waters of the Saint John river, the Minister of Fisheries at once rushed to the defence of this so-called regulation. I was surprised that he adopted this unjudicial attitude in view of the fact that a fundamental principle of British justice was involved. I was more surprised at the arguments he presented to this committee. He said that the regulation merely restricted a right; that all it did was to control the method of fishing; that these riparian proprietors had simply been regulated as to the method of exercising a right; that "We have not interfered at all with their right to fish, if they had a right"; he did not think the department had dealt unjustly with these people.
I take issue with him on the statements he made. This so-called regulation does not restrict a right; it is an absolute prohibition; it is not a control of fishing, but is an absolute confiscation of private property. These people have been treated like non-Aryans living under a nazi regime.


Richard Burpee Hanson: That is an indictment!


Douglas King Hazen: I do not wish to become too personal about these matters. There were some things I was going to say which, perhaps, I might just as well omit. But I will say this. It is only natural that, if you prohibit absolutely the catching of fish in certain parts of a river, more fish will be caught in other parts of that river. It is only natural that if you stop all netting, all catching of fish, and allow all the fish to reach their spawning

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grounds, more fish will be propagated. If the government of this country considers it advisable, either in the interests of wealthy anglers and their friends and supporters, or in the interests of commercial fishermen in other parts of the river, to take away from people in the non-tidal waters of the Saint John river their legal rights, to deprive them of their several fisheries, then I tell him that there is a right way and a wrong way to go about this matter. The wrong way is the method he has adopted by having this so-called regulation put into force. The right method is to expropriate the property owned by these people and to pay them what it is worth.
When private salmon clubs like the Resti-gouche or the Bonaventure wanted to improve the fishing in their river, they did not run to the government and ask it to take away somebody else's property in order that their sport should be benefited; they went to the fishermen along those streams and at the mouth of the rivers and paid them for their stands, and then they removed those stands. They acted in an absolutely legal and proper way.
I do not think there is any hon. member in this chamber who wants to see a person's property taken from him or stolen from him. But this so-called regulation has had that effect; it has taken away from these people their legal rights and property, and it has made no provision whatsoever to pay them for their rights.
The Minister of Fisheries said in August last that at some time-he did not say when- they were going to compensate these people to the extent of paying them for their boats and nets. That, as I said then, was but adding insult to injury. That is but a minor part of their claim. Their claim is based on a legal right of property. They are the owners of these several fisheries, and you cannot deprive them of their property by order in council followed by a special or any other kind of regulation.
The wrong done to these people must be righted. I regret that in the dying hours of this part of the session, I have been obliged to take up the time of this committee in discussing this matter. But I make no apology for doing so. A wrong has been done to these people. It is a wrong that must be righted, and the sooner it is righted the better.


Richard Burpee Hanson: I do not rise to discuss this matter. I merely desire to say that the hon. member for St. John-Albert has done a great service to the people

living along the Saint John river by bringing this matter so fully to the attention of the committee.
As to the legal position, I do not think there is the slightest doubt. I do not say that a property right has been taken away explicitly, but the effect of the order in council has been to take away a right which riparian owners have had since the days it was first granted. Under the constitution of the United States that would be absolutely illegal and unconstitutional; compensation would have to be made. Under our position the crown need not make compensation, but surely there is an ethical principle which should appeal to the minister. If it is the desire of the government and of the department that, there shall be no further netting in the non-tidal waters of the Saint John river, thus taking away a right which has been enjoyed for nearly a -hundred and fifty years, the only decent thing to do, and one which should have been initiated as soon as the order in council was passed, is to ascertain what the rights are worth and pay the riparian owners. It would not be a very large sum, and it would be to the credit of the minister if he would at once institute proceedings to have this done.
From the point of view of politics this is a cardinal mistake on the part of the minister. I do not know of anything better that he could have done for me in my riding than just what he has done. Make no mistake about that; this is a vote-getter for me and against the government, and also in the constituency of Victoria-Carleton. That, of course, is not a proper principle upon which this matter should be discussed. I congratulate the hon. member for St. John-Albert upon his study of the legal aspects of the matter. I appeal to the minister to have the legal position investigated if he has not already done so, and do justice to these owners.
One word on the question of lobsters. I regret that I was not in my place when the item was discussed a moment ago, but I was busy composing a cable to my former leader, and it was, I wish to assure the committee, a labour of love. I suggest to the minister that his handling of the lobster pack last year was an ilustration of how government cannot transact private business. What happened? You had a lobster pack on your hands, and an extraordinary sum of money was spent to sell this lobster pack, 5,320 cases. In a return brought down to the house, No. 131, on November 25 of last year, on the motion of the hon. member for Cumberland, we find that a total of 5,320 cases were sold up to October 31, 1940, and that the sum of 883,139 was paid, not to the fishermen, but to the canners; that the cost of operations in

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the marketing, handling and storage of the processed lobsters during the year 1940 at Halifax, Shediac, Charlottetown, and another place, was: for services, $6,733; for expenses, $2,602; making a total of $9,335, plus a sum of $538 for rental, plus $36,571 for cost of additional expenditures itemized, including $30,948 for advertising. The total expenditures, apart from the amount paid to the canners, was $46,446; the amount paid to the canners was $83,139; the total amount of the expenditure was $129,585. The actual amount received by the fishermen themselves, I venture to suggest, was less than one-third of the whole. Take away the cost, including the sum of $30,000 for advertising, take away the sum of $83,000 paid to the canners, and I suggest that not more than $40,000 of this money went to the fishermen. I am sure that half of this was paid out in the operations of the canners.
It may have been the intention of the department to help the canners, but I do not think parliament voted the money for that purpose. Parliament voted the money, if I apprehend the situation correctly, to help the fishermen and not the canners. What has been the result? Out of a total expenditure of some $130,000, I venture to suggest that less than one-third has gone to the fishermen. That is not good enough. Some other method must be adopted to deal with this industry. I suggested not long ago that the canning of small sized lobsters should be discouraged as far as possible. Anything under nine inches should be prohibited, and the propagation of the live lobster should be encouraged. It is the one method of dealing with the situation, even if the season has to be extended.
This situation arose in 1932-a short season, small lobsters. The government of the day handled it in a little better fashion. I admit that the canned lobster pack question was not to the front then. What we did in 1932 was to limit the size of lobsters that could be taken out of the water, and anything smaller than nine inches had to go back. We also extended the season for the fishermen, and the results to them were most satisfactory. Their income was more than doubled, especially in the fall. That is the only profitable method of handling the lobster fisheries. We must propagate the live lobster industry, putting the small lobsters back into the water so that they may grow and come to maturity. I suggest that, with the lobster considered such a delicacy as it is not only in our own market but in the markets of the United States, many more dollars would accrue to the primary producer than under the canned lobster industry.
In my opinion the whole situation must be reviewed, and I ask the minister to review it.


H873-242J
[Stage Direction]
Certainly the country is shocked to think that it cost this much money to sell 5,320 cases of lobster-$45,000. It is ridiculous. I do not care who is the father of this scheme; it is ridiculous. It is uneconomic; it is unsound- I cannot find adjectives strong enough to condemn it

and if the minister does not change it, he will hear further from me in succeeding years.
I know there is trouble in dealing with the situation. There is difficulty in connection with export. There is an absolute prohibition in effect so far as the other side is concerned. There is trouble in getting the product into the United States-just why, I really do not appreciate, unless it is competition with their own production. At any rate, the only solution for the lobster fishery

and I am thinking of the fishermen and not of the canners-is to propagate the live lobster industry. By c_ doing, I suggest that the lobster fisherman would get $5 for every $1 he now ^ets with his catch going to the canners.
The minister ought to look into this matter. I do not know what he is doing 'this year, but I presume he is following the course he did last year. I have not made inquiries. But if he does follow that course, and if he indulges in the costly advertising he did last year, he will hear from the daily newspapers of the country. If one wants to advertise an article of food, does anyone think that he should! go to a high-class magazine in Canada, or to the daily newspapers where people see the advertisements? Fifteen per cent of .the total amount is paid in commissions to some advertising agency in the city of Toronto. What is the connection between the advertising agency and the gentleman in Toronto who drew the $1,000 for expenses and -took no salary? Is he the advertising agent? Does the minister know? I am not going to say more about that, but I should like to have an answer to that question: What is the connection between Mr. Akins, or whatever his name is, and the advertising agency? Are they one and the same person? Will the minister review the whole position?
I suggest that the minister should do everything he can to encourage the live lobster industry and to foster exports to the central provinces and the United States where the product will find- a good buying .market, rather than to encourage further canning of this delicacy. In so doing, he will preserve the industry. If you continue taking seven-inch lobsters, how long will there be lobsters? It is suicide; it is not conservation at all. I visualize the time when there will be no lobsters if we do not do something about the matter, and we ought to do it in conjunction with the United States on the Atlantic coast.
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[Stage Direction]
Propagate this wonderful sea food, preserve it, and above all, pursue that course which will bring most in dollars and cents to the primary producers.
Jean-François Pouliot: Just one word. There is a word I do not understand in the remarks of the leader of the opposition. I have followed him closely for the last five minutes, but I think he made a slip. He is familiar with all the intricacies of the English language, but he said something that astounded me. He spoke of lobsters, a subject which is dear to his heart and which is appreciated 'by all those who are fortunate enough to eat lobster. Of course, the lobster will live; it will live long enough to be caught when it is the right size, and lobsters should not be induced to commit suicide, as the hon. gentleman has said. If the lobsters are committing suicide; if they are killing themselves, how can he 'blame the minister for that? The hon. gentleman should be more careful about his use of the English language. To-day he said that I had made a savage attack; that is another feather in my cap. But when he speaks of lobsters, would he be kind enough to explain to the committee how lobsters are committing suicide? Did he ever assist at one of these hara-kiris of lobsters? Is it done at the time they see the red bait when they are in the trap, or when they are still alive, ready to be broiled? The hon. gentleman must know. It must be one of the secrets of the Tory party.


Mr. CASSELMAN:: Why make a joke of it?


Jean-François Pouliot: The leader of the opposition made a joke of himself by using improperly the English language, a man who occupies the seat where that great philologist Arthur Meighen and that great viscount Lord Bennett of I don't know what sat. Let him explain what he meant by that.


Richard Burpee Hanson: Do not be ridiculous. You have been ridiculous all day.


Jean-François Pouliot: The hon. gentleman is ridiculous himself.


Thomas Vien: The item before the committee is for the administration of the Department of Fisheries. It is out of order to discuss questions of grammar or vocabulary.


Joseph Enoil Michaud: I regret that I cannot undertake to try to revise the great lobster industry on the principles laid down by the leader of the opposition. This committee knows well the reasons why the government was compelled to intervene in this industry. As I have already stated, it was because those interested, both fishermen and canners or

manufacturers, were fearful that they would have to close and abandon that otherwise profitable industry in view of the fact that the market of Great Britain and other European countries was closed last year by reason of the war. Up to last year, 85 per cent of the annual pack of lobsters was sold on the European market; about 5 per cent went to Canada and 10 per cent to the United States market. Last year we were faced with this situation, that twenty thousand people, depending practically on that industry on the Atlantic coast for their cash crop, were to lose it. The only cash that most of them draw out of the fishing industry is from their lobster catch, which lasts six weeks of the year in each district. Now it is being stated that, owing to the policy adopted last year by the department, the fishermen suffered. Here are the facts. First I must tell the committee that it takes two hundred pounds of live lobsters to make a case of canned lobster, or, in other words, two hundred pounds of raw material to -make a case which contains forty-eight pounds of canned lobster. Up to last year the fishermen were receiving for their raw material from three cents to four cents a pound. When we adopted this scheme last year and agreed to help the marketing of the catch, we made it a condition that the packers should pay the fishermen at least five and a half cents a pound for their raw material. Those who would offer their product to us and seek the help of our organization to dispose of it had to produce a certificate from the fishermen that the raw material cost them five and a half cents a pound. That is the first benefit derived by the fishermen.
This year we have again given this assurance to the trade, because last year was not a normal year. Had it been a normal year, with the success we had in marketing the pack, the government would not have intervened this year; but in view of the fact that it was an exceptionally low year, the trade was fearful that with a normal pack they could not take care of it. Again, a large number of people who depend on this industry for their livelihood would have been thrown out of employment, and we would have had to make it up by relief.


Richard Burpee Hanson: Does the minister speak of those employed by the canneries?


Joseph Enoil Michaud: No, the fishermen. The fishermen do not can their fish.


Richard Burpee Hanson: I know that. Do not tell me that. Why could these lobsters not be shipped to the live lobster market just as the other lobsters?

Supply-Fisheries


Joseph Enoil Michaud: Because there is a limit to the fresh lobster market. Anyone who knows anything about it should know that.


Richard Burpee Hanson: The great market of 130,000,000 people that I have heard about for the last thirty or forty years cannot absorb the lobster catch of Prince Edward Island? That is nonsense.


Joseph Enoil Michaud: There are sections in Prince Edward Island, the Magdalen islands, the northern part of New Brunswick from which it would not be feasible to market live lobsters on the Montreal, Toronto or United States market. Fishermen from those districts cannot profitably market their live lobsters in the United States in competition with lobsters from Maine.


Richard Burpee Hanson: Why?


Joseph Enoil Michaud: On account of the distance, the cost and the climate. Because of the lower temperature of the water, lobsters do not grow as large in those sections as they grow in Maine. For that reason, if the lobster is not canned, it cannot be marketed profitably. That has been established by all those who have some knowledge of that branoh of the industry. If it were more profitable for these fishermen to sell their lobsters alive rather than in cans, with the added cost of the work, the waste and the capital that goes into the plant, and cans and boxes and labels, they would do so. But it is a physical impossibility.


Mr. POTTIER:: There are too many fresh lobsters now on the market. .


Richard Burpee Hanson: If they fed them all in in one day.


Joseph Enoil Michaud: We have created a demand on the United States and Canadian markets for canned lobster such that to-day in some sections accessible to the United States market they find it more profitable to can their large lobsters and sell on that market, which is very high at the present time.
The hon. gentleman says that we spent 862,000 to market five thousand cases. That is wrong. We spent that money to help market the whole pack, which was 58,898 cases.


Richard Burpee Hanson: Then the minister's return is wrong. I have a return certified by the deputy minister showing the total number of cases was 5,320 plus forty-five.


Joseph Enoil Michaud: It all depends upon what question the hon. member for Cumberland asked. The whole pack put up by the industry last year was 58,898 cases, and our endeavour
was to help the industry to market that pack. We would rather not have marketed any, had the industry been willing to market it all. But they came to us and told us that they were fearful, and had had no experience in the domestic and United States markets. The most which had been marketed on the Canadian and United States markets in the past had been 15,000 cases. They were expecting to put up 70,000 cases, and they actually put up 58,898 cases. They asked us to help them to market the product. They suggested, and we all agreed to confer. We got them into a conference before the opening of the season, and it was agreed that the best way to proceed was to create a demand on the home market.


Richard Burpee Hanson: The minister knows nobody wants canned lobster if he can get fresh lobster.


Joseph Enoil Michaud: Yes, but how many can afford to buy fresh lobster? In the winter time it cannot be purchased. It is available only during a restricted period of the year, and the cost of keeping fresh live lobster is tremendous. People in Toronto and Montreal are the largest customers. It would be scarcely physically possible; and even if it were possible, the price of taking the commodity to those markets, and keeping it there in a fresh condition, live, all the year round, would be so great that the cost could not be absorbed.


Richard Burpee Hanson: Of course it could not be handled in that way. It could not be kept on the fish market, but it could be kept by those to whom the producers sell. That is so, because I have seen it done. It can be fed into the market in the early months of the year, and in the fall.


Joseph Enoil Michaud: Yes; but that is a limited and restricted market. It is a de luxe product.


Richard Burpee Hanson: Quite so.


Joseph Enoil Michaud: We proved last year that this is a commodity which a great number of people will take, when they are educated to it. We succeeded in educating them. I shall give the committee an indication of what I mean. Last year on the Canadian market we sold 28.000 cases, while in the past we had marketed only 3,000 a year. We marketed on the United States market 30,366 cases, while in the past we had marketed only 12,000 cases.


Richard Burpee Hanson: All right, carried.


Joseph Enoil Michaud: Now-


Richard Burpee Hanson: Carried.
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Joseph Enoil Michaud: -about advertising, we had figured on a production, last year, of 70,000 cases. We could not spend more than $50,000. We thought it was reasonable, based on the possible production of 70,000 cases.


Richard Burpee Hanson: It does not look reasonable now, does it?


Joseph Enoil Michaud: Yes, it does. It was not intended to be a yearly appropriation. It was intended only for last year and, as I said before, had production last year been normal we would have discontinued it. The industry, with the cooperation of the government, has proved that the whole pack can be marketed, both in the United States and in Canada.


Mr. KINLEY:: It was an innovation, to meet an emergency.


Richard Burpee Hanson: Oh, the reserves are called up.


Joseph Enoil Michaud: The criticism which has been lodged by the leader of the opposition is about the only criticism we had had so far with regard to this matter.


Richard Burpee Hanson: Then the minister has not read the daily newspapers.


Joseph Enoil Michaud: The daily newspapers are not criticizing. Some have asked for explanations. I am coming to that. My hon. friend knows the value of advertising. In the past, when we had a sum sufficient to spread it across the country, we did spread it among all the publications in Canada. There are 961 daily and weekly newspapers we could use. Had $50,000 been distributed among 961 publications, no single publisher would have received a great deal. We have thought that lobster can best be advertised, with only a limited amount of money at our disposal, by using coloured advertisements. We use coloured advertising exclusively, for two reasons: We think it is the most appropriate way of advertising lobsters; second, we were restricted in the amount of money we had to spend, and we thought that in view of the small amount we had, this would be the best means to get our product before the public. The result from last year's experience has proven that method to be satisfactory.
The hon. member has asked for information regarding the gentleman who carried on the advertising. I do not know his relationship with the Walsh advertising agency, except that he has had advertising experience. He holds himself out as the Toronto agent of the Walsh advertising organization, the head office of which is at Windsor, Ontario. Advertising is always placed on the same basis, namely,

on a space basis. Payment is made on a tariff rate arranged among the publications in Canada, including the daily and weekly newspapers and magazines. That tariff is known and published. It is checked by the treasury, and they all charge the same rate. We have nothing to do about it; we cannot change it. The publications control those rates, and we must submit to them.


An hon. MEMBER:: Carried.


Joseph Enoil Michaud: Pardon me; with regard to the Saint John river I would make one or two observations. I have no doubt that the hon. member for St. John-Albert was not serious when he accused me of theft. He has since given me a certificate of honesty, and I am satisfied. I suggest, however, that he was not altogether fair, nor was the leader of the opposition, when they based their whole argument on the fact that we were depriving these good people of a vested right. It was not our intention to do so, and I am sure we did not deprive them of the vested right of fishing.
Prior to last year that portion of the Saint John river above tide-water was the only nontidal water in which salmon was netted. In all other provinces and in all other waters the netting of salmon was not permitted. The action has been taken for the purpose of conservation. This controversy has extended for many years. The leader of the opposition knows that when he was a minister representations were made-


Richard Burpee Hanson: We resisted them.


Joseph Enoil Michaud: Yes, I know. But the hon. member was in a difficult position. Several of those people, availing themselves of the opportunity of taking out licences for the netting of salmon, were residents of his constituency, and also voters. I do not blame him for resisting the representations made, and for not implementing those recommendations.
But we have not deprived these people of their rights. Regulations have been enforced against these people which provide that they shall not fish after dark; that they shall not fish in months other than those between May and August; that they shall not fish with certain kinds of flies. There have been many restrictions. There were restrictions on those who did not avail themselves of the privilege of taking out a licence. We have now told them-


Richard Burpee Hanson: The minister has been referring to regulations. The

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department is legally entitled to regulate, but it is not entitled to pass a regulation which has the effect of confiscation or prohibition.


Douglas King Hazen: Hear, hear.


Richard Burpee Hanson: There is a legal distinction.


Joseph Enoil Michaud: We did not confiscate. We simply said, "You shall not use your right-"


Richard Burpee Hanson: Without permission.


Joseph Enoil Michaud: "-without permission, if you wish to use a set net."


Richard Burpee Hanson: But the minister will not issue a permit. That is the effect.


Joseph Enoil Michaud: We say, "If you wish to avail yourself of your right to take that fish with a hook and bait, or with flies, there are no restrictions whatsoever." It has been said that these fish do not rise to a fly. Well, statistics taken last year show a different story.


Douglas King Hazen: Whereabouts? Was that not in the pools?


Joseph Enoil Michaud: No; all along the river.


Douglas King Hazen: Does the minister say "all along the river"?


Joseph Enoil Michaud: Yes.


Douglas King Hazen: I take exception to that.


Joseph Enoil Michaud: Last year there were 1,072 salmon and 2,529 grilse caught in that portion where fishing with nets was restricted.


Douglas King Hazen: Has the minister the number caught in the pools, and how many pools are there?


Joseph Enoil Michaud: No; I have not that information.


Douglas King Hazen: Were all the fish mentioned caught in pools?


Joseph Enoil Michaud: I cannot give that information.


Richard Burpee Hanson: What are those figures based upon?


Joseph Enoil Michaud: Upon reports from the inspectors.


Douglas King Hazen: The minister knows that
salmon are caught in pools by angling only.


Mr. ROWE:: You said they were caught both ways.


Douglas King Hazen: The hon. member for Gaspe (Mr. Roy), who is not here this evening, has asked me to submit a question. He would like to know if the minister proposes to grant any subsidies to assist in the construction of barkentines which, I understand, are small schooners, along the Gaspe and Atlantic coasts?


Joseph Enoil Michaud: There is no such intention.


Douglas King Hazen: I understand that a firm
known as the Canadian Cod Liver Oil Company, Limited, has established a plant at Rimouski to manufacture cod-liver oil. Has this company received any financial assistance in connection with the construction of the plant or the purchase of the land? What progress is being made at this plant? Has the minister given any consideration to the bonusing of the fishermen who supply cod-livers to the plant?


Joseph Enoil Michaud: A plant to reduce cod-livers has been established at Rimouski in the province of Quebec, but this company has not received any subsidy or grant from the federal government. There has been no application made to the department for the payment of subsidies to fishermen who deliver livers to this plant, and I doubt if it would be possible. I understand that this company has a system of collecting the livers .along the coast and has centralized the reduction at Rimouski.


Douglas King Hazen: What amount has the plant produced up to the present time?


Joseph Enoil Michaud: I have not that information.


[Stage Direction]
Item agreed to.
74. Fish culture, $190,000.
Angus MacInnis: Might we have a breakdown of this item?


Joseph Enoil Michaud: The particulars are given at page 85 of the estimates: Salaries and wages, $109,825; allowances in lieu of dwellings, $515; printing and stationery, $950.


Angus MacInnis: It is not necessary for the minister to read those items because I can see them for myself. What I wanted was the division as between the Atlantic and the Pacific coasts.


Joseph Enoil Michaud: With the exception of a small item for the western division, this amount is all spent in the east. A few years ago the fish culture activities which the federal government had been conducting on the Pacific coast were turned over to the province, which undertook to carry them on.


[Stage Direction]
Item agreed to.
Supply-Fisheries
[Stage Direction]
82.	Special. To provide for the extension of educational work in cooperative producing and selling among fishermen, $25,000.
Joseph Alphée Poirier: Mr. Chairman, I would like to say a few words on item 82. I want to thank the minister for the grant he has given to the school of fisheries at Sainte-Anne-de-la-Pocatiere. That $8,000 grant from the Department of Fisheries has been very useful, for the last few years, to the fishermen of my constituency and to those of Gaspe. The technicians who belong to the teaching staff of the school of fisheries, and Mr. Alexandre Goudreau in particular, have organized throughout the Gaspe peninsula cooperatives which have been of immense advantage to our fishermen. I call this item in particular to the attention of the minister and I hope that the grant will be continued. Already the different cooperatives organized have 1,681 members belonging to 11 syndicates operating, thanks to the grant which the Minister of Fisheries has allocated to the school of fisheries of Sainte-Anne-de-la-Pocatiere for the last few years, and as the estimates have been reduced, I am afraid that the minister might reduce the grant. Should the minister discontinue or reduce the grant to the school of Sainte-Anne-de-la-Pocatiere, I fear that the cooperatives and the syndicates which have helped our fishermen to recover from a very difficult situation could not survive by their own means, as they are not strong enough yet. I beg the minister to show the same sympathy to the school of Sainte-Anne-de-la-Pocatiere and to continue the grant through which the cooperatives and syndicates of Gaspe have been developed to the point where they have sold last year over 6 million pounds of fillets.


[Stage Direction]
Item agreed to.
83.	To provide for assisting the salt fish branch of the fishing industry, $400,000.
Douglas King Hazen: How much of this vote was expended last year?


Joseph Enoil Michaud: The payments were as follows:
Number of
Province	fishermen Amount
Nova Scotia	
8,973	$169,203	32New Brunswick	
2,768	35,073	30Prince Edward Island.	629	11,398	74Quebec	
6,239	117,629	00
Included in the latter amount are payments to 2,553 fishermen in the Magdalen islands, totalling $48,210.69.


Alan Webster Neill: What about British Columbia?


Joseph Enoil Michaud: There were no payments in British Columbia because they produce no salt fish.


Mr.   EINLEY@: What is the total for the
maritimes?


Joseph Enoil Michaud: It is $333,680.95.


Douglas King Hazen: I do not wish to take up time unduly to-night, but did I understand the minister to say that the number of fishermen assisted was 2,768?


Joseph Enoil Michaud: That is right.


Douglas King Hazen: Would the minister at his convenience furnish me with the number of persons assisted in each county of New Brunswick in which assistance was given, the names of such persons and the amount they received?


Joseph Enoil Michaud: I think that can be done. If the hon. member asks for that information, we shall try to get it.


Douglas King Hazen: It will be a long answer, but I should like to have it.


[Stage Direction]
Item agreed to.

[Stage Direction]
1,9. National Housing Act, administration, $89,390.
Alexander Malcolm Nicholson: I have the National Housing Act of 1938 before me and, according to the preamble "it is in the national interest that a limited experiment in low-rental housing should be undertaken now, creating needed employment and directing public attention to the importance of housing problems generally, and providing a basis of experience on which the provinces and municipalities may follow sound and proven policies in the future." Then by section 3 the minister, with the approval of the governor in council, may:
(a) carry on or arrange for the carrying on of investigations as to housing conditions and the adequacy of existing housing accommodation in Canada or any part of Canada and as to the best means to be adopted to improve housing conditions.
Would the minister make a statement regarding the position in Canada at the present time as a result of the work of the housing administration in accordance with section 3 (a) ?


Hon. J. L. ILSLEY (Minister of Finance):: I am not prepared to deal adequately with that question to-night. The hon. gentleman is really asking me to give the committee a survey of housing conditions all over Canada. It would be a pretty lengthy undertaking, and I am not in a position to give it to-night.


Alexander Malcolm Nicholson: I am sorry I was not in the house a week ago Monday when a discussion took place on the tax on building materials. To my mind, as I indicated when discussing the budget on May 7, housing is one of the most important national problems at the present time. If the minister cannot give this information to-night, would he agree to let this item stand until to-morrow and give the committee the information then?


James Lorimer Ilsley: If the hon. gentleman wants the information for himself I shall get it for him; but if he wants it for the House of Commons he is asking for it at a very inconvenient time in the session. His question would involve a survey of housing conditions throughout Canada, and to cover that would require a forty- or sixty-minute speech. Generally speaking, I may say that there is a war-time housing problem, and that is the immediate and pressing housing problem. That is being solved by War-time Housing Limited, which is a corporation set up by the Department of Munitions and Supply. The problem with which that corporation is concerning itself has not much to do with the National Housing Act.
The National Housing Act, as the hon. gentleman has stated, was passed at a time when there was unemployment in the country, and had as one of its objects the furnishing of employment and the encouragement of building because there was unemployment at that time. That particular reason no longer exists, although perhaps there are some other reasons why the housing act should be carried on. Consideration is being given from time to time to the National Housing Act. We have not yet terminated it; we are still carrying it on. It provides assistance to private builders of houses, and there is a considerable demand. On the other hand, it is just a question whether the government at a time like this should go into any expenditures or incur any obligation to assist in the private building of houses. The two problems are entirely separate. The war-time housing demand exists in localities where there has been a rapid expansion of war industry and where temporary housing would probably not be required after the war. That is one problem. The other is to assist persons to own their homes at reasonable prices with government assistance. That is another problem entirely, and we are certainly not extending the field of those operations. More and more people now are able to assume those responsibilities themselves.


Alexander Malcolm Nicholson: I am still not satisfied
with the answer which the minister has given. I know that a war-time housing administra-


REVISED
[Stage Direction]
, 1941
Supply-Finance-Housing Act
tion has been set up, but according to a return tabled on June 4 there were not any housing units completed up to May 1. Contracts had been let in Halifax, New Glasgow, Dartmouth, St. Catharines, Welland, Merritton, Hamilton, Fort Erie, Peterborough and Fort William. As I pointed out on May 7, I believe the government is not attaching sufficient importance to this phase of our war effort. On that occasion I mentioned that in the United States in the last war there was a wastage up to 10 per cent as a result of not having housing available in strategic centres. The Minister of Munitions and Supply stated this afternoon that we are embarking on a $400,000,000 munitions undertaking. Five per cent is a very conservative estimate in view of our serious housing shortage to-day compared with conditions at the beginning of the last war, because we have a surplus of possibly 1 per cent of houses in Canada to-day compared with 7 to 15 per cent of vacant houses at the beginning of the last war. Supposing there is a 5 per cent wastage, we are going to run into a tremendous outlay. We have set aside $10,000,000 for wartime housing, but I am not at all satisfied that the government are giving the direction to this problem which they should. The personnel of the directors would indicate that they are dollar-a-year men who are giving their services free of charge. As I pointed out the other day, I think we should have men, and women too, directing the affairs of this organization on a salary basis. In my opinion there are too many dollar-a-year men directing important undertakings.
Thomas Vien: I am sorry, but the hon. gentleman is now discussing the war housing scheme, which is not before the committee. We are discussing the housing act.


Alexander Malcolm Nicholson: Well, according to
section 3 of the act the minister is charged with carrying on or arranging for the carrying on of investigations as to housing conditions and the adequacy of existing housing accommodation in Canada or any part of Canada and as to the best means to be adopted to improve housing conditions. I shall try to confine my remarks to the various clauses of this act.
With regard to the situation in Halifax, the hon. member for Rosetown-Biggar made some reference to the serious shortage in that important centre, and I am told that he was called to task by one of the hon. members for that city. I find in the Halifax Chronicle of June 4, a letter written by Doctor H. B.
Supply-Finance-Housing Act

Atlee, of the medical faculty of Dalhousie university, in connection with the situation which exists in that city.
Your columns this morning contain the information that Mr. M. J. Coldwell has been "censured in some quarters" for bringing to public attention the condition of the slums of this city. Surely this represents ostriehism in its blatant and unabashed form-that ostriehism which, head hidden in the sand-


Thomas Vien: Order. Again, this refers to a war condition which is intended to be taken care of by the war housing scheme, and therefore the housing act has nothing to do with the conditions to which reference is made.


Angus MacInnis: Does the chairman assert that there would be no housing difficulty in Halifax if it were not for the war? There is a housing condition existing in every city in Canada, war or no war. It is really nonsense to say that there is no housing trouble in Canada except that which is caused by the war.


Thomas Vien: I am not suggesting
that. I am suggesting, if I understood rightly the article which the hon. member was reading, that it refers to a housing condition created by the war. If I am not correct; if this is a condition which could be covered by the housing act, that is different.


Alexander Malcolm Nicholson: I think, Mr. Chairman, if you listen to the letter, you will agree that it-


James Lorimer Ilsley: Mr. Chairman, on a point of order-and I am just asking for a ruling on this-is it not contrary to the rules of the house to permit a newspaper letter to be read in answer to a speech of a member of this house? I listened to the hon. senior member for Halifax the other day, and it was quite open, I should think, during that debate, and perhaps at the present time, for an hon. member to answer his speech, but to read a letter from a citizen of Halifax rebutting the speech of a member of this house, is, I believe, strictly against the rules.


Richard Burpee Hanson: That is right.


Ian Alistair Mackenzie: Yes; that is so.


Thomas Vien: On the point of order,
it is not in order to read articles from newspapers or letters written by private persons outside the house. Some brief reference can be made to them, and to articles in newspapers, but it is an abuse if the whole article or a lengthy letter is read. If no exception is taken, sometimes it passes as a measure of latitude given to an hon. member. But it is

against the rales of the house to read articles from newspapers or private letters which originate elsewhere. Brief references to them may be made, but the reading of such documents is against the rule.


Alexander Malcolm Nicholson: I am very glad to bow to your ruling, Mr. Chairman. I refrain from making further reference to this letter. I should like to urge hon. members to read the Halifax Chronicle of Wednesday, June 4, and see what a distinguished medical practitioner in the city of Halifax says about the urgent housing problems of that city. Since I am not permitted to proceed along that line, I wonder whether the minister would make a statement regarding section 3 (b):
. . . investigations as to plans or proposals that have been adopted elsewhere than in Canada. . . .
I should imagine that his national housing organization, in carrying out the provisions of this act before the war-time housing scheme was set up, would have instituted a survey of housing problems across Canada, and I do not think it is too much to ask the minister to give the committee the result of findings made by that administration to cope with an urgent problem.


Douglas Gooderham Ross: I have listened
with great interest to what the hon. gentleman has had to say. I have been connected, as a matter of fact, with the Toronto housing company for a great many years. I thoroughly approve the stand which the government are taking to-day in connection with their temporary housing arrangements. I do not think this is an appropriate time for the government to spend money on permanent homes; the government need the money for war-time expenditures. I thoroughly approve the government's plan. Furthermore, these people who will be housed in various sections of the country owing to the contingencies of the moment will probably not remain in those districts after the war. Therefore we do not want to build up in the different communities a permanent provision for something which is not going to be permanent. I approve the plan of getting people to buy war savings stamps, invest in victory loans, and so forth. They will have something stored away, so that when the war is over they will be provided with some capital, will be able to return to the communities whence they came, and where permanent businesses will be established, and have some resources to go on with. Then, I believe, will be the time for the government to provide money for the construction of permanent homes.

Supply-Finance-Housing Act
If I may have the indulgence of the committee, because I must plead that I was a little deaf in missing the item when it came up, I should like to revert for a moment to item 46- I shall not occupy more than a minute or two.
Item 46 relates to a question of administration. I hold in my hand the report of the standing committee on banking and commerce, under date of Thursday, June 1, 1939. This committee was set up for the purpose of going into the monetary system of Canada, and it served a useful purpose. We had before us a great many witnesses, and those hon. members who sat on the committee had an opportunity to air their own particular theories and views. I am sure the minister will agree with me when I say that the meetings of that committee, at which we had evidence from such distinguished men as Mr. Graham Towers and Mr. Clark, have stopped a great deal of talking in the House of Commons by lion, members who know nothing whatever about banking or commerce. I admit that, having been a member of that committee, I did glean a little knowledge, and I think we got some idea of how little everybody knows about the monetary system to-day. I would refer to this statement in the committee's report:
Your committee has been unable in one session of parliament to complete its study of so wide a subject and recommends that the study of the subject be continued during future sessions of parliament.
All the members of the banking and commerce committee, the hon. member for Queens-Lunenburg (Mr. Kinley), the hon. member for Rosthern (Mr. Tucker), the hon. member for Vancouver-Burrard (Mr. McGeer) and all others, took an intense interest in the study which we carried out that time. We heard many witnesses, and a great deal of good was accomplished. I was going to make a suggestion. We have had a considerable amount of discussion on the budget. We have talked a great deal about it, and there are a good many members of the house-I saj' this with all due respect to all the members of the House of Commons including myself-who do not know everything. As a matter of fact, sometimes a good many of us have talked about things we do not know very much about. We are going to have to raise more money during the war, and my suggestion is that we have a meeting of the banking and commerce committee again along these lines.
I am sure the members of the committee will all be glad to serve on it and to give their time and talents to the work, with a 14S73

243}
view to offering the minister suggestions which would help him in his work. We could study the monetary system and also the principles of taxation. I might refer the minister to a few remarks he made in connection with taxation. He admitted on several occasions that he was inexperienced, and I do not think that is to his discredit. He has done a marvellous job in a great many ways, and it is all the more credit to him to admit his inexperience in some matters. Not only that, but he has imposed certain taxes which he has had to take back, and I admire him for so doing.
At any rate, I believe that a good deal of controversy could be eliminated in the way I have suggested, if the banking and commerce committee were allowed to convene next October, or whenever we come back, and call witnesses.
The deputy minister in his report has given some outstanding information. I certainly give him credit for it. No one knows more about most of these matters than Mr. Towers, and his views were very useful. The trouble is, there are so many subjects connected with the question of taxation. It is a study in itself. The law of diminishing returns is something that must always be kept in view. I am not a student of economics, but I have a little common sense and that is all we need. Without disclosing any idea of what there was going to be in the budget, the minister would get a vast amount of information from all parts of the country, from all members of the committee. From my own observations in the banking and commerce committee I doubt very much if another body of men could be found in Canada with a broader knowledge of three things-human nature, psychology, and banking and business.
I would also compliment the chairman of the committee, who is an economist of no mean understanding. There are a great many men in this country whom we could have before us, who have their own ideas. We could find out many things that wrnuld be helpful. We could have before us people from various parts of Canada, the westerner and the easterner, expressing their respective points of view with regard to taxation. Principles would be discussed, and everything would be done without disclosing what the budget would contain. We could get the advantage of the best brains in the country.
The minister has been so frank in some of the statements he has made in connection with taxation that I would urge upon him the
Supply-Finance-Housing Act

importance of having the banking and commerce committee functioning. The minister knows how broad the whole subject is. I know the hon. member for Queens-Lunenburg and all the other members of the committee will bear me out.


Mr. BLACKMORE:: I wish to associate myself with the hon. member for St. Paul's (Mr. Ross) in advocating that the banking and commerce committee be used for the purposes he has outlined. I am positive that before long the government will see its need to know more about money than it does at the present time; the most reactionary people will learn something progressive about money. I therefore take pleasure in supporting his proposal.


Thomas Langton Church: Under the national housing act a great deal of good work has been done in the outskirts of some of the larger cities; but during the debate the other night when reference was made to the administration of the act, and the details of the item on page 79 of the estimates, it was not pointed out that the whole thing grew out of what was done by the Bennett government when my motion for a housing committee was adopted. In 1935 a committee was appointed on this motion to consider the whole housing and reconstruction situation. It sat for three months and brought down a splendid lot of recommendations which resulted in the setting up of this act and a federal housing policy, and according to the figures given by the minister, something like $50,000,000 has been spent to date on it. One resolution which I myself proposed was adopted, namely, that the work should be done not by a government department but through the banks. The work has been well done, and I trust that, in view of the high cost of building, the need of small homes in cities and the high rates of interest- six and a half and six per cent, and some of the shark loan companies take bills of sale and chattel mortgages-the minister will take some steps to work out a continuing policy for the next few years of small houses which are badly needed.
There is some duplication in the administration of this department since the war started, and War-time Housing Limited is building these fabricated houses in Halifax and other places. I was looking over the situation in Toronto the other day, and I appreciate the work the department has done. I hope they will still continue and extend it, and take some measures through the banks or loan companies to advance money to these small wage earners, many of them munition workers, for the building of small houses. The Bruce

report on housing in Toronto did not build any houses; it got some tom down because the city amended the by-laws, but the city of Toronto was one of the pioneers in housing. I do not agree with what was said here some three weeks ago about Toronto. Toronto has no slums; it has a few dilapidated houses, but the statements made were totally incorrect. Anyone visiting the outskirts such as Leaside would see many excellent small houses. Travelling between Toronto and Muskoka and Parry Sound and other parts of new Ontario, one sees unsuitable dwellings. I hope this work will not be forgotten during war time because it is one of the most necessary things the government can do, and this department has done good work.


Alexander Malcolm Nicholson: Would the minister answer my question about the survey work carried on by this department prior to the setting up of War-time Housing Limited? .


James Lorimer Ilsley: The national housing administration ever since it was set up has been making surveys in various parts of the dominion so as to acquaint itself with housing needs. That is in the ordinary course of its work in administering the National Housing Act. The surveys they made, the information they gathered, were of value to the government when the government was formulating its policy with regard to war-time housing. The government has full appreciation of the importance of supplying housing, seeing that temporary housing is furnished for these war industry centres, Halifax for example. But as I said, that is a different field of activity from that of the national housing administration. The tendency will be not to extend the national housing administration activities, but the acute housing problem in various parts of the dominion brought about by war conditions is being attended to by War-time Housing Limited, which is under the department of my colleague the Minister of Munitions and Supply, not the Department of Finance.


Alexander Malcolm Nicholson: According to an order in council passed on February 24 set out in section 4, paragraph (c), it would be the duty of War-time Housing Limited to draw upon the personnel and other technical resources relating to housing at present in the government service, and in particular to utilize the services of the housing branch of the Department of Finance. In the order for return part of my question was:
Were members of the staff of national housing moved to Toronto and later brought back to Ottawa? If so, for what reason?

Supply-Finance-Housing Act
And the answer to that was:
Some members of the housing administration, Department of Finance, were temporarily moved to Toronto to assist in the organization of War-time Housing Limited. When their services were no longer required in this connection they returned to Ottawa to the housing administration.
Would the minister explain the relationship between those two departments? Why were some sent to Toronto and then called back, and what is their present position?


James Lorimer Ilsley: At the present time there is no relationship between them, except that national housing administration is making available information they gathered. But employees of the national housing branch are not now working for or in War-time Housing Limited. War-time Housing Limited has perfected its own organization, and the initial assistance which it received from Mr. Nieolls and this branch has ceased. The employees who went to Halifax to assist at the beginning have come back to Ottawa, and the two organizations are now separate.


Alexander Malcolm Nicholson: From the speech the minister made on June 2, I gather that he plans on national housing going out of business. He indicated that while national housing activities are all right in peace time, now the job should be done by war-time housing.


James Lorimer Ilsley: They are two different jobs. I did not, I think, say anything to the contrary on June 2. I have said that the tendency is to curtail and not expand: the activities of the housing branch, but that is different from going out of business. The hon. gentleman must realize that they have a tremendous job to do in any event with regard to the present investment the government -has in all parts of the country in housing. No decision has been reached to cease further advances under the National Housing Act.


Alexander Malcolm Nicholson: I understand -that the rules prevent me from reading from previous debates, but the minister's reference on June 2, carried to its logical -conclusion, would mean that national housing would automatically fold up for the duration of the war. I have been trying for six weeks to get information as -to what War-time Housing Limited is doing, and I think the minister's department, the Department of Pensions and National Health, which has also done a good deal on the housing question in Canada, and the national research council, which has carried on very valuable research work, should be used by War-time Housing Limited.
I referred to this order in council passed on February 24, and I find that another order
in council passed later, on April 24, rescinds that very important section. Would the minister explain what is happening? I think it was good business to pass the order in council of February 24 saying that-
... it may draw upon the -personnel and upon the economic and other technical resources relating to housing presently available in the government service, and in particular shall utilize the services of the housing branch of the Department of Finance.
Therefore some explanation should be given why it was decided on April 24 to reverse that policy.


James Lorimer Ilsley: I gave the explanation. The employees of the national housing branch assisted War-time Housing Limited in the initial stages. Then it was decided by Waintime Housing Limited that it would be preferable for them to go on with their own organization, not using the employees of another branch of the government. By mutual consent it was decided that those employees should return and continue in the employ of the national housing branch.


Ian Alistair Mackenzie: Might I intervene to say that by consent it has been arranged to sit until midnight. Therefore a formal motion will not be
necessary.


Alexander Malcolm Nicholson: According to this return the staff of national housing was moved to Toronto-


James Lorimer Ilsley: Some members of it.


Alexander Malcolm Nicholson: -to assist in the organization of War-time Housing Limited. How long were they there, and how extensive was their work in setting up War-time Housing Limited? I have been trying to find out what is going on in War-time Housing Limited. I still think they are not very well organized. How long was the staff of his department setting up War-time Housing Limited? How long did they work?


James Lorimer Ilsley: Some of them were in Toronto nearly a month; some, not so long.


Alexander Malcolm Nicholson: I realize that members of the committee are anxious to complete the business, and I certainly would not take the time of the committee unless I considered that this was an urgent question which is not receiving the consideration on the part of the government that it deserves.


James Lorimer Ilsley: The hon. member is wrong about that, I can assure him.


Alexander Malcolm Nicholson: There are three departments of government which have given important consideration to this problem. My information is that their services are not being used by War-time Housing Limited. I refer to the
Supply-Finance-Housing Act

Department of Pensions and National Health. I have before me a pamphlet they produced in 1938. It indicates that they have made a careful study of the whole question of housing, as it relates to the public health of Canada. I commend the department for this excellent publication. The bureau of national research has carried on scientific work in this field. My information is that their research facilities and their services are not being used by War-time Housing Limited.
The minister has not satisfied me so far as to why this order in council was passed on February 24, requiring the personnel of the national housing administration to be used by War-time Housing Limited. These are men who had training in their particular field. They are men over whom we have some control. On the other hand War-time Housing Limited is under the control of a group of directors who are serving on a dollar-a-year basis, without remuneration. They have engaged one Victor T. Goggin as general manager at $10,000 a year. I suggest that this procedure does not establish confidence in the minds of the people who have been interested in this problem.


Thomas Vien: The hon. member is discussing the hiring of a man by War-time Housing Limited. That has nothing to do with the subject matter before the committee. Whether or not the Department of Munitions and Supply has hired a man at a salary of $10,000 is not relevant, so far as the present item is concerned. It might be considered when we are discussing the estimates of the Department of Munitions and Supply.


Major James William Coldwell: As I understand it, the hon. member is asking why the organization already in existence has not been used, and why another organization has been set up. That is his point.


James Lorimer Ilsley: Yes, I know. I have answered the point, as best I can. I have told about the beginning of the activities of War-time Housing Limited in Toronto. I have told how Mr. Nicolls assisted in the initial stages. I have described how it was decided, by mutual consent-certainly it was the opinion of Wartime Housing Limited, and I believe it was also the opinion of Mr. Nicolls-that it would be better if War-time Housing Limited got together its own staff and its own organization, thereby permitting Mr. Nicolls' staff to return to Ottawa. They had plenty of work to do, themselves.
It was considered desirable that those two organizations continue separately, instead of together. Because the terms of the order in council seemed to make it obligatory upon

the members of the national housing administration, the employees of the national housing branch, to serve in War-time Housing Limited -something which War-time Housing Limited, after a trial, considered undesirable, and a consideration in which Mr. Nicolls concurred- the change in the order in council was made.


Alexander Malcolm Nicholson: I believe hon. members in all parts of the house are proud of the accomplishments of the national housing administration. The minister stated that prior to the setting up of War-time Housing Limited, a survey had been made regarding needs in Canada. That was part of the routine work of national housing. Can the minister give any good reason why the national housing administration could not have gone on and carried out the work now being undertaken by War-time Housing Limited? Could it not have done that work more efficiently and more economically for the Canadian taxpayer?


James Lorimer Ilsley: That is a different matter altogether. They could not do both.


Alexander Malcolm Nicholson: Why not?


James Lorimer Ilsley: Because they have too much to do in the national housing end of the work. The national housing branch has a long-term and a steady job, of a particular type. They are working on one problem, while War-time Housing Limited is dealing with a temporary and a different type of problem altogether. It is dealing with temporary, government-built and government-owned houses. Other houses are not government-built or government-owned. They are permanent houses, privately built, with government assistance by way of loans. It is a different matter entirely.
We felt that the building of temporary houses was a war-time problem, a temporary problem, and one of the type for which the Department of Munitions and Supply was designed. The Department of Munitions and Supply did take charge of the problem. They used our employees for a while and, under circumstances I have indicated to the committee, they decided that it would be better for them to go on with their own organization, completely, and to let the national housing administration continue with its good work.


Alexander Malcolm Nicholson: If I understood the minister correctly, he pointed out that before War-time Housing Limited was set up, the national housing administration went to those points where there were acute housing problems, and carried out their survey work.


James Lorimer Ilsley: Yes.

Supply-Finance-Housing Act


Alexander Malcolm Nicholson: Were they not making a plan to deal with this problem? Were they not changing national housing activities so that they could enter the field of pre-fabricated houses, or temporary houses? Was there any definite reason why the national housing administration might not enter the temporary housing field, and do it more economically and more efficiently than Wartime Housing Limited?


James Lorimer Ilsley: It was thought they could not.	.


Alexander Malcolm Nicholson: Why?


James Lorimer Ilsley: They may have had plans to do that, but it was decided by the government that the other plan would be the better way of doing it.


Alexander Malcolm Nicholson: I say that the minister is handing over 810,000,000 which should be given to the national housing administration. That is something to think about, and something which ought to be the concern of this committeg. I realize that a discussion of War-time Housing Limited activity does not come under this vote, and I must bow to the ruling of the Chair. But I suggest that the minister of this department has something to answer for.


James Lorimer Ilsley: Of this department, do you say?


Alexander Malcolm Nicholson: Yes, the department of the Minister of Finance has something to answer for in failing to keeping the activities under a government-controlled organization-


James Lorimer Ilsley: I have no ambition to take charge of war-time housing, I can assure the hon. member. It is not the function of the Minister of Finance to regulate housing. In this instance its functions are predominantly those of lending, on good credit.


Alexander Malcolm Nicholson: And you are still going to lend.


James Lorimer Ilsley: So long as we carry on the administration of the National Housing Act. We administer that act which has to do, mainly, with the lending of money to private individuals. That is a different matter altogether from building houses. Even if I had the power, I would not let the Department of Finance go into the business of building government houses.


Alexander Malcolm Nicholson: But the Minister of Finance is going to hand over 810,000,000 of the taxpayers' money.


James Lorimer Ilsley: Yes.


Alexander Malcolm Nicholson: To War-Time Housing Limited?


James Lorimer Ilsley: Yes.


Alexander Malcolm Nicholson: I think it would be
much better to have that 810,000,000 spent under the minister's supervision, on a lending basis, if necessary, for the use of corporations which are going to need additional housing.


James Lorimer Ilsley: I disagree.


Thomas Vien: Does not the hon.
member realize that he has 'been, discussing War-Time Housing Limited? We are not discussing the National Housing Act in the terms he has indicated. The hon. member has stated his case more than once, and the minister has answered. I believe I am quite fair in drawing the hon. member's attention to these facts.


[Stage Direction]
Item agreed to.
50. Old age pensions, including pensions to the blind, administration, $42,320.
Howard Charles Green: Has any consideration been given to the provision of some sort of cost of living bonus for old-age pensioners? I realize there will have to be some discussion with or endorsation by the provinces-at least, I presume there will have to be because they pay a portion of the old age pension. We find in our districts that these old people are suffering a great deal because of the increased cost of living, while their pensions remain strictly limited. I suggest that this problem should receive the serious consideration of the government, particularly in view of the fact that Canada is the most backward country in the British empire with regard to old age pensions and general security legislation.


James Lorimer Ilsley: We have received quite a number of representations, but we have not taken any action nor have we given the matter extended consideration. It would require an amendment to the act to raise the amount beyond 820 a month, and there would have to be new agreements with all the provinces. The cost of living has not advanced more than 7 or 8 per cent since the outbreak of the war, and I do not think there would be a sound reason for amending the act and entering into new agreements.


Howard Charles Green: Has the government received any representation from any of the provincial governments?


James Lorimer Ilsley: Not so far as I can recall; I think they have all been from private individuals and organizations.


Howard Charles Green: Is the government willing to negotiate with the provinces?
Supply-Finance-Housing Act


James Lorimer Ilsley: I could not say, because the question has not been considered by the government. I am more than doubtful about the provinces being willing to do it although I have no definite information on that.


Alan Webster Neill: Did the minister say that
he had received no representation from any of the provinces, from British Columbia, for instance?


James Lorimer Ilsley: I do not think any representation has been received from any provincial government.


Alan Webster Neill: My impression is that the
matter was discussed in the local house and that a resolution was passed, but I may be wrong. I noticed in the papers yesterday that the electric railway men in the home town of the hon. member for Vancouver South have been given a wage increase of six cents an hour, which works out more nearly to a 12 per cent increase than 6 or 7 or 10 per cent. A 10 per cent increase on the $20 would be $2. That may not seem much to us, but it would mean a great deal to these old people. We have only to look across the line at Washington where for some time they have been receiving something like $30 a month.


Angus MacInnis: This is a matter of great concern to the old people of Canada. If we take the dominion as a whole, at least 50 per cent of the population over seventy years of age are in receipt of old age pensions. This pension of $20 a month provides only for a niggardly means of sustenance. The average pension received does not amount to $20 a month. A return tabled a few weeks ago by the Minister of Finance gives the following average pensions:
Alberta	 $18.56
British Columbia	 19.12
Manitoba	 18.70
New Brunswick	 14.65
Nova Scotia	 14.92
Ontario	 18.56
Prince Edward Island	 11.32
Quebec	 15.66
Saskatchewan	 16.93
Northwest Territories	 20.00
It is only in the Northwest Territories that the full pension is paid. The minister said that the cost of living has risen some 7 or 8 per cent. The papers to-day give the figure as being almost eight per cent. The old age pension received in New Brunswick, Nova Scotia, Quebec and Saskatchewan is $15 or less, and 8 per cent of $15 would be $1.20. What it really amounts to is that, instead of getting $15 a month, these old people are getting less than $14 a month.
We are making provision for the payment of bonuses to people in industry. In many 
instances this is being done, not to make adjustments, not because we think they should have it, but because we are afraid if they do not get it they will make trouble. Surely we should not overlook these old people who are not in a position to make trouble, who must take what they can get and get along with it. When, as was pointed out a moment ago, the government can provide $10,000 a year for a man who is going to do something that we do not know about as yet, surely it can do something for the old people of this country.


Norman Jaques: I should like to associate
myself with those hon. members who have spoken on this subject. I have spoken on it quite often in the past, but apparently with no success. I should like to make a few remarks because I think this matter has an important bearing upon the economy of this country. As the hon. member for Vancouver South has said, Canada lags behind every other country in the British empire in the matter of old age pensions, both as to the age limit and as to the amount. I do not know why the age limit is set at seventy years, unless it be that according to the good book, if a man is not dead at seventy, he ought to be.


Angus MacInnis: They do not think he
will live long after that.


Norman Jaques: Small as the maximum
pension is, most of the recipients receive even less. I have often wondered why Canada lags behind in old age pensions. There are psychological reasons. I believe it is because we are supposed to be a thrifty people. It is thought that if a man has been a virtuous citizen he should be able to provide for his old age. If he has not been able to do so, then he should be punished for his sins in the past. Originally thrift meant putting a thing to its best use, but to-day it means nothing more or less than saving money. I tried to prove in the committee on banking and commerce, but in vain, that no man can save money except at the expense of the community. It is bound to cause a shortage in purchasing power. What is the purpose of this drive to encourage savings, if not to decrease purchasing power? The reason for this is the war, but the war will not last forever. I want to be on record with regard to this matter.
I can only hope that the policy we followed after the last war, that of deflation, will not be followed after this war is won. We shall have to do the opposite, and I do not know a better way of putting out fresh purchasing

Supply-Finance-Housing Act
power than through the old age pensions, by increasing the amount of the pension and by lowering the age at which it is payable.
For those who might object to my statement that an individual saves money only at the expense of the community, let me put it in this way: If a man saves money he is producing more than he is consuming-I think there can be no argument about that-or he is selling more than he is buying. If he succeeds in doing that, someone somewhere must be buying more than he is selling, and the unemployment problem in all countries is partly due to this craving for saving money. For the benefit of those who do not agree with these ideas, let me quote briefly from "Essays in Persuasion" by John Maynard Keynes. He says this on that subject:
There are to-day many well-wishers of their country who believe that the most useful thing which they and their neighbours can do to mend the situation is to save more than usual.
This was written in 1932, and at that time there was a depression, which we are promised we shall have when this war is over-unemployment and depression. Keynes wrote in similar circumstances after the last war. He goes on:
If they refrain from spending a larger proportion of their incomes than usual they believe that they will have helped employment. If they are members of town or county councils they believe that their right course at such a time as this is to oppose expenditure on new amenities or new public works.
Now, in certain circumstances all this would be quite right, but in present circumstances, unluckily, it is quite wrong. It is utterly harmful and misguided-the very opposite of the truth. For the object of saving is to release labour for employment on producing capital goods such as houses, factories, roads, machines, and the like. But if there is a large unemployed surplus already available for such purposes, then the effect of saving is merely to add to this surplus and therefore to increase the number of the unemployed. Moreover, when a man is thrown out of work in this or any other way, his diminished spending power causes further unemployment amongst those who would have produced what he can no longer afford to buy. And so the position gets worse and worse in a vicious circle.
The best guess I can make is that whenever you save five shillings, you put a man out of work for a day. Your saving that five shillings adds to unemployment to the extent of one man for one day-and so on in proportion.


Thomas Vien: Order. The hon. gentleman can make a brief reference to the text, but surely he cannot read page after page of a book.


Norman Jaques: I have not read a page
yet, Mr. Chairman.


Thomas Vien: I am sorry but-


Norman Jaques: I have only three lines more, and I think it is a pity to spoil this quotation.


John Ritchie MacNicol: What book is my hon. friend reading from?


Norman Jaques: It is "Essays in Persuasion" by John Maynard Keynes, an economist of some note and not a Social Crediter. Great minds think alike, as I may remind the hon. gentlemen. To conclude this quotation:
On the other hand, whenever you buy goods you increase employment-though they must be British, home-produced goods if you are to increase employment in this country. After all, this is only the plainest common sense. For if you buy goods, some one will have to make them. And if you do not buy goods, the shops will not clear their stocks, they will not give repeat orders, and some one will be thrown out of work.


Thomas Vien: The hon. member has crowded a lot of material into three lines.


Major James William Coldwell: He lost his place and found another one.


Norman Jaques: Yes; I missed my place and I think I read one part over twice. This passage seems to cause some merriment, but let me put this to hon. members. What was the position of this country before this war started as a result of the policies which they evidently still believe in? The Prime Minister of Great Britain said, "Never did so many owe so much to so few," and that applies to us in this country just as much as to anybody else. I say that the policies of deflation which were adopted after the last war not only made this war inevitable but made it impossible for those countries which followed these policies, and stayed with them to provide themselves with adequate protection.


Major James William Coldwell: When the estimates of the Minister of Mines and Resources were before the committee, I drew his attention to the fact that persons who had lived in the Yukon and had removed to other provinces were not entitled to count their residence in the Yukon for pension purposes in the province to which they removed, and that this causes a serious hardship to a comparatively small number of aged people. I was hoping that some consideration might be given to straightening out that difficulty and relieving these few aged people of the distress which is thereby caused. I am not going into particulars of this case because I mentioned it the other evening, and no doubt it has been brought to the attention of the department.
I thoroughly endorse the requests of those who to-night have asked for a bonus, or, what is better still, an increase for the aged people who are in receipt of the pension. The cost of living is going up. The staple articles which they use have gone up in price, and the new

Supply-Finance-Housing Act
taxes on sugar and on other commodities containing sugar still further increase the cost of living for these aged people and the blind.


James Lorimer Ilsley: If I may interrupt for a moment, is it not true that a dollar will now buy more than it would in 1927 when the Old Age Pension Act was enacted?


Major James William Coldwell: It depends upon how you spend the dollar. So far as foodstuffs go, the minister is probably right. But that does not alter the fact that the pension is insufficient. May I point out that we have a very large number of people in Canada in receipt of old age pensions. I have here a copy of the report on the administration of old age pensions and pensions for the blind in Canada for the fiscal year ended March 31, 1941, and I find that we have altogether 185,946 pensioners, old age and blind. To me it is a striking commentary on our economy and on the economy of certain provinces to look over the list and note the percentage of pensioners in the various provinces. When I went west thirty-one yecrs ago I remember how at that time we thought we were going to a new land where in later years there would 'be security for all who toiled there. But when I look at the figures for Saskatchewan I find that 59-6 of all persons over seventy years of age are in receipt of an old age pension. In Alberta the percentage is 56-56; in Manitoba, 55-33 per cent; in British Columbia, 49-79 per cent; in Nova Scotia, 51-62 per cent. The worst, of course, is New Brunswick, with 61-83 per cent of all persons over seventy years of age in receipt of old age pensions.
There is another factor which ought to be considered. I was speaking this afternoon about the necessity of maintaining morale in ihis country, and I believe that morale depends to a very large extent upon the home conditions and the security of the people of our land. If we are going to give that security when the war is over, we might offer some indication of it now by giving the old age pensioners some increase, at least, of their pensions. This is being done in other parts of the British commonwealth. The motherland, with all her tremendous financial undertakings and obligations, has raised the old age pension quite substantially in the last year or so. New Zealand has done the same. But we in this country have not given any indication to our people that we have in mind anything but returning when this war is over to the old pre-war conditions. It is not good enough, and it is undermining the morale of our people.

I suggest that here is one place where we could show the people of Canada that we have something better in mind, by increasing for the old folks the comparatively small pensions which they now receive. I associate myself with all those who in this chamber have made this plea to-night.


Howard Charles Green: Would the minister be
willing to open negotiations with the provinces concerning the question of paying such an increase?


James Lorimer Ilsley: It is primarily a provincial responsibility.


Howard Charles Green: Oh, no, it is not. The dominion pays 75 per cent; it is primarily a federal responsibility, and it cannot be shoved off on the provinces.


James Lorimer Ilsley: Oh, no; the provinces pay the pensioners and administer the system, and we make a grant.


Howard Charles Green: They administer it, but the dominion pays 75 per cent of the amount, and certainly the provinces caifnot make a move without the help of the dominion.


Major James William Coldwell: And the auditor general has the last say.


James Lorimer Ilsley: It is primarily provincial. They administer the system and pay the pensions, and we make a contribution.


Major James William Coldwell: Yes; but the pensioners are paid with the approval of the auditor general. If the province grants a pension, and the auditor general believes that the proof of age, for example, is insufficient, although the province has accepted it, the auditor general has the last word and turns down the pension. It would seem to be true that the province does administer it locally, but the final say and certainly the heavier responsibility are in the hands of the dominion government.


Alan Webster Neill: I would point out to the minister, as regards responsibility, that while, according to the British North America Act, it may originate in the province, yet it is a matter of record that, when we here passed the Old Age Pension Act, in 1927, it was the dominion that approached the provinces, and not the provinces the dominion, asking them whether they would "come through" if the dominion paid a certain portion. I remember that distinctly, because the question was asked here, and the minister made a reply stating how many provinces had replied to the invitation, and what their answers were. There is no question that the initiative did come on that occasion from the dominion.


[Stage Direction]
Item agreed to.

Supply-Finance
54. Pensions-Sir Frederick G. Banting, $7,500.
Mr. MacKINNON (Edmonton West) moved:: That vote No. 54 of the main estimates for the fiscal year ending March 31, 1942, be deleted.


Mr. COCKERAM:: May I ask the minister why that is being deleted?


James Lorimer Ilsley: Because Sir Frederick Banting was killed on February 23.


Alan Cockeram: What about his family? Care was taken of the family of the late Minister of National Defence, Mr. Rogers, and I think there should be similar action here.


James Lorimer Ilsley: Well, consideration was given to that, and it was decided not to place any item in the estimates. The committee will understand that precedents are created every time pensions are granted in that way, and they are capable of indefinite expansion. I am informed that there was a considerable amount of insurance. I am not sure of the amount nor what the facts are with regard to that. But his wife and daughter are being paid a pension at the rate of $1,188 per annum under authority of the Canadian Pension Act. The late Doctor Banting held the rank of major in the Canadian Army.


[Stage Direction]
Motion agreed to.
56. Subsidies and special grants to provinces. Special grants-New Brunswick, $900,000; Nova Scotia, $1,300,000; Prince Edward Island, $275,000; Manitoba, $750,000; Saskatchewan, $1,500,000; British Columbia, $750,000.
Mr. MacKINNON (Edmonton West) moved;
That item No. 56 of the main estimates for the fiscal year ending March 31, 1942, be deleted.
Mr. COLD WELL:: Why is that being
deleted?


James Lorimer Ilsley: There is an item in the supplementary estimates for a very much larger amount which makes this unnecessary.
Mr. GREEN; Is that part of the arrangement with regard to income tax?


James Lorimer Ilsley: Yes.


Howard Charles Green: Are not these votes which are now being deleted special subsidies?


James Lorimer Ilsley: Yes.


Howard Charles Green: Were they covered by the offer to the provinces?


James Lorimer Ilsley: Oh, yes. These are special grants, and all these are to be dropped with the
provinces which accept the offer, and all these provinces have indicated their intention of doing so.


[Stage Direction]
Motion agreed to.
62.	Miscellaneous grants and contributions. To provide for report on cultural conditions in Canada (literature, art, drama, education, etc.), $2,500.
Gordon Knapman Fraser: Is this necessary?


Angus MacInnis: Would the minister explain to whom this item is to be paid, and what it is for?


James Lorimer Ilsley: This item has been here for some years. It is really a pension or grant for the benefit of a distinguished Canadian who has rendered a great service to Canada in the realm of literature. Questions are usually not pressed beyond that, on this item.


[Stage Direction]
Item agreed to.
63.	Miscellaneous grants and contributions. Federal district commission-maintenance and improvement of grounds adjoining government buildings, Ottawa, and for improvements to the parkway system under the control of the federal district commission, $133,500.
Thomas Langton Church: This vote is for maintenance and improvement of grounds adjoining gov-erment buildings, Ottawa, and for improvements to the parkways system under the control of the federal district commission. Then there is an item for maintenance of parks, parkways and plant, Ottawa and vicinity under control of the federal district commission, and another item for the corporation of the city of Ottawa. The amounts for these three items are, respectively, $133,500, $200,000, and $100,000. Other municipalities do a considerable amount of similar work and do not get anything for it.
I would ask the minister whether consideration could not be given to a rearrangement of the monuments around these grounds. The monument to Sir John A. Macdonald is away at the back and Alexander Mackenzie is supposed to sleep on the strong box-I do not know if the minister guards it as closely- and D'Arcy McGee is in the backyard. I asked the Minister of Public Works about this matter last year, and I also discussed the question when my former leader, Mr. Bennett, was here. I thought there should be some rearrangement of these monuments in view of the changed situation in connection with the Canadian National station. Sir Wilfrid Laurier is in the front, and I am glad to see him there, but I suggest that in the recess the government might consult a landscape artist about this matter, because these
Supply-Finance

monuments are not very creditable to the present arrangement. Some are, as I say, in the backyard, some on the main street, and some obscured by a number of motor cars. In view of the ceremonies held at Kingston last Saturday, I suggest that some better position should be given the monument which was erected to the chief author of confederation, Sir John A. Macdonald, more in keeping with the prominent part he played in confederation and afterwards. I hope the government will take this matter up and try to beautify the grounds so as to have them harmonize better with the general surroundings, in view of the amount of money that has been spent. We are spending a great deal on purely municipal work while other places are entitled to consideration. I would ask the minister to give his consideration to this whole question and to consult the Minister of Public Works.


James Lorimer Ilsley: I will bring the hon. member's request to the attention of the Minister of Public Works.


Major James William Coldwell: What does the word "vicinity" mean in connection with statutory vote for the federal district commission? Do we go much beyond the city limits?


James Lorimer Ilsley: There is a district under the control of the federal district commission.


Major James William Coldwell: What is the mileage?


James Lorimer Ilsley: There are parts of Hull and parts of Rockcliffe under the control of the commission.


Gordon Knapman Fraser: Could the minister induce the city to do some better sanding, putting some calcium chloride in the sand? Round parliament buildings and the main streets of Ottawa it is terrible in the winter for cars as well as for people crossing the streets.


An hon. MEMBER:: The hon. member must be a tenderfoot.


Gordon Knapman Fraser: No matter who you are, you have to have creepers on.


Alan Cockeram: Cannot some saving be made on this maintenance item?


James Lorimer Ilsley: A very large cut has been made in it.


[Stage Direction]
Item agreed to.
67. General. To provide, subject to the approval of the treasury board, for salaries, reclassifications and increases, $100,000.
Howard Charles Green: Will the minister explau,
this item?


James Lorimer Ilsley: This is a continuation of a similar provision made in previous years to provide for salaries and increases for which provision is not made elsewhere in the estimates. It is intended to cover unforeseen contingencies that may arise with respect to staff and to avoid the possibility of crippling essential services. Allocations are made by the treasury board as required during the year.
Mr, NICHOLSON: How much was spent last year?


James Lorimer Ilsley: About $25,000.


Alexander Malcolm Nicholson: All for the finance department?


James Lorimer Ilsley: No, for the whole service.


[Stage Direction]
Item agreed to.
66. General. Farmers' Creditors Arrangement Act, 1934, and Municipal Improvements Assistance Act, 1938, administration, $261,000.
Major James William Coldwell: What is the cost of the operation of the Municipal Improvements
Assistance Act?


James Lorimer Ilsley: The cost of administering the Municipal Improvements Assistance Act is almost infinitesimal. There is practically no staff at all. We are not making loans under that act.


Major James William Coldwell: How many cases were taken up in the last year, and what was the total amount adjusted?


James Lorimer Ilsley: For the fiscal year ended
March 31, 1941, the number of farmers interviewing official receivers was 3,514; proposals submitted, 1,808; meetings of creditors held, 1,925; voluntary settlements effected by official receivers, 348; cases dealt with by boards of review, 3,418; total number of eases dealt with, 3,766.


Mr. EDWARDS:: The boards of review dealt with 3,418 cases in 1941. How does that compare with the previous year?


James Lorimer Ilsley: In the previous year the
number was 6,162.


Manley Justin Edwards: Then there is a falling [DOT] off of almost 50 per cent in the number of cases dealt with?


James Lorimer Ilsley: Thereabouts.


Manley Justin Edwards: Is there any disposition on the part of the government to close up the boards of review and wind up their
operations?


James Lorimer Ilsley: I do not think we could do that; there are still a good many cases to be attended to.

Supply-Auditor General's Office


Mr. WEIR:: Has the minister received any request in connection with the Farmers' Creditors Arrangement Act with regard to Manitoba?


James Lorimer Ilsley: Yes.


William Gilbert Weir: What consideration has been
given to it?


James Lorimer Ilsley: Much consideration has
been given, but it was decided not to introduce any amendment before we adjourn this time at any rate.


[Stage Direction]
Item agreed to.
68. General. Unforeseen expenses, expenditure thereof to be subject to the approval of the treasury board, and a detailed statement to be laid before parliament within fifteen days of next session, $80,000.
John Ritchie MacNicol: I should like an explanation of the words, "a detailed statement to be laid before parliament within fifteen days of next session." Does it mean within fifteen days after the session is opened?


James Lorimer Ilsley: That is right.


Alan Cockeram: How much was spent
last year?


James Lorimer Ilsley: Up to February 20, 1941,
the amount spent was $32,827. That is in the fiscal year 1940-41. After that, $1,271 was spent, making about $34,000 in all.


[Stage Direction]
Item agreed to.
AUDITOR general's OFFICE
S3. Salaries and expenses of office, $455,790.
Alexander Malcolm Nicholson: What is the relationship between the auditor general's department and the special government-owned corporations set up by the government in connection with war-time business?


James Lorimer Ilsley: They are all audited by the auditor general just as if they were branches of departments of the government.


John Ritchie MacNicol: What is the reason for
eliminating from the auditor general's report a vast number of items, the doing of which has materially reduced the value of the report from the point of view of searches by members into statements?


James Lorimer Ilsley: There was an explanation
given in the report at page 561, but perhaps that was not considered sufficiently explanatory. Here is some further explanation.
Up to last year the report mingled English and French versions in the same volumes. In size the pages totalled 1,354. Last year separate volumes in each language were issued. These totalled 1,137 pages.
The act states what information must be included in the auditor general's report, but leaves to him the form in which it is to be presented. As a result the predecessor of the present auditor general stated in his report for 1923-24, page xx volume 1, that he had reduced the size by 1,000 pages that year. In the report for 1925-26 he advised that he had again reduced the size from 2,260 pages to 1,694, and further reductions were subsequently made, for the last report prior to that signed by the present auditor general consisted of 1,354 pages.
The auditor general says that what he did was to save over 130 pages when information supplied was duplicated elsewhere in the report. He also dropped certain tables of a statistical nature when the information is provided in other official reports, for example the tables of outstanding loan issues, because that information is to be found in the public accounts, also certain statistical tables which might be queried. One was that listing payments to newspapers, because, since much advertising is placed through advertising agencies, who receive commissions from the newspapers, the precise amount actually paid to a paper may not be that included in the statement.
The form is not always readily comparable with the report of the year before. Apparently it is within the discretion of the auditor general as to the form in which he puts his report, and he felt that he was saving duplication.


Thomas Langton Church: The title of the auditor general's department is not properly descriptive. Does the auditor general's office audit all war-time expenditures? As I understand it, the Department of National Defence and others have their own auditors, and the auditor general is an auditor of auditors. Does this office, costing $455,790 a year, audit all the government's war expenditures? I understand that each department dealing with all these outside boards and dollar-a-year men and all the departments, fifty-six of them, have auditors themselves. Doer the auditor general re-audit them or lay down rules for the audit by the sub-auditors of the various departments? Does the auditor general supervise all the war expenditures that have been gone over by some roving committees of the House of Commons?


James Lorimer Ilsley: I do not know that I can give a quick description of exactly what he does. The comptroller of the treasury, representing the Minister of Finance, has his officers, who are numerous, in every branch of the government service, and sees to it that money is not spent unless duly authorized.

Senate and House of Commons
The auditor general's function is that of a representative of parliament. He is responsible to parliament, not to the government. He supervises and audits here and there throughout the whole government service, and reports to parliament.


Alexander Malcolm Nicholson: I presume this vote covers the peace-time activities only. Has the minister available the additional amount required to look after war-time activities?


James Lorimer Ilsley: There is some vote authorized out of the war appropriations. I have not the amount here. I am sure it has been given to the house at an earlier time.


Alan Webster Neill: I should like to say a word in support of the argument of the hon. member for Davenport. The remarks regarding the saving by the auditor general may be correct, and of course cutting out duplication is all to the good. But so far as the average member of parliament is concerned, practically the whole usefulness of the report is destroyed. Time was when if someone came along and said that Tom Jones was getting too big a salary or too much in his expense account, one could look him up and find exactly what pay lie was drawing and what expenses. Now one cannot do that. One can go to the auditor general's office as I have done, and he was courtesy itself and gave me a great deal of information about the particular man, but what I want is to be able to check up on any man in the government service. It very often stops claims that a man is being heayily overpaid, and I used to appreciate it very much, but now the auditor general's report is of no value at all from that point of view.
Item stands.
Progress reported.



SPECIAL WAR REVENUE ACT


James Lorimer Ilsley: That the said amendment be now read the second time and concurred in; but that this house, while disapproving of any infraction of its privileges or rights by the other house, in this case waives its claims to insist upon such rights and privileges; but the waiver of the said rights arid privileges is not to be drawn into a precedent; and, further, that this house agrees to the incorporation in this bill of Bill No. 101, an act to amend the Special War Revenue Act,
And that a message be sent to the senate to acquaint their honours therewith.
He said: The amendment made by the other house to the Special War Revenue Act is very

small in relation to the revenue collected. It is scarcely a revenue amendment. The amendment proposes a change in a section of the act. The suggestion is that proclamation of coming into force is not to be made until their constitutionality is submitted to the Supreme Court of Canada. As I had agreed that immediately these sections were passed-if they were passed-they would be submitted to the Supreme Court of Canada anyway, I am making this motion now, but asserting the principle that this house is waiving none of its privileges with regard to money amendments.


[Stage Direction]
Motion agreed to, amendment read the second time and concurred in.
On motion of Mr. Mackenzie (Vancouver Centre), the house adjourned at 12.05 a.m.
Thursday, June 12, 1941.