1942-04-21

[Stage Direction]
Right Hon. W L. MACKENZIE KING (Prime Minister): Mr. Speaker, I should like to lay on the table of the house copies in English and French of an exchange of notes with the United States setting forth an agreement on compulsory military service.
41561-114$
There are three notes. There is the note of March 30 from Mr. Sumner Welles, Acting Secretary of State, to the Canadian Minister in Washington; the note of April 6, No. 222, from the Canadian Minister in Washington to the Acting Secretary of State, and the note of April 8 from the Acting Secretary of State to Mr. Wrong, charge d'affaires in Washington.
The United States Selective Training and Service Act, when it was passed in the summer of 1940 applied only to United States citizens, and to aliens who had declared their intention of becoming United States citizens. The act was amended in December, 1941, after the entry of the United States into the war. One of the amendments which was then passed provided for the conscription of Canadians and of nationals of other co-belligerent countries who were resident in the United States, and who had not declared their intention of becoming United States citizens.
Thus, by last December all Canadians residing in the United States became subject to compulsory service on the same basis as the United States citizens. Subsequent to the passage of this legislation the United States informed us that they would be willing to permit some of these Canadians to elect to serve in the armed forces of Canada, in lieu of service in the armed forces of the United States. The United States offer applied to non-declarant Canadians-that is to say, to Canadians who had not declared their intention of becoming United States citizens. We gladly accepted this offer, since we agreed with the United States that the united war effort of our countries would be strengthened if Canadians in the United States who had not yet given evidence of their desire to make the United States their permanent home were given an opportunity to fight in the armed forces of their own country and under their own flag, instead of fighting in the armed forces of the United States.
The agreement is reciprocal in every respect. If United States citizens, in Canada should in future be made liable to compulsory military service in the Canadian armed forces they will be given exactly the same privileges as Canadians in the United States are being given by the United States government.
The United States government has also, by the exchange of notes, declared that it is agreeable to the Canadian government imposing on United States citizens residing in Canada a liability to compulsory military service.
It might be a convenience to hon. members if this exchange of notes were printed in the Votes and Proceedings of the house. They will be printed a little later in a series of
Pacific War Council
[Stage Direction]
documents published by the Department of External Affairs, but it may be some time before that series is published.


[Stage Direction]
Bill No. 57, for the relief of Mary Celina Broadhurst LaRose.-Mr. Macdonald (Brantford City).
Bill No. 58, for the relief of Elsie Epstein Cohen.-Mr. Casselman (Grenville-Dundas).
Bill No. 59, for the relief of Gertrude Pelletier Patenaude.-Mr. Boucher.
Bill No. 60, for the relief of Marieatt Vendi-tello Diano.-Mr. Gray.
Bill No. 61, for the relief of Edna Annie Heazle Constable.

Mr. Boucher.
Bill No. 62, for the relief of Dorothy Reed Cushing.-Mr. Boucher.
Bill No. 63, for the relief' of Sarto Desnoyers.-Mr. Bercovitch.


[Stage Direction]
On the orders of the day:
Mr. H. C. GREEN (Vancouver South):: I should like to ask the Prime Minister whether he will make a statement at an early date concerning the Pacific council which was set up at Washington subsequent to the adjournment of this house on March 27.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, the only
statement that I would be at liberty to make is one which I think I might make immediately. As my hon. friend knows, the Pacific war council was set up about three weeks ago. The meeting which was held on Wednesday of last week, and which I was invited by the President to attend, was the third meeting the council has held. The meeting of the war council was presided over by the President, and its proceedings were similar to the proceedings of a cabinet. I would not be at liberty myself to state what subjects were discussed or what conclusions were reached; any statement to be given out with respect to the proceedings of the council would be given out by the President. I understand that no announcement has been made of that particular day's proceedings or of the proceedings of the two previous meetings of the council.
The discussions, as would be obvious, related to war matters pertaining to the Pacific. No public intimation could be given of what was discussed because anything given to the public would be given equally to the enemy. At

the meeting which I attended there were present Sir Ronald Campbell, minister for the United Kingdom; Mr. Loudon, minister in the United States representing the Netherlands; Doctor Soong, representing China; Doctor Evatt, Minister for Foreign Affairs of Australia, who represented Australia, and the Hon. Mr. Nash, representing New Zealand.
I understand that meetings of the council will be held more or less regularly every week.
I believe it will be in the interests of the proceedings of the council that for the most part the same persons should represent the different countries at the respective meetings in order that they may be more familiar with the matters being discussed. I do not know that there is more that I can say at the moment, unless my hon. friend has some specific question to ask.


Howard Charles Green: Who will be representing
Canada?


William Lyon Mackenzie King: Our minister at Washington, Mr. Leighton McCarthy, will represent Canada at the meetings. Mr. McCarthy was not in Washington at the time of the first meeting. Mr. Hume Wrong, the counsellor of the legation, represented Canada on that occasion. At the second meeting Mr. McCarthy represented Canada. For reasons that will be obvious it has not been thought advisable that more than one person representing any country should be present at a meeting. If there were more than one representative of any country present, it might create embarrassment with respect to the representation of some of the other countries.


Mr. M. J. COLDWELL (Rosetown-Biggar):: Mr. Speaker, may I follow up that question? As the other dominions and countries are represented on the council by men who have had experience in the government of their country, does not the Prime Minister think that Canada should be represented by someone other than a high commissioner, someone who has had experience in the government of this country, a man of ministerial status?


William Lyon Mackenzie King: Canada has not a high commissioner at Washington, but is represented by the Canadian minister to Washington.
I would say, as regards the present minister to Washington, that, as my hon. friend is no doubt aware, Mr. McCarthy was for many years a foremost member of this House of Commons. While he has not been a member of the government of Canada he has had wide parliamentary experience. Canada is exceedingly fortunate in having one of Mr. McCarthy's exceptional attainments to represent our country at Washington and in having

P/ie Plebiscite
him represent Canada at the meetings of the Pacific war council. I would also say that I think Mr. Hume Wrong, while he has not been in parliament, has had exceptional experience in diplomatic work in different countries and is exceedingly well qualified to represent Canada on any board or council such as the Pacific council. I would not feel that previous cabinet experience would necessarily be an essential qualification. It no doubt would be helpful inasmuch as the proceedings of the Pacific war council are carried on very much as proceedings would be in any cabinet. The personal qualifications of the representative would count for a great deal, I think, in respect of the effectiveness of his service.


Mr. T. L. CHURCH (Broadview):: Mr. Speaker, may I ask the Prime Minister a further question? What relation has the Pacific conference which was established in London a month ago, representing certain countries, with Canada excepted, to the Pacific council at Washington, with Canada included? Will the London conference have to report to the Washington council, and will there have to be an exchange of notes before we can have any defence in the Pacific? What is the relation between the body in London and the one in Washington?


William Lyon Mackenzie King: My hon. friend will recall I had some difficulty, when I was asked at an earlier stage of the session a question with respect to a Pacific war council in Washington, to say whether Canada would be represented on that council. My difficulty arose from the fact that a Pacific war council was formed in London, England, in the first instance, and at that time it was not certain whether a Pacific war council would ultimately be also formed in Washington. The council which was first set up in 'London was a gathering of the representatives of certain Pacific countries which were immediately involved in the operations in the southeast Pacific, brought together at the instance of the Prime Minister of Great Britain. At the present time provision has been made for the meeting from time to time in London of this counterpart of the Pacific council which meets ini Washington. Canada will continue to be represented on that body by the high commissioner. For the present it has been thought advisable to have the council dealing with Pacific affairs meet regularly in Washington rather than in London. The whole matter of the study of conditions in the Pacific has had to take shape more or less in accordance with the manner in which events have helped to shape it.


Thomas Langton Church: Will not the London conference have to report to Washington first?
And in the meantime Japan may take action in the Pacific, as we have lost control of the sea in the Pacific.


William Lyon Mackenzie King: As my hon. friend knows, there is a combined strategy with which certain of the heads of the defence forces are concerned in London and also in Washington, and communications pass continuously between the two. There are bodies which exist alike in London and in Washington which have to do with questions that arise out of decisions with respect to strategy; but the fact that one exists in the one country and the other in the other does not mean that either is subordinate to the other. It is part of the arrangement under which the present war is being carried on, on behalf of the United Nations and which recognizes at the head as the combined command, the Prime Minister of Great Britain and the President of the United States.


Thomas Langton Church: In other words, we are to depend on Washington instead of London for defence in the Pacific.



THE PLEBISCITE


[Stage Direction]
On the orders of the day:
Hon. R. B. HANSON (Leader of the Opposition):: Mr. Speaker, I would ask a
question of the Secretary of State or some other member of the government in respect to advertising for an affirmative vote on the plebiscite. Is the government or any department of the government sponsoring free advertising for the plebiscite? I am prompted to ask this because I have received a copy of the Campbellton Gra-phic of April 16, carrying a full-page advertisement signed by the Minister of Fisheries (Mr. Michaud), and upon it appears the coat of arms of Canada. I wonder if the government is doing any advertising on a national scale or on a constituency scale with respect to the plebiscite. I should like to know just what the position is. I had to pay for the advertising that was done in my own constituency, and if I had to do that, I assumed that others did.


Hon. N. A. McLARTY (Secretary of State):: I think I can best answer the leader of the opposition by saying that the chief electoral officer has put in each newspaper in Canada an advertisement of the proclamation calling for the plebiscite, giving the date of the plebiscite, the time of the plebiscite, and other particulars. The government has not spent any money on any advertising for the plebiscite so far as I am aware-certainly the plebiscite committee has not-in so far
The Plebiscite

as it asks any elector to vote "yes" or "no". We are spending some money in advertisements which I believe are quite modest, asking the electors to get out and vote.


Mr. HOMUTH:: Too modest.


Norman Alexander McLarty: Perhaps too modest, but we did not wish to be extravagant. The advertisements merely ask the people to vote on the plebiscite.


Hon. J. E. MICHAUD (Minister of Fisheries) :: Mr. Speaker, may I say in regard to any advertising that may have appeared in any newspaper in this country over my signature or printed at my request, that it is going to be paid for by myself. If the coat of arms appeared in one advertisement

I have not seen it-I presume that was due to the loyalty of the printers. I am not responsible for having the coat of arms printed alongside the advertisement which I requested them to print.



QUESTION AS TO SPECIAL GASOLINE RATION ON VOTING DAY

[Stage Direction]
On the orders of the day:
Mr. G. A. McLEA'N (Simcoe East): I should like to ask the Minister of Munitions and Supply if it is the intention to 'have a special ration of gasoline issued for the plebiscite day?
Hon. C. D. HOWE (Minister of Munitions and Supply):: Consideration has been given to this matter. Is is obvious, to all those who are familiar with the situation, that to make any special provision for gasoline for the plebiscite day is quite impossible. The only notice which has appeared in the press on this matter was a quotation from a speech of the leader of the opposition (Mr. Hanson). Repercussions from the oil administrator of the United States followed immediately; I believe the oil controller had a telephone message at noon next day.
The situation is that Canada is very heavily dependent upon the United States, not only for petroleum, but for the transportation of petroleum. All of us who read the newspapers know that the sinking of tankers has been extremely heavy, and our Canadian fleet has suffered along with the rest. Under these circumstances I think it would be a negation of the purpose of the plebiscite to provide additional gasoline for bringing out the vote.
When speaking in my own riding, I asked my constituents to give as freely of -their gasoline as they were giving of their time. I got a very favourable response. I believe

that all those who have an appreciation of the importance of the plebiscite will gladly provide the gasoline required, not only to convey themselves to the poll, but also to assist others who would be unable otherwise to cast their votes.


Richard Burpee Hanson: I regret the decision. I hope that the expectation of the minister with respect to the voluntary surrender of coupons for use on plebiscite day will be met. I made -the announcement to which he refers as having had repercussions, simply upon a message which I received from one of the minister's secretaries that the matter was under consideration: that was as far as I ever went. I was hopeful that a formula might be adopted which would give some leeway in the use of gasoline on that day, because in the rural -parts of the country it is going to be very difficult to get gasoline for the transportation of voters to -the polls, and I do not think that they will walk.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. J. W. NOSEWORTHY (York South):: I should like to direct a question to the Minister of Labour as a result of two telegrams I have received this morning from the Midland shipyards. First, will the minister tell us what is the cause of the dispute at the shipbuilding plants in Midland and Kingston; and, second, what action- is being taken to settle it?


Hon. HUMPHREY MITCHELL (Minister of Labour):: The hon. gentleman did not give me any notice .of the question. In the first place, the strike at Midland was called without any knowledge of the department; it was called because a man was demoted and then laid off. A conciliation officer was sent in there, and an agreement was arrived at with the company that the man would be given his job back, and that the men could return to work without discrimination. It was pointed out to them prior to that that the strike was illegal. Following that they placed further demands before the company. The department took the position it always takes in the case of an illegal strike: first of all the men must return to work. The next step was the calling of a sympathetic strike at Kingston in support of the Midland workers who went on strike because this or man was laid off. I would say this about Kingston: they had an agreement with the company under which all disputes would be submitted to a tribunal of employers and em-

Canadian Army
ployees. Notwithstanding that, and the fact that they were told it was illegal to strike, they went on strike. Now the position taken by the department is that the question is no longer one for us to deal with; it is a question for the Department of Justice. I would like to say this, though: it would be just too bad if the men who go down to the sea in ships, in corvettes, went on strike because a man was demoted.



NEW ZEALAND


William Lyon Mackenzie King: The house will be pleased, I am sure, to know that this morning, at Wellington, the Prime Minister of New Zealand announced that the Hon. Frank Langstone has been appointed to represent New Zealand in Canada as high commissioner in this country. Mr. Langstone has had an important public career, having served in the House of Representatives of New Zealand, also having been Minister of Lands and Native Affairs in his own country. He is also well known to a number of our citizens, having visited Canada last year in connection with obtaining essential munitions and equipment for New Zealand. I should like to say how welcome Mr. Langstone's appointment to Ottawa as high commissioner of New Zealand will be by both the government and the people of Canada.
With Mr. Langstone's appointment we will now have in Ottawa high commissioners from all the self-governing parts of the British empire, just as Canada is represented in all parts of the British empire by our high commissioners.


Major James William Coldwell: Are we to be represented in New Zealand?


William Lyon Mackenzie King: We have been for the last two years, by Doctor W. A. Riddell.



CANADIAN ARMY


[Stage Direction]
On the orders of the day:
Mr. D. KING HAZEN (St. John-Albert):: I should like to address a question to the Minister of National Defence. A bulletin was posted to-day in front of a local newspaper office to the effect that 400 soldiers left a ship at an eastern Canadian port, and that 135 of those soldiers had missed the vessel when it sailed. Would the minister care to make a statement to the house about this occurrence? If that bulletin was posted following a statement issued by the Minister of
National Defence, would he tell us why a statement is issued to the public before the members of this house are informed of the occurrence?


Hon. J. L. RALSTON (Minister of National Defence):: Answering the last question first, Mr. Speaker, I do not agree that each statement issued from the Department of National Defence must necessarily be communicated first to the House of Commons. The statement was issued as soon as it was possible to issue it after the safe arrival of that particular convoy, and it was given to the press. As a matter of fact it was issued this morning and communicated to the press for the afternoon papers. I know it has been suggested here from time to time that no statements should be made to the press unless they have first been made here.


Richard Burpee Hanson: No-on matters of policy, not factual matters.


James Layton Ralston: I am glad to hear my hon. friend say that, because I am sure the House of Commons is not to be regarded as a bulletin board, where a department has to make statements in the house in regard to matters of detail or administration which are ordinarily published in the papers. That is the answer to my hon. friend's second question.
Answering the first question, I am sorry I have not before me at the moment the statement which was issued to the press. Briefly, about 400 men walked off the ship at Halifax at the time of embarkation, and about 135 had not returned or did not get back to the pier in time to be embarked. The situation, as set out in the statement, was that the ship arrived very much later than she was expected. The time for disembarking those who were on the ship, for loading provisions-and by the way, they were to load eight weeks' provisions plus an additional twelve days' provisions-for cleaning the ship and for loading personnel to go on the ship, was cut to about half of the normal time. The result was some confusion, and some dissatisfaction, particularly with the condition of the ship and the rations. A special party was put on to make conditions as livable and comfortable as possible and I think that every step possible was taken to make the situation as agreeable as it could be under the circumstances. But there is no doubt in my mind that the ship was not in as good condition as is normally the case with troop-ships. As a matter of fact, the embarkation officials examined the ship and, after their examination, determined that the number to be carried on it should be reduced by about 20 per cent from the number
Canadian Army

which had been carried on her inward voyage; and notwithstanding that, these men walked off the ship as a protest against conditions in connection with the ship itself and with regard to rations. Many of them came back. Some of them were rounded up. All but 135 sailed on the ship and of that number some came back voluntarily and some were rounded up. They got back to the ship too late. She was in the stream. She had weighed anchor and they were too late to go on board. Disciplinary action has been taken with regard to them. I have no doubt from the information I have received that they were led astray by a few ringleaders, and these ringleaders are being specially dealt with. It is obvious that the situation was such that their action could not be condoned. It was not a case where men could take the situation into their own hands, and it would be manifestly unfair to the vast proportion of the men who embarked on the ship and who are now safely overseas.
I read further from the statement which has just been handed to me.	Generally
speaking, those who disobeyed orders expressed their disappointment and regret when they got to the dock and found the ship had gone. They had been warned that the ship would sail but they believed they had time to go ashore for a final fling before embarking. Conditions on board troop-ships are often cramped and not too comfortable, but the tens of thousands of Canadian soldiers who have gone overseas have recognized how necessary it is to utilize all available shipping and have put up with whatever discomforts there were as part of the day's work.
The difficulties were increased by the fact that the contingent which sailed on this ship was made up of no less than sixty-nine different reinforcing detachments and they therefore could not be organized and closely controlled in the same way as complete units would have been.
We are putting our views very clearly before the United Kingdom authorities in order to prevent a recurrence of conditions so far as transports are concerned. At the same time we are making certain changes in the embarkation and troop conducting system with particular reference to troops which are not in organized units. I can say definitely that corrective action is being taken. I am confident that there should be no excuse for a repetition of this isolated incident which in the absence of explanation might have reflected on the good name of Canadian soldiers.



BUSINESS OF THE HOUSE

[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: It is understood that the
first order will be No. 5, under government orders, continuing the discussion on the resolution of the Minister of Pensions and National Health (Mr. Mackenzie), and the next order will be No. 12 on the order paper, respecting provision with regard to insurance of property against war risks and payment of compensation for war damage. It is in the name of the Minister of Finance (Mr. Ilsley). It is then proposed to take up item No. 7 on the order paper, for the house to consider in committee of the whole the resolution with respect to the two billion dollars to be granted His Majesty towards defraying expenses of the war. In order to avoid repetition and to expedite progress, it is proposed that when we reach the war appropriation measure we shall deal with departments in the following order: (1) The Department of National Defence; (2) National Defence for Naval Services; (3) National Defence for Air; (4) the Department of Munitions and Supply; (5) the Department of National War Services. Ih the course of the discussion the Minister of Finance may wish to make some statement on subsidies. With that exception it is intended to proceed continuously with the discussion of that resolution when it is brought down.


Howard Charles Green: There are several other
departments which are concerned with the war appropriation bill. Is it intended that they shall be discussed en bloc after the ones enumerated are dealt with?


William Lyon Mackenzie King: The departments I have named are the ones which I imagine will occasion most of the discussion. I have mentioned them in order, so as to prevent overlapping in the discussion of the subjects that may come up. It is understood of course that all other departments concerned directly or indirectly can be discussed immediately after the conclusion of those I have mentioned.



VETERANS' LAND ACT


[Stage Direction]
The house resumed, from Monday, April 20, consideration in committee of the following resolution-Mr. Mackenzie (Vancouver Centre) -Mr. Vien in the chair:
That it is expedient to introduce a measure to make provision for the settlement on the land of veterans of the present war, to prescribe the terms of such settlement and to grant a

Veterans' Land Act
measure of financial assistance to such settlers, and further for the appointment of a director, of officers and other employees in connection therewith.
Howard Charles Green: In making his statement last night the minister said that the new settlement bill would provide for assistance to men who wish, to take up small holdings and who would be earning at least a portion of their income in some other way than by farming.
I wonder if he would amplify that statement. For example, will the bill cover those men who wish to take up an acre or two outside our cities or towns? In recent years there has been some movement in that direction and I think that if the bill is made broad enough to cover that particular class of soldier it might be very helpful in improving conditions which have existed in our cities throughout the depression years.
Hon. IAN A. MACKENZIE (Minister of Pensions and National Health): The answer is yes. The bill is much more flexible in that regard than the old Soldier Settlement Act, but it is intended to have possibly a qualifications committee set up to deal with small holdings and with the question whether men might be self-sustaining or whether there might be supplementary wages earned in the cities or small towns.


Howard Charles Green: Is it intended to cover only the exceptional case, or will there be many thousands of such cases?


Mr. MACKENZIE (Vancouver Centre):: It is contemplated as a definite policy under the proposed bill.


Richard Burpee Hanson: That is to say, small allotments are to be made to those who may not be farmers and they would cover the chicken farmer, the man who lives on the outskirts of a community and works in the city.


Ian Alistair Mackenzie: Provided it is buttressed by employment opportunity. Otherwise it might not be economical.


Richard Burpee Hanson: If he had employment, that would be a condition precedent.


Ian Alistair Mackenzie: Yes.
Mr. HANSON (York-SunbupO: What are the buttresses to which the minister has just referred as being prerequisite to assistance under this scheme?


Ian Alistair Mackenzie: In regard to the small holdings, the buttress would be reasonable assurance of employment opportunity within a reasonable distance of the holding.


Mr. WRIGHT:: Is it intended to have small holdings adjacent only to industrial areas, or will they also be established in places adjacent to the cities of western Canada?


Ian Alistair Mackenzie: I understand it is the intention to have them in the vicinity of industrial areas where there would be reasonable assurance of employment opportunity.


Richard Burpee Hanson: I regret that the exigencies of the occasion-I think that is a good phrase-compelled me to leave the chamber last evening before the minister had completed his statement.


Mr. MACDONALD (Brantford City):: You were rendering very good service.


Richard Burpee Hanson: I hope so;
I am not always the best judge of my own efforts. I should like to express my thanks to the minister for the courtesy he extended to me in sending some time ago a review of the remarks which he made last night. I am interested in this question of land settlement. I am not at all sure that it will be a success;
I have grave doubts, for various reasons. I am not going to pour cold water on the scheme; I hope it may be a success. But undoubtedly its success or failure will depend in large measure on the management, the character of the men who undertake obligations under the scheme, and the direction given to the men.
One of the first requisites for a land settlement scheme in respect of farming is that the applicant must have a genuine love of the soil. It is no good to put a man on a farm unless his heart is in it. Many of the men from the cities and towns in the old country who were brought out here under land settlement schemes had no knowledge of conditions in this country and had no real love of the soil. That I think is the first requisite for the successful operation of any scheme of this kind.
The second requisite is some knowledge of farming. I am speaking of those who will become genuine farmers. I want to impress upon the minister and upon his officials who are to operate this legislation, that a man cannot be put upon a farm and achieve success unless he has some knowledge of the work. The officials who are supervising should make very certain that the applicant has a knowledge of the vocation which he intends to attempt.
A third requisite is that no scheme of land settlement for farms should be undertaken with public funds unless the conditions are such that a man may have reasonable expectation of success. I know something about the soldier settlement scheme. It was started as a result of a public demand. Canada had vast
Veterans' Land Act

open spaces, large areas of crown land available for settlement. The scheme was meant to operate for the most part in western Canada where land was still available for settlement, and it was subject to conditions then existing which to my mind doomed it to failure almost from the beginning. I am not familiar with the situation in the west, but in the east there was failure because of inflated values. The minister referred to that last night. But that was not by any means the only cause of failure. One of the chief causes was the failure of the administrative staff-I do not remember who they were, and at the moment it is not important-to see to it that the proper farms were purchased.
One member I heard to-day discussing this matter said that on some of the farms sold to returned soldiers they could step from one stump to the other. I can recall farms in my own province where the returned soldier could almost leap from one rock-pile to the other; from the very beginning he could not hope to scratch a living out of the soil under the conditions that obtained. Therefore a very great deal depends upon the skill and ability and judgment of those who are administering the scheme. The success or failure of the scheme so far as land settlement is concerned will depend in large measure upon the ability of those administering it and their exercise of proper judgment.
An interesting question was raised last night by the hon. member for Lethbridge as to whether we required more farmers in this country. I have my own view. I have never thought that a nation like Canada could have too much agricultural production. If we do not produce we shall never get anywhere. In my own province the lack of success of farmers is due to lack of quality production. The farmers of New Brunswick are not producing enough to feed our own population. Yet in many respects their plight is pitiable. It is a sad admission to make, but I think it is true largely of the maritime provinces generally-
I could except Prince Edward Island, of course, because I believe in certain lines it produces enough to feed its people. But we have continuous!}' the spectacle of foodstuffs being brought in by the carload from Ontario', meat products especially. That should not be.
I am glad to be able to say there is a movement in that province now for greater meat production, sponsored I understand by the superintendent of the experimental station at Fredericton, who is very much alive to the situation. But the reason for the lack of production in New Brunswick is that for years farming in that province, and in various parts of the maritime provinces as well as elsewhere, has not been profitable.

Until it can be demonstrated that men can go on the land and make a reasonable living I do not think the scheme should be encouraged too much. What inducement is there to put a man on a farm in western Canada ito raise wheat? Let us take the classic case, because we hear more in this house about that than anything else. I do not think anyone should be encouraged to buy a wheat farm in western Canada under this scheme until conditions are different from what they are to-day. We might produce more dairy products in this country if we established the necessity for them, and dairy products are in very good demand at the moment. We should encourage the production of more wool. And by the way, without wanting to start a discussion I should like to put this query to the Minister of Finance. Why is it that under the price ceiling the price of wool has been fixed at 25 cents a pound while just across the line it is 41 cents, a difference of about 70 per cent?


Mr. ILSLEY:: I suppose that was the price prevailing in the base period.


Richard Burpee Hanson: It shows the inequity of the scheme.


James Lorimer Ilsley: It does not show anything of the kind.


Richard Burpee Hanson: Well, we shall have to differ for the present. I did not intend to get into a discussion of that.


William Ross Macdonald: The difference in price will increase until they have a price ceiling in the states.


Richard Burpee Hanson: Well, we cannot legislate for them, and I am not going into that at the moment. But 25 cents a pound for wool is inadequate, having regard to the present demand for wool in this country.
I am going to leave it at that. There are various lines of agricultural endeavour which could be made profitable to the farmer if he were allowed to have a little free scope. I suggest to the Minister of Agriculture that it is his duty-and I think perhaps he is already aware of that, and has been endeavouring to give effect to it-to see that the agricultural producer in this country gets a fair return, having regard to all the circumstances, and the conditions which confront this nation to-day. I am sure he is not unmindful of the position and will not be derelict in his duty, in so far as he has the power to produce that result.
I could speak with respect to the potato farmers in my own province who operate at a loss three seasons out of four and who, in the fourth season when they have a chance to operate at a profit, are met by this ceiling. No floor, may I add, is put under them.

Veterans' Land Act
All these things work inequalities which are not conducive to settling the land or to greater production from the land. There are certain aspects of the scheme which are quite commendable, and there are certain others which I query: I have not lived on the land, but for forty years in my own constituency I have been very close to it. I believe I can say I have as much money invested in the land in my own community as any other individual in that community. At all times I have tried my utmost, and always with great difficulty, to keep people on the land.
When this scheme is crystallized into legislation and becomes operative, I suggest the greatest care should be exercised in its operation. Do not let us have any stampede of men to go on the land because of an attractive offer-and I do not deny that from a financial point of view the offer is attractive. The state is making a substantial contribution, to which I raise no objection. I am not objecting to anything which may be done for the reestablishment of returned soldiers. But the element of selectivity must be exercised. A man's own conception of bis abilities may not be the best one. A disinterested judgment by those who are competent to judge is essential. I hope there will be no great rush to buy land on which to settle farmers unless certain prerequisites are determined by the department.
I have tried to lay down only three of these prerequisites, and I believe they are sound. By the way, I notice this scheme is not to be administered by the minister. Perhaps he is to be congratulated upon getting out from under so far as the actual administration is concerned. I should hope that his colleague who is to administer the act, under a single director, will at least read my remarks, and perhaps act on them.
No one should be put on the land simply because he wants to be there. He must have a love of the soil and must know something about farming. Before he is allowed to go on the land there should be reasonable probability of his making a success. This country should not be buying land for men who will not succeed or who will not work. Let it be understood that the fact that the government is handling it is not the important factor. A man must be prepared to work, just as you and I have had to work, and as we will have to work for the rest of our days.
I wish this scheme well. I should like to see everything possible done for the reestablishment of the soldiers, but I certainly advise great caution. First I would say to the director: Beware of the land shark who will
sell you farms for a consideration. Eliminate them, if you can, and deal directly with the owner. One great defect in the last scheme was indicated by the fact that a soldier who was the son of a farmer would apply for land and would wind up by buying his father's farm. That must be avoided, at all costs. The soldier would get the farm, under the agreement; his father had the money, and the farm was sold to the government.


William Ross Macdonald: And the father died and left the money to the son.


Richard Burpee Hanson: Yes,
sometimes he did and sometimes he did not. But it was a sale to the government under the guise of soldier settlement. I hope that did not happen often, but I remember one outstanding case in my own community which I deplored. Had I had anything to say in the matter I would have felt I had the right to interfere, but I had neither the authority nor the responsibility to interfere in that instance. Such are the pitfalls I ask the department to avoid. I have no doubt the department is fully aware of all these difficulties, and that these are matters which have come within their experience during the last twenty or twenty-five years.
Before taking my seat I make one more appeal to the Minister of Agriculture to see if something cannot be done for the general agricultural producers to the end that these price levels, which in many cases are uneven, may be made more equitable.


Mr. SISSONS:: I desire to express my support of this resolution, and to say at the outset that I do not share the pessimism expressed by some hon. members. In my view a plan for soldier settlement on the land after the war is both desirable and in every way necessary, and is to the advantage not only of the returned soldiers but of Canada as a whole.
My remarks will deal chiefly with only one phase of the situation, namely, settlement in the area with which I am best acquainted and which is represented in this chamber by the hon. member for Cariboo and myself. Before dealing *with any particular aspect of the matter, however, I should like to make a few general observations.
I am quite well aware that there are many difficulties confronting any settlement scheme. There is no doubt that western Canada's landscape is strewn with the wreckage of settlement schemes which have failed. Following the last w'ar soldier settlement was not the success it might have been, but
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neither was it the great failure some hon. fnembers would have us believe. So far as western Canada is concerned I believe it will be found that the number of soldier settler failures compared favourably with the number of failures of ordinary settlers.
We have heard the argument that because the farmer of to-day cannot make a living it is useless to put more settlers on the land. In this argument there is of course some merit. But surely if we can predict anything we can predict that we are going to win this war, and that in that victory there will be something new which will mean a better day for agriculture. I believe this resolution is predicated on two things, the winning of the war and a new day for agriculture following that victory.
I agree with the leader of the opposition (Mr. Hanson) when he says that those who will be responsible for this legislation will have to exercise a tremendous amount of care. I was impressed by what he said about the type of man who should come under this legislation. I was struck particularly by his phrase " love of the soil ". I think that phrase embodies a principle that should be followed. I do not think it is sufficient that the returned man was on a farm before he went overseas. I do not think it is sufficient that a certain amount of training may be given. I agree that both these things are necessary, but there must be something more. There has to be what we might describe as a temper for farm life.
I should like to give the committee a few interesting figures from an analysis made by Professor Dawson and Professor Murchie of field studies in the Peace River country in the years 1929 and 1930. They examined some 332 farmers who were located on different types of farms. Some were in well-settled areas, others in the homestead areas, and others in the in-between areas. Of those 332 farmers, 28 per cent had worked only at farming while 72 per cent had been engaged in other pursuits. Of the 332, 81-6 per cent were born on farms and 18-4 per cent were born in towns or cities. Twenty-five per cent had no previous agricultural experience, while 75 per cent had had one or more years' agricultural experience. Of the 75 per cent who had had some agricultural experience, 50 per cent had had from one to nine years' farm training; 32 per cent had had training of from ten to nineteen years, and 18 per cent had had twenty years or more of training.
They examined twenty farmers who had the highest farm labour income. Of the twenty, five had been farmers all their lives and fifteen had spent some part of their lives 
in other gainful occupations. Then they examined twenty farmers who had the lowest farm labour income, and the same thing applied there; five of them had been farmers all their lives and fifteen had been engaged in other gainful occupations for part of their lives. Again they took the experienced farmers and of those in the highest group it was found that they had an average of nineteen years' farming experience, but those in the lowest group had had an average of twenty-one years' farming experience.
I give these figures in order to make this point: one cannot be dogmatic as to what qualifications or what attributes an applicant should possess. It is not enough to say that he must have been a farmer in the past, or that he must have farming experience. While that principle should be kept in mind, there is a greater principle; as the leader of the opposition has said, the applicant must have a love of the land; he must have a temper for farm life.
Another question is the initial capital that a soldier settler should have. We know that in the scheme following the last war he had an indebtedness amounting to 90 per cent, or in some cases 100 per cent, of the value of his property. Inflated values prevailed at that time. It is quite evident that one poor season would wipe out any equity in the property. From the statement of the minister I take it that under this scheme he will have an equity at the start of at least 50 per cent. That is the amount of equity which the mortgage companies require before granting a mortgage, and it is the amount of equity required by the Canadian farm loan board. It seems to me that in that regard he should be placed in a much more favourable position than the soldier settler after the last war.
The leader of the. opposition made reference to administration, and I do not think he stressed that point too strongly. There were weaknesses in the administration of the soldier settlement scheme following the last war, but personally I have a great deal of confidence that the present director of soldier settlement, Mr. Murchison, and the very able supervisors he has now-I am fairly well acquainted with these men in my own province-will make a success of this matter. They know their work, they know their settlers, and there is every reason to expect that they will make a success of it so far as administration is concerned.
I come now to a phase of the matter in which I am particularly interested, that is, the question of new land versus old land. I realize that of necessity most of the land acquired for these soldier settlers will be acquired from private owners. I suggest that

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there are several disadvantages in that. One disadvantage is that you will be buying land from farmers who are now operating, thus putting them on the labour market or into the field as competitive purchasers of other land. However, there is another angle; you may be purchasing land from farmers who because of advanced years are no longer efficient producers. Such land purchases would be all to the good. A great deal of caution will have to be exercised in the purchase of land from private owners. The land may be marginal or submarginal land; it may be overrun with weeds or generally run down. The leader of the opposition emphasized another disadvantage. These purchases are likely to cause speculation in farm lands and raise the purchase price of these lands far above their productive value.
Coming from the Peace River district, I am naturally interested in the frontier. I feel that a large number of these returned soldiers will inevitably seek the frontier. History will Tepeat itself. The Peace River country was settled largely after the last war, and returned soldiers played a great part in the settlement of that country. Probably the majority of these men were not under the soldier settlement scheme, and to-day these soldiers form the backbone of the Peace River country. Between 4,000 and 5,000 of their sons have enlisted, out of a total population of some 60,000. I believe this constitutes a record for the dominion. These 4,000 or 5,000 young men are either overseas or serving in Canada, and every one of them is a salesman for the Peace River country. When they come back they will desire to settle on the land, and they will bring a lot of friends with them.
The building of the Alaska highway is directing new attention to the Peace River country. A large number of United States soldiers are working on that highway and have passed through this country. I am told that a great many of them are keenly interested in settling in the Peace River country after the war. If we are not going to settle this vacant land with our own soldiers, I do not see how in the world we can prevent a large number of returned United States veterans from going there and taking up land. There is in this country the only agricultural frontier remaining unsettled in Canada.
The report of the Rowell-Sirois commission estimates that there are still available 16,000,000 acres of arable land in western Canada, the greater part of it in the Peace River country. This may be an underestimate, but it is probably pretty nearly correct. That land is in part first-class prairie soil, and first-class or second-class wooded soils
which will require clearing. The colony at Tupper Creek has shown that the only way to clear that wooded soil is by mechanical equipment, with which you can clear one or two hundred acres at a time, and that is what will have to be done if that land is to be made available for settlement. This land is not particularly adapted to the growing of wheat, but it is particularly adapted to mixed farming.
There is available in the Peace River country an area which can take care of a large number of returned soldier settlers. I feel that it could take care of all the 25,000 soldier settlers which this measure contemplates, and I think the minister and the department would be very well advised to make this Peace River country the spearhead of their whole settlement policy. You must have some spearhead which will sell this policy not only to the returned men but to the people of Canada. So far as the Peace River country is concerned that territory has already through the years been sold to the people. It has been sold to this house since the days of Hon. Frank Oliver, who spoke here on its behalf. It has been sold to this house by Mr. Kennedy, a former member, and by Mr. Pelletier, my immediate predecessor, representing the constituency of Peace River. It has been sold to this house by other members such as the member for Cariboo, the member for Athabaska, the member for Skeena, the member for Chambly-Rouville, the member for Vancouver-Burrard, the member for New Westminster, and more recently by the member for Davenport, who visited the Peace River country last summer. He came, he saw, he was conquered, and he is coming back again. None of the things which these members have told this house of the Peace River country in times past has been an exaggeration. Here are some of the things which the Minister of Pensions and National Health said about that territory. He referred to it as "that Peace River empire"- "that marvellous territory, tremendously rich in resources"-"the last great undeveloped portion of this dominion, that splendid north-land"-"what is in very essence and very truth a valuable empire in itself." And the Prime Minister has referred to it in these words: "The Peace River country is amongst the richest in Canada"-"a great tract of land crying out for development."
It has the soil, the climate and the sunlight. Nine times in the last fifteen years the Peace River country has brought the wheat championship to Canada. No other agricultural area in Canada has so many hours of sunlight during the growing season as the
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Peace River country, and spring comes earlier there than in any other part of western Canada except in the most southerly part of southern Alberta.
I feel, Mr. Chairman, that the day of haphazard planning of settlement in Canada has passed, or should have passed, and if the present scheme is to be a success it must be most carefully and thoroughly planned. There is no area in Canada where the foundation has been better laid for planned settlement than in the Peace River country Exhaustive soil surveys have been made of that territory by the province of Alberta, by Doctor Wyatt. Studies of settlement conditions in the area were made in 1929 and 1930 by Doctor W. A. McIntosh of Queen's university, by Professor C. A. Dawson of McGill, and by Professor R. W. Murchie of the university of Minnesota. These studies are all contained in a volume entitled "The Peace River Country" in Canadian Frontiers of Settlement. It is an exhaustive study of settlement and plans for settlement of that area. Much similar work has also been done by the experimental farm and illustration stations, and there has been the work of the soldier settlement board itself and of district agriculturists, as well as the many studies made by the Canadian Pacific and the Canadian National Railways. Of late years we have had in the constituency represented by the hon. member for Cariboo the Sudeten colony, whose experiences have brought out information which should be very useful to the minister and the department in any settlement scheme of this kind.
Such a scheme as this, Mr. Chairman, involves a good deal more than just putting the soldier settler on the land and then telling him to root, hog, or die. It means in the Peace River country a great deal more than that if the soldier is to be settled on new land. It means the building up of auxiliary services; it means settling the soldier conveniently to railway and other facilities if he is to have a chance to make good in a real way. He must have contact with all the social services which are required. The settlement of new communities of itself creates, openings for other returned soldiers in a business and professional way. Any such new settlement also means the purchase of equipment, which in turn gives employment to returned soldiers in other parts of the country. And particularly new settlement means this, that you are getting the utmost in value for what you put out.
So far as the Peace River country is concerned, soldier settlement in that area must also mean the development of adjacent areas. 
One such area is now being developed by the Alaska highway. It would mean the development also of such areas as the Yellow Knife mining field and the -rich mining areas lying west of the Rocky mountains in the constituency of Cariboo. It would mean an outlet to the Pacific coast. It would mean all these things and more. I feel very strongly, sir, that there should be vision in any plans made in this connection, and that the Alaska highway, that magnificent and gigantic undertaking, should be a symbol of the scope of the development which will take place in that area.
Settlement means something more so far as the Peace River country is concerned. It means transportation. This has been clearly established in the past, and it is just as clear to-day. In that connection I should like to quote what Sir Edward Beatty said on September 27, 1937, on his return to Edmonton after visiting the Peace River country. I have been in communication with him recently and he tells me that he is still of the opinion that he expressed in these words in 1937:
That north country needs a settlement plan and needs it quickly, and together with that there should be a programme of rail development.
The Peace River district impressed me most favourably. But its one major need still is that of increased settlement. I am confident that the country could absorb at least twice the population it now bears.
I certainly intend to suggest to the federal government that it embark on a broad policy of settlement for the north. Extension of rail facilities should go hand in hand with colonization. That is something that should be axiomatic.
The Peace River country definitely needs more people, and the sooner it gets them, the sooner will an elaborate programme of rail development become feasible and imperative.
That territory is served by the Northern Alberta railway, which was incorporated by this parliament in 1929. The act of incorporation sets out certain rail extensions which the Northern Alberta railway was empowered to build. One of these extensions was from Grimshaw to the northern boundary of the province; another was from Spirit River to a point in British Columbia; another one was from Hines Creek to Fort St. John.
I quite agree that you cannot ask the railways to go in at this time for a programme of railway development. But, as my final thought, I certainly would like to urge that there should be a railway extension from Hines Creek to Fort St. John. It would open up an area which, according to the soil analyses of Doctor Wyatt, contains something like two million acres of the best arable land to be found in western Canada. More than

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that, Fort St. John is the southern terminus of the Alaska highway. That point can now be reached only by a highway which crosses the Peace river by ferry. Surely, with the United States government putting up the money for that Alaska highway, the least that Canada can do is to make Fort St. John readily accessible by rail. I do not know whether the United States engineers have asked for that or not. They may be timid about suggesting to this government what railway extensions should be made; but, seeing that they are taking the responsibility of building the road, I believe our government should inquire of them whether such a railway extension would be of benefit to them. I am certain that the answer would be that such an extension would be of immense service.
That is all I have to say to-day. I wish only to repeat that I am most strongly in favour of the principle of this resolution. I urge that the legislation following it be put forward with vision, with wisdom, and with courage.


Mr. SENN:: I wish to congratulate the hon. gentleman who has just taken his seat (Mr. Sissons) upon the fine description he has given of the Peace River country. I hope, however, that the minister, and the director-whoever he may be-will not be so strongly impressed by the hon. member's eloquence that all the money to'be expended and all the soldiers to be settled under this scheme will be placed in the Peace River district. After all, good opportunities for soldier settlement exist in other parts of Canada, and places where they have just as good an opportunity to be successful as in the Peace River district, however fine that district may be.
I am in favour of a soldier settlement scheme of this nature. The minister has had the advantage of reviewing the last act and profiting by the errors which were made in the drafting of it and in its provisions. I have no doubt that the director, whoever he may be, when the time comes will have the same advantage of profiting by a study of the weaknesses in the administration of that act. I am not one of those who think that that measure and the administration of it were altogether a failure. Undoubtedly there were individual cases, indeed too many of them, which were not successful. But there is this to be considered, that the soldier who settled on the land some twenty-odd years ago under the former scheme was handicapped in a way which the present soldier may not be. Land values at that time were exceedingly high; since that time there has been a constant lessening of values until they have now reached a very low level indeed. It seems to
me that land can be purchased at the present time at a price which will give the present-day soldier much greater advantages than he had under the last scheme.
I fully agree with the leader of the opposition that two or three things are essential if this scheme is to be a success. First, we must have the right type of man to go on the land. Certain types are not cut out to be farmers. There are those who have not the proper qualifications for farming, just as there are men who have not the necessary qualifications for other callings. It seems to me that in large measure the success of the project will depend upon the director who selects these men. He will have an obligation difficult to discharge, and will likely make mistakes at one time or another.
The success of the scheme depends also upon the administration of the act. I am glad to say that I think the terms are very liberal indeed. The encumbrance on a farm should not be too heavy; in fact there was a saying among the older farmers that it should not exceed 50 per cent of the actual value of the farm if the farmer is to have any reasonable prospect of getting out of debt during his lifetime. That is as true to-day as it was in days gone by. There are, of course, always exceptions to a rule, but there have been altogether too many cases where the encumbrance was too high for the farmer to discharge during a normal lifetime.
I have already said that when the former act was brought into effect farm prices were too high and farms were purchased at too high a price. At the present time, it seems to me, that difficulty will not be encountered.
I am sorry that I have not had the privilege of studying as closely as I would have liked, what the minister said last evening. One thing I noticed is that the ceiling of expenditure is to be $4,800, of which $3,600 may be expended on the farm itself and the buildings, and $1,200 for equipment.


Ian Alistair Mackenzie: Live stock and equipment.


Mark Cecil Senn: I suppose the ratio between the cost of the farm and the cost of stock and equipment will vary in different localities. There are in the province of Ontario, I am sorry to say, places where you can buy a pretty good farm, consisting of 100 or more acres and with fairly good buildings, for $3,600. It is said, and I believe it is true, that in a great many instances farms are being sold for less than it cost to place the buildings on the farms. I am doubtful whether $1,200 for stock and equipment is sufficient to furnish such a farm so that the
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farmer may have a reasonable prospect of success. He has to have certain equipment. He must have power of some kind, and as $1,200 will not furnish him with motive power he will have to have horses. He will have to have a certain line of implements not only to put grain in, but to harvest it, and in addition he must have a certain amount of live stock, cattle, sheep, pigs or whatever he may want to produce. In certain localities in Ontario $1,200 will not properly equip a farm. I would ask the minister to explain how this figure was arrived at. What amount of equipment is considered essential, and what has been done in the way of calculating the amount of equipment that can be purchased for $1,200 to furnish a farm of this kind?


Ian Alistair Mackenzie: I have not that information, but I am informed that the committee which sat for eighteen months discussing the details of the measure did carefully survey the very point raised by my hon. friend. If the amount for live stock and equipment were increased it might lead to an increase in the burden on the settler himself, or it might lead to an increase in the public burden, which is $34,000,000 under this legislation. There is the point, which might partly meet the suggestion of my hon. friend, that they have the power of forgoing capital payments for the first five years, paying only interest, so that the farmer might increase his stock by natural increase or by adding to it himself.


Mark Cecil Senn: I suppose when the bill is in committee figures will be presented if necessary to cover that point.


Ian Alistair Mackenzie: Yes. Suggestions will be gladly accepted with regard to the sufficiency of the amount.


Thomas Langton Church: We are asked to declare in this resolution that it is expedient to introduce a measure to make provision for the settlement on the land of veterans of the present war, and so on. What does the government mean by expediency in this connection? When the enemy is at our front door, at the side door and the back door, is this the time to bring in such a measure? Has the minister made any survey of the men engaged in the present war to find out whether many of them wish to go on the land?


Ian Alistair Mackenzie: My remarks last night contained a detailed analysis of a survey that was made of 200.000 service men, and it showed that 33,000 desired to go on the land, or 16-6 per cent.


Thomas Langton Church: I wish to point out three or four principles in connection with this resolution. In the first place, it is not expedient at the present time to introduce such a measure. How does it come about that because we have a plebiscite next Monday these measures are being brought down at the present time when they are not primary or expedient? The result is that the questions which are of primary importance, questions having to do with the prosecution of the war, we are not allowed to discuss at all. How many soldiers overseas at the present time will want to go on the land when they return? In the first place the Minister of Labour (Mr. Mitchell) has announced a very extensive exemption from military service of farmers and their sons, and all that kind of thing. We have to be guided by experience in an important matter like this, and from the unhappy experience of the soldiers in the last war-the experience with regard to veterans going on the land-I am persuaded that at this time, until the war is won, the principle of this resolution is all wrong. I suggest that we should be very slow to adopt it, especially at a time like this. We all know what happened after the last war. I know a great many farmers who went on the land in Ontario to making a living, but because of lack of foresight, vision and efficiency what became of these men after the last war? They had to put up with unemployment, misery, want and greater and greater poverty and have their homes broken up, notwithstanding all the protective measures which the government gave them, including the Farmers' Creditors Arrangement Act, which was a measure for the benefit of farmers and soldiers who went on the land.
Let me point out one or two features of this particular problem. In the first place, I think it is all moonshine at a time like this. It is not expedient to introduce this measure at this stage. I repeat, all this planning is nothing but moonshine when at this very hour Britain and Canada are fighting for their very lives, with the enemy at Canada's front and back doors. They kept on talking like this all last fall in Washington about what they were going to do after the war, until Pearl Harbour came. I suggest that the wreckage will be so great after the war that there will be little to salvage, especially for the men who have gone to the front. With all the exemptions that I have indicated, I know that there are a good many men who do not want to go on the land. A large majority of the recruits are from the industrial centres in our cities and towns and they will not be booted about the country as the men were who came home after the last

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war. They will not be booted about by a lot of stay-at-homes advising them to go on the land, when farmers' sons themselves are going into munitions plants making six, seven, eight and sometimes nine dollars a day with overtime, while these brave men are risking their lives on land, on sea and in the air to protect us, and doing it for $1.30 a day. That is what they are doing, and yet their dependents are denied a cost of living bonus. Some civilians in the civil service get $175 a month and the Minister of Finance rises in the house and gives people of that class a cost of living bonus, while next door is a soldier's wife with four or five children. While that breadwinner is over in England or on the seven seas fighting the battles of the country, how is he treated? How are his dependents treated? He is refused a cost of living bonus although his rent, groceries and everything else are the same as those of his neighbour who does not go overseas to fight. Do you think that these soldiers who have been fighting our battle will put up with this sort of thing as they did in the last war? I say no. It is the duty of the government first to win the war, to put first things first.
Regarding the expediency of introducing this measure, I would quote a couple of lines from something that Napoleon said in his correspondence. At a time like this when the enemy is at the door we are taking a plebiscite, and the government is bringing up secondary matters. This is the second day since we have come back and we are discussing only secondary matters; the chief issue before us, the war, is not being touched. In his Correspondence, No. 15212, Napoleon said that "by gambling with the lives of men you lose the confidence of the troops." That is what we are doing at the present time. We are gambling on the fact that we have had protection on land and sea and in the air through the mother country and we are gambling that the enemy will never invade our own country. We may have a rude awakening. We are therefore proposing all these secondary matters that could very well wait for a time, until the war is won.
War searches men and policies. In the first two years of the last war they were going on like this in Britain. They were considering politics and they made all kinds of mistakes, until in 1917 they decided that these domestic questions should wait until the war was won, otherwise you have the cart before the horse. The result was that at the end of 1916, with the dominions represented, an imperial war cabinet, proposed by Lord Milner, was formed, and it had a great effect in winning the war. It is unfortunate that that is not put into
effect now instead of measures like this, at a time like this, which lead nowhere. The people of this country want something done about the war first.
What about soldiers who were industrial workers in the cities? They do not know anything about farming; why are they not protected? I asked years ago for the protection of that class of worker under the Farmers' Creditors Arrangement Act. In the last war a great many did go on the land and suffered untold hardships. This way of dealing with this problem is all wrong. To the former minister of national war services I proposed a plan in 1936-38 by which these young people, who have now nearly all gone to the war but were then riding around the country on freight trains, should be given some measure of protection by which they could learn a trade, get clothing and lodging and pay, and get military training. One way the government can help large numbers of these returned soldiers is by adopting a large building and reconstruction policy near to and in cities. The proposal in 1935 was along that line. The government spent nearly $80,000,000 on reconstruction and housing. That would do as much as or far more for the soldiers at the front to-day who do not understand farming than such a measure as this. A man cannot learn to be a farmer in a day. You can learn to be a member of parliament in a day and talk about these secondary problems, but you cannot make a success of farming without some knowledge of it, no matter how much protection is given.
Another point is that a great many of these young men who went to the war were apprentices in some kind of industry. To ask them to give all that up and go on a farm is not feasible in all cases. In any event this should wait until the war is won. We are not yet mobilized for war in Canada. The mentality of the people of Canada is not a war mentality; that is plainly shown by the introduction of this resolution. The whole way of doing business here is an illustration of what Mr. Churchill spoke of as the enormous and unquestionable part humbug plays in the life of great people dwelling in a state of democratic freedom. He was referring to the bringing up of domestic matters that could well wait until after the war is won. I do not ask the government to wait that long. But I do say that if that is the form of protection soldiers in England and overseas are going to get when they come back home, telling them to go on the land, when their families have been treated the way they have been, being refused a cost of living bonus, they are made sick and tired.
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I hope the government will get on with the war. They are marking time, waiting for something to happen to the plebiscite next Monday, but the enemy may be here before long.	It is not expedient to bring in a
measure like this now. We have had nothing but unbroken defeat for the last two and a half years; Norway, Dunkirk, Crete, Libya, Malaya, Hong Kong, Singapore, Burma; nothing but failure, and it is because we have failed to do our duty in the last twenty years; we have failed to rearm. I have every confidence in the minister; I admit that he has done much good war work in getting the army mechanized and in other matters. But I think these matters are secondary; we should have some total war effort before the minister goes into these problems, which can wait until after the war is won. We do not know yet who is going to own the country, let alone who is going to own the farms. The people who are protecting us are the men who have gone overseas.


Mr. FAIR:: Is it the intention of the
government to review the cases of soldier settlers under the old soldier settlement board plan, with a view to bringing their debts down to such a figure that they will have a reasonable chance of home security?


Ian Alistair Mackenzie: That question does not come under my department but rather under the department of the Minister of Mines and Resources. So far as I am aware there is no such intention, but any question affecting soldier settlers under the old Soldier Settlement Act can be thoroughly discussed when the estimates of the Department of Mines and Resources are before the house.


Robert Fair: The experiences of the
settlers under the old board have been such as to throw a wet blanket on this or any similar plan until we have in this country a different policy for agriculture. During the years I have been in this house we have argued persistently for a better agricultural policy, and to-day we are still waiting for that policy to be announced. I do not care what business a man may be in, farming or banking or anything else, so long as he is compelled to produce below cost there will be failure and failure and more failure, as we have had under the soldier settlement board and under all farming conditions.
The Minister of Mines and Resources (Mr. Crerar) told us last night that so many men had paid for their farms. I agree that a small percentage did pay for their farms, but the minister will have to agree that a number of them paid not with money earned on those

farms but because they had a little before, and a number of them who had money when they went on the soldier settlement plan are to-day without any. I know of several men who had pensions and sunk that money trying to pay soldiei settlement board loans, and to-day they are either on the road or threatened with eviction. That is not right. Until we have a different policy for agriculture there is no use trying to make a success of this or any other land policy. If a soldier settler is given free land and then is compelled to sell his product at below the cost of production, anyone will see that in the near future he will be on the road.
Last night the Minister of Finance (Mr. Ilsley), as reported at page 1777 of Hansard, suggested that inflation was the cause of failure of a number of men settled under the old soldier settlement board plan. I would say the government were responsible for the policy that existed at that time. If they did not control these matters in the interests of the common people instead of the privileged few, then the government must take the blame for the failure of these men. And if it was their responsibility to control the policy of the country, then it is their responsibility to make amends, even at this late day, for their thoughtlessness and carelessness in the past.
A number of what we might call arm-chair farmers have spoken on this question. Only a few moments ago one hon. member said it was necessary to have settlement in certain parts of the country so that railway facilities and that kind of thing could be built in. He even went so far as to quote Sir Edward Beatty. I believe the policy of the soldier settlement board and several other organizations in the past has been one, not of giving the people of Canada a living, but rather of building up Sir Edward Beatty's Canadian Pacific railway and other similar institutions. I do not believe it should be the policy of the government or the country to use any class for the purpose of building up railways or other companies. Rather the government's policy should be one of placing people in such a position that they may make a living. If the services and possibly the lives of our men overseas to-day have to be sacrificed so that others may make fat profits, then it is high time that some persons other than those in office to-day took over the reins of government.
I intend at a later stage to have something further to say with respect to soldier settlement on the land, but because it is out of order now I shall reserve it until the proper time.

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Mr. FRASER (Peterborough West):: 
Percy Ellis Wright: Mr. Chairman, as one
who took up land under the soldier settlement scheme after the last war, and one who has spent twenty-two years trying to pay for it, I believe I am familiar with this subject from the point of view of the settler. Much has been said to the effect -that the administration was not what it should have been. My experience, however, has been that the administration of soldier settlement was probably as fair as the administration of any other measure.
There were certain basic things which were wrong under the old act, and I am afraid they remain in the present one. I am not going to discuss in detail the provisions of the old act; I shall go into that more fully at a later time. I would point out, however, that under the old act there was no relationship between prices paid and values of products which had to be sold by the farmers later on. We bought land when it was worth a certain amount, when wheat was worth so much, and when cattle, horses and everything else were at certain prices. We are repeating the procedure to-day, only on a smaller scale.
To-day milch cows are selling at $85 each. Cream is selling at 32 cents or 33 cents a pound. What guarantee will the settler have when he buys his cattle that he will be able to dispose of his cream at 32 cents a pound?
Will he be in the same position as he was after the last war, when cream went down to 15 cents or 16 cents. After the war, what will prevent the Scandinavian countries from sending -their produce to the British markets? Shall we be able to compete with them? Under our present set-up, I do not think we shall.
The measure before us envisions a quarter-section as a farm. To-day in western Canada a quarter-section is not an economic unit to operate. The settlers who were able to pay for their land under the old act were those who were in a position to purchase other lands, so that they would have economic units to work. If we are to accept the quarter-section as a unit under this bill, then right from the start it is doomed to failure, because a quarter-section is not a satisfactory unit.
The tendency in agriculture to-day is toward specialization; we find it in every branch of the industry. If we go to the coast, we find poultry ranches with from 2,000 to 20,000 hens. Farms with only a hundred hens have no chance in competition. In my own constituency I know of men feeding a thousand hogs. The small farmer with only a couple of litters has no chance in that kind of competition. Especially is that true in reference to the grain farmers. What chance has a quarter-section of land to-day in competition with the large grain farms? It has no chance in the world; and if that is to be the basis under this measure, I can assure the committee that it is doomed to failure. In my own district I know that in the last two years seven quarter-section farms have been sold and absorbed into larger units. Most of those farmers were men who had twenty-five or thirty years' experience in farming, but they could not make it go. In many instances their farms were paid foT. How can we expect a young man who is green, as far as farming is concerned, to start in on a quarter-section farm and compete with a farmer who has one or two sections of land? It simply cannot be done.
One of the reasons why the old act was a failure, to a large extent, was that certain men who had not had experience and were unsuited to farming were placed on farms. That can be avoided this time. But the two remaining reasons cannot be avoided under this present measure, and I would seriously advise the government to think twice before making the quarter-section an economic unit. It has not proved successful in the past.
To-day in the United States certain schemes which I believe have seme chance of success
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are in operation. Over there they have taken irrigated areas and have settled farmers on small acreages in those areas. Adjacent to them have been larger areas of land to be cultivated on a community basis. Those dry farms have been operated on a community basis, with the irrigated areas. Some such scheme might be set up in certain areas of the west, and I believe it would have a chance of success.
The small holdings suggested under the bill are a good thing, especially when they are set up adjacent to industrial areas where men can obtain part-time employment. That is a scheme which to a certain extent might be extended in western Canada. Around all our towns in the west we have certain developments along this line, where subdivisions are taken over by people who can obtain parttime employment either in the town or on the farms adjacent thereto. I believe that scheme could be developed in Canada for a certain type of individual who desires that kind of employment. But so far as accepting the quarter-section as a farming unit in western Canada is concerned, I doubt very much whether, in view of present-day competition from those who are specializing in various kinds of agriculture, it can be done.


Mr. MacNICOL:: 
Major James William Coldwell: First may I say that I am very glad indeed to note that the government is considering plans for the reestablishment of the returned men after the war. Because of the experience we had following the last war, I am not particularly enthusiastic about the bill that is before the committee. The figures presented last night by the minister himself regarding that experience are on record and show that out of some 25,000 settlers, the number now remaining on the land is approximately 8,000; those who have paid off their land number 2,700; those who
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have sold their equity, 884; and the remainder, over 13.000, have abandoned the scheme either voluntarily or upon notice.
Yesterday from the veterans' association at Drumheller, from a committee of three, I received three pictures. They 'are large enough for most hon. members to see. The first one shows a soldier settlement home after twenty-two years-a shack so miserable that it is a wonder that any human being could inhabit it; yet it is inhabited by a family. Here is the second one, a little better than the first, and here is the third. I have seen so-called homes like these inhabited by soldier settlers across the prairies, and I am hoping that any scheme that we adopt will not be a scheme that will lend itself to this kind of thing.
I am thoroughly in agreement with what was said by the hon. member for Melfort who sat down a few moments ago, that if we are going to have a land settlement scheme for our soldiers we should make sure that the men who are to be settled on the land are settled in an economic unit and in proximity to a market or within reach of transportation facilities so that they can get to market and sell their produce. The economic unit, as he has said, as far as the prairies are concerned, is very much larger than most members of this house think. I am not going into the bulletins which have been issued by the university of Saskatchewan, and which we have quoted in this house from time to time, showing that the economic unit in many areas of the west to-day is at least a section, 640 acres, and that in some instances where the land is light, no sufficient living can be made by a family unless they have a full line of machinery and two sections of land. So the economic unit varies in different places, and one of the reasons why the last settlement scheme failed was that we sent the settlers into districts which were unsuitable for the kind of settlement these soldiers could undertake.
As regards the small holdings near the cities, we should be careful not to think of this as a solution. A certain number of people could be employed in that way near some cities. But when I was at Victoria, spending just one day there, I admit, in December of last year, I took the opportunity of visiting some of the soldier settlement farms and the farms which they had abandoned and which are now settled by British settlers on the Saanich peninsula, very near to Victoria. I found that the stories told there of these small holdings, where the settlers are supposed to work on the land during part of the year and then get supplementary 
employment in the city, were not dissimilar from the stories we hear from the soldier settlers on the prairies. We have had periods of unemployment in the cities, and during those periods there was no supplementary work to be had. In addition, the small holders found that the people in the city could not buy their fruits and vegetables when they were produced. Unless we can devise ways and means of planning our agricultural and our economic life so that our agriculture and industry may be supplementary to one another, and that one may absorb the products of the other, we shall not be able to make a scheme of this sort work satisfactorily.
One hon. member said a few moments ago that Great Britain was bringing a great deal of land under the plough and that she would assist in the feeding of Europe. I do not think that is quite what the bulletin or the government had in mind. I suggest this, that Great Britain will be much more self-supporting after this war than she has ever been before. One who has been there can readily see that land which was never ploughed before, or not ploughed for many years, is now under the plough. In the county of Devonshire from which I come, when I went back there for a day I drove over land which I remembered as park land, land over which deer ran, and I saw this land now ploughed up. I know that when this war ends, the agricultural production of this country will be quite sufficient, and we must not make the mistake of settling men upon the land after the war unless they are thoroughly suitable for that kind of work and unless we can provide them with transportation facilities or find markets for what they produce.
I am hoping that when the war does end, the nations of the world will get together and formulate plans for international trade and commerce which will stabilize that commerce, and stabilize agricultural production to a degree. While I think we are wise to consider plans of this kind during the war, because if peace comes suddenly and we have no plans made for any of our returned men, we are going to be in a very bad position, I want to emphasize, in discussing this particular measure, that we must not consider a scheme of this kind to be any solution even for the 16 per cent of the men who have signified their desire to go back to the land after the war. Much more must be done, and that much more involves the larger picture of the economic structure of this country. I do not like to see this question being discussed apart from the larger picture. We must make sure that plans of this kind fit into the whole picture of Canadian economy

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when this war ends. There is no question that we are then going to be faced with conditions such as we have never faced before. The old methods of laissez-faire have undoubtedly gone for good; whether we like it or whether we dislike it, we are going to be faced with economic planning in practically every country of the world, and we ourselves will have to fit into that picture somehow. I warn the minister and the committee that, while it is wise to discuss plans of this description, we should not look upon them as being in the nature of a solution of the great problem which will face us at the end of this war.
I too, like the hon. member for Battle River, do not propose to go to-day into the whole soldier settlement scheme. I want to say something about it when the appropriate minister is before the house with his estimates, and although he is in his seat now, I do not propose to get that far out of order. The experience of the soldier settlers under the earlier scheme will interfere with the promotion of a scheme of this description. I believe that in the districts where soldier settlers inhabit such places as I have mentioned this afternoon, the very fact of the miserable conditions under which these people live did interfere at the beginning with our recruiting. I have heard young men say, "Look what happened to the men who gave up everything in the last war; see where they are now." In some instances these boys came from places just like that. I know that owing to the progress of the war and the intensification of recruiting efforts, as well as to some extent the economic pressure which was discussed here last night, many of these boys have joined up. But when they come back, though they themselves were bom in rural localities, they are not going to risk getting into the condition in which their parents were or in which people on the land have been right up to the present time.
What I have said applies not only to the soldier settlers but to the agricultural industry very generally. The farmer, it is said, throughout history has always been the forgotten man. He was the slave, the peon, the hewer of wood and the drawer of water. I do not believe that our society can exist and go forward industrially unless we lay the foundations of prosperity in the rural and agricultural areas of our country. That involves much more than a scheme for putting people back on the land; it involves a reorganization of our economic system in such a manner that the farmer will be guaranteed a reasonable return for the labour which he expends and for the knowledge which he puts into his land and into his effort.
While I am going to support this measure now in committee, I want to have it clearly understood that, as far as we are concerned, we want a scheme which will fit into a larger economic scheme to deal with the rehabilitation of the country when the war ends.


Mr. CASTLEDEN:: What is the present equity of the board in the land under administration at this time?


Ian Alistair Mackenzie: It is $30,444,000.


Richard Burpee Hanson: That is the written-down value?


Ian Alistair Mackenzie: Yes.


Mr. DECHENE:: I would not have presumed to occupy the time of this house-as you know, I do so very sparingly-had it not been for the defeatism which has been so evident in this house in the remarks of hon. members opposite,-


An hon. MEMBER:: Past experience.


Joseph Miville Dechene: -hon. gentlemen from that part of the country from which I come, where I have lived practically all my life, where I know that a scheme such as is being brought down by the government under this resolution is possible of successful achievement. I deprecate their manner of speaking, not only for that reason, but also because of the state of mind which it may bring about among our young men who are now in the forces and those who will enlist later. I deprecate the habit that some hon. members have of picking out one case, possibly a sad one, where an unfortunate situation has arisen on account of lack of crop or something of the kind, as a reason for condemning a whole scheme, condemning a whole district, condemning a whole country because of one failure. Time after time I have sat here and heard hon. members trying to make out a case for condemning a whole region and a whole government administration, on the strength of one incident arising in some settlement out west or elsewhere in this country.
The leader of the Cooperative Commonwealth Federation has just pointed to conditions in some shacks. When the hon. gentleman was still in Britain and in swaddling clothes, I, for one, lived in a shack of that kind, homesteading with my father, some fifty years ago. But in those days we did not have
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the hon. gentleman's kind of party to offer us something for nothing. We did not have the sort of policy which seeks to have the government do something for you. We had spirit and courage of the kind which developed the great west, qualities which are still available to make a success of a measure such as the government proposes to introduce.
I wish to support the hon. member for Peace River, whose constituency adjoins mine. I desire also to say something to the committee, the minister and the government about the district which I represent. I beg the indulgence of hon. members if in the short time at my disposal I refer frequently to that particular part of the country, because it contains a great deal of land; and no matter what the hon. member for Melfort may say, or how successful a farmer he may be, I contend that if you put the right man on the right land, such as we have in our district, he can make a living, and a fairly good one.
Hundreds of friends of mine throughout that north land are making a decent living on quarter-sections and half-sections. I say to the hon. gentleman that if he is looking for a fortune, if he wants to make a lot of money, it is useless for him to go on any kind of land, be it homestead or any other kind. Let him join the Canadian Pacific Railway Company or something of that sort. What are we offering our young men to-day, these men who are braving difficulty and danger? Are we going to tell them that they are afraid to go on a piece of land? After offering their lives in the greatest and noblest cause for which any man can venture his life, are they to be told that they have not the courage of their ancestors to go to the lands in the west which are still available and make homes for themselves as their fathers did before them?


Mr. BRUCE:: This is to-day, not yesterday.


Joseph Miville Dechene: I regret that my voice is bad, Mr. Chairman.


Gordon Knapman Fraser: So is your argument.


Joseph Miville Dechene: I have before me the
figures of the last census. Although probably some hon. members who have spoken to-day come from districts which people are leaving, I may say that the constituency of Athabaska showed the largest increase in population in the last ten years of any part of Canada, bar none, not even excepting the far-famed Peace River. We showed practically one-quarter of the entire increase of population in Alberta, and we would have shown a larger increase than that had not the provincial government, with the usual sanity shown by

that government, cancelled some years ago the homestead policy so that to-day there is no more homestead land to be secured in that province.
Those who have condemned the proposed scheme but who say they will vote for it have forgotten that the government are doing what should have been done after the last war. What I am saying now is not a condemnation of the government of that day. The minister in charge of the bill said last night that it was a new venture, that no organization had previously been set up such as we are preparing to erect now in order to provide men going on the land with proper information as to location, the nature of the soil, the possibilities of the district, transportation and so forth. The government to-day are preparing to do all that. We are telling our boys that there will be made available for them an organization fully informed and capable of directing them in any province where land is still available.
From a point 25 miles northeast of the town in which I live the railway plan, as mentioned by the hon. member for Peace River, showed possibilities and indicated what the directors of the two great railway companies thought of that north country from the point of view of future settlement and development. The Canadian Pacific railway for a great many years had no interest in the northern part of Saskatchewan and Alberta until about 1925, and during that time the northern half of those provinces were considered Canadian National territory. Branches were built by the Canadian National Railways from Prince Albert and Edmonton, north, east and west. Later on, in 1927, 1928 and 1929, the Canadian Pacific Railway Company secured charters for lines from Prince Albert in a westerly direction, and a line was constructed to a point 25 miles west of Meadow Lake. The Canadian National Railways constructed north-easterly from Edmonton in the direction of the town in which I live, and the railway is in operation. They had a charter to build a line to St. Walburg, Saskatchewan, and another branch from my home town to join the Canadian Pacific railway at a place known as Beaver Crossing on the Beaver river. They obtained running rights to a place near Loon Lake, and from a point north of Beaver river the Canadian Pacific railway continued in a north-westerly direction to Lac La Biche, to join with the Northern Alberta Railways, leading eventually to a western outlet. It was a vast plan. Surveys were made; plans were all prepared, and when the crash came in 1929, both companies were preparing to give contracts to build

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these different lines. I have available for the committee figures with regard to homestead land at that time which was still capable of settlement in that country. These lands constitute a large area and are productive. The rainfall is almost certain every year, and there is a fair amount of merchantable timber so that the homesteader can earn a few dollars in the winter time. There are a large number of lakes filled with commercial fish-white -dish, trout and so on-and the farmers can work thereat in the fall and the winter and earn some money. With the hon. member for Peace River I realize that the time is not propitious to ask the government to build railways, but the construction of necessary lines should form a part of the enterprise, because plans exist already. They relate to a part of the country which was known to be productive; it was known to have possibilities of earning sufficient to meet any expenditures that might be made in developing it and to justify a railway line extending all the way from Prince Albert into the Peace River and Cariboo country.
The failures of the last settlement scheme have been admitted by everybody. Unfortunately, as a result of lack of preparation, mistakes were made at that time for which we cannot blame the board to-day, nor could wc have blamed them for many years past. I have had many negotiations with the soldier settlement board and have found them willing at all times to meet the settler more than half way. Any man who was willing to do his best found sympathetic treatment on the part of the board, wherever he might happen to be. The trouble was, however, that the purchases were made at a time of inflation. I realize that, unfortunately, human nature is the same everywhere, and I am afraid it will be the same after this war. A good many men who had some influence locally or with the then government took charge of the organization and the placing of settlers. In the district where I live, I can say that at least 150 men were placed all the way from Smoky Lake to Cold Lake. Some of the land was purchased through the agency of some men who had influence with the then government. The result was that land that was not suitable was purchased, and chattels were bought at prices that were far too high while stock was sold at ridiculous figures. I remember a team of horses that sold for between five and six hundred dollars and an ordinary cow sold for $150. That is sufficient to show that there was no possibility of any success. But where the soldier himself used his head, or where he was fortunate enough to fall into the hands of some man who wanted to be fair, he was
able to succeed. I can point out in that district dozens of men who have made good on the land and who to-day are happy. They own their land, or at any rate they owe very little on it. They make first-class citizens, and they are the type of men who are most needed in the west. The returned men who went into that part of the country, after serving overseas and risking their lives, exerted a very beneficial influence among the foreign population of western Canada. They are the type of people I love and admire, for they helped to develop the western plains. Those people from other lands who do not speak our own language and had not the same customs came into contact with our returned men and were helped to a wonderful degree. Our soldier settlers inculcated in them a love of the flag and of our institutions. They have done a great deal to build up the national edifice which we have been trying to rear in northern Alberta and Saskatchewan.
I am the father of a family; I have many close relatives in the forces, and some of them might possibly take advantage of this scheme. I want to congratulate this government upon the method they are adopting under this resolution of bringing back into trade and industry the boys who went out from here and making provision that those who are fit to go on the land can take advantage of the lands available in Canada, as well as upon the other bill providing for vocational training, which together will provide that every one of our boys upon his return will have some place to go and make a decent living after the war.
But is it right for some hon. members to paint such a terrible picture of what is going to happen to us after the war? Is it a proper thing to try to discourage these men, whether in Canada or overseas, to say that the country will not be able to take care of them when the war is over, to induce them to believe that we no longer have the Canadian spirit, that we have lost the courage and initiative of our ancestors, who from the waters of the Atlantic to the sunny slopes of the Pacific and from the gulf of Mexico to the Arctic created civilization and progress on this continent? I believe there will be a new deal after the war. The government is now preparing to bring about this new deal. No matter what my hon. friends directly opposite me say, I believe that to take one example out of thousands of something they evidently do not like and base criticisms of the government upon that is not fair. We want to offer the young men of this country something better than that.

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Since I am rambling on about myself, may I say that my ancestors have belonged to this country since 1632. When the foundations of the city of Montreal were laid, my ancestors were already established on the soil of Canada. I have never despaired of Canada. Even in the darkest days of the depression in 1930-32 when I was a member of the local house in Alberta I moved a resolution as an appeal to the people and particularly to the youth of Canada. It was very discouraging in those days, there seemed to be nothing for the people to do; at one time they were told to tighten their belts and at another time they were told they were too choosy. But I believe we shall never see those things again. We are now offering these chances of resettlement and building homes on the land. I should like to try with these young men to lift a corner of the veil which hides the future of the country I have the honour to represent. It is absurd to say that there are no possibilities here. There are great opportunities for those who come back; with this whole world to be reconstructed and fed, there will be tremendous opportunities for the young men and the young women. I am convinced that there will be more opportunities after this war for those with ambition and courage than we have had in this country for many decades. I say to the young men who are in the forces and to those who, unfortunately, perhaps because of physical defects are unable to join, do not listen to the proposition that this world will not be fit to live in after the war. I resent and deprecate and reject the libels being expressed on the floor of this house against Canada, its possibilities and its people.


An hon. MEMBER:: It is not against Canada.


Joseph Miville Dechene: We often hear it said that the morale of our fighting forces is as important as or more important than anything else, yet some public men do everything they can to destroy it. We know that prosperity and success are almost as much a matter of the mind as of physical achievement. If you lack courage and ambition, if you want something for nothing, then you are not going to succeed.
In supporting this resolution let me say that the district I represent offers many opportunities and that the population will welcome those of the fighting forces who will be so minded as to take up farming there as an occupation. We will do our very best to help them in every possible way. An hon. member said in this debate that the small man cannot compete with the big man. But if a farmer on a quarter-section has only a dozen hogs to sell, and if he knows how to raise them and they

are A-l they bring the same price on the market as the three thousand hogs of the big raiser. I realize that to-day farming is a profession. It is no longer the haphazard thing it used to be years ago. But I repeat that if we place on the land that is available trained men, men who have courage and ambition, and those men receive from the government the help and guidance which I know they are going to receive, I am sure that the present scheme will work to the benefit of thousands of our returned men and to the vast benefit of the part of the country where these men will make their future home.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Herbert Alexander Bruce: Mr. Chairman, I wish to say just a few words in support of the measure before the committee, one which I believe to be a sincere attempt to deal with the very difficult problem of rehabilitation. The minister in his most lucid statement of yesterday explained to the house that for months a committee had been sitting considering the various phases of this matter, and as a consequence of their work he is now presenting to the house what is believed to be the best way with which the matter can be dealt.
I do not think the fact that the Soldier Settlement Act following the last war was to a considerable extent a disappointment, if not indeed a failure, is any reason why we should not try again. We shall benefit from the mistakes made at that time, and avoid the pitfalls which exposed our soldiers to disappointment in their effort to rehabilitate themselves-.
There are one or two features in connection with this matter with which I should like to deal particularly. I was glad this afternoon to hear the minister say that the bill would be wide enough to include men who wished to have a small lot of an acre or two which, I presume, could be extended to ten acres. These would be lots where they could live and enjoy rural life, and at the same time assist in maintaining their families while, for a portion of the year, they might be occupied in some industry in a neighbouring town. I hope that this will be considered also from the point of view of the rural districts. I have in mind the necessity of having community centres such as one used to see in France. During the last war I had an opportunity of visiting various parts of rural France. I had also seen them on previous occasions, and each time I had

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been impressed with the methods employed by the French people in the rural districts to obtain, the maximum agricultural production, and at the same time to maintain community life. The people who are conducting the farms do not live on their farms, but maintain themselves in little settlements or communities where they can enjoy the privileges of social life, and bring up their children under those conditions, with schools and churches conveniently located, and with the advantages offered by stores and other opportunities which would be denied them if they were living in remote districts of the country.
Another thing in this connection which has appealed to me as a farmer, is that there should be more cooperation among neighbouring farmers. Surely it should be possible in a community of that kind to have many of the agricultural implements used in common, and arrangements made whereby at harvesting time reapers could be used in common to cut the grain quickly on the various farms. Then, later on, there would be the cooperative method of threshing and marketing the grain. It seems to me a great deal of labour is wasted through lack of cooperation. Although I do not always see eye to eye with the cooperative movement to my left, I believe there is much to be learned and much advantage to be derived from a cooperative movement in many phases of agriculture.
An example of this type of cooperation is found in the Antigonish movement in Nova Scotia. This is under the direction of St. Francis Xavier university and was started in the summer of 1927 by twelve farmers who got together to discuss what they could do to improve their crops and income for the next year. By meeting together during the -winter and discussing their problems and cooperating one with the other, they were able in the following year to sell the product of their farms for $5,300, a sum which had not been possible to realize previously. That work was continued, and it has extended until the present time. I was very much interested in the movement there, because it included housing as well. It was found that by a cooperative effort they were able to build their houses at a much reduced cost, and thereby provide much needed housing which they were not able to obtain in any other way.
I was sorry to learn that the Dominion Housing Act had ceased to function, and I suggest that under this measure it will be necessary to provide housing as well as land. If these smaller allotments are given to
returned men, some provision will have to be made to house them, and it should be quite easy to work out a housing plan in connection with the -measure the minister is now introducing by way of resolution.
I should like to express my entire agreement with the sentiment expressed this afternoon by the hon. member for Rosetown-Biggar when he said that this should be part of a general scheme to improve the lot of the farmer. Farmers throughout the country have had a difficult time to make a living, and we all know quite well that many of them have struggled for a lifetime only to find at the end of their days that they still have large mortgages on their farms.
During the last year in the county of Durham some sixty farmers had to abandon their farms. Most of those were 100-acre farms, which means a loss in productive capacity of some 6,000 acres. It was not a question of selling their farms, but rather one of abandoning them altogether. Therefore, when the government is looking for farms it will find a few in the county of Durham already available at a very small price. Perhaps they could be acquired by the payment of taxes.
My leader expressed my views very clearly to-day-extraordinarily well, in fact, considering that he knows nothing about farming; all of which goes to show that a lawyer can always have a brief.


Ian Alistair Mackenzie: He was brought up on one.


Herbert Alexander Bruce: Many other opinions have been expressed by other hon. members with which I heartily agree. I do not wish to delay the committee further in discussing this subject. My only hope is that when the measure is brought down it will incorporate most of the suggestions that have been made during the sittings of this committee.


Robert Fair: Just before the dinner recess
the hon. member for Athabaska (Mr. Dechene) endeavoured to make a contribution to this debate, and during the course of his remarks he made some misleading statements with reference to the homestead policy of the province of Alberta. While this may not be the place to go into the details of that programme, I do want to say that his statements in this connection were not any more truthful than those he made on another occasion during the last session. I suggest that they be investigated in other channels where the truth can be obtained.
Veterans' Land Act


Mark Cecil Senn: If the minister will bear with me, there are one or two things I should like to find out. On page 1769 of Hansard I find this statement by the minister:
The third and greatest difference is that no soldier settler under this bill will be encouraged or permitted to assume an uneconomic and unbearable burden of debt.
I should like to know if a settler who has been placed on the land will be able to purchase anything on credit. For instance, he may have a horse die when he has no funds with which to buy another, and it would be impossible to continue with his operations without a horse. Will he be permitted to purchase on credit in a case of that kind? A dozen cases of that sort might arise where a man would require to have credit. Will there be any supervision over purchases of that kind, or will he be allowed to go deeper into debt?


Ian Alistair Mackenzie: What I had in mind when I made that statement last night was the fact that at the outset his obligation may only be 50 per cent whereas under the old scheme it was much greater. Also, the rate of interest was greater under the old scheme. There is no question that when a settler is once on the land permission could be obtained for a temporary advance to help him out, subject to the limitation of the measure. The more he progresses, the more opportunity he would have to obtain credit. As I mentioned this afternoon, there is provision for no capital payments during the first five years when a man is having a hard time. I think it is reasonable to assume that provision will be made in the regulations for such purchases.


Mark Cecil Senn: That is by the department.


Richard Burpee Hanson: They will have to have something like that. I understand that all personal property will be vested in the crown.


Ian Alistair Mackenzie: Live stock and equipment. The man does not get final title to the equity until ten years have elapsed.


Richard Burpee Hanson: Therefore he would have very little merchantable credit. I would think that some provision will have to be made.


Ian Alistair Mackenzie: That could be adjusted by the regulations.


Richard Burpee Hanson: Is it the
intention to operate immediately under this proposed statute, or will it be postponed until after the war period?


Ian Alistair Mackenzie: I should not like to be bound down too definitely because this is to be reviewed by the parliamentary committee, but the intention is to have it operative forthwith. I would not be emphatic about the degree of operation, but it must be remembered that 40,000 men have been discharged from the forces already.


Richard Burpee Hanson: I think
that answers my question. The door is not definitely shut?


Ian Alistair Mackenzie: No, not at all. The intention would be to acquire certain lands in the immediate future.


Mark Cecil Senn: I have one further question to ask arising out of the fact that the ownership in stock and equipment is vested in the director or in the department. In that case a settler would have no authority to sell without direct permission from the director. I understand that these settlers will be located in different parts of the country, and without quite a large staff it will be quite difficult to have this permission granted just when the settler should sell his stock or whatever he has to sell.


Ian Alistair Mackenzie: It is provided that he can obtain permission from the supervisor for the sale of certain stock.


Mr. WARREN:: My few remarks on this resolution are prompted by some discussion that took place early in the afternoon regarding assistance to be given to men who are interested only in small holdings of perhaps one, two or five acres. I should like to refer briefly to that aspect of the proposal. If I understood the minister's reply correctly, it appears that it will be necessary for these holdings to be located within reach of industry where the settlers may be able to secure employment. I should like to suggest that consideration be given to placing men in small homes wherever they may want to settle.
After all, I suppose it is the ambition of nearly every man to own his home during his lifetime, but only a small percentage are able to achieve that ambition. There is a growing population of small home owners, men who have perhaps only one acre of land out in the country, sometimes four or five miles from even a village. I have been interested in noting how these people, with only a very small amount of cash, seem to be able to get along, raise a family and in some cases educate their daughters to be schoolteachers. If a man owns a home out in the country, his taxes may not amount to more than $5 a year. He has no rent to pay. If he has a

Veterans' Land Act
good cow, he gets his milk and butter and has skim-milk to feed to his hogs and hens. He will have butter to sell, because it would not need an awfully good cow to produce sufficient milk for that. Then he will have his eggs. If he keeps four hogs and sells two, the return from the two will pay the cost of feeding the four. If he knows how to butcher and smoke his meat, he will have meat that really costs him nothing. If he is industrious, he will be able to get what fuel he requires without having to pay out any cash. He will not have to buy any vegetables because he could grow his potatoes and other vegetables on his land. The result is that at the end of the year he finds that he does not need very much cash to make a living.
I have an interesting example I should like to give the committee to show just how little cash it takes to keep a man and his wife and family. This particular man happened to be working for me, and I asked him how much cash it took to keep him and his family for a year. He had not any idea. I asked him about his taxes, and he told me that because he lived in the village, they were $23.50. I asked, him about his cow, and he said that he had had to buy one bag of chop which cost him $1.70. I asked him about his hay, and he told me that he had cut it along the roadside and had been able to get plenty. He told me that he never had to pay cash for wood and that he was able to grow enough vegetables. After we had gone on for some time I said, "If you had $100 cash, would that be all you would require for one year?" He said, "Oh, yes; that would be plenty." Then I went in to see his wife. This was near Christmas. I asked her about the matter. When I mentioned the $100, she almost screamed. "Lornie has not given me one cent since the cow freshened last spring," she said, "and I have kept the house and myself and Phyllis on what we made from that cow." I told that to a member of parliament, the then member for Southeast Grey, I think it was, and she was horrified that people should live under such conditions. I said, "Tell me what is wrong. They have a nice, clean house and always have plenty of good food. They have meat and vegetables and fruit-everything that any person would want. Their clothes are always nice and clean. They have a good stove, a nice couch, and good beds to sleep in. What more can you ask?" Sometimes they have a radio and they own a car.
I give this, Mr. Chairman, just as an example of the small amount of cash that a person needs to live on if he has a little home of his own and can grow some of his own food, and so I would say to the minister and to hon. members, do not be too anxious to see that the returned men shall settle on land near an industrial centre. If, instead, they keep away from the city and go out into the country, no matter how far out they may go, they can always find work because some farmer in the community is always wanting an extra hand, and in addition there is road work and the lumber camps, so that they never need be out of work. It is not every man who is capable of taking one or two hundred acres of land and making a success of farming. There are men who can get along very nicely in some trade who could not make a success of a farm if you gave it to them, fully equipped, and so I would suggest that consideration be given to these small holdings. They do not cost much.
I had a man working for me last summer and he was preparing to build a good home. He had been paying rent, and he had built a little building in which to store his furniture while he was working for me. I suggested to him in the fall that he warm up that place and live in it for the winter. He was a handy man; he did that, and he told me afterwards that his wife was never so happy as she had been in that little house. He said, "You would hardly notice the small amount of fuel it took to keep the place warm." I said, "Is the place big enough?" and he replied, "Sure, there is lots of room." I suppose that little home did not cost him much more than $35 cash because he had his own lumber. They had two children, and they were comfortable and happy there. So we should not get into our minds that we need to be extravagant in our ideas of settlement. Let us help a man to find some sort of home that he can call his own so that he will be freed from the anxiety of always wondering whether he is going to be able to find the rent at the end of the month. We do not need to be too anxious to settle him near some industrial town or big city. I think very often we would be well advised to keep him as far away from the city as possible.


An hon. MEMBER:: Why?


Ralph Melville Warren: For a number of reasons, and I think you would find that he would get along better and be more contented with the simple pleasures that people manage to find for themselves farther out in the country, and he would then be less likely to develop expensive habits.
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Mr. MacINNIS:: I had not intended to say anything on this resolution, Mr. Chairman, but I am concerned over some of the suggestions that have been made to the minister in regard to the various schemes that might be included under this measure. I want to be as helpful as possible to the minister because I know he is anxious to make a good job of rehabilitation. And rightly so, because it is one of the most important jobs that could be given any minister. We have to have a proper organization of life after the war for the men who are demobilized from our armed forces and for those now engaged in war production-it is either that or chaos. I -think the minister should be commended for making a beginning on this problem now. But I am afraid that we cannot mix a small holdings scheme with a land settlement scheme where a man is supposed to pay for the land and become self-supporting after a certain period. On a small -holding a man cannot produce enough to make his own living, let alone pay for the land. It seems to me they are two separate things altogether. The one scheme will be on a sort of charitable basis, it seems to me, and the other is to a large extent a commercial venture. I would suggest to the minister that he should not promise too much in order to be accommodating. These matters should be looked into very carefully to guard against spoiling one scheme by widening it to include the other. I am not suggesting that nothing should be done in the way of small *holdings, but I do suggest that it should be kept separate from the real land settlement scheme.
We should remember also that any land settlement scheme to-day must be undertaken in the light of a full knowledge of the social and economic conditions prevailing. Many people when they talk about land settlement refer to what our fathers and grandfathers did in settling the land, and they overlook entirely the fact that conditions are quite dissimilar to-day. I was brought up on a pioneer farm where we saw very little money but where we could live fairly well because what we consumed was produced on the farm. We produced our own wheat, took it to the grist mill and had it ground into flour, and the flour -was baked at home. We produced our own potatoes and vegetables, raised our own mutton, pork and beef. Of course we also had quite a bit of herring which we had to buy, except that in the spring of the year we caught a few. I have seen my mother shear the sheep, card the wool and knit it. She could not weave, but a neighbour woman would do the weaving.

All that is changed to-day. We have such and such a company to do our laundering, another company to do our baking, and all the time we are being pressed to have somebody else do our darning, mending and all that. The old life is changed. The farmer to-day requires money to pay for everything which was formerly produced in the household. That money has to come from somewhere. It must be produced on the farms through the sale of agricultural products, or come as income from some other source. If we are to have a land setlement scheme under which those who go on the land are supposed after a year or two to be self-supporting, they will have to be provided with fairly large tracts, depending upon the particular kind of farm product they intend to produce, and there will have to be a market for what they produce.	.
I advise the committee not to be too sanguine of the success of any venture of this kind. The fact that we are living in a machine age is as true of agriculture as of any other kind of production. The more agricultural machines you have, the fewer farmers you will require. So, when the scheme is all ready, the continued improvement in farm machinery will result in a greater volume of farm products than can be sold, and our problem will not have been solved; it will have just begun. I make this first suggestion to the minister with the best of intentions, and recognizing that the minister wants to help the person with a small income who hopes to add to his living by having a small holding, but I do not think we should include the two kinds of settlement under the same bill.
Another thing he should remember is that the farmers of Canada by and large are in a bad way. I believe I am right in saying that one-half of the farmers of British Columbia are not self-supporting on the land and must have some kind of other work in order to keep going. There are those here from British Columbia who may know a little more about farming in that province than I do, but I have travelled through the province, and I am quite convinced that not more than half the farmers support themselves wholly f-rom their farms.


An hon. MEMBER:: It is the same in
Ontario.


Angus MacInnis: These are things which
we must keep in mind when we are organizing this plan. We must not be too hopeful that we are going to settle all our problems by putting people on the land.

Veterans' Land Act


Mr. CRUICKSHANK:: The farmers of
British Columbia have been mentioned so I should like to say a word, although I had not intended to say anything until we got into committee on the bill. I heard an Ontario farmer talking about putting a man in a S35 shack. I wonder how many recruits we shall get for our magriificent air force if they think that all we are going to offer them when they return is a $35 shack to live in. I wonder how many recruits we are going to get to join other branches of the service if we tell them that we propose to send them up to the Peace River district, no matter how far it may be, perhaps away in the wilderness. The proposition is not reasonable. I have not heard many returned soldiers speak in this connection. I am not going to talk at this time about the soldier settlement board, for I do not think this is the proper occasion, when we are discussing the present resolution. I may have something to say about the board later.
It seems to me that we are wasting a lot of time. Perhaps I am wasting some now. We have to win this war before we settle anybody. If any hon. member supposes that after this war these young men are going to be satisfied to be settled away off in some area forty miles from the nearest contact with civilization, he is badly mistaken. Speaking as a farmer member, I say that the hon. member for Vancouver East is correct in his reference to the position of farmers in British Columbia, except that I would say that 75 per cent, rather than 50 per cent, have not been able to support themselves solely from their farms. There is hardly an area to which that statement does not apply, with the possible exception of the Okanagan. I doubt if it does not apply there as well; But in the rest of British Columbia 80 per cent of the farmers have heavy mortgages and are behind in their taxes. Before you can settle these men on the land, the first thing you have to do is to find a market at proper prices for what the farmers produce. Apparently, from what was said by my good friend the hon. member for Renfrew North, or one of these millionaire districts in Ontario, all the farmers there are prosperous. But I should like to mention one farmer who came from that district to my district last year. He is one of these city farmers, with a big fortune behind him. We have 'been told by one hon. member from Ontario that eggs can be produced at a profit at nine cents a dozen. I may refer to a letter written by this city farmer who had a big business behind him, with regard to the fortune which could be made in the Fraser valley. This man found that things turned out very differently; he had
to sell all his cows and all his other live stock, and he is now subdividing his property and selling it in five-acre plots. It is very easy for people in other lines of business to talk about the fortunes to be made in farming.
I am going to support any bill which will help to rehabilitate returned men, but the minister or anyone else who knows anything about returned men knows in the first place that you are not going to be able to talk to the young soldier coming back from this war as you talked to the soldier of the last war. It is all very well to say, "Here is this magnificent pioneer area for you to develop. Your grandfather did that sort of thing and now you do it." Possibly he should pioneer, but do you think he will be willing to do that? I say to my hon. friend who suggests building these mansions for $35 that I do not know where a man can make a living in British Columbia by working a small place and picking up jobs on the side. Ask the hon. member for Vancouver East or any other hon. member from British Columbia where you could pick up work in the last ten years out there? The Minister of Labour knows. We had some ten thousand single men from eastern Canada in British Columbia, and the best we had to offer them was relief. Remember that after the war we shall also have the problem of those who will be unemployed following the closing of our war factories.
I am right behind this bill, but I want to emphasize to the minister that neither this nor any other farm scheme will be a success as far as the soldiers are concerned, or a success ultimately for the treasury of Canada, if you start these men with a heavy debt on their shoulders. It would be cheaper to give them their farms, wipe out the heavy cost of administration, and let them have something to live on.


Mr. BLACKMORE:: There is one more thought I feel I should like to express after the words of the hon. member who has just taken his seat. He asks if we believe that the returned men will be satisfied with a project of this kind. Certainly they will not be. I should like to know whether the members of this house are satisfied to offer them such a thing.


An hon. MEMBER:: No.


John Horne Blackmore: I should just like to know whether the members of the parliament of Canada have sunk so low as to offer the men who volunteer to go and risk their lives a miserable pittance, on their return, an opportunity to spend a life of penury.


Richard Burpee Hanson: What about growing sugar beets in your country?
Veterans' Land Act


John Horne Blackmore: That would be bad enough. It is very hard work. I believe that some hon. members who spoke this afternoon have altogether lost a correct sense of perspective. They have forgotten that we are a community of something like twelve million people living in one of the most richly endowed countries on the face of the earth, and that we are living in the year 1942. Certainly we should not be expecting our soldier sons to be forced to live according to standards which might have been acceptable in 1542. Let everybody bear that in mind as he faces each of the problems pertaining to the rehabilitation of the returned man.


Mr. ROSS (St. Paul's):: I have just a few words to say to-night.


The CHAIRMAN:: The widest possible latitude has been allowed, but only the principle should be discussed at this stage. This is a resolution; it is not a bill. I am in the hands of the committee, but I would point out that if the rules are to be applied they must be applied somewhere.


Douglas Gooderham Ross: I am speaking on the principle of the resolution. One most interesting idea that I have got from several members is this, that the old days of the scythe and sickle in the northwest are gone. There is no use trying to put any returned soldier on a quarter-section. There are many places in Ontario where we can take returned soldiers, and I am going to give my ideas in this regard. Let us go back a great many years to the time when we had the village and, gathered round the village, the shoemaker, the carriage maker, the blacksmith and all the other workers in the vicinity.


Richard Burpee Hanson: The grist mill.


Douglas Gooderham Ross: Yes. One of our
greatest difficulties to-day, one of the things from which we are suffering, is the geographical concentration of industry in various places. What I envision is this. The Minister of Munitions and Supply (Mr. Howe) is not in his place, but he has been endeavouring in our war effort to do something that is very much worth while, and that is what he refers to as bits and pieces. That is, where you have a factory here, a factory there, a little community that can do a good job economically and farm as well. But what have you in the northwest to-day on the farms out there? You have wheat farms, and in some places in the west it is an occupation for only four or five or six months of the year. What will you do with those people the rest of the time? In connection with those farms I sug-

gest that we must get into mass production so that we can produce economically. Why should we be subsidizing poor people who have no more than a bare living on a quarter-section? You have all the machinery in the world, and all you need is cooperation. You need something else for these people to do. On a tract of land of two or three thousand acres you can produce wheat at 25 or 26 or 27 cents a bushel. I will ask the Minister of Agriculture (Mr. Gardiner) if I am right.


Mr. GARDINER:: In most of it you are
wrong.


Douglas Gooderham Ross: I do not agree
with the Minister of Agriculture. As a matter of fact in Ontario there are various parts of the province where people cannot afford individual tractors on the farms, but we have men working together, four or five of them, sharing a tractor. That is what we have to get. We have something that we can really do. We can have these men put back on the land where they like to be, and they can engage in industry as well. That is the solution of the whole problem. Let us restore small communities in the country. Let us bring them all back. Instead of having everything concentrated in one great big city, so that when there is a depression everyone is out of work without anything to live on, if things were spread throughout the country there would be an opportunity for people to make a living.


Richard Burpee Hanson: The minister should make it clear after the discussion which we have heard this afternoon and evening that primarily this is a land settlement scheme. He should distinguish. If he does not in his own mind, I do in mine. There is a great difference between a land settlement scheme and a small allotment scheme. They are two entirely different problems, and while he is endeavouring to gather into the fold some suggestion of a small allotment scheme, primarily what parliament is passing on now is a land settlement scheme. The other finds its place in the picture only incidentally. If he studies the problem, he will find that the small allotment scheme is an entirely different thing. That is all I have to say.


Ian Alistair Mackenzie: I quite agree with the leader of the opposition, and I thought I made that clear, but I did not want to bind myself too specifically because this matter will be considered in detail by a committee of the house and suggestions will be carefully weighed.

War Risk Insurance


Mr. ESLING:: Will the provisions of the proposed measure extend to enlisted men who before having seen active service have been discharged because of physical disability? The same question applies to men who have been called up for training but have been discharged on account of physical disability.


Ian Alistair Mackenzie: My recollection is that the provisions refer only to those who have served abroad or who have served twelve months in the dominion. The question raised by my hon. friend is one that could be further studied by the parliamentary committee.


William Kemble Esling: Let me cite a case. A certain man actually disposed of a profitable business and enlisted. He went into the 111th battery and was discharged a month later because of physical unfitness. That was more than a year ago, and he has not yet been able to secure employment. In one instance he was practically accepted for employment, and when he came before the company's medical examiner and disclosed that he had been discharged from the army he was told, "If you are not fit to serve in the army, you are not fit to serve with us." He has been without employment. What is there in store for such a man? He offered his services to the country and should certainly have some attention.


Ian Alistair Mackenzie: Only those discharged with a pensionable disability would come under the provisions of this measure unless they served twelve months in Canada or served overseas. As regards the man to whom my hon. friend refers, if he was discharged not pensionable, then the welfare division of the Department of Pensions and National Health should obtain employment for him if possible, or try to get various forms of training or benefits for him.


William Kemble Esling: I will go a step further in the same case. The man made his way through Shaughnessy hospital, Vancouver, and was simply told there was no provision for treatment for him. He cannot have even treatment, to say nothing of employment.


Ian Alistair Mackenzie: If my hon. friend will give me the name privately, I shall be glad to look carefully into the matter, because every one is entitled to free treatment except for certain conditions for a year without allowances, and also special treatment sometimes for four months with allowances under special conditions.
Resolution reported, read the second time and concurred in. Mr. Mackenzie (Vancouver Centre) thereupon moved for leave to intro-
44581- 116
duce Bill No. 65, to make provision for the settlement on the land of veterans of the present war.
Motion agreed to and bill read the first time. WAR RISK INSURANCE



PROVISION FOR COMPENSATION FOR WAR DAMAGE TO PROPERTY

[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved the second reading of Bill No. 56, to make provision with respect to insurance of property against war risks and the payment of compensation for war damage.
He said: I made a statement to the house when this -bill was in its resolution stage, and I have nothing to add to that statement at this time. I simply wish to say that when the bill receives its second reading I propose to move that it be referred, not to the committee of the whole house but to the banking and commerce committee. I felt that I should inform the house of that fact now so that the house will realize that in the banking and commerce committee the bill can receive detailed study and analysis.
Douglas Gooderham Ross: What reference will the minister give to the banking and commerce committee, and what powers will he give them to call witnesses?


James Lorimer Ilsley: I shall just refer the bill to the committee. Bills are often referred to standing committees of the house, and the powers of such committees are well understood. They are set out in the rules of the house and governed by the practice of the house.


Richard Burpee Hanson: It will be in the hands of the committee whether it shall summon any witnesses?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: The minister made a statement at another stage of this legislation. I do not think I was in the house at the time the statement was made. It was on the last day before the recess. I read' that statement with care, and I think I understood some of the underlying principles of this legislation. At the same time I am bound to say that a study of the bill and of the minister's statement confirms the impression which I formed when the matter was in the resolution stage that this is a very technical matter. Since I am not an expert in insurance law, I confess at once that I am not in a position to offer

War Risk Insurance

much if any contribution to this debate. Yet there are certain points which I think I should briefly point out.
The preamble asserts:
Whereas by reason of the state of war now existing there is risk of damage to property in Canada by enemy action.
That, of course, is a truism and, being true, it is expedient to bring in some measure such as that now before the house. I assume there has been some substantial public demand for this measure.
What apparently is contemplated is a limited measure of insurance for a limited sum covering a limited area of risk, and I assume that is as far as the government or the minister intends to go at the moment. I have not had time or opportunity to examine similar legislation in the United Kingdom, but I understand that over there the principles are very much more extended, because of the situation now and for some time past existing. That is natural and reasonable. Unquestionably the risk of damage to property from enemy action over there has been and is at the moment far in excess of anything contemplated here. If my understanding of the position is correct, based on announcements that have been made and the information I have received from members of the ministry, the anticipated damage to property here from jnemy action is limited to that arising from sporadic raids on our coast and not from invasion. That may not be a correct statement of the position taken by the military experts of the government, but so far as I have been able to learn the government policy in that regard, from the public utterances that have been made-I am not going to refer to private utterances that I have heard-that is as far as the staff officers of the Department of National Defence have gone in their preparations for our coastal defence. I am not raising any particular quarrel with that. How far short of reality that may be no one knows, least of all myself; the whole thing is in the lap of the gods, and much will depend on what happens in the next few weeks.
In any event I assume that the present bill is in response to a public demand, although I am bound to say that very little inquiry has been made of me, neither have I had any communication with anyone. But in the statement which the minister made he adverted to the inquiry that the ministry had made with respect to this matter, and I shall speak of that in a moment.
Dealing with the bill itself, and without attempting to go into the clauses, it will be noted that the bill enables the government itself to enter into contracts for war risk

insurance; that the terms of the bill are enabling. There is no compulsory provision. As a first venture in this new field it is perhaps as well that it should be merely enabling and not compulsory, because the whole thing, at least for a time, is in the experimental stage. Time and events will determine the wisdom of the venture and whether or not the scheme should be extended.
Section 3 of the bill sets up this enabling provision:
The minister may, on behalf of His Majesty, enter into a contract of insurance with any person to insure against the risk of war damage, any property in which such person has an insurable interest.
That, if I interpret it correctly, visualizes a department of government entering into the business of war risk insurance contracts.
But I do not understand that that is the primary object of the bill. If I appreciate the situation aright, the minister proposes to use section 4 or some other enabling power in the bill whereby the actual insuring will be done by insurance or casualty companies. I am assuming-and he will correct me if I am wrong, because I have not had him give me a technical explanation of the bill-that he intends to operate under section 4, whereby the minister is enabled to establish one or more schemes of insurance, as he sees fit; or that he may refer to a separate condition that may obtain against which insurance will be taken out along the lines of the war risk insurance visualized by section 3. I should like the minister to make that clear.
However, if any other concrete scheme of war risk insurance is contemplated being set up under the bill, that is to say if the minister has in mind any scheme of war risk insurance other than that contemplated by the provisions of section 3, read in conjunction with the other appropriate sections of the bill, then I think he should tell the house what he has in mind. If there be such other scheme in contemplation, then I suggest to the minister that in conformity with sound legislative practice and sound policy the principle of suoh other scheme should be set out in the bill itself, and should not be left to the minister or supervisor really to legislate other war risk insurance schemes never contemplated by parliament.
I may be entirely on the wrong tack in this matter. I am speculating to a degree, and I should like to have a little more precise information. If there be such other scheme in contemplation, then I suggest to the minister that the principles of such other scheme of insurance should be incorporated subsequently in the body of the bill, and that he should make that clear; because, according to my way

War Risk Insurance
of thinking, under the provisions of section 4, read in conjunction with section 32, the minister may set up a scheme entirely different from that contemplated by section 3. Or he may set up any number of schemes. I suggest with great respect-and I do not intend to be controversial or destructive, but rather to be constructive-that parliament ought not to give to any department of government blanket powers of this kind, even in wartime. Of course it is a fact that in wartime, necessities on occasions may require full plenary powers in certain spheres and capacities directly connected with the war. But this would not appear to be one of those occasions. If the minister has in mind the setting up of any other type of insurance, then I think it should be set out in the bill. That is the principal objection I desire to register at this moment to the bill itself.
As I said before, I do not wish to hedge about this thing, but I must say that the minister's intentions are not quite clear to me. In fact I think it is clear from his previous declaration that it was not the intention of the government to enter into actual contractual relations under the provisions of section '3, but to utilize the facilities of existing insurance companies.
I may be wrong as to that, but I believe that is a fair interpretation to be derived from his words. But if it be true, may I say that I am not condemning his suggestion. I think it is worthy of the most careful examination, because I am one who believes that private enterprise will do a better job than any government department in a purely business matter such as this. I think it will be handled better, and greater care will be taken. They have a stake in the matter, and they will exercise greater care in the whole contractual operation, right down to the point of settling. Private enterprise may not be able to take all the burden in this matter. I do not know how great the burden may be, measured in terms of dollars and cents, and it might be able to take on the financial obligations only at r prohibitive cost.
This is an experiment. When the proposal was before the house on March 27, the minister made a statement in which he indicated that the bill was presented after an exhaustive study of the problem from coast to coast, and that a report had been prepared for him by an eminent member of the legal profession whose name he did not mention. The report had been prepared after that gentleman had visited the Pacific coast, the maritime provinces, Quebec, Montreal and Washington. I
regret that the minister did not give the house the name of that eminent member of the legal profession.


James Lorimer Ilsley: Mr. D'Arcy Leonard of
Toronto; I mentioned it yesterday.


Mr. JACKMAN:: A good man.


Richard Burpee Hanson: I have
no doubt. I have not had the honour of this gentleman's acquaintance. I have no doubt, however, that he was quite competent to make the report to the minister. I should have thought that perhaps we who have an interest in the matter, or who are trying to do our duty, might have had a copy of his report. It would have been informative, at all events. Perhaps it is my fault that I did not receive a copy of it; I dare say if I had asked for it the minister would have given it to me-although possibly it is confidential. ,


James Lorimer Ilsley: No.


Richard Burpee Hanson: It would have been not only informative but would have been of great interest to those who are really interested in this proposal.
. The minister stated that in addition the question had been studied by an interdepartmental committee of capable civil servants, and by the office of the superintendent of insurance. He further stated that there had been full consultation with the official representatives of the fire and casualty insurance companies of Canada, and that with the aid of such advice and material the plan of war risk insurance and compensation as embodied in the bill had been formulated.
I commend the minister for the pains which I know must have been taken before this bill was drafted. At the same time I regret we were not given a copy of the report for our information before the legislation reached this stage. All of the minister's statements certainly indicate to me that there has been careful preparation of this bill-and that is as it should be.
The minister then went on to describe the British precedents, which no doubt are very helpful, although conditions there are vastly different from what they are here, and from what we hope they may continue to be. He also indicated the situation in the United States where a corporation has been set up under the Reconstruction Finance Corporation, and authority has been granted to pay over a sum not in excess of a billion dollars to the War Damage Corporation funds. He also indicated that New Zealand had
44561-116i
War Risk Insurance

recently adopted compulsory war risk insurance based upon fire insurance policies already in force, as I gathered from his statement.
From what he said I gathered that what is indicated in Canada is a scheme based on the experience of some of these other nations, but very limited in its scope and application. The minister then laid down four principles which he stated were the basis of the bill: First, that the burden should be distributed equally across the country, because the whole nation is at war. Prima facie I should say that requires some further explanation. I am not dissenting from it; I can see sound reasons why it should be that way. It is a war risk that is being assumed, and the cost of that may be substantial, although perhaps not much in a given case. Being a war risk, it may be just to say that the burden of carrying that risk should be borne by the nation as a whole.
Then he went on to say that the second basic principle was that the insurance should be voluntary rather than compulsory. As a beginning, I do not think there can be much criticism of that principle. It is an experiment. I do not think we would want to put into effect a compulsory war risk insurance scheme. Without being able to measure in any degree the risk involved, a compulsory system is not justified in Canada at the moment.
The minister referred to the third principle which was that a certain .minimum coverage should be given to all home owners, householders and certain others without the payment of premiums. I am not just sure that that is sound. Per se I just cannot understand why those who have a certain minimum coverage or who come within certain classes of property owners should be free from the payment of any premiums. It may be that that is the system followed1 in other jurisdictions; I do not know, but at first blush I just cannot appreciate why there should be no premium cost to the owner. I cannot see that that is absolutely sound. After all, this is not to be a compulsory system, and it may be that there are sound reasons for that principle. I am not sure that it is absolutely sound having regard to the fact that under principle No. 2, the minister stated that no property owner is entitled' to compensation unless he along with other property owners has made a special contribution proportionate to the indemnity he would get. I just cannot seem to add up those two things.
The fourth principle enunciated by the minister was that the payment of indemnity

and compensation, except in cases of undue hardship or national importance, should be postponed until after the war. That is a pretty hard provision. I realize that the minister has stated that this is based on the theory that war needs must have priority, but there is an elasticity in the language with respect to the payment of indemnity and compensation except in cases of undue hardship or national importance. This will mean that certain persons will get paid and certain other persons will not be paid. That will give rise to great dissatisfaction. The phrase "cases of undue hardship" can be defined, but any significance can be given to the phrase "national importance." I just do not understand that particular class of case, and I think this should be made clear. Perhaps this is a matter that could very well be discussed in the banking and commerce committee. However, I do not expect to be able to attend the sessions of that committee, so I think I should make these observations here.
I do not think the time of payment should be left entirely to the discretion of any department of the government, or even to the minister. If there is a contractual obligation for which a premium has been paid, then I think there should be some stated time of payment. It should' not have to wait until a declaration is made. I suggest to the minister that the time of payment should be made certain in the bill or in the contract itself. Then the minister went on to say, as reported on page 1703 of Hansard of March 27:
The insurance policies will be issued by the existing fire and casualty insurance companies through their established agents.
That is what I was referring to before. If that is the settled policy of the government, I do not see why it is not incorporated in the measure itself. I have glanced over the measure, and I do not see anything to indicate that that is to be the line of policy adopted by the department in connection with this matter. As I said before, I offer this criticism, not in a spirit of opposition to the bill but because I believe that this is the proper method of legislating once a policy is laid down. The bill itself should, in concrete terms or in as concrete terms as possible, follow the theory and principle of the policy.
The bill provides for the deduction of premiums for income and excess profits tax purposes only to a limited extent. I should like to have from the minister on some appropriate occasion an explanation of why

War Risk Insurance
there is a limitation. The coverage will be small and the premiums cannot be great, relatively speaking, so I cannot see why there should be any limitation in the matter of deducting premiums for taxation purposes. I think that should be a legitimate expense. At least, that is the wTay it strikes me and I think it would so strike any business man. I do not blame the minister for trying to get all the revenue he can, but why penalize a man who takes the precaution of insuring his premises against war risk? Why not allow him to deduct the premiums just as he would deduct fire insurance premiums as a business expense? The minister has stated that he will recommend that the clause relating to the deductibility of premiums for income tax purposes should be discussed in the banking committee. He stated that he was not wedded to any particular view in regard to the matter and I gather, therefore, that he has an open mind on the subject.
My view is that in connection with business properties this should be deductible in full, taking into account the cost of operations. There may be some reason why there has to be a limitation, but it has not been made apparent to me. Section 28 provides:
The premium payable with respect to any contract of insurance shall, for the purposes of the Income War Tax Act and the Excess Profits Tax Act, 1940, be deductible as an expense of carrying on the business if the property insured under such contract of insurance is used in connection with and required for the purpose of the trade

I am not suggesting that there should be a deduction in connection with premiums paid on private homes. The section goes on:
-but such deduction shall only be allowed to the extent that the total taxes payable by the insured under the said act are thereby diminished by 40 per centum of the said premium.
I should like to have an explanation of why that limitation is there. Just what the effect of that overriding provision is, I do not know at the moment and I have not sought expert advice. I think we should have some further explanation from the minister.
There are other observations I should like to make with respect to other sections of the bill, especially section 32 which gives power to the governor in council to make regulations. This matter of legislating by regulation is becoming acute from time to time. I object to the principle, and I think the house ought to object to the principle of legislating by regulation or by order in council in connection with things that ought to be in the statutes themselves. I do not like the theory that a bureau of the government is to be
given from time to time the power of substantively enacting legislation, even within the ambit of the restrictions contained in the authorizing clause, unless it is absolutely necessary.
We are regulated to death to-day in matters in connection with the war. I believe that a large amount of that is necessary, but here you are giving power to an authority of government to put into these policies contractual obligations about which parliament knows nothing. They may be restrictions, or what not. Perhaps I am not expressing myself very well, but the principle, I say, is bad. I know it is the easiest thing in the world for government draughtsmen to put this class of clause in a bill. It is not new in this parliament; it is not new in the mother of parliaments. Hon. members who are students of legislation and of the law will recall a book that was written by a former Lord Chief Justice of England, Lord Hewart, under the title of "The New Despotism." I think I should register a protest on every occasion upon which I meet this form of despotism. I wish I could see some more evidence of being backed up by my colleagues in the legal profession. I am looking at one of them right now (Mr. St. Laurent), but I am not backed up at all.


Angus MacInnis: They were opposing you
in 1934.


Richard Burpee Hanson: That is
water over the dam so far as I am concerned. I am living in an entirely different age to-day.


An hon. MEMBER:: They are too.


Richard Burpee Hanson: They are too, but let us confine ourselves to the immediate question before us. My hon. friend the member for Comox-Alberni (Mr. Neill) suggests they are living in a different age too, but do not know it. Perhaps that is true. However, it is beside the mark at the moment.
I desire to register my strong protest against this policy of legislation by regulation. That is not what parliament is here for, and we should not be delegating our powers to even the best of civil servants to legislate for us. I would ask the minister to give consideration to that.
The power to make regulations given by this bill covers a pretty wide range. I am not going to take the time of the house to analyse the regulations. Hon. gentlemen can see them for themselves if they will look at pages 10 and 11 of the bill. They are contained in no less than thirteen subsections and all the governor in council has to do is to pass an order in council, not even under
War Risk Insurance

the War Measures Act, which is the godfather of most of these things. Then it is put in the Canada Gazete, which nobody ever sees, and the result is that nobody knows what the law is. That is one of the dangers of legislation by regulation under order in council. Having made that protest, I have not very much more to say.
I would ask the minister if he will enlarge on the principle that payments will not be made under the bill until after the war, meaning, I assume, until after the declaration of peace. He said that war needs must have priority. I do not think we should be quite content with that general statement. A man might have to wait for three years for compensation after a destructive bombardment, which I hope will never happen. My hon. friend the member for Victoria (Mr. Mayhew) is giving me his attention. If his place of business were bombed to-morrow, he might have to wait until after the war to get indemnity, provided, of course, he is insured under this legislation. I do not think that is quite good enough. How will he carry on his business in the meantime? I have no doubt my hon. friend has control of an ample supply of resources-if the government leaves him anything after he has paid his taxes.
I am not opposed to the principle of the bill, but I would hope that the banking and commerce committee will give it intensive study and that the proceedings of that committee will be public so that those of us who have not the opportunity of attending and participating in its proceedings may become familiar with what takes place and the recommendations advanced there from time to time. In this connection I would ask the minister to make available the report to which he referred and to which I have referred, also the recommendations made by the fire and casualty insurance companies who have been consulted, on the assumption that their recommendations have been made in writing.


Douglas Gooderham Ross: Mr. Speaker, I want first of all to congratulate Mr. D'Arcy Leonard who was called in by the minister, and who has gone back through some 150 years of war risk insurance for the purpose of recommending a policy such as we have before us to-night. I also want to thank the insurance fraternity of Canada, all those managers, adjusters and other officers who have given freely of their time to Mr. Leonard in order that the government might be in a position to bring down this bill to be put before the banking and commerce committee for consideration. and I am sure that they will be willing to come forward and give their

services to the committee in order that we may get a workable measure. I personally take a little pride in having been able to expedite this measure because, being connected with the business myself, I have had a great many inquiries from time to time, and as hon. members know, I have frequently asked questions to ascertain how soon the government's policy might be brought down. While I compliment the minister upon bringing it down after making an announcement with respect to it on December 24, I think the delay has operated to a certain extent against our war effort. As I said in the house on a previous occasion, business men who have goods to send to the coast have always been a little fearful, having no insurance protection of this kind, that if anything happened to the goods they would be wiped out.
The minister stated to the house that the obligation to be assumed by the government under this legislation would be not more than $50,000 in any one case. Well, the people of this country may need the government to assume a greater obligation than $50,000, and I do not see the reason for fixing that sum when the bill says further on in section 27:
The minister shall refer to the advisory committee any application to enter into a contract of insurance under which the maximum amount of indemnity which may be payable exceeds two hundred and fifty thousand dollars.
I do not see why the minister says $50,000 in another place because, if we had passed this bill on December 24, we would be assuming obligations up to an amount of $250,000. I think the minister should make an announcement immediately to clarify that situation.
This question of war risk insurance is so vast and takes in so many subjects that it needs the greatest amount of discussion and the assistance of all the experts whom we can possibly get to formulate a bill and regulations which will be workable. After the banking and commerce committee have these regulations formulated, and after the advisory committee have done their work, the regulations should come back periodically to the house or to the banking and commerce committee so that the Canadian people will be informed of them and know where they stand. One of our greatest difficulties, as my leader said a little while ago, has been that so many regulations have been issued without the intervention of parliament. In connection with this business it is almost impossible to draft regulations which will be useful forever. For instance, you form a company of insurance and elect your board of directors; then you appoint

War Risk Insurance
your manager and your staff. Assume, for instance, that the House of Commons is the board of directors; the board cannot be telling the people who are running the business what regulations are going to be in force from time to time; certain rules of underwriting have to be followed. More especially in the present case, where we have something which is entirely new, and with no experience to guide us, we shall have to work by the method of hit-or-miss, and regulations will need to be formulated and revised from time to time.
In the bill it is provided that the minister shall appoint an advisory committee. My suggestion is that this be done, not by the minister, but by the insurance fraternity of Canada. They have done a pretty good job. Under the direction of the finest insurance department in the world, our Canadian insurance department directed by Mr. Finlayson, the insurance fraternity should pick out the people who are best suited for this job. The committee itself should designate the supervisor whom they think best fitted for this job. I believe that that course would remove a great many difficulties. There are thousands of agencies that wish to be consulted in this matter. The success of this scheme depends to a great extent on these agents. It is necessary that they shall be imbued with a patriotic spirit, so that they will be able to get people in Toronto, Saskatoon and Lake Centre, let us say, as well as those who are in hazardous areas such as Vancouver and Halifax, to take out insurance in view of the possibility of losing their property. There are only two ways of doing this. One is to give the agents a high enough commission; the other is to imbue them with a patriotic spirit so that the risk may be just tacked on to the fire insurance policies. By this means we could get a tremendous premium.
Who else are interested? Of course, we have the managers of all the companies in this country. There are the stock companies, the mutual companies, and the reciprocal companies. Each must be represented on the advisory board which we are going to set up. Besides them, we have the adjusters who must be consulted and induced to pick out their best men. If we do these things, we shall have success with this measure.
In reference to what the minister said about spreading the burden over the country, there are a great many ways of doing that. Take what New Zealand did. There, the burden is spread over all the people who have fire insurance policies. It just means that twenty-five cents per hundred dollars is added to each insurance policy. In Canada we have $12,000,000,000 of fire risks assumed by our companies.
If we had compulsory insurance, a ten cents per hundred rate would provide us with $12,000,000. It is not a very big rate; I do not know whether it is enough. A twenty-cent rate, of course, would give us $24,000,000. That is one way. We might have the voluntary method of getting premiums, and also we could follow the course of taking money from the consolidated revenue of the country. Where we take the money from the insured risk, most of that risk would bear on real estate. I hardly think it would be entirely fair, because the hazard is on both coasts and real estate would be bearing it; whereas by the other method each individual one of us would be benefiting by the hazard which the people on the coasts were taking. Therefore, perhaps a total voluntary system is not the best one. Under a wholly voluntary system we would have a specified premium which would be taken out only by those people who were under the hazard-we will say Vancouver and Saint John and Halifax. We should, therefore, require assistance from the consolidated revenue fund. Other things might be considered. Take wheat, which is shipped from west to east under warehouse receipt; compulsory fire insurance is necessary. We might have some compulsory, some voluntary, and some consolidated revenue fund.
We do not know how much money will be required; that is an unknown quantity. We do not know what the hazard is, and there is no experience to guide us. Our position is entirely different from that of Great Britain, Australia, or New Zealand. For these reasons I urge that the best insurance brains of this country be brought together in this committee, so that the necessary study may be made.
In passing, I might point out something which may be more important than property loss, and that is personal accident which may befall people on either or both coasts. I know, Mr. Speaker, that you and I would be quite willing to pay some premium in connection with any physical harm which might come to people who are on the coast and taking the brunt of the risk while we right here in the centre of the country are sitting pretty. That is another thing which must be thought about.
The thing is not as simple as we think. In Great Britain this whole business does not hinge simply on one form of insurance. It is not just a question whether you will insure your house or anything like that. In section 4 it is provided that the minister may establish one or more schemes of insurance as he sees fit. In Great Britain there are seven different schemes at the present time, and they need seven different kinds of people to take care of the risks involved. In this country
War Risk Insurance

we have not seven different schemes. We have not some of the things they have to insure, but we do need a wide range of experience.
With regard to legislation by order in council, I congratulate the minister upon having brought in a bill instead of proceeding to carry out the policy by order in council. I think that the more the light of day is thrown on the question, the better it will be for us; the more the House of Commons knows about it and the more discussion there is in the banking and commerce committee, the better.
There is a provision with regard to regulations. It will be perfectly impossible for us to sit down in the House of Commons-it is impossible for most of us at any rate-and formulate the underwriting principles which will be required in this vast field, which is a life study in itself. We shall, therefore, have to go to the banking and commerce committee, formulate the matter there as closely as we can with all the brains we have, and then leave it so that it may be subject to change.
As regards picking out the supervisor, there is a provision in section 2 that the minister may, with the approval of the governor in council, appoint an officer to be called the supervisor of war damage insurance and may, with such approval, fix the remuneration to be paid to him. I suggest that would be the greatest mistake. Let the advisory committee pick their own man. You might not even have to pay him; they might pay him themselves. I happen to know what wonderful cooperation has been given by the whole insurance fraternity. All the companies of Canada have offered to do the business for the country at cost and the agents will do the same. Let us utilize all their services.
One or two other questions which enter into the consideration of this subject might be interesting to the house. Take the question of compulsory insurance. Let us take a big oil company-we will not mention any names- a company that has a tremendous hazard, for instance, in Bedford basin. Is that company going to be allowed to insure its hazard there without insuring all the rest of its property all over Canada? This is one of the questions which must be considered by the insurance companies and by the banking and commerce committee. Take a mortgage company which has an interest in mortgages throughout the country from Vancouver to Halifax. Will they be allowed to insure only their risks in Vancouver and Halifax, or must they insure all over the country? These are some of the questions that have to be considered. I am saying this only to illustrate the vastness of the whole subject and to show how necessary it is for us to enlist the best brains.

I do not like legislation by order in council, but I think it would be a very great mistake to tie the hands of the committee to be appointed.
One last word. Insurance is a matter of trust and faith as between individuals and companies, and we must have that in this case. You cannot lay down rules and regulations that will be iron-bound. We must have it the other way. It is provided that the minister shall as soon as possible, but within three months after tihe termination of each year ending on the 31st day of March, submit an annual report to parliament covering the business affairs of the minister under this measure for the twelve months ending on the said 31st day of March. I suggest that the committee to be appointed should be responsible for expenditures. Leave it to them. Let them do the job under the control of the superintendent of insurance, and then you will have something that is worth while. I certainly commend the bill to the house.


Mr. A. W. NEILL (Comox-Alberni):: I
wish to support the hon. member who has just sat down (Mr. Ross, St. Paul's) on his suggestion that $50,000 is too small a sum to carry this policy. If Vancouver or Halifax were bombed for an hour, $50,000 would be a mere fleabite in satisfying the demands that would be made. Even if it were $200,000, the same thing might apply.
I want to accept the challenge of the leader of the opposition (Mr. Hanson), although I am not a member of the legal profession. He challenged support from any member of his own profession-he narrowed it down to that- in his opposition to legislating too much by way of regulation. As one who has suffered many things for many years from that practice, I heartily endorse him, lawyer or no lawyer. Someone once said, "Let me make the poems of a country and I care not who makes the laws." I would say, let me make the regulations under an act and I do not care who makes the act, because I have seen the whole spirit and sense and purport of an act crucified by regulation. It is something that lends itself to abuse. It is necessary to have some regulations, for there are very few acts which do not require something of the kind. Section 32 says that the governor in council may, on the recommendation of the minister, make regulations, and it gives three or four specific instances. One would think they were fairly limited to these things, but it goes on to say:
(a) as to the manner of making and the forms of policies. . . .
That seems as if it would confine it to the form of the policy, but under the Old Age Pension Act the same provision is put in,

War Risk Insurance
giving them power to draw up the application form. Of course the application form must or should be limited by the terms of the act. But what did they do? They said the act gave them power to make an application form and to put anything in that application form they chose. And they did, and nearly made a new act. I am glad to see that in the last few weeks the British Columbia supreme court granted an appeal brought forward on behalf of a poor old age pensioner and decided that these autocratic bureaucratic regulations must not override the actual meaning and intent of the act. While I admit that you must have some regulations, they ought to be limited as far as possible and their abuse prevented.
I understand that by regulations made some months ago or perhaps a year ago, provision was made that any damage to life or person of seamen or fishermen, or to their boats I think, should be compensated; I presume such personal injury does not come under this bill which deals wholly with insurance of property against damage and war risk. This is considered important enough to call for a special act. The other protection is even more important inasmuch as it relates to human life, the protection of fishermen and I think other people too who lose their life or are maimed by bombing or enemy action; would the minister not deem that sufficiently important to deal with by a separate act also? Because regulations might come and go, sometimes they go with the government or the individual who formulated them. It would be more satisfactory to have such an important matter concerning the lives of a great many fishermen on our coasts dealt with by statute also.


Mr. BRUCE McNEVIN (Victoria, Ont.):: I note that by clause 4 of this bill establishing an insurance scheme to cover war risks the minister may establish one or more schemes of insurance. Might I ask the minister whether it is the intention to make provision for damage resulting from falling aircraft? Falling aircraft might be Canadian government aircraft or United States or British aircraft.


Mr. SPEAKER:: I would point out that
the debate on the motion for second reading is not the proper time to put questions to the minister.


Thomas Bruce McNevin: Then I wish to refer to
cases where there has been damage done by aircraft of the Canadian air training plan. My understanding of the situation is that there is a committee which has power to make settlements, but there is no statute governing the matter, and therefore an individual whose
property or person might suffer damage is entirely dependent on what might be termed a charitable attitude of mind on the part of this committee. There have been cases where very substantial loss has occurred from falling aircraft, in some instances British aircraft, associated, I assume, with the commonwealth air training scheme. I can give two examples. I am speaking only from memory, but I believe that in the province of Quebec a farmer, or perhaps the better term would be a truck farmer or vegetable grower, had his barn destroyed by fire resulting from a British aircraft crashing. I think the British representatives in Canada have power to make settlements up to 81,000; but if the loss exceeds 81,000, then the whole circumstances must be reported to the authorities in the old country for decision. Naturally that takes many months, and very substantial loss does accrue to an individual in waiting for a settlement. In this man's case the insurance company made a token payment of $200, but that would not replace his barn or equipment or seed, and therefore he is left in an unfortunate position.
In another case, I believe in Ontario, a falling aircraft destroyed a boathouse, and two persons lost their lives. We have no statute fixing the responsibility in such cases. If I am correctly informed, in both the United States and Great Britain there is a statute covering such incidents. As we now have one of the most extensive air training schemes in the world, such cases are likely to increase, and I do not think it should be left to the discretion of any committee to deal with these important and difficult matters. We have some insurance companies that now include damage by falling aircraft in their coverage; but a large number of insurance companies are not prepared to accept that class of risk, very largely because they are dependent, as I have stated, upon a charitable attitude of mind on the part of the committee as to whether compensation can be secured for such loss.
Therefore, if it is not the intention of the minister to institute a scheme to cover such damage, then I believe a separate bill should be introduced to cover matters of this kind, because Canadian citizens are suffering great inconvenience and substantial loss in the time intervening before settlement is made. For example, if an aircraft destroys some fruit trees, the committee has power to make settlement. One of the bases of settlement is that the identity of the aircraft must be established. That is sometimes very hard to do. If a bus or truck or automobile has an accident, then the operator of the vehicle
War Risk Insurance

must remain at the scene of the accident. But it would not be possible for the pilot of an aircraft to remain at the scene of the accident, because there would not be landing facilities there. The law should provide that where an aircraft does damage, there is an onus upon the pilot to report as soon as he reaches his destination that he had an accident which resulted in damage to life or property. I am firmly convinced that it is time a statute be enacted in order fully to cover such a condition as I have outlined.


Mr. GORDON GRAYDON (Peel):: In rising to take part in the discussion with respect to Bill No. 56, I may say I was much impressed by reading to some extent the discussions which took place upon a bill involving to a limited degree the legislation passed by the British House of Commons in 1941, known as the War Damage Act. As was pointed out to-night by the leader of the opposition, there are very substantial differences and distinctions as between the principles of this bill and the principles embodied in the legislation in the old land. For one thing, the question of compulsory insurance has not been adopted by this government in the legislation which is now before the house.
Like my leader, at this stage I am not in a position to suggest to the government that at the moment in Canada there should be anything like compulsory insurance of war risks. But the government might very well give consideration to the extension of the legislation, as time and circumstances may dictate, so that if it should become necessary in Canada for some compulsory form of insurance on war risks, it could readily be enacted, and we could be prepared for such a step.
I wish, however, to voice my opposition to the method by which this legislation is to be carried out. I do not know that I would have objected quite so vehemently against the principle of the carrying out of the legislation in this particular instance were it not for the fact that it followed in a long trail of regulations which are attached to our legislation from time to time. Surely it is becoming clearer from day to day to hon.
members that this chamber is dealing with______
well, I was going to say matters of almost minor importance, in some instances, in connection with our whole war effort administration.
When the War Measures Act was first brought into operation during this war the object most hon. members had in giving it their support was that it would be a 
convenience and an accommodation to the government. In addition to that, we felt it would be of tremendous advantage in the event of any emergency which might have developed from the war. But I do not believe private members generally ever expected the government of Canada to utilize the provisions of the War Measures Act to the extent to which they have been utilized in the last two and a half years. Furthermore, they have extended the principle embodied in the War Measures Act in bills such as this one, and have left nothing but a skeleton for us to deal with in the house, and they have relegated almost the entire legislation to regulations.
I protest against that, because it seems to me that we are not following the precedent established by parliament in the old country. I have before me the War Damage Act of 1941 passed by the parliament of the United Kingdom. This is an act which was debated for many days, and which consists of 102 sections. That was the bill passed in the United Kingdom, as opposed to this bill of only 34 sections now before us. It seems to me that even if we eliminate the matter of compulsory insurance which was embodied in the United Kingdom act, we have not left to this parliament the proper scope and proper sphere of legislative activity to which this chamber and parliament are justly entitled.
The minister may attempt to justify the regulations on the basis that this is more ot less an experiment in war risk insurance. Nevertheless the principle of government by order in council is there. Here again we have the principle of government by regulation instead of by the people. After all, we cannot treat lightly the trend taken by the government with respect to matters which I think might most appropriately form part of the discussion in this chamber.
In Great Britain the history of war risk insurance was one of slow movement. In the first instance there was a commission headed by Lord Weir which investigated the question of war risk insurance in the old land. In those earlier days that commission brought in a report opposing such a scheme, but that report was subsequently overruled, and the act to which I referred a few moments ago was the first step toward protecting the people in matters of that kind. The War Damage Act of Great Britain embodied not only the question of business principles but went almost to the root of the entire social fabric itself.
At this time I should like to read to the house one paragraph from the debates on that bill which took place in the British House

War Risk Insurance
of Commons on December 17, 1940. In answer to the Chancellor of the Exchequer, Sir Kingsley Wood, Mr. Pethick-Lawrence, the hon. member for Edinburgh East had something to say which, it seems to me, indicates clearly what was at the root of the legislation. More than that, it indicates the social and economic movement in the old country. This is what was said on that occasion:
This decision is one which I have felt has very wide ramifications, because in olden days the idea that the community was not responsible in any way for individuals was widely held. It was held with regard to unemployment; it was held with regard to accidents to work people. Gradually we have come to see that we are essentially one another's keepers in these matters, and that we cannot allow people who are injured through circumstances over which they individually have not full control to bear the full burden of their individual losses. The community has, therefore, stepped in. It is stepping in to-day in this matter, and it will have to step in more and more under the complicated system of modern society to meet the immediate dangers to which the individual becomes liable.
Then he went on to deal with the provisions of the war- damage bill which was then under discussion. Under the British act, of course the whole matter of compulsory insurance was considered, and that phase perhaps need not be discussed in dealing with the bill we now have before this house. I should like, however, to point out that it seems to me the present legislation can be regarded only as an initial experiment on the subject.
I can readily understand the difficulties facing the minister in connection with bringing in a measure of this kind, because first of all the question of vulnerable areas comes in. Then there is the question of the difficulty of getting private companies to assume the risks which normally would occur from war-time activity. There is the further difficulty arising from the different forms of warfare this war has brought home to us so emphatically. I think he must in all fairness and all justice consider how this matter has been dealt with in Great Britain. I do not think it is sufficient simply to bring a skeleton bill before this house as he has done and leave so much to regulations.
I was interested in what was said by the hon. member for Victoria, Ontario (Mr. McNevin). In the area from which I come, I suppose that there are more training planes in the sky than in almost any other part of the country, and we are naturally interested in the question of war risk for this type of loss. It is true that up to the present time it has not been substantial. Section 2, the
interpretation section of the bill, has this to say with respect to war risk damage in paragraph (1):
. . . but does not include damage occurring as the result of the restrictions imposed on the display of lights

I assume that this would not cover blackouts.

or of measures taken for training purposes.
I take it that the government has in mind the training of pilots and1 other men in connection with the empire training plan. I think the government should consider the suggestion made by the hon. member for Victoria, Ont., because I believe that many areas in the dominion would be affected.
In connection with war risk premiums we have nothing in the bill to guide us as to what these will be. There is scarcely anything upon which we can base an argument, because this legislation is quite different from that of the United Kingdom, and no comparison or contrast can properly be made.
I would suggest to the minister in charge of this legislation that when the question of war risk premiums comes before the committee he give serious consideration to one particular point, and with this I close my remarks. We have in Canada many men and women who are householders and who are on active service. The homes owned by these people, or the other buildings that they may own, would ordinarily come within the purview of the regulations if, as and when they are made. We should not be picayune with regard to our treatment of these people. I know it is the intention of the government to do the best they can as they see it in their own light, but in many instances I am not sure but that we are treating fairly these men who are serving us on active service. I do not say that with any idea of demagoguery, but I think in this as well as in other matters we should give more consideration to these men. It would not mean much to the country, but it means a tremendous amount to them. If the morale of our fighting,forces is worth anything, it is worth a good deal.
In bringing down any legislation we should be careful to see that the maximum of protection is given to these men. Having regard to the provisions of this bill, I suggest to the minister that in connection with men on active service who normally would be taking out war risk insurance, the premiums should be borne by the dominion government. It seems to me that when men are fighting overseas for us we might make this concession in their favour. I believe it is a right and just charge upon the
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taxpayers whom these men are protecting in the fight for righteousness and freedom. I leave this suggestion with the government because I believe it has some merit, merit which goes further than the mere question of saving a few dollars for the treasury of Canada. It means going one step farther and doing something worth while to improve the morale of these men and to provide a proper relationship between the men who are fighting and those of us who are legislating on their behalf.


Douglas King Hazen: Mr. Speaker the purpose of this bill is to set up a system of insurance of property against war risk and to provide for the payment of compensation for war damage. It was suggested by the hon. member for St. Paul's (Mr. Ross) that the bill might well include insurance against injury to the person, and the hon. member for Comox-Alberni (Mr. Neill) suggested that a separate bill might be introduced for that purpose. I think those suggestions should receive the careful consideration of the government.
The regular insurance companies have refused to issue war risk insurance since the Japs attacked Pearl Harbour, and legislation of this kind becomes necessary.
There are certain definite provisions in this bill. It provides that the owner and occupier of a dwelling house will have his home insured without cost to himself up to an amount not exceeding $3,000. It contains certain provisions for insurance against loss to personal property without cost to the owners of that property. It provides also for indemnity in the case of loss prior to the bill being passed, but only to a limited amount. I take some exception to the limit of $50,000 imposed by the bill upon the payment of damages incurred before the bill becomes law. In my constituency there is a hospital which stands in a prominent place and which provides a vulnerable object for attack. This building cost well over a million dollars and, if it were destroyed prior to the bill becoming law, the damages would be limited to $50,000.
I think the bill should contain a provision to protect a mortgagee, a man who has lent money for the construction of a home. Our ordinary fire insurance policies provide that in such cases loss shall be payable to the mortgagee as his interest may appear, and it seems to me that this bill should contain a provision for the payment of any loss that may be sustained by a mortgagee under these circumstances.
There are certain provisions in this bill, hewever, to which I take serious objection. The bill provides that the rest of the plan

will be established by regulations which will not be made by or apparently approved by the members of this parliament.
The bill provides that regulations will be made as to the manner of making and the forms of the policies, and as to the endorsements on and the applications for the policies.
It provides that regulations shall be made about the premiums to be paid, and about the standard conditions that will be incorporated in the policies; that regulations will be made to authorize insurance companies to execute policies and collect premiums.
In my opinion this system of insurance should not be set up by regulations or by order in council. There is altogether too much government in this country by order in council to-day.
The premiums to be paid, the form of policy, the form of endorsement, the form of application, the terms of the agreements which are to be entered into with the insurance companies-all these should be embodied in the bill or in schedules annexed to it.
The Minister of Finance (Mr. Ilsley) told us when he introduced the resolution that the bill was presented after an exhaustive study had been made from coast to coast. The conclusions of that study should have been embodied, it seems to me, in this bill and should not be left to regulations to be made by civil servants or by an advisory committee that is not responsible to the people of this country. The laws of the dominion should be made in this chamber, with the suggestions, the criticisms and the opposition of the elected members of parliament. We should not delegate our powers to a greater extent than is necessary even in times of war.
We should not let legislative boards or civil servants or advisory committees carry out duties that we were elected to perform, and members of parliament are negligent in their duty to their constituents if they permit the laws of this country to be made by regulations, the terms of which they do not know and have not passed upon or approved. All the provisions of the plan should be inserted in the bill that is submitted to parliament.
If it becomes necessary, as it doubtless may, to make regulations from time to time when parliament is not sitting, such regulations should have force of law only until parliament reassembles and passes and approves them. If parliament does not approve the regulations when it reassembles and they are submitted to it, they should cease to have the force of law.

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This bill is contained in eleven printed pages. The War Damages Act of 1941 passed by the parliament of Great Britain for a similar purpose is contained in about ninety-five pages. This bill is shorter, but the regulations passed under it no doubt will be very long. The bill passed by the parliament of Great Britain is long, but the regulations in all probability are short.
I hope that the committee which considers this bill will see to it that it is amended in such a way that all the details of the plan are contained in the bill itself and that the law is not made by regulations about which the members of parliament will have no say.


John Horne Blackmore: Mr. Speaker, there is one matter which I think should be brought to the attention of the Minister of Finance (Mr. Ilsley) in connection with this bill. I wish to commend him for the purpose and principle of the bill, but I do not think it goes far enough, as perhaps the minister himself would be the first to recognize. It should be broad enough to provide for the protection of all property in the dominion which might be endangered or injured as a result of the war activities in which this country is now engaged. I do not believe that protection of property from war damage should depend entirely on whether or not the owner of the property may have made a contract with the minister. There will be many classes of property in this country which will need to be protected, the owners of which for one reason or another will not have been able to make a contract with the minister in time to protect the property against eventualities which might rush upon us at any moment. I believe there should be something in the bill to take care of situations of that kind. Probably there is, but so far, I have not been able to find it.
The main suggestion I would make to the minister is this. It might be well in a country like Canada to organize this insurance measure in such a way that the provincial governments will cooperate more fully in the organization and administration of the scheme. Already there is at least one province which is going into the insurance of property in rather a big way. I see no reason why each province should not be acting similarly, and I see no reason why cooperation should not be organized between the dominion and provincial governments with the object of accomplishing the aims of this measure.
I intended to comment on the fine spirit of cooperation with the provinces which was manifested in the proposals of the Minister of Labour (Mr. Mitchell) yesterday with
respect to the youth training and vocational training schemes. I think that is the correct conception of carrying on in this dominion. There has been far too much tendency on the part of a great many people in charge at Ottawa to think that somehow or another they ought to run the show. There is a place for Ottawa to fit in, very definitely; but there is also a place, very definitely, for each of the provincial governments; if the people of Canada get the idea that this country cannot be carried on successfully without centralization, the whole country is headed for trouble. Even in a matter like this insurance bill, the fact should not be lost sight of for a moment that the provincial governments are just as vitally concerned with the property within their borders as is the dominion, and consequently will be just as ready to cooperate and work hard to bring about a set of conditions under which that property will be saved. Then there will be no feeling, on the part of provincial officials at least, that there is a tendency to centralize control at Ottawa. I would suggest to the minister that, if the bill is to be redrafted, he keep in mind this idea of organizing a scheme under which the provinces will cooperate with him and perhaps remove a great deal of the burden from his shoulders, and under which also the provinces will be a great deal happier.


John Ritchie MacNicol: May I refer for a moment to the definition of "householder" as contained in paragraph (e) of section 2 of this bill. It reads:
(e) "householder" means an individual occupying and maintaining a self-contained domestic establishment at his own sole expense and maintaining and supporting therein one or more persons connected with him by blood relationship, marriage or adoption.
That would bar from any protection a great number of people who maintain houses- widowers, and widows, who do not have living with them anyone of blood connection. Where would that great number of householders obtain protection under this bill?


Georges Parent: The hon. member will understand that we are not in committee. He has finished his remarks? When the minister replies it will close the debate.


Gordon Knapman Fraser: It is getting late. I did intend to speak, but I am on the banking and commerce committee, and what I have to say I could bring up then. I do wish to say, though, that I feel that this bill is absolutely needed, because neither the minister nor anyone else knows when Canada may have an enemy attack,
War Risk Insurance

and if we do have an attack of that kind there would be a great amount of damage. Therefore, the sooner this bill is put in force, the better for Canada.
There are a few items upon which I wish to remark. I had noted the matter of military aeroplanes used in training; also, in regard to section 2, paragraph (1) (iii), the "proper authority", and also "the carrying out of any attack", that that should include, I imagine, A.R.P. work, because they might do damage, or damage might be done in training, and those things should be covered. That is especially the case when one remembers that bombing planes carry over two thousand incendiary bombs, and it is known that one hundred and thirty-three out of every thousand bombs will cause fires, seventy-five of them being fighting fires, and we have to be prepared. I will speak in committee on these matters.


James Lorimer Ilsley: Mr. Speaker, I wish to express my appreciation of the assistance which hon. members have given by their suggestions to-night. I know there are other hon. members who have suggestions to make, but who, from a sense of responsibility and appreciation of the situation, have decided to postpone their remarks until the bill is discussed in the banking and commerce committee. I wish to express my appreciation of their attitude as well.
Although the discussion this evening has not been long, it has taken a fairly wide range; various sections of the bill-definitions and so forth

have been referred to; and I am afraid it will not be possible for me to deal seriatim with the points which have been raised in the debate. On two or three occasions questions were put to me by hon. members opposite and others in the house. I refrained from answering them because under the rules it is not permissible to answer questions in a debate; they can be answered, as I understand it, only by the person who has the floor, upon request; and I should like to say now that I did not intend any discourtesy to any hon. gentleman who asked me questions when I refrained from repl>
ing. I shall try to answer them now if 1 can recollect them.
The leader of the opposition directed attention to a rather important feature of the bill.
If his objection is well founded, it is fundamental-an objection, however, to drafting rather than to principle. It is not intended by section 4 of the bill to empower the minister to establish schemes of insurance which are not authorized by section 3 and other sections

of the bill. That is to say, this is a bill for the establishment of schemes of war risks insurance, not a bill authorizing the establishment of schemes of insurance generally. The leader of the opposition advanced an argument, which appealed to me as ingenious rather than sound, to the effect that the bill as drafted gives a very wide power to the minister to establish schemes of insurance generally. That is not the purpose, nor do I think it is the purport of the bill. Certainly, if there is any danger of the bill being construed in that way it should be amended, and that matter should receive attention in the banking and commerce committee.
The leader of the opposition has made some reference to the deductibility of premiums for income tax and excess profits tax purposes. I thought that, in the explanation of the bill which I gave the committee of the whole when the measure was in the resolution stage, I presented the reasons why it was deemed advisable to provide that these premiums would not be in all cases fully deductible. To put a simple illustration to the house: if the premium is-for the sake of example-15 cents per $100, and one company taking out insurance is in what we call the 79i per cent class under the Excess Profits Tax Act-roughly 80 per cent-that company would really be paying only 3 cents and the government 12 cents of the premium; while a company alongside, a competing company, which was not in that class under the Excess Profits Tax Act, but was paying 40 per cent, would be paying 9 cents out of the 15 cents and the government the other 6 cents. I put that rather briefly and perhaps not too accurately, because in a sense the government is not paying anything, but the government is paying by loss of taxation in both those cases. In the one case, however, the loss of taxation to the government is 12 cents, and in the other case the loss of taxation to the government is 6 cents. It was with a view of equalizing the treatment of those who insure their properties that the provision which is in the bill was inserted there. As I stated to the house, the matter of income tax treatment and excess profits tax treatment of those who insure their properties is a difficult one. There are three tenable positions. One is that the premiums should not be deductible at all, on the ground that they are not incurred as a necessary expense of earning the income but are really expenditures incurred for the preservation of the capital asset. Another is the position taken by the leader of the opposition, that they should be fully deductible, just as fire insurance premiums are fully deductible.
A third is the compromise which I have sug-

War Risk Insurance
gested in the bill before the house. I merely mention that because it was mentioned by the leader of the opposition and because the matter is one of some importance.
Objection has been taken by several hon. gentlemen to the bill on the ground that too much power is given to the governor in council. That position is always taken by oppositions. When this party was in opposition we took the same position repeatedly with regard to measures of the government of that day, and objections to our legislation have repeatedly been put forward on the ground that we leave too much to the governor in council. There is a difference between war-time conditions and peace-time conditions, and I think the argument for leaving a great deal of discretion and power to the governor in council in time of war is very much stronger than in time of peace. In support of that submission I would direct the attention of the house to the fact that the War Measures Act, which was passed I think in 1914 or 1915, substantially in its present form, expressly gave the governor in council power to enter into contracts of insurance of this kind without reference to parliament at all. I should say the war appropriation acts, not the War Measures Act. In a series of war appropriation acts power has always been given the governor in council, among other things, to take a part of the money appropriated by the act for the purposes of promoting the continuance of trade, industry and business communications whether by means of insurance or indemnity against war risk or in any other manner whatsoever; and it would have been strictly within the legal and constitutional powers of the government, not only under the War measures Act but under the War Appropriation Act, to have made provision for this insurance by order in council.
It is because it is a large measure involving an appropriation of $5,000,000 at the outset, and perhaps involving the establishment and carrying on of insurance business of very large dimensions, a measure which certainly concerns parliament as the custodian of the funds provided by the people of Canada, by taxation and loans-it is because of the large and important nature of this measure and because it is a financial measure, that we felt it appropriate to bring it before the House of Commons. I do not feel, however, that we should be asked, either here or in the committee, to spell out every line of the policies which we may see fit to issue or every provision of the schemes which it may be necessary to establish, nor do I think it should be required of us to state what the
rate or rates will be. This business is experimental to a considerable extent, and necessarily a large amount of discretion must be left to the government in establishing such a measure. The insurance of life and insurance against accident to the person as a result of war injury will be provided for by order in council. There are already certain schemes which may be described as insurance schemes. One I think of is a certain measure of insurance to A.R.P. workers. That was provided by order in council. There is in preparation before the treasury board at the present time, although it has come before the board only recently, within the last two or three days, a proposal for compensation to civilians for personal injuries as a result of the war. That is a matter which will be subject probably to change from time to time, and in regard to which amendments must be made. I think it appropriate and entirely in line with the action which has been taken in the past that that should be done by order in council. I am giving that information to the house because, just as I expected, certain members have asked in this debate what we intend to do about protection for civilians from injuries as a result of the war.
Another objection that has been raised tonight to the bill is that in the retroactive section, the section which provides for compensation to those persons who have not taken out policies because there has been no opportunity to take out policies, the limit of $50,000 is too low. An instance was given of a property worth $1,000,000 which might be destroyed before the bill becomes law. The question was asked, what fairness is there in limiting the amount recoverable to $50,000? Naturally we hope and believe that no loss of that magnitude will take place; but if full compensation were to be made in that case, the owner of that property would get the benefit of the assumption that had the bill been law he would have insured his property for the full million dollars, which is aij entirely unjustifiable assumption. The compensation is free, retroactive compensation, and I think it is fair that there should be some limitation of that compensation. Whether $50,000 is the proper amount, I do not know. It is an arbitrary amount and there may be an argument about that feature of it, but certainly there would be no fairness in providing in this bill the same amount of compensation to persons who had not insured, who might never have insured, as there would be to persons who had insured and paid the premium.
War Risk Insurance


Gordon Graydon: Has the minister any
idea as to prospective claims under that?


James Lorimer Ilsley: There will be none if there
is no bombardment. I have no ideas about what is going to happen.


Howard Charles Green: Is it intended that the home owner who suffers damage before the measure goes into effect shall receive $3,000? There is no retroactive section applying to the home owner. Perhaps it is the intention of the government that he should be covered just the same. The retroactive section applies only to the man who has to take out insurance.


James Lorimer Ilsley: My understanding is that
the home owner would recover. Perhaps that is not clear from the section, but I think it certainly should be.


Howard Charles Green: Is that the intention-that
if there were bombing to-night, the home owner would be covered as though the bill had already been passed?


James Lorimer Ilsley: It is my understanding. It
is a matter that should be dealt with in committee, but it comes as a fresh thought to me that because he is a home owner instead of a property owner he is discriminated against. I do not think that could stand for a moment.
The hon. member for Victoria, Ontario (Mr. McNevin) raised the question of insurance against damage from falling aircraft. That is a matter which can be looked into in the committee, but I want to point out not only to that hon. member but to some others who advocated a wider range of coverage, that the government has no desire to provide insurance that is being provided now even by a few companies. It is only because war risk insurance is not provided at all now that the government is getting into this business. I understood the hon. gentleman to say that some companies provided it, but not all. The object of this measure is not to give a cheaper form of insurance or a more convenient form or anything of that kind; it is to give insurance that cannot otherwise be obtained.


Gordon Knapman Fraser: None of them has issued any since Pearl Harbour.


Douglas Gooderham Ross: Falling aircraft, yes.


James Lorimer Ilsley: I understood the hon. member to say that some companies do insure against damage by falling aircraft.


Thomas Bruce McNevin: Yes, but the point I was interested in is, if it is Canadian army training aircraft there is a responsibility upon the government to pay compensation, but there is

no law providing that they must; it is dependent on a charitable attitude of mind. There should be some statute settling the obligation, as regards not only our own aircraft but United States and British aircraft.


Douglas Gooderham Ross: I think such insurance is available at the present time.


James Lorimer Ilsley: I understood it was.
I think those are the main points that were advanced by hon. members in the debate. There were other matters of definition, matters of considerable detail that I am not prepared to deal with at the moment, but which can be considered in the banking and commerce committee when the measure goes before that committee.


Howard Charles Green: As I read the bill, damage by sabotage is not covered?


James Lorimer Ilsley: Correct.


Howard Charles Green: Why not? For example, an enemy agent blows up a war factory, with resulting damage to many people; why are they not covered?


James Lorimer Ilsley: I do not know that I can answer that very satisfactorily, but I think it is that the matter of sabotage is very hard to determine. I think it would result in endless debate as to whether the damage really was due to sabotage or some other cause, I believe that is the main reason for not putting it in. The kind of damage insured against here is damage the cause of which is readily ascertainable; it is there for every one to see. There may be other reasons as well, but that is what occurs to me at the moment.


Howard Charles Green: Of course by ruling out sabotage you give the person who suffers the damage no chance at all. Would it not be more fair if he were left in the position that if he could prove the damage was caused by sabotage, he would be covered?


Douglas Gooderham Ross: I think, for example, riot and civil commotion can be covered without any difficulty. I understand that the one purpose of this bill is to give coverage that cannot be obtained in any other way at the present time to anyone who wants to insure. That, I understand, is the principle.


James Lorimer Ilsley: Yes; that is correct, to give coverage against damage from war risks which cannot be obtained from the insurance companies. I do not know whether sabotage can or cannot be covered, and there may be other reasons in that case. I think there are.


Douglas Gooderham Ross: There is one other thing that I think is important. Would the minister answer the question in connection

Questions
with the $50,000? Perhaps I was out of the house and did not hear him. I cannot see any reason why the bill is to cover up to $250,000 and still we have that $50,000 at the present time.


James Lorimer Ilsley: I attempted to answer that. If the hon. gentleman will look in Hansard to-morrow at what I said, I -think that will be sufficient for the time being. If he wishes, he can raise the point again in the committee.


Thomas Bruce McNevin: This discussion is perhaps out of order, but as to the point raised by the hon. member for Peterborough West (Mr. Fraser) I am only depending on recollection but I think that last year the banking and commerce committee passed an amendment requested by an insurance company whereby their charter was enlarged to cover damage by falling aircraft.


Douglas Gooderham Ross: That is right.


Thomas Bruce McNevin: But that is only one company, and a very large number of insurance companies are not prepared to accept that obligation until there is specific provision whereby the government accepts responsibility for damage.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on banking and commerce.
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Wednesday, April 22, 1942