1942-06-08

THE KING'S BIRTHDAY


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, to-day having been set apart as the day for the official celebration of the birthday of His Majesty the King, I feel sure that hon. members would welcome an opportunity to extend their greetings and good wishes to His Majesty in the form of a resolution of the House of Commons. I have prepared a resolution and have shown it to my hon. friend the leader of the opposition (Mr. Hanson), who has kindly consented to second it as worded. I would therefore move, seconded by Mr. Hanson: That, on this, the occasion of the official celebration in Canada of the birthday of His Majesty, King George VI, a humble address be sent to His Majesty in the following words:
"To the King's Most Excellent Majesty:
Most Gracious Sovereign:
We, the members of the House of Commons of Canada, in parliament assembled, desire respectfully to extend our loyal and heartfelt greetings to Your Majesty on this day set apart for the official celebration in Canada of Your Majesty's birthday.

At this time when, throughout the world, freedom itself is at stake. Your Majesty's calm courage, steadfast faith and active service have been an inspiration to your own peoples and to those of other nations joined in the common struggle.
It is our united prayer that, throughout these days of supreme trial, Divine Providence may continue to protect and guide Your Majesty, and that until the day of ultimate triumph and for many years thereafter, you may be given the strength to bear the great burdens which war has already created and may continue to impose.
With one voice we join to-day, as never before, in the words:
God save our gracious King,
Long live our noble King,
God save the King:
Send him victorious,
Happy and glorious,
Long to reign over us:
God save the King."
I would suggest that this resolution might be supported by the singing of the national anthem.


Hon. R. B. HANSON (Leader of the Opposition):: I have the greatest possible pleasure in seconding the resolution, which I am sure will be carried unanimously with one single voice in this house, and will reecho from shore to shore in Canada from all loyal people of this country.


[Stage Direction]
Motion agreed to.
Whereupon the members of the house rose and sang
God Save the King

[Stage Direction]
First, second and third reports of standing committee on miscellaneous private bills.- Mr. Donnelly.


Hon. T. A. CRERAR (Minister of Mines and Resources):: When the bill for the amendment of the Alberta Natural Resources Act was before the house some little time ago it was suggested that any correspondence relating to it should be brought down. I table now as a return all the correspondence that is available. There is nothing very much new in the correspondence beyond what I stated when the measure was under consideration in the house.


Richard Burpee Hanson: I should like to ask the minister what he means by "available". Are there any limitations?

Questions


Thomas Alexander Crerar: Certain representations
did reach me not directly but through second hands. These are not included in the return, because the consent of the person who originally sent the correspondence would have to be obtained.


Richard Burpee Hanson: By letter?


Thomas Alexander Crerar: By letter. But practically the same thing is contained in the correspondence that reached our office through the oil controller, Mr. Cottrelle.


Richard Burpee Hanson: That is a different matter.



QUESTIONS

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

Mr. CRUICKSHANK:: 1.	How many category C gasoline licences have been issued to bond salesmen by the British Columbia regional control office?
2.	What are the names of any bond salesmen now holding category C licences in British Columbia and what firms do they represent?


Mr. HOWE:: It is very difficult to answer this question. The regional offices have a very small staff, and it would be practically impossible to copy the data and file it here without considerable additional staff. Another difficulty is that it is not easy to know from the records which men are bond salesmen and which are not. The records of course do not disclose whom they represent. I ask that the question be dropped.


Mr. SPEAKER:: Dropped.


PRICE CEILING SUBSIDIES-APPLE AND TOMATO JUICE
Mr. CRUICKSHANK:: 1.	Under what terms is the subsidy being paid on the domestic production of, (a) apple juice, (b) tomato juice?
2.	What amounts have been paid in each month since the subsidy began on, (a) apple juice, (b) tomato juice?


Mr. ILSLEY:: 1.	(a) and (b). Under administrator's order A-44 of the wartime prices and trade board which affects canners' inventories of certain domestic canned fruits and vegetables 1941 pack on hand at the close of business on March 31, 1942, including apple juice and tomato juice, the maximum price at which any canner may sell these products, excluding goods invoiced but not delivered, on and after April 1, 1942, is the lowest f.o.b. cannery price actually charged by the canner in 1941 prior
to October 12. Subsidy is paid to such canner to the extent of 80 per cent of the amount by which his lawfully established ceiling price during the basic period exceeds his revised maximum selling price. Subsidy will be paid to the wholesalers in respect of their inventories of such products at the close of business on March 31, 1942, on the basis of the amount by which the canner's selling price of such products to the manufacturer exceeds such canner's revised maximum selling price of such products.
2.	(a) and (b). No claims have been finally settled to date.


BRAN, SHORTS AND SCREENINGS
Mr. CRUICKSHANK:: 1.	What was the price, f.o.b. Vancouver, at September 30, 1939, of, (a) bran, (b) shorts, (c) sereeenings?
2.	What was the price of No. 1 wheat, f.o.b. Vancouver, at September 30, 1939?
3.	What was the price, f.o.b. Vancouver on May 30, 1942, of, (a) bran, (b) shorts, (c) screenings?
4.	What ivas the price of No. 1 wheat, f.o.b. Vancouver, at May 30, 1942?


Mr. MacKINNON (Edmonton West):: 1.	Prices of feed per ton, f.o.b. Vancouver, September, 30, 1939: Bran, $23.30; shorts, $25.30; elevator screenings, $5.
2.	Publication of wheat prices at Vancouver ceased after the outbreak of war and has not been resumed.
No. 1 Manitoba northern wheat, per bushel, Fort William and Port Arthur cash basis, September 30, 1939, 71 cents.
3.	Prices of feed per ton, f.o.b. Vancouver, May 30, 1942: Bran, $29.80 (a); shorts, $30.80 (a); elevator screenings, $5.
(a) Includes S6 per ton freight subsidy.
4.	No. 1 Manitoba northern wheat, per bushel, Fort William and Port Arthur cash basis, May 30, 1942. 79J cents.


TRANSPORT CONTROL-QUEBEC PROVINCE
Mr. RAYMOND:: 1.	What is the name of the regional controller of transport for the province of Quebec?
2.	When was he appointed and by whom?
3.	Is he familiar with both languages?
4.	In the province of Quebec what are the relative proportions of Freneh-Canadian and English-Canadian truck drivers, respectively?


Clarence Decatur Howe: I think this question is
wrongly worded. There is no regional controller of transport for the province of Quebec. Perhaps it refers to an administrator in the wartime prices and trade board. I would ask that the hon. member reword the question.


Georges Parent: Dropped.
Questions



DUFFERIN CONSTRUCTION COMPANY CONTRACT

Mr. FRASER (Peterborough West):: 1.	Was a contract let to the Dufierin Construction Company for paving the yard of the Dufierin Shipbuilding Company?
2.	If so, what class of pavement was used?
3.	What was the price paid per yard?
4.	What was the contract price?
5.	Were tenders called for the work?
6.	If so, was the contract let to the lowest tenderer?


Mr. HOWE:: 1.	Yes, a contract was awarded by Toronto Shipbuilding Company Limited (ex. Dufierin Shipbuliding Company) to the Dufierin Construction Company.
2.	Bituminous pavement on stone base.
3.	The contract was placed on a cost per ton basis, laid, rolled and completed the contractor to supply all material. It is not the policy of the department to give unit prices.
4.	Payment is to be made on a quantity-used basis. The amount payable is not yet determinable because the job is not completed.
5.	Yes.
6.	Yes.



CANADIAN ARMY-INFANTRY-BATTLE AND WALKING-OUT DRESS

Mr. GAUTHIER:: 1.	Does the Department of National Defence
issue two battle uress uniforms to each man in the infantry?	[DOT]
2.	If so, at what cost?
3.	Is a walking-out dress supplied to each man in the infantry?
4.	If so, what is the cost of such uniform?
5.	Does the department issue a summer uniform to each infantryman?
6.	If so, at what cost?


Mr. RALSTON:: 1.	At the present time two suits of battle dress are issued to each infantryman. One of these is new and the other a part worn suit.
2.	The cost of one new suit of battle dress is $11.18.
3.	A walking-out uniform will be issued to each infantryman at the close of the summer season when the wearing of the summer uniform is discontinued. At such time, one suit of battle dress will be withdrawn from personnel.
4.	The cost of a walking-out uniform is $14.39.
5.	Yes.
6.	The cost of a summer uniform is $5.56.



GASOLINE RATIONING


Mr. PURDY:: In view of the gasoline situation in the maritime provinces, will the government take immediate steps towards having the railway passenger services discontinued in these provinces during the past few years, reinstated at once?


Clarence Decatur Howe: This question refers to a matter of internal management of the railway, over which the government does not exercise control.


Georges Parent: Dropped.



DEFENCE OF CANADA REGULATIONS-NEWSPAPER CENSORSHIP

Mr. DENIS:: 1.	What are the names and places of issue of the newspapers, magazines and other Canadian publications which have been convicted since the beginning of the war under the defence of Canada regulations bearing on censorship?
2.	What was the sentence in each case?
Mr. ST. LAURENT:
1.	(a) The Citzen, Ottawa; (b) Le Droit, Ottawa; (c) The Vancouver Sun, Vancouver.
2.	(a) Case dismissed; (b) Guilty on two charges. Fine of $200 imposed; (c) Guilty on one charge. Fine of $300 imposed.



OTTAWA NAVAL SERVICE BUILDING

Mr. SENN:: 1.	Who was awarded the contract for the construction of the naval service building on Cartier square in the city of Ottawa?
2.	What is the estimated cost of this building?
3.	Were tenders called for the construction of this building?
4.	If so, what are the names of each tenderer and the amount of each tender?
5.	When is it anticipated that this building will be completed?


Mr. HOWE:: 1.	Hill-Clark-Franeis, New Liskard, Ontario.
2.	$723,677.
3.	Yes.
4.	Four tenders were received and the lowest tenderer was awarded the contract. Other tenderers and their quotations are: A. I. Garvock, Ottawa, $745,000; Pigott Construction Co., Hamilton, $751,000; Johnson Bros. Co., Ltd., Brantford, $763,888.
5.	August 23, 1942.



KENNETH ZINCK

Mr. SENN:: 1.	Has Kenneth Zinek been appointed to a position in connection with the purchase of horses in the maritime provinces, or has he been granted a commissioned rank for this or other purposes?

Questions as Orders for Returns
2.	If the latter, what rank does he hold, and have any assurances been given to him of an early promotion?
3.	What salary and/or pay and allowances does he receive?
4.	What are his qualifications and past
experience?
5.	What are the particular duties for which he has been appointed or granted a commissioned rank ?


Mr. RALSTON:: 1.	No.
2,	3, 4 and 5. Answered by No. 1.



ADVISORY COMMITTEE ON DEMOBILIZATION AND REHABILITATION

Mr. FAIR:: 1.	What are the names of the members of the general advisory committee on rehabilitation?
2.	By whom was each member recommended?


Mr. MACKENZIE (Vancouver Centre):: ' 1. Interdepartmental general advisory committee on demobilization and rehabilitation:
Chairman, Brig.-General H. F. McDonald, C.M.G., D.S.O., Chairman of the Canadian Pension Commission.
Vice-Chairman, W. S. Woods, Esq., associate ' deputy Minister of Pensions and National Health.
C. H. Bland, Esq., Chairman of the Civil Service Commission.
Dr. Bryce Stewart, Deputy Minister of Labour; or alternate.
K. M. Cameron, Esq., Chief Engineer, Department of Public W7orks.
Colonel E. A. Deacon, Director of Auiliary Services, Department of National Defence.
Major-General II. F. G. Letson, M.C., E.D., Adjutant-General, Department of National Defence.
Air Commodore A. Sully, Department of National Defence for Air.
Paymaster Captain J. O. Cossette, Department of National Defence for Naval Affairs.
Dr. R. E. Wodehouse, Deputy Minister of Pensions and National Health.
Dr. W. C. Clark, Deputy Minister of Finance, or alternate.
Dr. G. S. H. Barton, Deputy Minister of Agriculture, or alternate.
Dr. S. A. Cudmore, Dominion Statistician.
2. Recommended by respective ministers of departments concerned.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. ISNOR:: 1.	What action has the government taken with regard to the closing of the plant, Acadia Sugar Refining Company at Dartmouth, Nova Scotia?
2.	What steps has the government taken in respect to the men, numbering about 200, who will be thrown out of work?
3.	Will the government take steps to investigate the cause of the closing of this plant?


Richard Burpee Hanson: Why is this question made an order for return? It seems to me a simple matter. It applies I assume to the minister's department.


Mr. ILSLEY:: If it does I can answer it, but I do not know that it does. It makes necessary a canvass of the departments to see what action was taken, if any.


USE OF CANADIAN CEREALS IN PRODUCTION OF SYNTHETIC RUBBER
Mr. FAUTEUX:: 1.	Have scientific investigations been carried on by the Department of Trade and Commerce as to the possibility of utilizing Canadian grown cereals to produce butadiene which is used in manufacturing synthetic rubber?
2.	Has the Department of Trade and Commerce made scientific research into the possibility of producing alcohol, rubber, starch and other commodities from certain farm products?
3.	If such research has been carried out, was a report made to the Department of Munitions and Supply thereon?
4.	Has the. department caused research to be made into the possibility of converting certain Canadian grown cereals into products necessary to our war effort by, (a) companies engaged in distributing petroleum and rubber in Canada,
(b)	the Department of Munitions and Supply,
(c)	the National Research Council?


UNEMPLOYMENT INSURANCE COMMISSION
Mr. RAYMOND:: 1.	When was the unemployment insurance commission appointed?
2.	What is the proportion of French-Canadian employees contributing to the unemployment insurance fund?
3.	How many contributors has the commission in, (a) Ontario, (b) Quebec, (c) maritimes,
(d)	prairie provinces, (e) British Columbia?
4.	What is the total of the contributions collected in each of the districts named?
5.	How many inspectors of unemployment insurance are there in each district and what are their names?
6.	How many employees, permanent and otherwise, are there in the head office at Ottawa, including the commissioners, whose salaries exceed $3,000 per annum?
7.	How many persons constitute the advisory committee and what are their names?
8.	How many members compose the national committee on employment, and what are their names ?
9.	How many compose the committee on the holdings of the insurance investment fund and what are their names?
10.	Is the English minority of Quebec represented on the district bureau of the province of Quebec by a deputy assistant district superintendent ?
11.	If so, who is he and what are his duties?
12.	Have French Canadians in the other districts similar representatives? If so, what are their names?

Questions as Orders jor Returns


MILITARY SERVICE-REGISTRATION CARDS
Mr. CASTLEDEN:: 1.	What steps have been taken prior to May 15, 1912, to ascertain that the cards of all single persons, widowers, divorced and legally separated male persons, without dependents, between the ages of 19 and 45 at the time of registration, are in the hands of the divisional registrars ?
2.	Has any check relative to these cards been made between the central registry at Ottawa and the duplicates which were forwarded to the divisional registrars?


MAN-POWER ACCORDING TO AGE CLASSES- ENLISTMENTS, POSTPONEMENTS, REJECTIONS, ETC.
Mr. DIEFENBAKER:: 1.	How many, (i) single men or widowers without children, (ii) married men or widowers with children, of the following inclusive age-groups, (a) 18-20, (b) 21-24, (c) 25-30, (d) 31-35, (e) 3G-40, (f) 41-45, were there in, (1) each province, (2) each military district, (3) each administrative division, at the time of the national registration?
2.	How many men, by (a) provinces, (b) military districts, (c) administrative divisions, have attained the age of 21 years since the national registration?
3.	How many men in the said groups, by provinces, military districts and/or administrative divisions, have (a) enlisted voluntarily in (1) the navy, (2) the army, (3) the air force; (b) been called up for service under the National Resources Mobilization Act; (c) been found unfit after medical examination;
(d)	applied for postponement of military training; (e) been granted postponement of military training; (f) actually been accepted for service at basic training centres; (g) are engaged in industry, agriculture or are otherwise gainfully employed ?
4.	Has a survey been made by the government with a view to ascertaining how many men are still available for military service in each of the foregoing classes?
5.	If so, who made the survey, and when was it made ?
6.	How many men were estimated to be still available for military service by provinces, military districts and/or administrative divisions in each of the said age-groups?
Mr. THORSON; Some of this information is not available. It may not be possible to give some of it by military districts, because the boundaries of the military districts do not coincide with those of the provinces or of the administrative divisions. With regard to subquestion 3 (a), it would take a great deal of time to get the information as to voluntary enlistments by age groups. As to 3 (c), I am not sure that it will be possible to obtain the information with regard to persons who have offered themselves for service and have been rejected. With regard to 3 (g), so far as I can gather, that information is not available in the form requested. Subject to these observations the question might stand as an order for return.


BILLBOARD ADVERTISING BY GOVERNMENT AGENCIES
Mr. MacINNIS:: 1.	How many departments, boards or other agencies of the government have made use of billboard advertising in the past twelve months?
2.	What was the nature of each of these advertising campaigns, the dates for which billboards were used, the amount of money expended for the rent of the boards and production of the posters, and the total number of billboards rented?
3.	Through what advertising agencies have these campaigns been placed?
4.	Is there any administrative control to avoid overlapping of billboard advertising campaigns by government departments?
5.	If so, what is the name of the official responsible ?


MERCHANT MARINE-WAGES, PENSIONS AND DEPENDENTS' ALLOWANCES
Mr. MacLEAN (Cape Breton North-Victoria) :: 1.	Are pensions being paid to the widows and dependents of men who lost their lives while serving in the merchant marine, (a) on ships of Canadian and British registry; (b) on ships of foreign registry engaged in taking supplies to the united nations?
2.	What is the monthly wage paid to an ordinary seaman on ships of Canadian registry?
3.	Is any dependents' allowance paid to the wives or dependents of said seamen?



GASOLINE AND TIRE RATIONING-BREWERS AND DISTILLERS

[Stage Direction]
Mr. DOUGLAS (Weyburn);
1.	In what classification do brewers' and distillers' trucks and trailers come, under the regulations governing the supply of gasoline and tires?
2.	What restrictions, if any, have been placed on the transportation of alcoholic liquors by truck, up to the present time?
3.	What materials used by the brewing and distilling interests have been rationed and to what extent?

Mr. MacNICOL:: 1.	What is the name and tonnage of each of the steamers, ships, boats or other vessels operating, or which have operated, on the great lakes which have been (a) purchased, (b) chartered by or for the government of Canada from the outbreak of war to date?
2.	From what persons, firms or companies was each of the said vessels, (a) purchased, (b) chartered?
3.	In the case of vessels, (a) purchased, (b) chartered from companies, what is the name of the president, the general manager and/or managing director of each such company?
4.	What was the total purchase price paid by the government for each such vessel purchased?
5.	What were the terms of payment contained in the charter party of each such vessel chartered ?

Gasoline
6.	What was the purchase price paid by the
owner of such vessel for such vessel on the last transfer of ownership prior to its acquisition by the government?	_
7.	Were any agents employed in connection with the (a) purchase, (b) chartering of any of the said vessels?
8.	If so, what are the names of such agents and what was the total commission or other remuneration paid to each such agent in respect of the purchase or chartering of each vessel?



GASOLINE


[Stage Direction]
On the orders of the day:
Richard Burpee Hanson: In view of the gasoline situation in
the maritime provinces; in view of the number of questions on the order paper with regard to this matter; in view of the agitation which is still going on in those provinces, and especially in view of a statement issued by the premier of New Brunswick, a copy of which I sent to the Minister of Munitions and Supply this morning, is the minister in a position to make any statement that will allay the anxiety, if that is the proper term to use, of the people in that part of the country, and give them some reassurance that the so-called discrimination-that is not my term, but it is the expression used by friends of hon. gentlemen opposite-against the maritime provinces will be removed? Personally I think I understand the situation, but I should like the people of the maritime provinces to be convinced. They are not being reassured by certain persons both in New Brunswick and in Nova Scotia, and this ought to be done as soon as possible. I understand the old game down there, which is to stir up antipathy toward the central part of Canada, and it is not a creditable performance. I know that is a dangerous thing for me to say, coming from the province of New Brunswick. If the minister and the oil controller will give the people of eastern Canada a little more factual information, the maritime provinces will loyally accept the situation; but they have to be shown.


Clarence Decatur Howe: My hon. friend will appreciate that I cannot state the stocks of fuel oil for the navy and air force; that certainly would be information of value to the enemy. I can say, in reference to gasoline, that the cracking at the Halifax refinery necessarily must be for the maximum recovery of: fuel oil. With regard to gasoline under the two-gallon ration, up to June 1 we actually slipped behind on our stock position; in other words we did not make or import as much gasoline
as was consumed under the two-gallon ration. However, the outlook for the future has improved considerably. We have been given some help in the matter of tankers by the maritime commission, and I can say that the situation certainly will not get worse and I believe will improve. Just as soon as the position warrants, of course we will increase the coupon value. As I have said many times, the purpose of coupon rationing is simply to distribute available supplies of gasoline fairly, and rationing will continue to be used for that purpose.


Richard Burpee Hanson: Is the
minister able to give any indication as to when the full coupon value will be restored? An assurance on that point would be well received. While I am on my feet I should like to add something I intended to say previously. The whole position down there has been stirred up by one big dealer, who apparently found himself in possession of very large supplies of gasoline. He is stirring up all this agitation, and the minister knows to whom I refer.


Clarence Decatur Howe: Well, Mr. Speaker, of course I cannot say whether the coupon ever will be restored to its original value, but I do think the situation will improve, and if it is possible to restore the full value, certainly we shall do so. I think there will be an improvement before the end of the current month.


Mr. J. J. KINLEY (Queens-Lunenburg):: With regard to the matter of gasoline and oil, may I say to the minister that there is an impression in well-informed circles on the coast that the supply of oil may be restricted because of the freight rates on the product with respect to which the price is controlled. Is there anything in that impression?


Clarence Decatur Howe: No, the excess cost of moving gasoline to the maritime provinces is being borne by the government. The movement to date has involved excess costs, which are being absorbed at the present time by the government, and the cost of the movement is not curtailing the supply in any way.



HONG KONG COMMISSION


[Stage Direction]
On the orders of the day:
Mr. M. J. COLD WELL (Rosetown-Biggar):: In view of the presentation of the report on the Hong Kong expedition; in view of statements made by the counsel engaged by the official opposition to present the case to the
Hong Kong Commission

commission, and in view of the statements appearing in the public press, will the Prime Minister set aside an early date when this report may be discussed in this house, and in the meantime table the evidence taken before the commission?


William Lyon Mackenzie King: First with respect to the evidence taken before the commission, on Friday last the leader of the opposition (Mr. Hanson) asked if it would be possible to have that evidence tabled. At the time I replied that I did not think it would be possible, for the reason that the hearing was held in private in order, as my hon. friend and others will understand, that matters which would be of real interest to the enemy should not be publicly disclosed. If it had been the intention to have the evidence made public, the commissioner, the Right Honourable the Chief Justice, would without doubt have sent copies of the evidence along with his report. The report itself has been tabled and of course is now before the house. As hon. members are aware, the report itself is being printed, and hon. members will wish to have it in their hands before any discussion takes place. As to setting apart a day for the consideration of the report, I shall be pleased to see that some arrangement is made; but first of all I would wish to consider some other matters relating to the question of an immediate discussion of the report. I am going to say a word in a moment with regard to business already before the house. I must take some account of the order in which matters are discussed in parliament. Before we begin the discussion of any new subject I feel we should if possible conclude the discussion of two subjects in particular. One is the bill relating to national defence and security, the resolution preceding which was before the house for some time. The other is Bill No. 80, which has to do with the amendment of the National Resources Mobilization Act.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: 
Richard Burpee Hanson: May I ask the Prime Minister for definite assurance that as soon as the war appropriation bill is through the house he will call Bill No. 80?


William Lyon Mackenzie King: Yes. I was going to ask my hon. friend if he would be prepared to proceed with Bill No. 95 this afternoon.


Richard Burpee Hanson: I am.


William Lyon Mackenzie King: Bill No. 95
was not announced on Friday, but if the house is ready to go on with it, the government is prepared to call it. As soon as that bill is out of the way there are just the two items of the Minister of Finance.


Richard Burpee Hanson: What about the war risk insurance bill? Will that be proceeded with before Bill 80 is taken up?


William Lyon Mackenzie King: It has been announced that we shall go on with the two other measures that are on the order paper but with respect to those I would undertake to say that if they take more than one day they will be allowed to stand until later. As soon as the national defence and security bill has passed this house, the government will take up the next measure.
Mr.HANSON (York-Sunbury): Mr.Speaker, if I may say a word or two I would point out that I have been pressing for the second reading of Bill No. 80, and I shall continue to do so. If there has been a distinction in the minds of some people between the resolution and the measure itself, I believe the Prime Minister has all along, as I read his words now, meant the completed legislation. I may have fallen into some' error by loose use of the terms "resolution," "measure" and "bill." I say at once that we will facilitate the second reading of the bill, so far as we are concerned, so that we may reach Bill No. 80
Labour Conditions

at the earliest possible day. I did facilitate the passing of the resolution, as hon. members know. On two different occasions I appealed to the house to pass the resolution, first a week ago Friday and again last Friday at six o'clock. I do not think it would have gone through if I had not made that appeal. Let us pass this bill at the earliest possible moment, because the country is eagerly awaiting the debate on Bill No. 80, and I want to get on with it. No one will be able to say that we, at least, have delayed the reaching of this measure.


Thomas Miller Bell: Mr. Speaker, I do not propose to sit quietly and listen to the leader of the opposition placing the responsibility upon others in the house. I believe if the time occupied in the discussion of the bill or the resolution were measured, and the pages of Hansard tabulated, it would be found that the leader of the opposition himself took a very considerable proportion of the time.


Richard Burpee Hanson: And why
should I not? I leave it to the judgment of the house whether as leader of the opposition I should not do so. I am not apologizing for anything I said in respect to it, or the time I occupied.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Clarence Decatur Howe: May I reply to a question
asked on June 5 by the hon. member for Vancouver East (Mr. Maclnnis), and recorded at page 3099 of Hansard. In his question the hon. member called attention to the laying off of 175 men at the Angus shops in Montreal. I have made inquiries about this matter and I find it has nothing to do with the tank or any other government programme. It is a seasonal lay-off in the car repair shop.



NOVA SCOTIA COAL MINES OPERATING ON HALF TIME-FUEL SHORTAGE

[Stage Direction]
On the orders of the day:
Mr. CLARENCE GILLIS (Cape Breton South):: I should like to direct a question to the Minister of Labour, based upon a telegram received from one of the mine workers' executives in Nova Scotia, a copy of which I sent to the minister. This telegram states that at the present time mines in Nova Scotia are oft half time, and these men cannot understand the reason for it. Is the minister in a position to give the house a statement as to

why the mines in Cape Breton are working half time, and what steps are being taken to remedy the situation in view of the serious shortage of fuel in Canada?


Hon. HUMPHREY MITCHELL (Minister of Labour):: There must have been some delay in the transmission of my hon. friend's communication, because I received it only as I entered the house. If I remember correctly, my hon. friend raised this question on Friday of last week and the Minister of Finance said he would make inquiries of the coal controller. I believe the matter was referred to in a previous telegram. I had one of our conciliation officers go there to look over the situation. My hon. friend will understand that there are certain technical aspects of the mining industry which may not be apparent to one outside the industry. If my memory serves me correctly, the main cause for the slow-down in production at the mines in Nova Scotia is the lack of ships to transport coal up the St. Lawrence and to other points.


Clarence Gillis: The Minister of Labour has only partly answered my question. He stated that the cause of the 50 per cent curtailment in the operation of Nova Scotia coal mines was lack of shipping. I think that is generally understood. What I asked him was whether the government were taking any steps to remedy that situation. I should also like to ask whether there is not a possibility of routing eastern Canadian coal into eastern United States markets and vice versa.


Georges Parent: Order. The question
should be placed on the order paper. Questions asked on the orders of the day should not, as I pointed out about three weeks ago, become the subject of debate at this stage.



ALASKA HIGHWAY-WAGES OF LABOUR IN YUKON- AGREEMENT WITH UNITED STATES AS TO WAGES AND WORKING CONDITIONS

[Stage Direction]
On the orders of the day:
Mr. GEORGE BLACK (Yukon):: I should like to ask the Minister of Labour a question. I have informed him that I intended to ask this question, and with your indulgence, Mr. Speaker, and the indulgence of the house I will divide it into three inquiries. I am confident the minister's reply will embrace all three. Is the order recently made by the national war labour board of Canada fixing the wages of common labour in the Yukon at 75 cents per hour plus cost of living bonus being enforced against all employers of common labour in Yukon? If not, why is the order n'ot enforced against all employers of labourers of all nationalities? Are foreign

Labour Conditions
employers allowed to employ foreign labourers on work done in the Yukon at wages greatly in excess of the wages fixed by the national war labour board and in excess of wages Canadian labourers are allowed to receive?


Humphrey Mitchell: Mr. Speaker, the answer to the first question of the hon. member is yes. The national war labour board is at present considering placing someone in the Yukon district who will have charge of the enforcement of orders with respect to wages and working conditions there. I can assure my hon. friend that sympathetic consideration is being given to the suggestion he made in this house last Thursday.
It might be of interest to the house if I gave a summary of the arrangements that have been made between the United States and Canadian governments with respect to wages and working conditions, not only in the Yukon but in British Columbia and Alberta in connection with the building of the Alaska highway and other works that are being carried on.
By arrangement with the Department of External Affairs conferences were held with the representatives sent from Washington by the United States government with the object of agreeing on certain basic conditions.
The notes exchanged between the government of Canada and the government of the United States concerning the construction of a highway to Alaska provide that the United States government shall:
Arrange for the highway's completion under contracts made by the United States Public Roads administration and awarded with a view to insuring the execution of all contracts in the shortest possible time without regard to whether the contractors are Canadian or American.
In order to give effect to this agreement it has been arranged with the United States authorities that if contracts are let to United States contractors those contractors shall recruit their labour in the United States and shall not include persons normally resident in Canada. The labour so recruited will be paid at United States wage rates, which include a premium for work done abroad. The wages will be exempt, in accordance with the terms of the notes, from Canada taxation, and such matters as social insurance and workmen's compensation will be dealt with in accordance with United States law. United States rules as to working conditions will apply.
In the case of contracts awarded to Canadian contractors labour will be recruited exclusively in Canada. Canadian wage rates and working conditions will prevail. The wages will be subject to Canadian taxation;
unemployment insurance and workmen's compensation will be governed by Canadian law.
It is, of course, possible that in an emergency it may be necessary for United States contractors to engage some Canadian labour on the spot. It has been agreed that they will do so only through the Canadian employment service and that the labour so engaged will be paid at Canadian wage rates; that the wages will be subject to Canadian taxation and that Canadian law will govern unemployment insurance and workmen's compensation.
The reason for these arrangements is clear. The speedy completion of the road is necessary for the defence of Canada and of the United States. In order that the road may be completed as soon as possible, both United States labour and Canadian labour must be employed. United States labour can be recruited only if United States wages are paid and United States conditions of work apply. Consideration had to be given to our policy involving price and wage control, because it has been the practice in the United States to give extra pay for employment abroad. On the other hand, it is essential for the maintenance of the price and wage structure in Canada, which has been carefully devised to avoid the peril of inflation, that the wages paid to Canadian labour employed on the road should not be out of line with wages paid on other Canadian enterprises of a comparable character. By confining American contractors to recruitment of labour in the United States and Canadian contractors to the recruitment of labour in Canada, it is hoped to avoid the friction and the misunderstandings which are bound to arise if the same employer were employing two sets of men to do precisely similar work at different rates of pay. It is realized that this difference cannot be entirely eliminated, but it is hoped that a frank explanation of the circumstances will make it possible for the men concerned to understand what is being done and why it is being done, and to realize that the whole arrangement is designed to expedite the completion of the road without distorting the Canadian price and wage structure.
As a further precaution, United States employees are to be urged to assign a considerable part of their wages in the United States so that the cash payments which they receive in Canada will not, in most cases, exceed the cash payments received by Canadian labour.
Wheat Purchases



FUEL OIL


[Stage Direction]
On the orders of the day:
Mr. KARL K. HOMUTH (Waterloo South): I should like to ask the Minister of Munitions and Supply a question arising out of many inquiries which are being made. Can he give the house some indication as to when a definite policy will be laid down with respect to gas and oil heating systems? The people are worried about this matter.
Clarence Decatur Howe: I expect to be able to make a statement within the next day or two with respect to heating with oil. We have made a careful analysis of the oil position and are hopeful that the situation will not require such drastic action as I suggested in the house. With respect to gas, of course that is a matter over which this government has very little control. We strongly recommend that all furnaces that can be converted to coal should be so converted, because we doubt very much whether adequate supplies of gas can be furnished for the coming winter.

AGREEMENT FOR FURTHER PURCHASES BY GREAT BRITAIN-ANSWERS TO QUESTIONS OF MEMBER FOR QU'aPPELI.E
On the orders of the day:


Hon. J. A. MacKINNON (Minister of Trade and Commerce):: Mr. Speaker on
June 1, the hon. member for Qu'Appelle (Mr. Perley) asked two questions with reference to the sale of 120 million bushels of wheat to the British Ministry of Food. At that time I stated that I would endeavour to obtain answers to both questions. The first question was:
How could a sale have been made on the basis of October and December futures when they have not been opened yet on the Winnipeg exchange?
There is no reason why sales cannot be made on the basis of futures which are not as yet posted for trading purposes, and this sale of 120 million bushels was made on May 22 last, and is subject to all contractual requirements, just as if the futures were trading in the market. I would call the hon. member's attention to the fact that the next few months are very important in the grain trade. In view of the increased price which will be paid on the 1942-43 crop, a proper adjustment of the price of wheat to new and higher levels

is necessary. In order that no one may gain from this adjustment, the posting of the October and December futures has been delayed. In due course these futures will be posted and as cash wheat is purchased by the cereals import board at the seaboard, these futures will be given up to the exporter on the instructions of the cereals import board against the cash wheat purchased.
The second question asked by the hon. member for Qu'Appelle was:
Will the minister read to the house the cables which have passed between his department or the Canadian wheat board and the British Ministry of Food with respect to the request that he be authorized to announce the price, even if the price is not mentioned?
I may say that Mr. Mclvor sent a cable on May 27 last to the Canadian wheat board representative in the United Kingdom, Mr. R. V. Biddulph, from which I quote as follows: . .	. At recent agricultural committee hearings some members of committee pressed for announcement of price on previous contracts. We informed them we were not in position to announce price as British Ministry of Food had expressly asked us not to disclose prices. We would now appreciate very much if cereals would authorize us to announce price of this sale as well as prices of former recent sales.
To this Mr. Biddulph replied:
Ministers cannot give decision for a day or so.
A further cable was sent through the Secretary of State for External Affairs, directed to the High Commissioner for Canada in London, on June 2, 1942. This cable read as follows:
When the announcement was made in the House of Commons by Minister of Trade and Commerce of recent purchase by United Kingdom ministry of food of 120 million bushels of wheat futures, opposition members renewed requests that price be disclosed. Canadian government have no objection to disclosure of price and unless United Kingdom government have substantial reason for withholding the information we would appreciate their concurrence, not only the disclosure of price of recent sale but also of prices at which former bulk sales were concluded. We request you to take up this question with United Kingdom authorities and to advise us as soon as possible if they are agreeable to disclosure by us of prices at which Canadian wheat board have been selling to United Kingdom Ministry of Food.
No reply has been received to this telegram.


Mr. E. E. PERLEY (Qu'Appelle):: There must be a contract or an agreement of some kind. Will the minister table any cables that have passed between his department or the wheat board and the British Ministry of Food? There must be some agreement in connection with a sale of 120 million bushels

Oil cmd Gas Development
of wheat. There must be some paper or some cable. Will the minister table the cable, or the agreement, or the contract, even if he must omit the price?


James Angus MacKinnon: My understanding is that this sale was arranged by cable between the cereals import board and the Canadian wheat board at Winnipeg. I do not know what previous telegrams there were, but the telegrams I have read are all that are in my possession.


Ernest Edward Perley: Will the minister table
them? I am not asking for the price; I am simply asking that the minister table the cables between the two governments or the British Ministry of Food and the wheat board with respect to this sale of wheat.


Ernest Edward Perley: Will the Minister of Trade and Commerce furnish to the house the offers and acceptance cables which are always the basis of contracts between the wheat board and the British government?


Georges Parent: I think that is a question which might properly be placed on the order paper.



WHEAT ACREAGE REDUCTION BONUS-PRESS REPORTS AS TO FILING OF ACREAGE STATEMENTS

Mr. J. A. ROSS (Souris):: I should like to ask a question of the Minister of Agriculture with reference to the acreage reduction bonus, based on a press dispatch appearing in the Winnipeg Tribune of Thursday, June 4, 1942, headed "Bonus Red Tape Angers Farmers," and which quotes Hon. D. L. Campbell, minister of agriculture for Manitoba, as commenting on the confusion and duplication caused by the filing of acreage statements where there is no change in the operator's acreage from 1941. During April and May the press carried articles pointing out that where there was not a change in acreage it would be unnecessary to file a fresh statement for 1942, but apparently this has recently been altered.


Georges Parent: I am afraid that question will have to be placed on the order paper.


James Arthur Ross: Is it not in order for me to mention that there is great confusion amongst the farmers who have not filed an application by May 31, 1942? Are they not eligible for the bonus?


Georges Parent: The question should be placed on the order paper.



OIL AND GAS


[Stage Direction]
On the orders of the day:
Mr. J. S. ROY (Gaspe):: In view of the gravity of .the problem brought about by the shortage of oil and gas, I would ask whether the government will not make a serious attempt to explore the possibilities of oil that are offered by the Gaspe oil fields.


Clarence Decatur Howe: The government itself is not drilling for oil, and it is not the policy to do so at the moment. The Gaspe oil fields are not a proven field, and in the circumstances the government would not be warranted in itself attempting their development.
Mr. BLACKMO^E:	Is the government
dependent entirely on private enterprise and private initiative for exploring oil fields and opening new wells? Is the government not directing this activity in any way?


Clarence Decatur Howe: The government is certainly directing the activity. The experts of the natural resources department are active in all areas where it is known that the prospects for oil are favourable. Of course private enterprise has exploited wild cat wells, as we say, in a great many areas, including Gaspe. I think that we could waste a great deal of effort in areas of that kind-areas that have not been proven-without greatly increasing the supply of oil. We are encouraging drilling in areas that are considered to be favourable.


Mr. BLACKMORE:: By what means would the minister encourage them? Suppose the minister discovered what looked like a good potential oil field; what measures would the government take to induce oil companies to go in there?


Clarence Decatur Howe: We would try to make it attractive for oil companies to drill there. We have passed legislation to that end during the present session. We would allow people competent to do development work to go in and develop that area.


Joseph Sasseville Roy: Has the government asked for any report from the geologist. Doctor Jones, who has made a survey of the Gaspe oil fields? This engineer has been working in that area for twenty years, and I believe could give the government valuable information with respect to it.


Clarence Decatur Howe: I shall be glad to make inquiries.
Third Victory Loan


Mr. NOSEWORTHY:: What steps is the government taking to secure a maximum production of oil from the Turner Valley fields?


Georges Parent: Obviously that is a question that should be placed on the order paper.



LOAN OF $750,000,000 TO MEET LOANS OR OBLIGATIONS, TO PURCHASE UNMATURED SECURITIES, AND FOR PUBLIC WORKS AND GENERAL PURPOSES

[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved that the house go into committee to consider the following resolution:
That the governor in council be authorized to raise by way of loan under the provisions of The Consolidated Revenue and Audit Act, 1931, an amount not to exceed in the whole the sum of seven hundred and fifty million dollars for paying or redeeming the «'hole or any portion of loans or obligations of Canada and also for purchasing unmatured securities of Canada and for public works and general purposes.
Motion agreed to and the house went into committee, Mr. Bradette in the chair.
Richard Burpee Hanson: Would
the minister desire to make a statement now? I do not think this resolution should take very long, but I suggest that he should give us information as to what it will cover in the way of maturing obligations and the like.


James Lorimer Ilsley: If this resolution passes,
the bill based upon it will authorize the governor in council to borrow a sum not exceeding $750,000,000 through the issue, sale or pledge of securities of Canada. The purposes for which money so borrowed may be used will be set out in the bill. Those purposes are:
(1)	To pay or redeem the whole or any portion of any loans or obligations of Canada;
(2)	to purchase unmatured securities of Canada; (3) for public works; (4) for general purposes. The main purpose for which it is intended to use moneys to be borrowed under the bill is to pay off securities of Canada which mature or are callable within the next year or two. I will give to the committee a table showing the loans which are maturing or are callable prior to the end of 1943. Maturing in 1942, $73,951,470.85.


Richard Burpee Hanson: When was that issued? Is that a treasury bill or bond issue?


James Lorimer Ilsley: Bonds. I shall come back
to that. Maturing in 1943, $677,000,100; callable prior to the end of 1943, $294,337,500.


Richard Burpee Hanson: That is a one billion dollar total.


James Lorimer Ilsley: Yes. It makes altogether
$1,045,289,070.85. In addition there are treasury bills of $270,000,000, making a total of $1,315,289,070.85.


Richard Burpee Hanson: Is that
the total amount of outstanding treasury bills?


James Lorimer Ilsley: The total amount of outstanding treasury bills is $270,000,000.


Richard Burpee Hanson: Is that what is currently called floating debt, in England, for instance?


James Lorimer Ilsley: I do not know.


Richard Burpee Hanson: It is unfunded debt, anyway.


James Lorimer Ilsley: I am not sure about the
use of the terms. They are treasury bills, whatever adjective you apply.


Richard Burpee Hanson: They are
short-dated bills that are issued from time to time to take care of government necessities, at a very low rate of interest, and usually snapped1 up, I understand, by banks and insurance companies for the purpose of employing their current funds without being tied up for a long time.


James Lorimer Ilsley: That is right.


Richard Burpee Hanson: And that
is the total amount of our treasury bill commitments?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: It is considered, I suppose, that it will have to be refunded in a long term commitment. Is that the idea?


James Lorimer Ilsley: When treasury bills come due there are new treasury bills to take their place.


Richard Burpee Hanson: Sometimes they are absorbed by a bond issue.


James Lorimer Ilsley: Yes. I do not know whether
that has happened recently.


Richard Burpee Hanson: Is this a rolling snowball, the floating debt which is represented by these treasury bills? Is it intended never to refund them, or is it intended to pay them out of current revenue, or what? The government must have some plan with respect to the retirement of these obligations, either by payment in cash or by funding them in long term securities. They are of very short terms.

Third Victory Loan


James Lorimer Ilsley: The amount of treasury bills outstanding has been increasing over the last
few years.


Richard Burpee Hanson: I imagine that is true.


James Lorimer Ilsley: I should think it might be desirable not to have any plans for converting them into a long term debt. The money is borrowed at a low rate of interest, almost a non-existent rate of interest, and there is no reason why there should not be a substantial amount outstanding continuously.


Richard Burpee Hanson: It may be good business, I do not know; but it is a very limited form of financing. That is to say, it has to be taken care of immediately, and I suppose as long as conditions are as they are there is no doubt these will be taken care of by renewals.


James Lorimer Ilsley: That is right.


Richard Burpee Hanson: In ordinary times of peace, when these are issued they would generally speaking be taken up in the form of a funded debt on a long term basis. I am not quarrelling with the plan.
I think the government is saving money by the issuing of short-dated treasury bills, but I should not like to see it go on indefinitely, reaching huge proportions, because something might happen when the holders would not want to renew them. There has to be some policy behind it.
Did the minister complete his statement? He was to put on Hansard the whole of the maturities.


James Lorimer Ilsley: What the hon. gentleman asked for was the date of issue of the securities maturing in 1942 and 1943.


Richard Burpee Hanson: Yes, and I should like to have that supplemented by the rates, and split into the amounts. It could be put on Hansard in the form of a table.


James Lorimer Ilsley: It will take two or three minutes to get the dates. I may say with regard to the bill to be based on this resolution that the moneys borrowed under the authority given by the bill may also be used for public works and general purposes of the government of Canada. It is to be noted however that the proceeds of the sale of securities issued under this authority have to be paid into the consolidated revenue fund and can only be paid out of the consolidated revenue fund under parliamentary authority. This means that moneys borrowed under it can
be used for public works and general purposes only if moneys for this purpose have been voted or authorized by parliament. The bill is not itself an authorization for the expenditure of the money. It is merely authority for the borrowing of the money, and once it is borrowed it can be used for these general purposes if subsequently authorized.


Richard Burpee Hanson: I think it is wise to make that clear.


James Lorimer Ilsley: Yes, that point has always come up when these loan bills came before the house. Previous loan acts all provided that the moneys borrowed could be used for public works and general purposes. There is thus no change in principle with regard to this matter.
The amount to be authorized is $750,000,000. The loan act of 1931 and subsequent loan acts passed in 1933, 1935, 1936, 1939 and 1940 have all authorized the borrowing of $750,000,000. That is the amount that is put in. There is no particular magic in that amount. In fact it would appear to me that probably another loan act will be required next year, although we have been able to go two years since the last loan act of $750,000,000 in 1940.
I suppose hon. members understand that the purpose of these loan acts is to vote money to meet maturing obligations, whereas the purpose of our estimates is to meet current obligations of the government. The war appropriation bill is to meet war expenditures, as a separate function.


Richard Burpee Hanson: The purpose of this resolution is really threefold, as I understand it and as I recall the previous ones. First it is to take care of maturing loans or obligations. These include, as the minister has stated, a relatively small portion for the fiscal year 1942-43, and a substantial portion for the following year. The portion for this year includes the treasury bills. Second, it is for the purchase of unmatured securities of Canada. The minister has not said whether he proposes to purchase unmatured securities, but this is an enabling authority. I assume he means by that callable loans; or it is even wide enough for the government to go out in the market here or elsewhere and buy unmatured securities of Canada. Third, it is for public works and general purposes. I recall discussing this third feature on a prior occasion and having it made clear at the time by the minister that while this form was being used and had been used on previous occasions, in itself it was not sufficient to authorize the government to spend any part of this
Third Victory Loan

$750,000,000 on public works or for general governmental purposes beyond the retirement of loans or purchase of unmatured securities, without a special vote.


James Lorimer Ilsley: That is correct.


Richard Burpee Hanson: I think that is clear and satisfactory. The minister might say what the government's intention is with respect to purchasing unmatured securities. What is the policy? Is there anything in view? Is the government calling any further maturities in London, or would that be paid out of some other vote, or perhaps out of the $2,000,000,000 appropriation?


James Lorimer Ilsley: This would give authority to repatriate, but there is no intention to use the authority for that purpose. I do not say we would not, but-


Richard Burpee Hanson: But you want the authority?


James Lorimer Ilsley: It authorizes the calling of the securities that are callable. Many of them are callable. It goes further and authorizes the purchase of unmatured securities if we wish to do that. It might be desirable.


Richard Burpee Hanson: Has the government any intention of so using it?


James Lorimer Ilsley: We have no intention of using it. By that I do not mean that I am giving a commitment that it will not be used for this purpose.


Richard Burpee Hanson: At the present time it is not the intention to use it, but you want the authority.


James Lorimer Ilsley: That is correct.


Richard Burpee Hanson: I am agreeable.


James Lorimer Ilsley: As to the details of maturities, I could put this table on Hansard, but perhaps the committee would like to hear it: Issued May 1, 1922, callable May 1, 1942, due May 1, 1952, interest rate 5 per cent, payable in New York, $100,000,000.


Mr. NICHOLSON:: Payable in New York funds?


James Lorimer Ilsley: That is right.


Thomas Miller Bell: What is the present market value of that security?


James Lorimer Ilsley: It is around par in New York.


Thomas Miller Bell: That I take it would be the type of security that it would be advantageous to call at the present time?


Mr. HANSON (York-Sunbuiy):: You would have to pay an exchange premium.


Thomas Miller Bell: Even at that, you are paying interest at 5 per cent plus 10 per cent on 5 per cent in New York. If you could borrow at the rate at which we have been borrowing here, it would seem to be good business to call it.


James Lorimer Ilsley: It takes a great deal of foreign exchange.


Thomas Miller Bell: That may be a hurdle to surmount, but from the point of view of a commercial transaction it looks good.


James Lorimer Ilsley: The next is $249,000, issued June 1, 1937, maturing June 1, 1942; interest 2 per cent, payable in Canada. The remainder are as follows:
Date of	Date of Interest	Whereissue	maturity	rate	payableJuly	1, 1941..	..July 1, 1942	4	Canada	Oct.	15, 1934..	..Oct. 15,1942	3	Canada	Jan.	15, 1937. .	.. Callable Jan. 15, 1943 Due Jan. 15, 1944	21	New York	Apr.	15, 1942..	..Apr. 15, 1943	1	Canada	May	1, 1941. .	..May 1, 1943	21	New York	June	1, 1935..	. . June 1, 1943	24	Canada	Jan.	2, 1941. .	.. July 2, 1943	14	Canada	Aug.	15, 1935..	.. Callable Aug. 15, 1943 Due Aug. 15. 1945	24	New York	Oct.	15, 1923. .	..Oct. 15,1943	5	Canada	Oct.	15, 1933..	.. Callable Oct. 15, 1943 Due Oct. 15, 1945	4	Canada	
Amount outstanding $ 33,293.470 85 40,409.000 00
30.000.	000 00
250.000.	000 00
10.000.	000 00 20,000,000 00
250.000.	000 00
76,000,000 00
147.000.	100 00 88,337,500 00
That makes a total of $1,045,289,070.85.


Richard Burpee Hanson: In the case of these loans payable in New York, it might not be abvisable to pay them off.


Thomas Miller Bell: It would not be.
[Mr. R. B. Hanson.1


James Lorimer Ilsley: I do not see how anyone could tell whether it would be unless they knew something about the price. However, I do not need to go into that. The treasury bills outstanding, as I said, amount to $270,000,000. Treasury bills are renewable

Third Victory Loan
under the appropriation acts, but if the amount were funded into long term debt, the necessary authority would have to be provided. This bill would be the authority. For instance, treasury bills are issued so often for the refunding of previous treasury bills that if we had to rely on these loan acts as authority for the issuing of treasury bills, we would rapidly exhaust our authority.


Richard Burpee Hanson: They are revolving debts, not revolving funds.


James Lorimer Ilsley: Yes, so that we do not
have to rely on our loan acts for the issuing of treasury bills. If we did we would need loan acts all the time, or very big ones.


Richard Burpee Hanson: The
treasury bills are listed there, are they, and will be placed on Hansard t


James Lorimer Ilsley: I have not the list here, but I can get it.


Richard Burpee Hanson: I do not know that it is important and I do not want to hold up the minister. The bond issues are
important.


James Lorimer Ilsley: I have the list here.


Richard Burpee Hanson: I would not ask the minister to read it but it might go on Hansard with the other lists.


James Lorimer Ilsley: The list of treasury bills outstanding at April 30, 1942, is as follows:
Date of	Date of	Interest	Where	Amountissue	maturity	rate	payable	outstandingFeb.	13, 1942..	..May 15, 1942...	.... -545	Canada	
$ 45,000,000I'Yh.	27, 1942..	..May 29, 1942...	.... -547	Canada	
45.000,000Mar.	13. 1942..	..June 12, 1942...	.... -552	Canada	Apr.	1. 1942. .	...July 3, 1942...	.... -550	Canada	
45.000,000Apr.	17. 1942. .	..July 17, 1942...	
-544	Canada	Apr.	29, 1942..	..July 31, 1942...	.... -545	Canada


Alexander Malcolm Nicholson: Has the minister the figures in connection with the appropriation bill of two years ago, showing the unmatured securities which were retired?


James Lorimer Ilsley: Yes. The table is as follows:
Loans issued under the authority of the Loan Act, 1940
Issue	Maturity	Interestdate	date	rate	Description
per cent
Oct.	1,	1941	Oct.	i,	1952-	June	15,	1945Jan.	2,	1941	July	2,	1943May	1,	1941....	May	1,	1942May	1,	1941	May	1.	1943June	15,	1941	Dec.	15,	1946'	June	15,	1951Sept.	1,	1944Mar.	1,	1942	Mar.	1,	1948Mar.	1,	19513 War Savings Certificates	3	Second War Loan	..	Non-Interest Bearing	Certificates,Series B	2J	Two and One-Half	Year	Notes...1	One Year Note	2J Two Year Note (N.Y.)	2	7 1941 Victory Loan	3	J 1941 Victory Loan	
2i 1 Second Victory Loan (1942)	
3 J
Amount

It will be noted that 8150,000,000 of war savings certificates were issued under the authority of that last loan act, as well as certain bonds in the second war loan, the first victory loan and the second victory loan. The bonds issued under the authority of that loan act were bonds issued for refunding purposes, not for cash. Persons who bought them turned in their old bonds and got these in their place.


Thomas Miller Bell: Do I understand that
non-interest bonds were issued under that authority?


James Lorimer Ilsley: Yes, a million dollars' worth.


Thomas Miller Bell: Was there not something issued in New York?


James Lorimer Ilsley: I should correct what I
said about the million dollars being issued. An order in council has been passed, under
Third Victory Loan

the authority of this act, authorizing the issue of a million dollars' worth of non-interest bearing security, series B. However, that amount has not been issued. They are issued from time to time as applications come in.


Thomas Miller Bell: What is the total of
that non-interest bearing loan?


James Lorimer Ilsley: It is not very great. Up to April 30 the amount was $9,144,694.99.


Mr. MacNICOL:: Payable in New York?


James Lorimer Ilsley: No, these are non-interest
bearing certificates.


Mr. WRIGHT:: 
James Lorimer Ilsley: Only to renew existing
obligations.


Richard Burpee Hanson: It would be interesting to know the amount of the total funded debt of Canada held in the United States, and the annual cost (a) without exchange, and (b) with exchange. I should like to know, too, when the original debt was incurred. If I do not miss my guess it will be found that most of this indebtedness arose originally between 1922 and 1930. Those were the halcyon days when everything was going beautifully, and when New York was the mecca for all borrowers, particularly the treasury of Canada, and the provinces-not to speak of corporations in this country. I recall a certain warning given out in 1927, I believe it was, by a gentleman who then occupied this seat, against this kind of borrowing. No heed was paid to the warning we gave, and we are paying for it to-day, right through the nose. I hope this will be a salutary warning to all governments, no matter what their political complexion may be, that the debt of the country should be held within the country. If held in Canada no very appreciable difficulties will arise in handling it. It is the debt we owe to the stranger which may cause us great anxiety in days to come.
A short time ago I discussed this matter with a man who knows what he is talking about, and he told me that, taking the war and all other factors into consideration, the size of Canada's debt need not cause us much anxiety, so long as we owe it to ourselves. But when we go outside the country - to borrow we must be prepared for the worst, if the worst should come. That was sound reasoning. If we owe to ourselves we can take care of our debts by taxation, but we cannot tax foreigners. The man in

another country expects to be paid according to the terms of his contract. Attempts have been made to do that, but they have always met with tremendous reaction and resistance, and there have been reflections on the credit of the country. So long as we have this system we have to keep our conscience.
If the minister cannot give complete information to-day, he may do so at a later stage. I should like to have, in some detail, information as to the origin of the debt. I should like to have included the debt of the Canadian National Railways, because between 1924 and 1930 I believe this country borrowed on its credit in the New York market, through the medium of the Canadian National Railways, the sum of about $400,000,000. We are paying through the nose for that policy. I should like to know both the direct debt and the guaranteed obligations, so that the country will be apprised of the total burden upon which we have to pay principal, interest and exchange.


James Lorimer Ilsley: I can give at once Canada's direct debt payable in New York. It stands at $459,000,000, with annual interest charges of $16,210,000. These are the figures as of April 30, 1942.


Richard Burpee Hanson: What is the exchange? It is part of the burden.


James Lorimer Ilsley: Eleven per cent on the interest, amounting to $1,783,100. I have not before me figures showing the Canadian National Railways' guaranteed debt payable in New York.


Richard Burpee Hanson: Could the minister give us some idea? Is it as much more, or an amount in excess of that? I should like also to know the origin of the debt, and how old it is. I am not referring to renewals.


James Lorimer Ilsley: I could go through a list I now have and pick out the dates of issue of bonds payable in New York, making up the $459,000,000.


Olof Hanson: I am not asking the minister to do that. Perhaps he would have his staff put this information in the form of a table which would be available when we are discussing the bill. I believe the guarantee branch of the Department of Finance could give us the same detail with respect to the indirect obligations of the Canadian National Railways, and particularly the date of origin of these obligations.


James Lorimer Ilsley: That would involve tracing them back.

Third Victory Loan


Richard Burpee Hanson: Yes, it
would involve some work, but if possible I should like to have it. If the information cannot be obtained quickly I should like to know how much of these two sums, the direct obligation of 8450,000,000 and that of the Canadian National Railways, was incurred between 1922 and 1930, when this country went on a big spending and borrowing spree in the New York markets. The same thing was true of the provinces.


James Lorimer Ilsley: The hon. gentleman wants
the particulars of the $459,000,000-when the debt was incurred?


Richard Burpee Hanson: Yes, when the first borrowing occurred.


James Lorimer Ilsley: It will not be sufficient
merely to give the date of issue of the present bonds, because they may have been issued for the purpose of refunding previous bonds, and that procedure may have occurred two or three times. Does the hon. gentleman want similar information with regard to the Canadian National debt payable in the United States and guaranteed by the dominion government, and also the unguaranteed Canadian National debt?


Richard Burpee Hanson: Is that
in the form of certificates for rolling stock issued under the Philadelphia plan? There is a specific term that is used but I have just forgotten it. When I was on the railway committee in the old days we used to inquire about that. I thought they were all guaranteed by the government, although secured by a specific mortgage and subject to a trust.


Clarence Decatur Howe: No, they are not guaranteed
by the government.


Richard Burpee Hanson: The minister might include the obligations that are payable in New York, whether guaranteed or not.


Mr. GRAHAM:: When an issue matures in New York and you arrange for a new loan to retire the old one, do you have to retire the old one in terms of the previous amount plus the exchange?


James Lorimer Ilsley: If a loan is payable in
New York funds, so many dollars must be paid. We must obtain those New York dollars in some way.


Roy Theodore Graham: You do not get the
holders of the bonds to accept the new issue? I realize that that might not be possible.


James Lorimer Ilsley: That is not the course followed.


Roy Theodore Graham: I assume the new purchasers might not be the same as the old holders?


James Lorimer Ilsley: That is right.


Alexander Malcolm Nicholson: The minister gave a figure of $459,000,000 as being the amount outstanding in the United States as at the end of April, 1942. Has he the figure as at the end of the previous fiscal year, so that we may see whether the picture has changed since the beginning of the war?


James Lorimer Ilsley: I have not the figures, but it has decreased $10,000,000 since the outbreak of the war.


Richard Burpee Hanson: Does that mean that $10,000,000 has been paid off in that time?


James Lorimer Ilsley: That is right.


Richard Burpee Hanson: More
would have been paid off if it had been considered the best thing to do.


James Lorimer Ilsley: When bonds fall due, just what the government should do is considered carefully and arguments pro and con are weighed. I forget what maturity it was, but there was one where we finally decided that the best thing to do was to pay part and renew part.


Mr. QUELCH:: Would it be possible to get a statement showing the total of Canadian securities, dominion, provincial, municipal and private, held abroad; also the dates of issue, the dates of maturity and the rates of interest?


James Lorimer Ilsley: I am informed that it
would be impossible to get that. The bureau of statistics makes an estimate, but as there is a certain movement in securities there is no way of finding that out with any exactness.


Victor Quelch: Could you not compel the owners of securities to register them by a certain date and thus get that information?


James Lorimer Ilsley: The holders abroad?


Victor Quelch: Yes.


James Lorimer Ilsley: I do not see how that could be enforced.


Richard Burpee Hanson: There is one thing of which the hon. member can be certain. Holders of corporation securities, whether residing in the United States or in Canada, insist on being paid in New York funds when the securities are payable in New York funds. I have often wondered about the patriotism of those people. Perhaps I should withdraw that. If everybody were to give up his exchange it would be a wonderful
Third Victory Loan

thing, but one man will not do it unless everybody does. It is a terrible drain upon this country and upon the foreign exchange control board. I have been in that position myself. I am quite willing to give up to the state part of, shall I say, my unearned increment. If they want it all, they may have it so far as I am concerned.


Victor Quelch: Suppose the federal government desired to pay off its indebtedness in England and to call in all debts held in that country in the form of Canadian securities before making an additional gift of money; would it not be possible to find out what dominion, provincial, municipal and private securities were held there?


James Lorimer Ilsley: We have repatriated all
dominion government and Canadian National securities held by residents of the United Kingdom. The hon. member is probably referring to provincial, municipal and industrial securities.


Victor Quelch: Yes.


James Lorimer Ilsley: The United Kingdom government probably could obtain exact information with reference to the securities in the hands of residents of the United Kingdom by compelling a registration. They would have the authority to do that. However, that would have to be a programme carried out by cooperation between the dominion and United Kingdom governments.


Victor Quelch: Have there been any conversations with that end in view?


James Lorimer Ilsley: No. Our programme did not involve the repatriation of industrial securities held by residents of the United Kingdom.


Victor Quelch: I am very much in favour of the billion dollar gift, but I do think attempts should be made to pay off whatever we owe in Great Britain, whether it is in the form of federal, provincial, municipal or industrial debts. In the long run it means that goods have to be shipped from this country to pay those government and private debts. I was just wondering whether we are going to get some of those securities.


James Lorimer Ilsley: The matter was gone into pretty thoroughly in the debate on the billion dollar gift, and a good argument was advanced for not denuding residents of the United Kingdom of their Canadian securities. I do not want a repetition of the arguments advanced then, but so long as they have a substantial investment in this country they will have a financial interest in purchasing goods from this government and developing trade with us. If all these securities were brought home there

would be a strong tendency on their part to purchase wheat from the Argentine and cattle from other countries in whose properties and industries they had an interest.


Victor Quelch: I was reading through the debate the other day and it seems to me that that was the main argument advanced. An effort is being made to guarantee a foreign market for our products after the war, whereas we should try to develop our internal economy so that we will have a home market for our own products, or for the products for which our own products may be exchanged, rather than depend upon a favourable balance of trade. By this means an internal economy would be developed under which other countries could buy the production of Canada that was not required for our own consuming. You would be giving goods for goods.


James Lorimer Ilsley: I have always taken it for
granted that it would be impossible in the lifetime of any of us to develop an economy in Canada that would supply a market for the whole wheat production of Canada.


Victor Quelch: But the goods for which
wheat could be exchanged.


James Lorimer Ilsley: You mean goods such as
British goods?


Victor Quelch: Tropical goods.


Roy Theodore Graham: Is not that argument
also applicable to the United States, that Canada might be wise to go there to a reasonable extent for the very reason the minister gives?


James Lorimer Ilsley: That might be, but the question is not as acute with the United States as it is with Great Britain, because Great Britain purchases an enormous volume of goods from us, and the balance of trade is favourable to us as between Canada and Great Britain. All sorts of considerations come in there, questions of fairness, whether that is the right way to cooperate in carrying on a war, whether it is sensible from the point of view of postwar trade, and so forth. I realize that persons may have different opinions about it. This whole subject was pretty well threshed out in the debate on the billion dollar gift.


Roy Theodore Graham: When Canada negotiates
a new loan on the New York market to retire a loan, does the minister explore the possibility of raising a loan payable in Canadian funds rather than in United States funds?


James Lorimer Ilsley: I think that the floating of
a loan in New York payable in Canadian funds is impracticable. Some people in the

Third Victory Loan
United States used to accumulate Canadian bonds payable in Canadian funds, and they had reasons for doing so. But when you go into a market like the New York market to borrow money it is understood that you agree to repay the money they lend you, which is United States money.


Alexander Malcolm Nicholson: A few years ago some Canadian companies bought securities which were to be paid in New York funds. If I remember correctly, the city of Calgary had some legal troubles over an issue of that sort some years ago. Are any of the amounts in the list which the minister has given us payable in New York funds to Canadian companies?


James Lorimer Ilsley: We do not know the holders or where they are. Some of these holders may be Canadians.


Victor Quelch: I can appreciate that there is the difficulty of obtaining foreign exchange in. the United States and that we desire to export gold for that purpose, but I understand that the great bulk of the gold we export to the United States is held in that country and therefore to that extent it does not in any way help the war effort of the United States and Canada taken together. To that extent it is an absolute loss so far as our combined war effort is concerned. I see that some of the gold mines are advertising in western Canada for men who are needed in other industries. The minister of munitions has told us that he could use right away five thousand mechanics at Arvida and a thousand miners at Sudbury. That makes six thousand men that he needs right way, and whom he could get if the gold mines in Canada ceased operating. The gold mines of. Canada are not making any real contribution to the joint war effort of the United States and Canada. Does not the minister feel that the production of gold could well be stopped for the duration of the war? After the war it would provide employment. We could have an agreement with the United States whereby the goods we require from her could be obtained under the lease-lend law, and then after the war we could repay our indebtedness to the United States in gold, if the United States desired to take gold. Our gold cannot be regarded as any help to the joint war effort of the United States and Canada. It is a help to Canada, but the war effort must be regarded as one joint effort by Canada and the United States, and the production of gold
does	not	help that	joint effort. On	the
contrary it is a complete loss of labour to the war effort.


James Lorimer Ilsley: Sooner or later the subject to which	the hon.	gentleman refers	willprobably come up for debate in some way. The hon. member has brought up this question	two	or three times before. He	hassuggested that we should close up the gold mines. He has asked me two or three times if I did not think that would be a very good idea,	and	I cannot	remember having	said
that I did. I should not like to express an opinion on it at the moment. I doubt whether this is the proper time to bring up the subject.


Richard Burpee Hanson: The minister could at least say that the export of gold helps our foreign exchange.


James Lorimer Ilsley: Yes, if we are to go on buying from the United States and not be thrown into a relationship which is undesirable from our point of view, that of being a debtor, whether merely a debtor having obligations under the lease-lend law or otherwise. We ought to be in a position to pay for what we get. It makes for smooth delivery of goods, parts and materials to Canada, and gold is just what we need for that purpose. The hon. gentleman suggests that we should work out an entirely new arrangement, an arrangement which would be very hard on communities which rely on the production of gold, and very hard on the large number of persons employed in the industry. These social problems are of great importance, and these are all matters which would have to be taken into consideration if we were to adopt a policy such as the hon. gentleman has several times advocated.


Mr. ESLING:: We already know of one community in the far north which is becoming entirely deserted. When the mines cease operation the business community that is dependent upon the mines has to fold its tent and move out, just as the miners do. They find another locality and start business, and the men must look for other employment.


Richard Burpee Hanson: The minister mentioned the policy of lease-lend. This may not be the proper time or place to inquire with regard to that, but it would be interesting to know whether the policy is in operation, the extent to which it has been put into operation, the obligations that have been incurred both ways, and the balance for or against this

Third Victory Loan

country. If he could give that information it would be interesting. I do not assume he has it before him at the moment.


James Lorimer Ilsley: We do not avail ourselves of lease-lend.
Mr.	HANSON	(York-Sunbury):	But	the
minister suggested	possibilities. It is definite
that we have not yet taken on anything under lease-lend?


James Lorimer Ilsley: That is correct.
Mr.	HANSON	(York-Sunbury):	Has	the
offer been extended to Canada?


James Lorimer Ilsley: I always understood it was available to Canada if Canada wished it.
Mr.	HANSON	(York-Sunbury):	But	we
have not got it so far?


James Lorimer Ilsley: No.


Richard Burpee Hanson: I am glad
to hear it.


Alexander Malcolm Nicholson: I have been interested in the remarks of the hon. member for Acadia. I noticed in the evening paper that Mr. Little, speaking over the week-end, mentioned! that Canada was near an extreme labour shortage. In Saskatchewan the gold fields will become ghost towns, and while it is perfectly true that some of these towns were built up for the production of gold, they will suffer hardship if we discontinue production. The present may not be the time for the discussion of this important subject, but some minister of the crown should indicate whether any lead has been given by the government with a view to negotiation between the two governments to see whether the large number of men engaged exclusively in gold production and the amount of available equipment might not be used to better advantage. While there are hardships in moving people from a town in which they have been living for some years, there are greater hardships which they might have to contemplate. The point made by the hon. member for Acadia is well taken. We cannot afford at this stage to have highly trained men and valuable equipment producing goods that are not essential in the present conflict, and I cannot think of large quantities of gold as being produced in the best interests of Canada and the United States, taking everything into consideration. I wish the minister would indicate whether consideration might be given in the house to the whole question.


Victor Quelch: Would the minister also give us information regarding the action that is taken in Russia, Australia and South Africa? I understand that in Russia production has

been discontinued, and, to a large extent it has been discontinued also in Australia. H he could give that information it would be a lead on the question.
Resolution reported, read the second time and concurred in. Mr. Ilsley thereupon moved for leave to introduce Bill No. 96, to authorize the raising, by way of loan, of certain sums of money for the public service.
Motion agreed to and bill read the first time.


Georges Parent: When shall the bill be read the second time?


Richard Burpee Hanson: I think it would be a good idea to read the bill a second time now. I should like to have a look at it. I believe the minister was to give me some information about foreign loans and guarantees. If I can get that information on Hansard, I am willing to have the bill go through. It is in the standard form of previous years?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: I should like to look at it a moment. So far as I am concerned we could have the second reading and there would then be the committee stage.


James Lorimer Ilsley: I move that the bill be now read the second time.
Motion agreed to and bill read the second time.


Georges Parent: Mr. Hsley moves that I do now leave the chair for the house to go into committee on the said bill.


Mr. POULIOT:: In past years the second reading of a bill has been postponed just because the bill had not been printed in one of the official languages. Here we have absolutely nothing before us. There must be a stop to this.


Mr. NEILL:: The bill has already been read the second time.


Georges Parent: When shall the house go into committee on the bill?


James Lorimer Ilsley: Next sitting.



BUSINESS OF THE HOUSE

James Lorimer Ilsley: The next order of business mentioned was the war risk insurance bill, but that presents new difficulties every day and I am not prepared to go on with it to-day. I am trying to work out with the Minister of Fisheries an arrangement which will meet the wishes expressed by some hon. members the other day; other questions have arisen as to whether the

Income and Corporation Tax
bill should apply to ships on inland waters or not, and certain information which is not in the possession of the government will have to be obtained. I cannot have that for two or three days, and it makes an awkward situation so far as this bill is concerned. I am proceeding to set up the organization just as if the bill had gone through, because I have to do it. I am getting committees together, and as soon as I have these preliminary matters settled, as far as they can be settled by the government, I shall have to bring this bill into the house again, but I cannot do so to-day or to-morrow.


Richard Burpee Hanson: I realize that the minister has
difficulties on his hands, but his colleague said distinctly that this would be among the orders of business to-day. Apparently there is no team-work between members of the administration with regard to these matters. However, I am not going to refer to that further. If the minister cannot go on and if there is a hope that he will be able to work out a solution for the fishermen, I would say we should let the bill stand over. As a matter of fact, all he has to do is to go into committee and then move the committee out; he has the remedy in his own hands. But I hope a solution will be found with respect to the fishermen.
He mentioned another difficulty with regard to shipping on inland waters. There was also a sharp division of opinion in the committee on another point which may occasion some debate here. So perhaps it is just as well to let the matter stand. But I want it understood that as far as we are concerned we were prepared to go on with the bill.


James Lorimer Ilsley: We might revert to government notices of motion. There is a most urgent matter which my colleague the Minister of National Revenue would like to take up, the resolution standing in his name. When we are through with that we might proceed with the second reading of the war appropriation bill. The resolution of the Minister of National Revenue may take some little time.


Richard Burpee Hanson: I have
no objection to accommodating the administration. But this was not on the orders of the day for to-day, and therefore I did not give any study to it, although in odd moments I have been trying to give some attention to these matters. I am quite willing that we should revert. The minister can make a statement and if we find it is a complica'ted matter, I think he should not proceed beyond that stage.


Georges Parent: By unanimous consent.
44561-198J



INCOME AND CORPORATION TAX


[Stage Direction]
Hon. C. W. G. GIBSON (Minister of National Revenue) moved that the house go into committee to consider the following resolution:
That it is expedient that the houses of parliament do approve of the convention and protocol entered into at Washington on the 4th day of March, 1942, by the government of Canada and the government of the United States of America concerning rates of income tax upon non-resident individuals and corporations, the avoidance of double taxation, the prevention of fiscal evasion in the case of income tax and the exchange of certain fiscal information, and that this house do approve of the same.
Motion agreed to and the house went into committee, Mr. Bradette in the Chair.
Mr. GIBSON:: This convention was signed on March 4. On the following day I made a statement in the house outlining the terms, or the chief terms, of the convention, and so probably it is not necessary to give a lengthy explanation to-day. It might, however, be advisable to give a brief review of the deductions at the source as between Canada and the United States as they have existed and been modified by a prior convention and as they are modified by the present convention.
In 1933, for the first time Canada imposed a 5 per cent tax deduction at the source in respect of dividends and certain interest leaving Canada. It was not until three years later that the United States first imposed a tax deduction at the source in respect of certain periodic payments made to persons resident outside of the United States. In 1936, when the United States imposed a 10 per cent tax deduction at the source it was felt that representations should be made to reduce that to 5 per cent so that there would be parity of deduction between the two countries with respect to these periodic payments. As a result, the convention of 1936 was entered into, and from that time until April 29, 1941, the deduction at the source of each country remained at 5 per cent.
In April, 1941, Canada raised its rate of tax deduction to 15 per cent, and in so doing automatically abrogated the existing convention. As a result, the then existing law in the United States pertaining to deduction at the source applied equally to Canada, as it did to all other parts of the world. The law of the United States required a deduction of 16i per cent, and thereafter 16J per cent was deducted in the United States.
However, the United States government then raised the tax deduction rate from 16i to 27i per cent, so that during the last three
Income and Corporation Tax


Richard Burpee Hanson: If this convention goes through, will it operate to revert to the former rate, and will there be refunds covering that period?


Colin William George Gibson: Yes, it will give us refunds not only of the difference between 15 per cent and 27| per cent, but also of the 16i per cent rate that existed from April, 1941, when we changed our rate from 5 to 15 per cent. When we did that, the United States rate automatically applied to Canada.
Mr. HANSON (York-Sunbury) When we abrogated the convention.


Colin William George Gibson: Yes, in April, 1941.
This discrepancy in the amount of the deduction at the source again became the subject of negotiations with a view to parity of deduction. The negotiations culminated in the convention which has been tabled, and which was signed on March 4, 1942, by our minister at Washington, Mr. Leighton McCarthy, and the acting under-secretary of the treasury, Mr. Sumner Welles.
This convention, as my previous statement indicated, is wider than the prior convention of 1936. Broadly speaking, it does the following:
1.	It reduces the United States tax deduction at the source from 27i per cent to 15 per cent, and is retroactive, so that parity of deduction as between the two countries has been restored.


John Ritchie MacNicol: From what date?


Colin William George Gibson: From April, 1941, the date when we abrogated the prior treaty.
2.	Certain extraterritorial features of the United States law as they impinged on the Canadian taxpayer are eliminated. By way of example, the United States law imposed a tax on any Canadian company, 50 per cent or more of the revenue of which was derived from sources within the United States, if the income was accumulated by a recipient Canadian company. Or again, if a Canadian company had 50 per cent of its revenue from the United States, then any Canadian indivdual resident who received dividends from that company was liable to taxation under the United States extraterritorial law. These extraterritorial features have been eliminated.


Richard Burpee Hanson: All of
them?
LMr. Gibson.]


Colin William George Gibson: All of them as applicable to Canadians.
3.	For the years prior to 1936, the United States revenue officials have been seeking to collect taxes on gains said to have been made by Canadian individuals and companies transacting business through Canadian brokers on the exchanges in the United States.
Many of these claims antedated 1929. Many of our Canadian residents, if they did make some profits prior to 1929, suffered substantial losses thereafter, and I am informed, were called upon to pay their United States obligations; so that in the result, in some instances more money was paid into the United States than ever came out.


Richard Burpee Hanson: Do I
understand that heretofore the United States treasury has sought to impose on Canadian nationals taxes in respect of capital gains made by Canadians operating through United States brokers on the stock exchanges in New York or elsewhere?


Colin William George Gibson: Yes.


Richard Burpee Hanson: On the
theory that capital gains and capital losses are taken into consideration under their income tax law, while in Canada they are not. Has Canada at any time ever acceded to that position, and what was the result? Did these people have to pay? I had not known that the United States government had actually taxed Canadian nationals resident in Canada on capital gains.


Colin William George Gibson: There have been a great many claims, some of which have been settled, others of which have not been disposed of. As a result, Canadian taxpayers have not been sure whether the United States government was going to endeavour to collect from them or not. With this convention these claims are being dropped, and the only claim now being made by the United States government is with respect to the tax on any dividends or interest received on moneys invested in the United States.


Richard Burpee Hanson: Does this cover taxes that were paid by some Canadian nationals prior to the settlement? Will such taxes be refunded? It seems to me they should be, in justice.


Colin William George Gibson: No; there is nothing in the tax convention providing for the refund of moneys already paid. Perhaps I might continue with my statement, which deals with these matters.
Representations were made to the United States government that such claims be not made, and for some time they were in fact not

Income and Corporation Tax
made. However, after 1932 the United States revenue officials actively sought to Collect taxes in respect of these old transactions. These claims were resisted by Canadian taxpayers on the ground that they were not carrying on business in the United States, that they were not subject to the revenue laws of the United States, that they had been informed that the claims would not be made, and in fact they were not made for many years but were, as stated, subsequently revived. Now by the convention these claims are settled on the basis of the 1936 law as modified by the 1936 convention; that is, in general. 5 per cent in respect of any dividends or interest received from United States securities, and no claim in respect of any capital gains on stock market transactions. Any person in Canada who wishes to take advantage of this convention must, within two years from the date of this convention, apply to Washington for a settlement on the basis outlined. Therefore all persons concerned should take note of this requirement. Otherwise the law as formerly asserted by the United States might now be imposed as against those who fail to make such a settlement.


Richard Burpee Hanson: Why should that be necessary? Why should not the government deal with it?


Colin William George Gibson: Those cases are still outstanding; there was a liability under United States law, and they can still proceed against the taxpayer if they desire to do so.


Richard Burpee Hanson: If the
cases are going to be dropped, why should that not be done by express arrangement under this convention?


Colin William George Gibson: Under the terms of the convention the taxpayer who is liable under the earlier laws must file returns so that they will know he has made a disclosure of the interest he received during that period.
4.	If there is any case of double taxation arising by reason of a United States company doing business in Canada, or vice versa, and the company by reason of the apportionment of profits is being taxed on more than 100 per cent of its profits, it can ask for a conference between representatives of the two governments with a view to securing an adjustment.
5.	The convention also provides for an exchange of information pertaining to the payment of dividends, interest and other fixed periodic payments. This provision does not require Canada to give information respecting the income of residents of Canada.
6.	If the authorities of one of the contracting states are under the belief that the other country is being used as a basis of perpetrating fiscal fraud, a request for special information may be made pertaining to the activities of any such person, and after consultation the information may be exchanged. This is designed to preclude evasion and fiscal fraud.
There are other minor features in the convention which are self-explanatory on reading, and require no special mention at this time. This convention was ratified by the senate of the United States on the 28th day of May, 1942, and it only remains for parliament to pass this resolution. The convention, it will be observed, is beneficial to all Canadians who receive income from sources within the United States by way of interest, dividends, rentals, royalties, salary, and other periodic payments, by returning to them such deductions above the rate of 15 per cent as have been made from the moneys coming to them since April 29, 1941. It is also beneficial to the revenues of Canada, inasmuch as the tax deducted at the source in the United States is allowed as a deduction from the tax otherwise payable in Canada on the same income, and the smaller the amount deducted in the United States, the greater the tax payable in Canada.


Richard Burpee Hanson: That last statement is very interesting. Will the minister apply that principle in the case of succession duties paid as between the provinces and the dominion? I just throw out that thought, that if this is a good principle as between national governments it is also a good principle as between the dominion and the provinces in respect of succession duties. I do not expect the minister to answer that question immediately, but certainly I wish he would give some thought to it.


Colin William George Gibson: Of course there is no change in the law in that connection. That is already the case; we already permit the deduction of taxes.


Richard Burpee Hanson: But the minister laid emphasis on it, and that thought passed through my mind as he made the statement.
I understand the reason for desiring to get this resolution through to-day if possible, because on May 28 the United States senate ratified this treaty or convention, and unless we also ratify it they will continue to charge our nationals 27^ per cent. I think it would be less than just if we were to delay the passing
Income and Corporation Tax

of the resolution. I have tried to give it some thought, and I believe we have made a fair bargain. I am just wondering how serious is the position with respect to what I might call tax dodgers. I have in mind those people who claim a domicile, we will say, in Bermuda or in the Bahamas, but who spend the summer in Canada and the winter at Pinehurst or in Florida, who do not pay anything to anybody if they can help it. How effective is this going to be with respect to those who do not claim a Canadian domicile but who spend, let us say, 183 days here and 183 days in Florida, who flit back and forth in the expectation and hope that they will not have to pay anything? We have people of that kind, I am sorry to say, and I dare say they have them in the United States also. How effective is this going to be with respect to that class of citizen?


Colin William George Gibson: The exchange of information will undoubtedly be of assistance; and in cases where they have reason to suspect that some action has been taken for the purpose of escaping taxation, specific questions will be asked and specific information requested.


Olof Hanson: That is
back and forth, as between the officials?


Colin William George Gibson: Yes, between the governments.


Richard Burpee Hanson: What
about the man who spends 183 days in Canada and then goes to Florida for 182 days, and who does not file a return in either country? How do you deal with that man?


Colin William George Gibson: As a Canadian resident he
is liable to income tax. We deal with that man by deduction at the source for national defence tax wherever the income arises in Canada.


Richard Burpee Hanson: That
would be effective to the extent that you could deduct from his income at the source, I suppose, but what about bearer bonds?


Colin William George Gibson: The same thing applies
there; he cannot cash his coupons without filing the ownership certificate with the bank.


Richard Burpee Hanson: That is just the ownership certificate; but is the bank now authorized to deduct any income tax on the presentation of a coupon with an ownership certificate? Does the law go that far at the moment?


Colin William George Gibson: No, not at the present
time.


Richard Burpee Hanson: So you
have not complete machinery to deal with the tax-dodgers?


Colin William George Gibson: Well, we secure the information through those ownership certificates, so that we know who is liable for tax. Then it is up to the department to follow it up.


John Ritchie MacNicol: My income tax returns
were filed making allowance for a deduction of 27-i per cent on bonds which I hold) in the United States. If the difference between 27-J per cent and 15 per cent is returned to me, as I presume it will be as from the date mentioned by the minister in April, 1941, then I presume the amount I receive as a rebate will have to appear in my returns for 1942, and it will have no reference to 1941?


Colin William George Gibson: That question was asked some time ago by the hon. member for Peterborough West, and at that time he was told that the department would give the taxpayer the option either of including the rebate in the year it should have been received by the taxpayer, namely in 1941, or of including it in the year in which he actually received the rebate.


Mr. CASTLEDEN:: Could the minister
make a statement as to how much in Canadian funds leaves this country annually in the form of interest and dividends on bonds, shares and securities, and give us the comparative amount of income from such capital coming into Canada from the United States?


Colin William George Gibson: I have not the figures showing the amount of income leaving this country. However, I have the amount coming into this country from the United States. An estimate has been prepared by the foreign exchange control board for 1941, and the incomes which would be affected include profits from subsidiary companies, taxed at the rate of 5 per cent, and amounting to 8-9 million dollars. The amount of dividend is 15-7 million dollars, and interest from bonds and other sources amounts to 6-4 million dollars. Other periodic payments, such as annuities, rents and royalties are estimated at 4 million dollars, making a total of about 35 million dollars in interest, dividends and profits coming to this country.


Richard Burpee Hanson: Has the minister the reverse figures?


Colin William George Gibson: I have not the reverse figures, but I may be able to get them from the foreign exchange control board.


Richard Burpee Hanson: Is it not a fact that this is really advantageous to Canada?

Income and Corporation Tax


Colin William George Gibson: 
Roy Theodore Graham: I understand the convention does not become operative until it is ratified by this parliament.


Colin William George Gibson: No, it does not become
operative until it is ratified, but it is retroactive to January 1, 1941. The figures respecting income are on the basis of the convention operating over a full year, and also on the income figures for 1941.


George Hugh Castleden: Would the relative figures for 1938, 1939 and 1940 be available?


Colin William George Gibson: We could get them, I believe, from the foreign exchange control board.


Alexander Malcolm Nicholson: The minister stated
that the amount of income coming to Canadian citizens would not be disclosed. I understand that in the United States that information is published. It seems to me the time has now arrived when consideration might be given to following a similar procedure in Canada. A few days ago I had a question on the order paper respecting Major Hahn of the John Inglis company. This is a company which has received over $35,000,000 from the Canadian treasury, and yet members of parliament are not permitted to know the extent of Major Hahn's annual income from that company. If we are to decide as to a fair rate of taxation, we ought to know how much the officials of some of these companies receiving government contracts are making. It seems to me that provision might have been included in the agreement. Has the minister's department given consideration to following the policy adopted in the United States?


Colin William George Gibson: It is not a matter for my department to take into consideration. There is a provision in the Income Tax Act that secrecy shall prevail, and members in the department take oaths of secrecy every four months. If we were to give the information obtained in the department, a change in the act would be necessary.


Richard Burpee Hanson: Has a new order in council been passed authorizing the Minister of Finance, upon application having been made to him, in a given case to lift the price ceiling on salaries? I have just
learned about this matter, and I wonder if that is the condition. This sacrosanct priceceiling policy of the governnment apparently is to be punctured in a few new places. I understand that the new order in council was .passed on Saturday, and that under it it is possible to break the ceiling.


Colin William George Gibson: I know an order in council was passed with respect to employees taken on in a new war industry, who had been receiving a probationary rate of salary.


Mr.   ICINLEY@: By permission of the
minister?


Colin William George Gibson: Yes.


Richard Burpee Hanson: In other words, we have a policy of salary-fixing by the will of the minister. But the salaries of labour and of executives are to remain frozen. However, if a man is a dollar-a-year man and becomes a salaried official, the minister may break the rule in favour of such man. It is just a matter of trial and error.


An hon. MEMBER:: Worse than that.


Richard Burpee Hanson: Yes,worse than that. It may leave itself open to all kinds of abuses and favouritism. The whole thing is wrong.


John James Kinley: I think it is just the opposite.


Richard Burpee Hanson: I say the principle of being at the mercy of the Minister of Finance is wrong. I do not say the minister will abuse the privilege; I believe he is a conscientious man. However, the whole position is wrong, and to leave the breaking of a policy to the discretion of an individual minister is not a proper procedure. Again we are being governed by order in council, and an attempt is being made to preserve a position which from the very beginning has been more or less untenable.


Mr. MacINNIS:: Unless there is a very recent order in council fixing salaries, then my information, from the one I read, was that the order in council did not really fix salaries. That is, the first paragraph or two fixed the salaries, and then the remaining four or five paragraphs went on to say that notwithstanding anything set out in the earlier paragraphs the Minister of National Revenue could give increases, almost at will. That is what one must expect when there is a salaried class dealing with this matter. I am not finding fault with the Minister of Finance or the Minister of National Revenue

Income and Corporation Tax
because, even if they were supermen, it would be impossible for them to keep within their grasp all the details with which they must deal in the course of a day. If the minister has time to read what passes, not necessarily by order in council, but by orders passed pursuant to orders in council, he would find that an individual would say "By virtue of the powers vested in me by order in council number so-and-so, I, So-and-so, order such-and-such a thing".
This is approved by superior officers, and usually their signatures are printed thereon. It states it is issued with the approval of the minister concerned. Obviously the minister concerned has not the time to go over these orders carefully and know what they mean. I imagine that what happens is that the order is brought in and laid before the minister. He asks what it means, and it is explained to him. He then says, "all right; let it go." He cannot do anything else. Wages are not only fixed by being frozen by a general order in council; they are now being fixed by an order in council issued on the express recommendation of the Minister of Labour after commissions and conciliation boards have allowed different rates of wages.


Humphrey Mitchell: That is wrong.


Richard Burpee Hanson: Is it the statement that is wrong, or is it the facts that are wrong?


Humphrey Mitchell: The statement is wrong.


John James Kinley: What has this to do with the agreement?


James Lorimer Ilsley: It is out of order, but the hon. member is wrong.


The ACTING CHAIRMAN (Mr. Bradette):: The hon. member has raised a point of order, but it has always been the practice to permit rather wide latitude in discussion in committee of the whole. However, I ask hon. members to keep fairly well to the resolution before the committee.


Angus MacInnis: I am quite willing .to admit that what we are discussing has no relation whatsoever to the resolution before the committee.


James Lorimer Ilsley: I just want to correct one statement.


Angus MacInnis: It will be out of order.


James Lorimer Ilsley: What I am about to say may be out of order, but only to the same extent as the hon. gentleman has been out of order. He has been sowing the seeds of class antagonism by his reference to the fact that the

salaried class would .tend to favour itself when drawing up these orders. If he will examine the order setting up the national war labour board and the order setting up the salary ceiling, he will find that there is certainly no more latitude allowed to permit raises under the salaries ceiling order than there is in the other order. In fact, I think there is not nearly as much.


Angus MacInnis: I shall be willing to prove what I say, to my own satisfaction at least.


James Lorimer Ilsley: That it was done by the salary classes who are theoretically supposed to be working for their own interests and against the interests of the labouring classes? That is not the case. The statement the hon. gentleman has made is just a mischievous accusation without any basis in fact.


Angus MacInnis: I agree that this subject matter is out of order, but if the minister is going to make a statement of this kind that reflects on me, I certainly must be allowed to reply. I can prove everything I said from the order in council, and I propose to do so at the proper time.


James Lorimer Ilsley: The hon. member can try to do that at the proper time. When the hon. member says that care is not taken with these orders, that the ministers let them go by without knowing what they are doing, he is wrong again. Every one of these things is examined and debated and argued over. Nothing has taken more time than these orders in council, having in mind the danger of the kind of charge the hon. gentleman has made to-day. Time after time we have said, "If you do this for the salaried people, you have to do it for labour; if you put restrictions on labour, you have to put them on the salaried people." Those advocating a change in the salary-ceiling order always put it on the ground that this right was given to the workingman under the other order. If the workingman gets a promotion, he receives higher pay. If he is undergoing probationary training and he gets through that period, once he enters the period where he would normally get a higher rate of pay, he is given that pay. It was argued that a similar provision should be included in the salary-ceiling order, under which there could be a probationary rate followed by a higher rate. The salary-ceiling order is every bit as strict as the labour order. In fact, for a long time it was more strict, and I think an excellent case could be made out for its being more strict at the present time. I knew perfectly well, and the government knew that there would be certain members of this house who would say that we were favouring the salaried class, that we were favouring

War Appropriation
directors and those in managerial positions while we kept the lid on labour. The government kept that in mind, and were careful to have an answer for every one of these charges, and those answers will be given when the time comes.


Richard Burpee Hanson: You
brought in the wages order first. Then a clamour arose, and you brought in the salaried order.


Humphrey Mitchell: When I was chairman of the national war labour board we started out to administer both salaries and wages. Then the Minister of Finance made a statement, and salaries were taken away from the board and put under the Minister of National Revenue.


George Hugh Castleden: The resolution refers to the exchange of' certain fiscal information, and I was wondering if the minister could give us some specific information about what is intended.


Colin William George Gibson: That is covered by article XX, which reads:
The competent authorities of the United States of America shall forward to the competent authorities of Canada as soon as practicable after the close of each calendar year the following information relating to such calendar year:
The names and addresses of all persons whose addresses are within Canada and who derive from sources within the United States of America, dividends, interest, rents, royalties, salaries, wages, pensions, annuities, or other fixed or determinable annual or periodical profits and income, showing the amount of such profits and income in the case of each addressee.


George Hugh Castleden: Where will the minister get that information? Will it be deposited with the income tax branch?


Colin William George Gibson: That would be obtained from the different companies and from the banks when ownership certificates are filled out. The returns by the companies would show to whom dividends are paid.


George Hugh Castleden: Those returns are
available to the department?


Colin William George Gibson: They are available at all times.


Thomas Miller Bell: What is the basis of computing income tax of high officials? For example, the vice-president of the International Nickel company reports an income- I am speaking from memory-in excess of 8200,000 a year. Is the place of his residence or the place from which he derives his income taken as the basis for working out the income tax?


Colin William George Gibson: I would not want to give an answer to any one particular case, but generally speaking, the basis for taxation of salaries is the place where the person resides. If the salary, however, is over $14,000, any amount in excess of that sum is not allowed as an expense to the company in computing its tax.
Resolution reported, read the second time and concurred in.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



WAR APPROPRIATION BILL


[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved the second reading of Bill No. 95, for
granting to his majesty aid for national defence andi security.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Ross (Calgary East) in the Chair.
On section 1-Short title.
Mr. STIRLING:: Is there any significance
in this bill being called the national defence and security bill? Was that the title given to the bill brought down in previous sessions generally known as the war appropriation bill?


James Lorimer Ilsley: I believe so. I do not
recollect what the long title of the other act was, but there has been no change.


Grote Stirling: Is it similar?


James Lorimer Ilsley: Yes; it is supposed to be
the same.


Grote Stirling: When the 1941 bill was
before the house providing for the requirements for the fiscal year ending March 31, 1942, there was a supplementary bill for the fiscal year ending March 31, 1941, running concurrently in the house, the supplementary bill being required to balance the expenditures of the previous fiscal year. Is there such a bill this year?


James Lorimer Ilsley: A supplementary bill for
$135,000,000, called the Supplementary 1941 War Appropriation Act, was brought down this session. That was required to supplement the $1,300 million that was voted for the year 1941-42.

War Appropriation


Mr. ROSS (St. Paul's):: Mr. Chairman, the other night when I tried to speak on this measure I was ruled out of order. I do not know whether I shall be in order to-night or not. I see the Minister of Pensions and National Health (Mr. Mackenzie) smiling. I like to see him smile at me when I speak in this house because his smile is encouraging.
What I wanted to speak on was equality of service and equality of payment. We have a very difficult situation in Canada to-day with respect to clerical help. I do not say that each individual clerk in the house or each individual clerk in the country should not be paid what he or she is worth; but after all, we are trying to put a ceiling upon wages, and we are trying not to compete among each other for clerical help. Take, for instance, the girls who came to work in the civil service in Ottawa in the early stages of the war. Many of them came from patriotic motives and started in at a salary of approximately $70 a month. The next batch that came in got perhaps $90 a month, and the next batch, $120 a month or whatever it was. The result is that the large institutions in this country are finding it very difficult to keep their clerical help. I am not complaining about that. We will give our clerical help to the government if they need clerical help. But let us get together on a cooperative basis. As it is now, the government comes to the insurance companies, for example, the Sun Life, the Canada Life, the London Life, the the Dominion Life, the London Life, the Confederation Life, and so on, and says to them, "We need clerical help". I say: Do not come along and take our clerical help away from us, because the insurance companies are in this position, that we cannot pay our help any more than they are getting because their wages are frozen. What we have to do is to create new positions for these people. I suppose the various companies could get together and say, "We will trade you this crowd for that crowd, and we will adjust their wages." That is the only thing to do; but let the government come along to the insurance companies and say, "We need clerical help; what can you do for us?" That is what should be done instead of having the government go throughout the country taking this one and that one and raising wages. Moreover, it is an incentive to inflation. We will pay our clerical help the same as anyone else, but we should get together on a cooperative basis so that there
fMr. Ilsley.]
will not be chaos, because it will come to that unless we do something. We are all in the same boat.


Mr. REID:: What about the United States government? They are coming here, offering people $150 a month and taking them across.


Douglas Gooderham Ross: Many young girls have gone from our institutions to Washington at $150 a month, but they have come back because the cost of living is so high that they are not as well off there as they are here. I think $70 a month is pretty low for a girl who is brought to Ottawa and has to get along in this city, with the rent and board she has to pay. I suggest that without very much trouble the government could get together with the institutions that are employing labour. Many people might take the view that life or casualty insurance is not essential to the war effort. I contend that it is essential in a sense. When one considers that a great many of the men who are overseas and others who are engaged in the war effort are protected by life insurance, it is an essential business. Not only that, but the life insurance companies have been the greatest source of our war loans. The companies collect money from the people and lend it to the government. I do not think we should have any more competition if we can avoid it. Let us get away from it. I do not begrudge these girls or men the wages they are getting, but unless we get rid of this competition I do not know where it will lead us. We shall have chaos. I should like to have an answer.


James Lorimer Ilsley: If the hon. gentleman will put in a word or two the point he wants answered, I will try to answer it. I understood from him that there was some movement of employees from one concern to another. Is that the problem?


Douglas Gooderham Ross: The point is that the government is competing against essential industries or businesses for clerical help.


James Lorimer Ilsley: The salary rates in the civil service have been kept pretty well in line with what they have been in previous years. The classifications have not been changed. There has been a slight change with regard to those who have just come into the service or have been in for six months. The clerk grade 1, or stenographer grade 1, or typist grade 1, gets $65 after six months, and another grade was created, grade 1A, carrying a salary of $75, but that classification applied only to stenographers with two years' experience. These are not excessive salaries, and the only other concession the government has made to the changed situation, the great

War Appropriation
demand for labour, is the cost of living bonus to civil servants. That has been kept within carefully defined limits. I believe that in some localities where it is impossible to get clerks or stenographers without raising these salary rates somewhat, the rates have been raised; but if I remember correctly, they have not been raised beyond the maximum of the classes in any case, and I am surprised to hear that the government has been offering salaries that were excessive or greater than those paid by business. I do not think that is the situation. It might happen in a few individual cases, but as a general rule the government has not outbid business at all. Business is continually making offers to those employed in the government, and we are receiving representations to the effect that unless we raise salaries we shall lose our employees. The hon. gentleman may have seen the insurance companies' end of the problem, but I do not think he has seen the government's end of it. I do not think there has been any great bidding for help either by business or by the government. We have certainly tried to keep everything under control, so that there would not be.


Douglas Gooderham Ross: There is one further point about this. The minister says there is no bidding. I could give him dozens of instances where girls with no experience whatever have been taken into the services, not through the civil service commission but in other parts-


James Lorimer Ilsley: Such as?


Douglas Gooderham Ross: Some of the national defence services.


James Lorimer Ilsley: Does the hon. member mean enlisted girls?


Douglas Gooderham Ross: I know they have been taken on. If we are to have a contented community, the government cannot take on a girl who has no more experience than an ordinary filing clerk and put her in a position where she gets $40 or $50 more than another girl who has experience. I am bringing this to the attention of the government because it is important that we get this down to brass tacks. If the government want girls or men let us get together with the government and let the government say, "We want so many from you and so many from you" and so on, and we will say to the government, "All right; you take these people; we will take them back after the war, but in the meantime we will try to train some more people for you." That is logical, but at present the situation is chaotic.


[Stage Direction]
Section agreed to.
44561-199t
On section 2-Appropriation $2,000,000,000 less $500,000,000 voted under 1942 c.9.
Grote Stirling: Would the Minister of Labour state the policy of the government with regard to work being done by the Japanese in the road camps?
This is the setting for my question. The minister will remember that after the California gold rush, the royal engineers sent a company round the Horn to what was then British Columbia, because it was feared that there might be rioting and insurrection among the gold miners who came up from the south. That rioting did not come to pass, and the royal engineers were put to work building roads. They built through that jungle country of the lower Fraser mainland; they built up the Cariboo and they started to build a road through the southern part of British Columbia from Hope in the' direction of Princeton. This was largely for the reason that gold was being discovered in all the creeks in that southern section. All this took place something like eighty years ago. Ever since then, attempts have been made from time to time, years apart, to make a join in that road between what was started on the east end and what was started on the west end of it. Now that the government's policy is to use certain Japanese males in road camps, certain camps have been erected and are being used at both ends of that gap, which is variously described as being from thirteen to twenty miles long. As far as I am aware, they have not reached the actual gap itself, but have been repairing and improving the roads approaching the gap.
The reason why I make these few introductory remarks is that all the people through the southern part of British Columbia as far as the Alberta boundary are looking forward with great hope once more to the prospect that that road may be finished, because it would considerably shorten the distance for all that traffic. When the Japanese first entered those camps at the east end of the gap, that is forty-three miles west of Princeton, the onlookers were disappointed to find that very little work was being done. There was no machineiy. They were afraid that once more they were going to look on at certain scratching of the earth without any result.
I am informed that a certain amount of improvement has taken place and that some road machinery has appeared on the spot. The minister of public works of British Columbia has all along taken a considerable interest in the matter and has stated that he has induced Ottawa to take rather a different view from that which Ottawa had taken of the value of that link from the point of view
War Appropriation

of defence. Whether that be so or not I do not know, but he has been endeavouring to put at the disposal of those camps certain pieces of road machinery. Unfortunately, however, all such machinery is in process of wearing out, and with the difficulties of getting more machinery the department of public works of the province does not want to see that machinery worn out too rapidly. Consequently, the people are once more becoming dispirited with regard to how the progress of the work will be kept up. So I ask the minister if he will be good enough to explain the policy of the government with regard to the Japanese in those camps, the facilities which will be provided for them to carry out the work, and the quantity and quality of the work which will be required of them.


Humphrey Mitchell: First I would say we are going to press with vigour the road-building policy that is in operation at the present time.


Richard Burpee Hanson: What is that?


Humphrey Mitchell: The building of roads. Second, there is a limit to the machinery available. In the next three or four months there will probably be going on in British Columbia more work of that kind that has for its purpose the successful prosecution of the war in that part of the dominion. However, it may be difficult to get the amount of road machinery we may require for these roads. My hon. friend can rest assured that all the machinery that can be got will be obtained.
With respect to the Japanese, personally I would rather see them employed for the relief of what one might call the acute labour shortage in certain other parts of the dominion; for instance, cultivation of sugar beets, cutting of pulpwood, and those lines of endeavour where there is an acute shortage of labour at the present time. But the slack will be taken up in these road camps. Take, for example, the transcontinental highway at Schreiber. I think that should be used as a reservoir for Japanese labour from which we can move them into pulpwood camps and sugar beet fields in western Ontario, as we are doing at the moment.
I am well acquainted with the district of which the hon. member speaks, and from my point of view I should like to see that road completed because of the quicker access it would give between the section to the east thereof and Vancouver.


Grote Stirling: It would be a valuable addition to the road communication in the west. It was pointed out by the hon. member for Fraser Valley (Mr. Cruiekshank) on more

than one occasion that the road and two railways are located very close together in the Fraser canyon, and that sabotage might produce an unpleasant situation there. This at least would be an alternative and additional road. Is there machinery available from any other source than borrowing from British Columbia?


Humphrey Mitchell: I do not know. The general machinery situation is difficult right across the dominion. That must be admitted. While we have some machinery that belongs to the Department of Mines and Resources, the procurement of other machinery at this time is not easy, particularly in view of the work on the Alaska highway. However, the hon. member may rest assured that whatever machinery we can get will be obtained in order to complete the road to which the hon. member refers.


Mr. DOUGLAS (Weyburn):: When this
bill was in the resolution stage the hon. member for Mackenzie (Mr. Nicholson) made an exhaustive statement in regard to the increased consumption of liquor in Canada. Nothing has been said by anyone on the treasury benches as to government policy in that regard. I do not propose to-night to go fully into the cogent arguments so well advanced by the hon. member for Mackenzie; it is hardly necessary to do so. He pointed out then that the increase in liquor consumption in Canada during the past year has been alarming. In one province that increase was as high as 35 per cent in 1941, as compared with 1940. Bodies of Canadians from the Atlantic to the Pacific have become somewhat concerned about the matter. The wartime prices and trade board, which operates under the Minister of Finance, has had to call upon the people of Canada to accept rationing of sugar, tea, coffee and many other commodities in daily use; yet here is a traffic which requires sugar, honey, cereal grains, equipment, labour and so on, the use of which is bound to take away from Canada's war effort at least to some extent. The Minister of Munitions and Supply tells us constantly of the difficulties in regard to shipping; yet, as the hon. member for Mackenzie pointed out, one firm alone in Canada exported 400,000 cases of beer.
This is a difficult thing for the people of Canada to understand. It has often been stated that the reason why more military equipment was not available at Hong Kong and the Malay peninsula was lack of shipping space; yet Mr. Philip Guest, British United Press correspondent in the far east, in his reports from the scene of conflict made the

War Appropriation
statement that before Hong Kong was captured 600,000 bottles of whisky were destroyed, and that before Singapore fell 800.000 bottles of whisky were destroyed. Apparently shipping space had been found at some time or another for the shipment of supplies of this kind into what were potential danger zones. It is difficult for the people of Canada, who are being called upon to make sacrifices; for the children of Canada, who are being asked to do with less candy and sugar, to understand why there should be a privileged group who so far seem to have been completely excluded from the necessity of accepting any sort of rationing. Even now, when one goes into a restaurant and orders milk, he gets a glass of milk instead of a bottle, because the glass is no longer available for bottles of milk in certain circumstances. There appears to be no suggestion, however, of rationing the glass that is used for the bottles necessary for the liquor industry. When I was in western Canada a short time ago I noticed in one of our newspapers an advertisement inserted by the breweries, suggesting that people should buy a bottle of whisky and give the bottle to the Red Cross. They did not suggest to whom the whisky should be given.
I think the government ought to make some statement on this matter. I am not suggesting now that advantage should be taken of the war in order to try to introduce prohibition. That is not the question at issue at all. The point is that here we have a lucrative trade, which has grown by leaps and bounds during the period of the war and which so far has not been made subject to any form of restriction whatever, as far as we are aware; which is using materials, labour, machinery, shipping space and all the rest of it, while other commodities which are required by the great majority of the Canadian people, and some of which are essential to the welfare of the people, are being rationed and curtailed.
It seems to me that before this debate concludes, we ought to have some statement from the government, particularly from the Minister of Finance, under whom the wartime prices and trade board operates, as to just what is the government's policy. Does it propose to allow this traffic to continue, in spite of the fact that other commodities are rationed, or has it some policy with reference to the brewing and distilling interests in Canada? I wish that at some time during the debate the minister would give us such a statement.


James Lorimer Ilsley: Well, Mr. Chairman, I was hoping that we might finish this bill to-night. I am not prepared to make a statement on the
question raised by the hon. gentleman. As he was speaking I was wondering why he was bringing up this subject under this section. Apparently he is arguing that because there is some rationing of commodities such as tea, coffee, sugar and so on, which have to be transported long distances over water, therefore a commodity which is manufactured in Canada and of which there is no shortage- perhaps there should be a shortage of it, but there is not-should also be rationed.
I have received quite a number of letters from persons who argue in the same way, and a great many of their arguments are extremely unfair. For instance, there is the argument that the government could find space to send beer to Libya but could not find space to send equipment to Hong Kong. That argument is going the rounds in certain circles; it has an interesting sound and is being rather widely circulated. As far as finding space to send equipment to Hong Kong is concerned, of course we did find space to send equipment there.


Richard Burpee Hanson: Too little, too late.


James Lorimer Ilsley: Well, we had every reason to think the' equipment would reach there in time, but unfortunately, because of certain developments, it did not. Reference has been made to beer being sent to Libya. The beer in that instance was purchased by a British government agency, not by the Canadian government at all, and the British government found space for it. As I understand the situation, there is not a shortage of space in ships going in one direction.
The same argument is used with regard to whisky coming here from England; the same thing is said about that. We did not have anything to do with arranging for the shipment of beer to Libya; that was a matter looked after by the British government. I suppose they thought it would be a good idea to get some beer to the soldiers in Libya; and while I know my statement will not meet with universal approval, I think the attitude of a great many people who think it is a crime to send beer to soldiers in Libya is wholly reprehensible. When one considers what the forces of the empire are going through in Libya, a tropical country where it is very hard to get the right kind of water, or any water; when one considers the deaths that men die who are taking part in tank warfare, I think a good many persons here in Canada who are making sarcastic remarks about the sending of beer to soldiers in Libya could be better employed.

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As far as the regulation of the sale of liquor is concerned, no one comes out and says we should have national prohibition. I did not hear the remarks of the hon. member for Mackenzie the other night, but I do not think he advocated national prohibition, nor do I think anyone in any province is advocating provincial prohibition. Hon. members know that if we were to begin to interfere with the hours and conditions of sale, we would be up against certain problems. They know, too, that there is a different problem in every province. They know there is public sentiment in one province for one kind of regulation, and public sentiment in another province supporting another kind of regulation. After tremendous difficulties, tremendous heartburnings, and troubles of every kind, we finally, in this dominion, got the control of liquor on a basis of regulation by provinces, and by provincial governments, and we are going to leave it there-as long as we possibly can, anyway-because if the provinces cannot assume and discharge the responsibility of regulating the sale of liquor, then they are incapable of taking that share in the war effort which I think they are capable of taking.
I presume the reason why the provinces are not more rigid in their regulations respecting the sale of liquor is that they find that public sentiment in those provinces is not in favour of it. The point I do not understand is why persons are converging their attack on the dominion government when, in fact, the provincial governments have the responsibility. I do not know whether provincial governments wish to assume that responsibility-but I think they do. That is where those persons who are advocating a more rigid curtailment of the sale of liquor should go.
When we come to the matter of rationing I would point out that liquor is not comparable with commodities concerning which there are shortages. With regard to the use of Canada's resources-well, some grain is used, add I suppose there is some machine capacity. Practically all of it is now in those plants. It is very much limited in its use of labour, and is in an entirely different position from the manufacture of refrigerators, automobiles or other manufactured articles which directly take steel and other commodities from our war effort.
I do not say that the sale of liquor should not be curtailed. I do not say that the government should not do anything in that direction. But let us put it on the correct ground, the ground that the consumption of a large quantity of liquor by the people of the nation is bad for the nation. Do not get it on the specious ground that we should treat the sale of liquor the same as we do tea, or

the same as we do coffee, or the same as we do sugar. That is a specious ground, and it is not sound reasoning. Do not put it on a ground of that kind; and do not put it on the ground that it is taking steel, machinery and one thing or another away from the war effort, because in fact it does not take nearly as much away from the war effort as a great many other things which hon. members would not argue should be stopped at all.
I am not talking in favour of the liquor interests. A favourite tune played is that the government is under the control of the distillers and brewers, and that we are repaying some kind of debt, or something like that. I do not know anything about any debt to the distillers or brewers. Their interests are the last which concern me-or concern the government, so far as I know. I do not believe that those are considerations at all; I know they are not considerations which govern.
It is a common thing to pick up a letter which says, "You have taxed everything else, but you have not taxed liquor." As a matter of fact, at the beginning of the war the duly on spirits was four dollars a gallon, and now it is seven dollars a gallon, an increase of 75 per cent. At the beginning of the war the tax on malt was six cents a pound, and it is now twelve cents, representing an increase of 100 per cent. At the beginning of the war the tax on wine was fifteen cents a gallon, and it is now forty cents, or an increase of more than 100 per cent. A charge frequently made, and about which I have patiently to write a denial, is that we have kept our hands off the liquor people, and that we have not imposed taxes on them at all. A year ago, when the budget was being prepared, I looked into the matter respecting the consumption of spirits and I found that the consumption of spirits had risen very little in 1940 over 1939. It will be remembered that the budget was brought down in the spring of 1941. I found that the consumption of beer had risen about 20 per cent, I believe it was, in 1940 over 1939, and we increased the tax on malt from ten cents to twelve cents a pound. What it will be possible or necessary to do in the future I do not know; and certainly I am in no position to make any statement to-night on the matter.
I would advise hon. members who are directing their attention to this matter to address themselves to the provinces, whose prime responsibility it is to regulate and control the liquor traffic.


Richard Burpee Hanson: Did the
premier of Ontario not suggest that this government had some responsibility in the premises?


James Lorimer Ilsley: Not as I read his statement.

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Richard Burpee Hanson: What was the minister's reaction, to the suggestion of the Hon. Mitchell Hepburn?


James Lorimer Ilsley: I do not think Mr. Hepburn
suggested that we had any responsibility. As I read his statement, it was that if the dominion were to do the regulating, probably the people would pay more attention to the regulations than if it were done by the provinces- or something of that sort. That was a sentence among some other sentences. I did not gather, and I should be very much surprised if the premier of Ontario would suggest, request or intimate that this government should step into the field of the regulation of liquor. He has taken the contrary stand repeatedly and frequently, and very recently.


Richard Burpee Hanson: My impression was he was trying to pass the buck.


James Lorimer Ilsley: I do not think he did.


Richard Burpee Hanson: He did not
pass it, but he tried to.


Thomas Clement (Tommy) Douglas: The minister questioned the propriety of raising this matter under this section. I would remind him that this section provides for the payment of this large sum of money for (a) security and defence and (b) the peace, order and welfare of Canada. I think the section is sufficiently general to warrant this discussion.


Richard Burpee Hanson: Absolutely.


Thomas Clement (Tommy) Douglas: The minister has said that the responsibility lies with the provinces. The cold facts are, of course, that the regulation and sale of gasoline were in the same position; but when the federal government felt that the sale of gasoline ought to be curtailed, in the interests of Canada's war effort, it has no hesitation in taking action to prevent the sale of that product after seven o'clock at night-


James Lorimer Ilsley: We had to have the gasoline.


Thomas Clement (Tommy) Douglas: -and the sale of it on Sundays.


James Lorimer Ilsley: We had to have the gasoline to operate our aeroplanes.


Thomas Clement (Tommy) Douglas: My point is that when the federal government believes curtailment of the sale of any product is in the interests of Canada's war effort, the fact that the commodity comes within provincial jurisdiction is not permitted to interfere. The fact of the matter is that if the curtailment of the consumption of liquor is something which ought to be done, the federal government has all necessary power to do it.
The minister cannot shelve the responsibility simply by saying that this is a provincial matter. This is a federal matter, in view of the fact that this country is at war. If it is in the interests of Canada's war effort to take this step, the federal government ought to take it. To avoid the whole question and to say that those who are interested should approach the provinces is just begging the question. I was surprised to hear the minister use that argument.
Then he proceeded to build up a straw man and to knock him down again, by referring to what people have said about sending beer to Libya. I was not talking about sending beer to Libya.


Mr. HOMUTH:: Is the hon. member against
it?


Thomas Clement (Tommy) Douglas: Then the minister referred to what he called the specious ground, that since we have curtailed tea and coffee we ought to curtail the sale of alcoholic beverages. That was not the point. The fact of the matter is that there are commodities going into the manufacture of alcoholic beverages which are required in Canada's war effort.


James Lorimer Ilsley: The hon. member mentioned sugar.


Thomas Clement (Tommy) Douglas: Yes.


James Lorimer Ilsley: That is used only in wines. The amount used in the making of beer is insignificant, and the amount used in manufacturing spirits is nil, so far as I can find out. Then, sugar used in wines has been rationed, as it has been in every other industry.


Thomas Clement (Tommy) Douglas: Large quantities of honey are used in making wines, and I am informed that many of the wineries have been getting under the regulations and securing large quantities of honey from the honey producers. Barley and other cereal grains required for the feeding of live stock and for the people of Great Britain are also going into the manufacture of this product. Every effort is being made to save glass; yet huge quantities are used to manufacture the bottles required for this article. It is not only a question of the shipping space that is used. The Minister of Munitions and Supply referred to the difference in the gasoline quota for central Canada and for the maritimes. He said that it was not possible to get ships to send gasoline to the maritimes and that they would have to get along with what they could produce from their own
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cracking plant. The same difficulty applies here in connection with the question of rolling stock. The argument put forth is not specious at all. The minister can hardly wonder why a great many people in Canada are asking themselves why this group should be so privileged.


James Lorimer Ilsley: They are not.


Thomas Clement (Tommy) Douglas: They constitute practically the only business in Canada upon which the government has not laid a heavy hand.


James Lorimer Ilsley: That is not correct.


Thomas Clement (Tommy) Douglas: The government has not made out a very good case, and some statement ought to be forthcoming as to what it is proposed to do in this regard.


Douglas Gooderham Ross: I am not in favour of taking away the soldier's beer. The whole thing is a matter of government policy. The hon. member for Weyburn (Mr. Douglas) has been telling us how much of this and how much of that goes into the manufacture of this product. I do not know, but if it is necessary for us to cut down the manufacture of spirituous liquors, beer, wine and everything like that, then we will do it. The men most capable of deciding whether this should be done are the commander in chief of the Canadian forces and the other commanding officers. They know more about this matter than anybody else. If they make representations to the ministers of national defence that this should be done, then the government will see that it is done. As I say, I am not in favour of taking away the soldier's beer as long as it is used within reason. However, this government should watch carefully what the provincial governments are doing and be sure that they are looking after the situation to see that this privilege is not abused.


Alan Webster Neill: I have not taken any part in this debate which has lasted for some six weeks. I had determined that I would not because I thought I could best serve the country by keeping quiet and letting the session come to an end in order that the government might go on with the war work. I also had some feeling of sympathy for the tired, overworked, half-dozen members of the government who had to bear the brunt of the attack that has been made upon them. At first I thought this was a good thing because the attacks that were made were circulated through the press, and then the ministers rose in their places and explained the whole thing away, showed that what had been said was absolutely untrue or capable of suitable explanation. I thought that was the best business at the time.

But conditions are changing. As hon. members all know, I do not speak in this house for any one but the people I represent. That is to say, I speak for no party, either as the leader of it or as a member. But I do speak for the people I represent and have done so for many years. I know what they are saying; I know what they are feeling; I know what they are doing, and I know what they are hoping. I know that this all sums up to a profound dissatisfaction with the conduct of the government. No doubt in many instances this feeling is unjustified, but that is the consensus. This applies also in some measure to the opposite side of the house. The feeling in Comox-Albemi is, "for God's sake, quit talking and get on and do something."
The bickering and the talking that went on in connection with the plebiscite, the delay in taking the necessary action, incensed the people. Still they sat and they listened and they looked. When the plebiscite passed in a most decided manner they expected quick and prompt action. But they have not got it. If any country, if any body of men expected that something would happen this week, it was that Bill No. 80, to amend the mobilization act, would be brought down either to-day or to-morrow. We now find that that is not to be done because of what appears to be a misinterpretation on our part of. the Prime Minister's statement. But I think we were led into it. We understood that this bill would be brought on when the appropriation resolution went through the committee. However, we are now confronted with the explanation that what was said was with reference to the passage of the complete bill, perhaps weeks hence. There was a profound disappointment among hon. members here, and I am sure there will also be profound disappointment throughout the country.
The people are demanding action now, and nothing else will suffice. This feeling is being concentrated in ill will toward the government or toward the leader of the government. But it is spreading also to a feeling of general contempt for constitutional government. The people are asking, "What are those fellows in Ottawa doing? They have done nothing for six months; they are leaving us in the lurch when we want action." This feeling is perhaps stronger in British Columbia because of our greater expectation of enemy action. I leave that thought with the government. Speaking for the people whom I represent, I urge the government to bring on Bill No. 80 and a bold, forward-looking policy at once.
As it has been mentioned to-night, I should like to say a few words about the Japanese situation. A number of these people have been moved, much less quickly than we

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expected and hoped, to areas outside of the so-called restricted area, which is along the coast. But they have been located in such a way and in such a manner that the people are justifiably incensed and alarmed. I understand the idea has been to put the women in some of the ghost towns. That is all right, provided there is a guard around them. However, the able-bodied men are being put in road-building camps. Generally these roads are located along the railroad because the railroad naturally chose the best route, and the road is bound to follow. I am not blaming the government for this, but several camps have been set up in British Columbia, with two or three hundred Japanese in each. My information, which I consider is most reliable, is that these three hundred Japanese are provided with picks and saws and axes. An axe can be a very dangerous weapon if one wants so to use it. To guard these men there are three white men, each with a rifle.
If you had three guards in the penitentiary, one of them located on a balcony such as we have here, if anyone down below moved he could threaten to shoot. If he did shoot he would bring the whole penitentiary guard to his assistance. But at these camps it is simply Tom, Bill and Harry who are doing the guarding. It is true that each man has a rifle, but there is nothing to hinder the Japanese from crowding around and asking what time it is or if he would give a match. Then when the guard is surrounded a Jap could stick a knife in him. If the guards are working in three shifts, the other two men would be sleeping. If they are not working in three shifts, then things are worse; the three men would go to bed at night and leave the Japanese to do anything they liked.
It may be said that these camps are located where they could not do much harm, but wait until the right moment comes and it will be too late. I have tried to find out-but so far I have not been able to get any information- but I understand that no check is made of express parcels being sent to these Japanese. These parcels might contain dynamite or anything like that. Most of these camps are within short distances of the railroad. There is one camp in particular within a quarter of a mile of two railroads and a bridge. If one particular bridge were put out of business, the whole traffic to eastern Canada would be cut off. A Japanese with a few sticks of dynamite which had been shipped in to him by express could go down and blow up that bridge, and British Columbia would be cut off absolutely from the east. It may be said, "Oh, well, they would let us know and we would get people to them," but how would we know? The
Japanese would overawe the white men and sweep down the valley taking everything in front of them.
There is another feature. The bridges are supposed to be guarded, but that is being done in the same sort of happy-go-lucky fashion. You know, Mr. Chairman, we are at war with a bitter and brutal enemy, and a vital bridge should be properly guarded. We kept a guard outside this building last summer. Air force men did guard in front of this parliament building. That was a spectacular thing, and it was all right. But guarding a bridge in war time is different. A man may be walking up and down a railway bridge, and it may be 150 feet down to the water. All that would be needed would be for someone to pick him off with a rifle, and that would be the end of him. Then his assailant could easily blow up the bridge or touch off a charge of dynamite and destroy a vital connection. This is war, real, bloody war, and we must have an effective guarding of vital bridges.
The people out there are getting all wrought up, and naturally so, and if you had a wife or daughter of the teen-age in those districts you would be concerned too. Do not have any illusions that the enemy will adhere to the rules of the Geneva convention or anything of that kind. Get that out of your head entirely, and at least make this attempt to meet the situation. Have these camps connected by telephone. Possibly they are now. If not, it could be done very easily, and there should be a telephone system connecting the men who are guarding the bridges with some central office. Of course, the blowing-up of a little culvert would not do very much harm, but a vital bridge is a different matter, and any money spent to protect these bridges would not amount to anything like what it would cost us if the bridge were destroyed. Have all the important bridges connected by telephone, and have the guards telephone to the central office-it does not matter where it may be-at fixed hours. Then, if a guard does not telephone in at the appointed hour, say eleven o'clock, you would know there was something wrong, and you could get hold of a ranger unit and ship them out to that spot. That is the way we do things in war. If the guard did not telephone from the camp or bridge at eleven o'clock or one o'clock, or whatever hours were agreed upon, the central office would know that the man had been attacked or murdered and that it would be necessary to stop the trains and turn out the troops. The expense would be a mere bagatelle, and it certainly would relieve people's minds, the wives and mothers of men who are fighting overseas for us to-day. It is their women and children whom we must
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protect. It is up to us to be especially careful, and we are not being especially careful. We are having these vital spots guarded in a perfunctory fashion, like turning out a guard of honour for the lieutenant-governor. What we want is to do it as it should be done in war time. In India, where there used to be occasional raids from the hills, we had double sentries, one man marching east and another west, so that everything was always in plain view of one or the other. Let us do this thing in real war fashion and really protect these vital connections, as they are not being protected to-day.


John Ritchie MacNicol: Mr. Chairman, what remarks I have to make on Bill No. 95 I can make on paragraph (a) of section 2, which reads:
2. (a) the security, defence, peace, order and welfare of Canada.
I presume that the vote of $5,500,000, under the heading of surveys and engineering branch, in the statement put on Hansard by the minister at page 2922, giving details of the war appropriation for 1942-43, pertains to a roadway from Prince Rupert to Terrace and to Cedarvale. I have been wondering whether this vote goes far enough. I do not think it does. I am for this road, for the purpose is to build a roadway from Prince Rupert to Cedarvale, a distance of about one hundred miles. The route from Prince Rupert to Cedarvale continues on to Hazelton and to Vanderhoof, and thence down to Prince George in north central British Columbia. After the roadway from Prince Rupert to Prince George is complete, if connecting links east were also completed, it would be part of a connection with the Alaska highway; but it ends nowhere, as far as the Alaska highway is concerned, even if it is completed from Prince Rupert to Cedarvale, Hazelton, Vanderhoof and Prince George. Whoever is in charge of the engineering plans covered by this vote should suggest a further appropriation to enable this roadway to connect central British Columbia and east of the mountains.
The Alaska highway runs from Fort St. John northerly to Dease, and thence to White Horse. All that is intended to be done under this vote is to build a road from Prince Rupert to Cedarvale. What is gained is a through road from Vancouver to Prince Rupert-all very necessary and something with which I am in hearty accord. But it does not go far enough to give a connection with the Alaska highway. Whoever authorized the plans could have gone further and submitted plans for a roadway from Vanderhoof via Fort St. James to Manson Creek, and thence through the mountains to Finlay 
Forks, the source of the Peace river. From Manson Creek there is no connection east. A large part of the road from Vanderhoof to Manson Creek is largely passable, perhaps by motor cars. If the hon. member for Cariboo were here, he could tell us whether the roadway is passable for cars. It is only another thirty-five miles from Manson Creek to Finlay Forks; from there east, if the roadway is carried on to Hudson Hope and Fort St. John, is a distance of approximately one hundred and twenty miles, and at Fort St. John the road would connect with the Alaska highway.
To deal with this project as this vote does, is dealing with a very important connection in a piecemeal fashion. If the government intends by this vote to accomplish a real defence, where does Alaska and Yukon defence come in under these plans, when there is no connection with the road east of the mountains and the Alaska highway, which is being built by the United States government from Fort St. John to White Horse, and then on to Alaska? I cannot understand why this vote did not go further and really get us somewhere as far as the defence of the Yukon country is concerned. The vote should have been for twice this amount, and the road should be carried through the mountains to Fort St. John to connect with the Alaska highway. There is no road from Fort St. John east. The road is completed from Peace River to Hines Creek, but from Hines Creek to Fort St. John it is not completed.
While I support this vote, I want to impress on the minister that the vote is not sufficient, and the road should go farther to connect with the Alaska highway. I see the Minister of Labour nodding his head, and he is right in nodding his head. This road does not connect up with the Alaska highway, and therefore I should like the minister to get in contact with the engineers and suggest to them that they ask for another appropriation to connect this Prince Rupert roadway at Vanderhoof with one through the mountains as outlined in the plans and specifications that accompany this vote, to Hudson Hope and Fort St. John. In that way we would have a real defence road.


Thomas Reid: It might have been better if the United States had kept to route A or route B.


John Ritchie MacNicol: They are prepared, I
believe, to support connection through the mountains, because their engineers realize that this does not get them anywhere as far as the

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Alaska highway is concerned. I believe they are ready to connect the railway through the mountains so that the railway from Prince George would extend north in the direction of Hudson Hope to Fort St. John, up to White Horse.


Thomas Reid: I believe they will have to come back to one of those surveys.


James Lorimer Ilsley: All I can do with such a suggestion is to bring it to the attention of the Minister of National Defence. This is a defence expenditure. It has been very carefully considered, but we should not be called upon to explain to the committee just how our defence projects in British Columbia will be used under conditions like these, and 1 could not tell the committee if I wanted to. It is going to be difficult enough to get the men and machinery to do this amount of work, let alone twice as much. As Minister of Finance, I had this particular expenditure examined a second time to see whether it was considered to be absolutely essential, because it is expenditures like these that put a peculiarly heavy strain on the resources of the country at the present time. But this project was represented to be necessary, and just to the extent that it is proposed. All I can do is to bring the representations of the hon. member to the attention of the Minister of National Defence.


John Ritchie MacNicol: One word further. I am supporting the vote because it will assist the Department of National Defence in permitting military traffic to carry on from Vancouver to Prince Rupert. But when you arrive at Prince Rupert under present conditions with the Pacific ocean and the traffic thereon subject to torpedo attack from the Japanese, it does not get you past Prince Rupert. You have to get up to the Yukon and Alaska. What I tried to point out is that there is no connection between the road which this vote is for and the road east of the mountains, and the Alaska highway. That could be connected up by projecting the roadway from Vanderhoof, which is partly constructed, I believe, as far as Manson Creek. All that remains to be done is to go through the mountains via Finlay Forks, Hudson Hope and Fort St. John, and it strikes me that that must be done before the road will be a defensive road for the Yukon. I know that country, and I am afraid as to how it will be defended unless these roads are connected. Five and a half million dollars goes a long way and will do a good job to complete that Prince Rupert road, and it should be completed. But let us get away from the plan of proceeding by a piecemeal fashion. Let us complete
something. Let us complete from the central British Columbia highway, from Vanderhoof to the east of the mountains too, so as to connect with the Alaska highway.


Mr. GREEN:: I hesitate to say anything
that would detract from the argument of my good friend the hon. member for Davenport, but this particular road is of the utmost importance in the defence of the Pacific coast. Prince Rupert is probably the most exposed settlement on the west coast of Canada, and yet it has no highway connection with the interior of the province. There have been roads leading to within 100 miles or so of Prince Rupert, but there has been no road leading along the lower end of the Skeena river to the city. I presume that this vote is for that particular road. It is not meant as a connection with the Alaska highway at all, but as a road to connect Prince Rupert with the interior of British Columbia, and eventually with Edmonton. For the transport of troops, equipment and supplies, it is of the utmost importance, and therefore I hope the committee will not get the wrong idea about the vote and will not regard it as unnecessary. I am sure every hon. member from British Columbia will join with me in urging the government to go ahead with that road as quickly as possible; nothing should be done to hold up the work.


John Ritchie MacNicol: Evidently my hon.
friend is not familiar with the north end of British Columbia.


Howard Charles Green: I am a member from British Columbia, and the hon. member for Davenport is a member from Ontario.


John Ritchie MacNicol: I do not speak about
something of which I know nothing. I go to see these things. In the first place, I said emphatically that I was for the proposed road because it completed the highway from Vancouver to Prince Rupert. If the hon. member did not hear me, that is not my fault. The hon. member in the course of his remarks said that it would connect with Edmonton. How will it connect with Edmonton? I am in favour of a connection with Edmonton, but you have to get through the mountains to make that connection. This road does not call for going through the mountains east, and that is what I am suggesting.


Howard Charles Green: I do not mind being given
pointers by someone from my own province; the actual fact is that the work being done by the Japanese from Yellowhead pass west is to finish the other end of the road so that there will be connection with Edmonton and the prairies while this work on the Prince
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Rupert end will complete the far western end of the road. My good friend has not been in British Columbia for a year or two, and he is a little out of date.


Karl Kenneth Homuth: The peculiar thing about
this debate is -that we go from alcoholic beverages to Japanese and then to roads. I wanted to say a few words before the hon. member for Comox-Alberni rose, but he was a little ahead of me. I wished to refer to two matters mentioned after he had spoken, the question of alcoholic beverages and the Japanese. In the minds of some people the first is the more vicious of the two; to my mind the second is the more vicious.
On several occasions in the last two or three weeks we have heard a great deal of criticism from members of the Cooperative Commonwealth Federation with regard to the stand of the government on the question of curtailing the sale of alcoholic beverages. I think it is time that parties who question the government on certain policies should have a policy of their own. The question arises to-day, is the Cooperative Commonwealth Federation in favour of the curtailment of alcoholic beverages? If they are, let them say so. But what they say is, "Where does the government stand? What is the government going to do about it?" You cannot debate a question by evasions and questions. I am not so sure that we are not allowing to rise in this country the same old arguments we had in the last war, which resulted, after the war, in conditions of which none of us were very proud and which eventually every province in Canada but one repudiated. If members of the Cooperative Commonwealth Federation believe there should be curtailment of the sale of beer, wine and alcoholic beverages of all kinds, let them move an amendment to have that done. If they think that space is being used in ocean carriers to carry beer to the men in Libya, and that it should not be done, let them say so. These things cannot be done by innuendo. Most hon. members recall the campaign in the last war in every province of this dominion, the committee of one hundred in Toronto, committees that were organized in other provinces. I well remember a little skit that appeared in the papers at that time, written by a man who had spent three years in the trenches in France. As I recall the words it ran something like this:
I read of these tea and coffee blighters Who rave about kingdom come.
They want to stop our cigarettes,
They want to stop our rum.
Water, they say, would be better.
Water! Great Scot! out here We are up to our necks in water,
Do they think we are standing in beer?

I remember that, and I remember the agitation for the curtailment of beer and rum to the soldiers, closing the canteens throughout all the allied nations, and then the agitation to stop cigarettes. How far would these prohibitionists go? If the time has come that we are going to talk about the curtailment of alcoholic beverages and all these things that appear to be vices in the eyes of some people or some parties in this house, let hon. members come out and take a clear stand, put themselves on record so that it is known where every member of this house stands, instead of trying to throw the responsibility on someone else by innuendo and to gain a certain amount of kudos without taking any stand themselves. It is time we took a stand on this question.


George Hugh Castleden: Where does the hon. member stand?


Karl Kenneth Homuth: I am against them.


An hon. MEMBER:: Are you speaking for your party?


Karl Kenneth Homuth: Whom are you talking for?


Angus MacInnis: I am not going to reply to the hon. gentleman who has just taken his seat, because no reply is necessary. Every province in Canada has had laws curtailing the liquor traffic. Does my hon. friend suggest that those restrictions be removed? If that is what he is suggesting, why does he not rise in his place and say so? What is the use of saying things by innuendo? One ought to talk clearly.


Karl Kenneth Homuth: Well, you are not very distinct.


Angus MacInnis: Well, that answers you anyway.


Karl Kenneth Homuth: You just think so.


Angus MacInnis: Yes, I think so; that is, provided your head is clear enough to be answered.


Karl Kenneth Homuth: Do not worry about my head. If I were as worried as you are, I would think so.


Angus MacInnis: I am not muddled through beer anyway.


Karl Kenneth Homuth: What do you mean by that?


Angus MacInnis: Anything at all you like.


@Acting Chair(man)? of Committees of the Whole: (Mr. Ross, Calgary East): Order.


Angus MacInnis: While we are on this matter, I mentioned this afternoon that royal

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commissions and boards of arbitration had given awards in labour disputes and that these awards were set aside and the wage rates set by order in council. My understanding is that the Minister of Labour demurs to that statement, and I wish to put the facts on record so that there will be no-misunderstanding.
I have in my hand sessional paper No. 116 (a) tabled in the house on Monday, February 23 last. This sessional paper is a return to a motion made by me for:
A copy of all letters, telegrams, orders in council and other documents in the possession of the government, relating to the appointment of the royal commission on shipbuilding in the provinces of Ontario and Quebec, as well as a copy of any recommendations made by the said royal commission, and any report or reports of boards of conciliation and investigation under the- Industrial Disputes Investigation Act in relation to disputes between any or all of the companies mentioned in order in council P.C. 629, January 26, 1942, and the employees of such companies.
This royal commission was appointed on September 2, 1941, and the members of the commission were: Hon. Senator Leon Merrier Gouin, K.C., Montreal; Mr. Vincent C. MacDonald, K.C., Dean of the Faculty of Law, Dalhousie University, Halifax; and Mr. F. H. Barlow, Master of the Supreme Court of Ontario, Toronto.
As I have mentioned in the house before, the commission was appointed without any consultation with labour, and there was no labour member on it. It made its report, if my memory serves me aright, on November 24, 1941.


Richard Burpee Hanson: Will the hon. member tell us what the terms of reference were.


Angus MacInnis: Yes, they are in the report, as follows:
The committee of the privy council have had before them a report dated August 29, 1941, from the acting Minister of Labour, representing-
(1)	That demands for increased wages and other changes in labour conditions have been made by employees of certain shipbuilding firms in the province of Quebec;
(2)	That such demands either directly or indirectly are of concern to all shipbuilding firms in the province of Quebec and especially in the following: Canadian Vickers, Limited, Montreal; the Davie Shipbuilding and Repairing Company, Limited, Lauzon; and George T. Davie and Sons, Lauzon;
(3)	That the firms affected are occuped wholly or chiefly on work which is essential to the conduct of the war and that a cessation of work in this industry would be detrimental to Canada's war effort and cause serious injury to the public interest; and
(4)	That w-ith a view to ensuring harmonious and satisfactory relations between the employers and w-orkmen and promoting stable
labour conditions in the shipbuilding industry of the province of Quebec, an inquiry should be made into matters pertinent to these demands in the three firms above-mentioned and in any other firms that may be designated by the Minister of Labour.
The minister accordingly recommends that a commission be appointed, under the provisions of part 1 of the Inquiries Act. . . .
Then it states who are to be members of the commission.
The minister also recommends that the commissioners have the right to determine the manner of conducting the proceedings in respect to such inquiry and to make all necessary inquiries and investigation for the purpose of ascertaining what w-age or other labour conditions should be established and whether or not such conditions should be uniform in the plants under inquiry, the commissioners to present their report on the matters investigated and their findings and recommendations to the Minister of Labour; in making their recommendations the commissioners to have full regard to the wartime wages policy prescribed in order in council P.C. 7440, dated December 16, 1940, as amended by order in council P.C. 4643, dated June 27, 1941.
The minister further recommends that all fees and expenses payable to the commissioners or to witnesses or other persons w-ho may, under their authority, be concerned in the proceedings of the commission. . . .
Then follows the usual provision found in these orders in council. As I have already mentioned, this commission made a very full report, appended to which was a schedule of wages covering all the shipbuilding plants of Ontario and Quebec. I might add that a further order in council was passed giving the commission authority to investigate the shipbuilding plants of the province of Ontario, as well as those of the province of Quebec. On January 26, 1942, order in council P.C. 629 was passed, reading as follows:
Whereas the Minister of Labour reports that a plan for the stabilization of basic wage rates in certain shipyards has been developed on the basis of the recommendations of the royal commission on shipbuilding in the provinces of Quebec and Ontario, the reports of certain boards of conciliation and investigation under the Industrial Disputes Investigation Act and various submissions from employers and employees concerned;
And whereas the minister further reports that in the interests of industrial peace it is desirable that immediate effect should be given to the aforesaid plan;
Now, therefore, his excellency the governor general in council, on the recommendation of the Minister of Labour and under the authority of the War Measures Act (chapter 206, revised statutes of Canada, 1927), is pleased to order and doth hereby order as follows,-
1.	The basic wage rates for mechanics and the cost of living bonus for all employees in the shipyards, specified in the statement attached hereto, shall be adjusted as of the dates and in the amounts indicated in each case;
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2.	The Minister of Labour is hereby authorized to adjust the basic wage rates for other classifications of employees of the aforesaid shipyards in such relationship to the basic wage rates specified for mechanics and in such amounts as in his opinion, have regard to all the circumstances, are fair and reasonable.
That order, in my opinion, puts into the hands of the Minister of Labour the power to decide what are fair and reasonable wage rates. I have before me the wage rates recommended by the royal commission for the various classifications, as well as those in the schedule attached to order in council P.C. 629. In the Kingston, Collingwood and Midland shipyards the royal commission recommended basic wage rates of eighty cents for mechanics. In the Kingston, Collingwood and Midland shipyards the order in council lays down a basic wage rate of seventy-five cents an hour. In the case of the other shipyards concerned the same differential exists; there is very little difference. There is a difference in the wage rates of Marine Industries Limited, where the scale recommended by the royal commission was seventy-two cents and sixty-seven cents, while under the order in council the basic wage rate established for mechanics was seventy cents.


Humphrey Mitchell: I have not that report before me, but if my memory serves me right the recommendation of the royal commission was about sixty-seven or sixty-eight cents at Sorel.


Angus MacInnis: That is Marine Industries Limited. The recommendation of the royal commission was seventy-two cents for loft-men and patternmakers and sixty-seven cents for others. This information, in my opinion, substantiates quite definitely the statement I made this afternoon. There are a great many matters I should like to deal with in this connection, but I do not want to hold up the measure to-night, so for the time being I will let it go at that.


Humphrey Mitchell: Just to keep the record straight, it is quite true that the order in council was passed, as my hon. friend has safd. I do not think this is the first time that the recommendations of a royal commission have not been accepted by the government or by interested parties. There is nothing mandatory about it; it is like thd report of a board of conciliation. We were in this difficult position. I think it fair to say that the rate structures in the shipyards across Canada, largely as a result of the rapid growth of the industry, were in a chaotic condition. Shortly before I assumed office, order in council P.C. 8253, which had for its purpose the control of wage structure throughout Canada, 
was made law. Then we got the report of the royal commission respecting certain shipyards in Ontario and Quebec. Then there came a report of the board of conciliation in Quebec, and the report of the board of conciliation was at variance with that of the royal commission. Might I point out that the passage of the order in council was to allay what was termed by the representatives of the men a difficult situation in the shipyards.
As I said before, rates were established by order in council. I made it clear to the leaders of the men, however, that that would not deny them the right to appeal to the national war labour board for increases in those rates, if they so desired. They made that application. The board sat on an application from the Ontario shipyards at Midland, Collingwood and Kingston, and approved the rates established by me, through order in council.


Angus MacInnis: Was that	the national
war labour board?


Humphrey Mitchell: Yes.


Angus MacInnis: Who is chairman of it?


Humphrey Mitchell: I am chairman of it, and I think my hon. friend knows that. I believe all hon. members know it-and if any construction can be placed upon that fact, I should	like	to state	clearly, withrespect to the national war labour board and the regional labour boards, that they are composed of nominees appointed after consultation with	the	dominant	organizationsand the dominant employer organizations of the dominion.	I	would not	describe the
nominees as representative, because they are servants of the state.
May I say to their credit that they sat down and administered an order in council with fairness and with credit to themselves and the organizations which supplied their names to the government in connection with the choosing of the respective boards.
As I said, representatives of these men filed their case with the board, and the board substantiated the wage structure mentioned in the order in council. May I add that in the Kingston and Collingwood yards the rates paid at the moment are from 50 to 100 per cent greater than what they were at the outbreak of war. The rates paid along the St. Lawrence are the highest ever paid for the grades of work done in those yards.
I know something about that because, when I was chairman of the industrial disputes inquiry commission, we went into the disputes at Mortons, of Quebec city, and in

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order to justify what we thought was a fair rate we went back as far as 1914. The rates at that time were the highest that had ever been paid in the history of the yard. I am not suggesting, it will be understood, that they were fair or reasonable rates. But I think this might be fairly stated, that after setting these rates by order in council, and after seeing the written evidence from the national war labour board, the position taken by myself as Minister of Labour was vindicated. May I add that I did not cast a vote when the decision was made.


Angus MacInnis: Although I wanted to discuss this matter, I would not have raised it now if the minister had not suggested that what I said this afternoon was not correct.
I hold in my hand a copy of a telegram sent to the minister in connection with order in council P.C. 629 by a representative of one of the unions concerned in the Morton shipyard dispute. It is addressed to the Hon. Humphrey Mitchell, Minister of Labour, Ottawa, Ontario, and states:
On December twenty-second you requested vicepresident Coyle and myself to come to Ottawa to discuss report of the board of conciliation in the Morton shipyards. After considerable discussion with deputy minister Stewart and director of industrial relations Crawford it was agreed and a proposition submitted to us in writing on December twenty-third that was to be submitted to the men with rates of wages based on report of the royal commission on shipyards and other provisions of the report of the board of conciliation would be accepted acting on your suggestion, and as a war measure this proposition was submitted to the men with our endorsement and adopted and notification was conveyed to you by telegram from myself under date of December twenty-ninth. I was considerably surprised to-day to receive word that Morton Company had posted notices repudiating our agreement. Vice-president Coyle informs me that deputy minister Stewart has informed him that the department had repudiated the conditions we agreed upon. If this is so without any recognition of our rights or consultation with us is an outrageous and unwarranted violation of our agreement and a breach of faith by a department of government and will warrant the disapproval of the workers throughout the whole dominion and bring the government into disrespect for repudiating a written agreement thereby placing myself and Coyle in a very unsatisfactory position as the men accepted our endorsation in good faith. We would appreciate some explanation of the situation.
This is signed by John W. Bruce. My information is that there was no satisfactory explanation given, and that after the department called Mr. Coyle and Mr. Bruce in and made a written agreement with them-which they asked for in writing, and which was put in writing-the Morton company refused to accept it. The next thing they knew, an
altogether different proposal was put into effect by order in council P.C. 629. These are the kind of things which are disturbing the people in industry all across the country.


Humphrey Mitchell: All through my connection with the labour movement and since I have been minister I have taken the definite stand that one ought not to make a decision until all the evidence is in. At the time in question I was not feeling well-and it will be understood, of course, that I am not using that as a prop-but I am given to understand that this was the subject of consultation with the Department of Munitions and Supply which, in the final analysis, was paying the freight. I did take part subsequently in consultations between that department and the companies. I have also discussed the matter with representatives of the employees. That is about all I can say about it. I believe I have taken a fair position. The mere fact that some individual sends a telegram in which he states something, does not necessarily mean that it is based on fact.


Angus MacInnis: All right; if the minister says that the telegram is not based on fact, that does not concern me. That is the concern of John W. Bruce, who will no doubt be glad to hear that his telegram to the minister was not based on fact.


Humphrey Mitchell: It may be based on his understanding, but not on mine.


Angus MacInnis: But this whole dispute was not a question of misunderstanding among the parties concerned. The fact is that the Minister of Labour has, in the vernacular of the street, the bulge on John W. Bruce. The minister can pass an order in council making this mandatory on the organization Bruce represents.


Humphrey Mitchell: That order in council
was not used as a club.


Angus MacInnis: Just tell that to the
employees.


Humphrey Mitchell: I have told them, and they understand the situation. It is all very well for my hon. friend to rise in his place and say that I used the order in council as a club; I want to say that that is the last thing in the world I intended to do.


Angus MacInnis: I did not use those words.


Humphrey Mitchell: The hon. member used the word "club".


Angus MacInnis: No; I do not think I did.


Thomas Miller Bell: The hon. member said that the minister had the bulge.
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Humphrey Mitchell: It means the same thing. There was a difficult situation existing at that time. Order in council P.C. 8253 had just been passed. The position taken by the national war labour board was that they would not make a decision until they had heard the evidence. The royal commission of which my hon. friend speaks took four or five months with its sittings and drafting its report.


Angus MacInnis: Three months.


Humphrey Mitchell: I felt that something had to be done immediately to allay the situation in the shipyards on the St. Lawrence and Ontario, and I took the responsibility of doing that, pointing out that these men still had the right to appeal to the national war labour board, which they did.


Angus MacInnis: Did the minister recommend the order in council before or after the recommendations of the royal commission were received?


Humphrey Mitchell: After.


Angus MacInnis: Two months after.


Humphrey Mitchell: I could not say.


Angus MacInnis: The date of the report of the royal commission is November 24 and the date of the order in council is January 26. It was not a matter of being held up by the royal commission; if there was any hold-up, it was after the report of the royal commission had been received in the Department of Labour.


Clarence Gillis: If this is an Irishman's fight, I will get into it. I am prompted to rise this evening because of a question I asked the Minister of Labour this afternoon, with respect to the marketing of coal in Nova Scotia. The answers I received from him and from the Minister of Munitions and Supply were anything but satisfactory. In view of the fact that the Minister of Labour, as chairman of the national war labour board, took upon himself by means of an order in council the functions of negotiator between the unions and the employers, I am going to go into this situation a little more fully to-night. I think the whole matter has been badly handled. First, there has been a lack of a national fuel policy and, second, the negotiations carried on by the national war labour board with the miners have not been of the best.
Almost two years ago I brought up in the house the marketing of Nova Scotia coal and the necessity of that fuel as an essential war commodity. I pointed out to the Minister of Munitions and Supply that the time was coming when ships would not be available for the transportation of coal up the St. Lawrence and

that the facilities on Cape Breton island for the shipment of coal to the mainland needed considerable improvement. The strait of Canso is a bottle-neck that should have been remedied some fifty years ago. The assembling yards needed considerable extension two years ago, but nothing has been done. I have written the Minister of Munitions and Supply on two or three occasions to ask if something could not be done to improve the shipping facilities across this strait in order to accelerate the transportation of coal and other necessary war materials-there are a lot of them being produced on the island-but his last communication was to the effect that because of the large expenditures being made it was not considered economical to make this expenditure at this time. The strait is only a mile wide, and it could be bridged or tunnelled. Much money has been spent in Canada in the extension of plants and so forth which were not as badly needed as is improved transportation along this particular line.
There is no excuse for the coal situation that exists in Canada at the present time after three years of war. The fuel controller broadcast that fuel would be rationed, and the Minister of Munitions and Supply stresses the fact that those using oil for domestic purposes will have to use some other fuel. The fuel board is perhaps doing the best it can as a strictly administrative body, but it is subject to orders from the department of government under which it functions. It administers regulations only, and I do not think there is sufficient latitude in the regulations to enable it to do the job it should be doing.
There is no excuse for the mines in Nova Scotia working on a three day a week basis. A short-sighted policy has placed us in the position where we have no other transportation facilities available. From time to time we eulogize our relationship with the United States. There is a market in the eastern states for Nova Scotia coal, and there is a market in central Canada to Quebec for Pennsylvania coal. Surely this situation that has now developed must have been seen months ago. I cannot understand why the fuel control board or the minister or someone else who had access to the facts and was in a position to judge the road ahead could not have arrived at some understanding whereby coal could have been marketed in the places I mentioned. Nova Scotia coal could be marketed in the New England states right into the Boston market and United States coal could be shipped by rail to Ontario and Quebec. This arrangement could last for the duration of the war. It should have been done, but it has not been done.

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I am led to believe from discussion with at least one of the officials of the fuel control board that they have some plan in mind. We are, however, facing a serious situation at the present time as far as fuel is concerned. I should like to amplify the statement I made that the minister and his department through the national war labour board have usurped the normal bargaining powers of the trade union movement and that as such they must accept the whole responsibility for the negotiations that are carried on. They have taken over the functions of a union dealing with an employer. Orders in council 7440 and 8253 have definitely wedded the unions to the national war labour board instead of to the employer. Unfortunately, since that has taken place, the experience of the miners' unions in Nova Scotia has not been very happy. They had their difficulties in the past with the operators, but their difficulties have been considerably increased since they started to deal with the national war labour board. There has never been a contract signed with any degree of satisfaction since the government took over that function.
In 1940, the McTague board, appointed under order in council 7440, made certain awards. While they were not all they should be, those awards have never been lived up to. The McTague board recognized the fact that miners' wages in Nova Scotia were 7-1 per cent below the 1926-29 levels, and in accordance with the terms of reference set out in the order in council those wages should have been increased, but during the negotiations the company proved to somebody's satisfaction that they did not have the money. They have been broke ever since they came into Nova Scotia. The award made by the McTague board was a cost-of-living bonus of thirty cents a day. The board set out in their report that the company could not pay the thirty cents at that time, but that they would pay fifteen cents a day and that as their financial condition improved, the additional fifteen cents would be paid. One of the arguments which the mine-workers' union are having with the war labour board now is that the company should be forced to live up to the award made by the McTague board in 1940. The miners have been patient and long suffering, but the company now takes the position that they do not have to pay that additional fifteen cents and that they are not going to pay it.
Just a few weeks ago the miners' union presented a brief here which sets out their case clearly. I am not going to read it. No
doubt the minister is familiar with it. What I am saying now is said from memory with reference to the McTague board award. The company owes the miners of Nova Scotia, if the McTague award means anything, a bonus of fifteen cents a day retroactive to February, 1940.
As I understand order in council P.C. 8253, the national war labour board is given no power to determine wages or bonuses based upon a company's ability to pay. It is a straight matter of fixing a cost-of-living bonus in keeping with the index as laid down by the government. That is my interpretation of the order in council. But when the miners' union met the national war labour board, the board took the position, after an examination of the books of the company by some auditors-


Humphrey Mitchell: At the request of the
miners and the operators.


Clarence Gillis: That is right. They asked
for an impartial examination of the affairs of Dominion Steel and Coal Corporation and its subsidiaries and the ability of that entire organization to pay the rates asked for by the miners of Nova Scotia. The auditors made a partial examination of the coal industry, but make no mistake about this, you cannot examine coal without examining steel because they are interlocked. There were timber lands, wire-nail companies, and so forth -altogether twenty-six subsidiaries owned and controlled across Canada by the Dominion Steel and Coal Corporation, and so I say that the analysis made of the company's books was only a partial one and certainly does not give a true picture of the affairs of the company. On the surface the figures presented to the national war labour board might indicate that the company had no money, but I would call the minister's attention to what is said by a standard authority on Canadian and international affairs, a booklet called "Trend," issued on April 17, 1942, from 231 Jesse James-or St. James street, Montreal, and in it I find this observation on the financial page, "Splendid progress of Dominion Steel and Coal". This was in April. They go on to say:
The management of this corporation was sufficiently far-sighted to rebuild and improve plants and properties very extensively before the war.


Humphrey Mitchell: You would not object
to that, would you?
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Clarence Gillis: Not at all, but wait until I come to their financial position, and remember, the company maintain they are broke. It goes on:
The result of this policy has been that more than $20,000,000 has been ploughed back into the business, from earnings, since 1935. Thus Dominion Steel and Coal is well equipped to take a prominent part in Canada's war effort.
The point I make there for the benefit of the chairman of the national war labour board and the Minister of Labour is this, that you cannot examine coal in Nova Scotia without examining steel and the other twenty-six subsidiaries of this corporation. Where did they make their improvements? Did they plough back any of this $20,000,000 into coal, or did it go into industrial plants in some other part of Canada, and was it charged back to their coal operations? Is that why they are broke? That angle was not probed at all. Only coal was probed, and the decision of the board was based! on figures presented by the company that they were not able to pay. If the company has ploughed back $20,000,000 it certainly did not go into the coal industry, and yet it might have been produced by the coal industry. That is something which the minister should endeavour to find out. This controversy over wages will never be satisfactorily settled until somebody is big enough to examine the financial structure of this whole organization.
I quote still further from this standard authority on Canadian and international affairs:
What this means to shareholders-there are 1,039,083 shares of no par value outstanding- is revealed by the following salient points:
1. In past five years-1937 to 1941 inclusive . . .
Do not forget that they were broke in 1941 and could not pay 15 cents a day bonus. It goes on:
1.	In past five years-1937 to 1941 inclusive- net profits have averaged $1,241,000 or $1.24 a share.
2.	During the same period, working capital has improved by over $7,000,000, to the current figure of $13,349,317. This is equivalent to approximately $13 a share.
3.	Earned surplus amounted to $6,028,059, or nearly $6 a share.
That picture certainly does not coincide with the figures presented to the national war labour board by the auditors who made the examination and said that the company was not in a position at that time to bring the wages paid in Nova Scotia up to the 1926-29 levels as required by the order in council. So much for that controversy with respect to wages.
(Mr. Mitchell.]
I understand that the door is still open, that the mine workers' union are still negotiating with the minister, and I am merely jogging his memory on this question of the company being broke and unable to pay. I should like to know where that $20,000,000 went and where it came from. Was it ploughed back into industrial plants in Ontario and Quebec? Did any of it go back into coal? Again, if this earned surplus of $6,028,059 was earned in the five years including 1941, certainly the company could not have been as poor in 1940-41 as they made out to the McTague board and the national war labour board. I expect that the mine workers' union will be meeting with the board again, and I would ask the minister to consider whether under order in council P.C. 8253 the board have authority to determine wages and bonus on the basis of the company's ability to pay. As I read the order in council, they have not that power. They may interpret it differently. That point certainly needs clarification.
There is another point I would bring to the minister's attention, and I am doing this, not for the purpose of criticizing but because I want to be helpful and to avoid friction. I know the miners of Nova Scotia have contributed their full share in the war effort. They led the province in the last war loan. They are making the full contribution they are permitted to make to the armed forces. They are not allowed to enlist. You would get many recruits from these Nova Scotia mines if you would let the men join the army. They are a class of people who have been badly abused. Only last summer they were black-guarded over this dominion in full-page ads which stigmatized them as saboteurs, sabotaging the industry, when they were accused of sitting down on the job. But I am absolutely certain that other factors were involved there.
In the face of the situation facing us to-day, these mines are working only three days a week. There was a full-page ad in the Halifax Herald of April 8, 1942-I have it here, and it must have cost a lot of money-put out by the Dominion Coal company to try to prove to the public, to the government and to anyone who was ignorant of the facts that the miners of Nova Scotia were curtailing production by absenteeism and all that kind of thing.
That was in April, 1942, and here they are, a few weeks later, with 50 per cent less time being worked. There are no full-page advertisements as to the reason. They met the

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miners' executive board and all they told them was, "From now on we shall be on short time", but the reasons are not made known. The people of Nova Scotia and the public of Canada are not children, and they are not going to take very kindly being treated as such. If there is a reason for curtailing production in the fuel industry and people have to tighten their belts and make sacrifices, then the cards should be laid on the table face up, and the people should know about the situation. If you can tell them that lack of shipping facilities is responsible, very well; they will take their share of the sacrifices that are necessary. But they want to be told.
In the past two or three days I have received dozens of telegrams asking me to find out from the government why mines should be working half time. What is the reason? The people there say they can get no information. Talking the matter over with some officials who have to do with the movement of coal, I find they take the attitude that either the company, or the government, or somebody in the know, should make a statement. There is no reason why the people should not be told.
With respect to the steel industry there is another thing which is militating against progress. This is a national industry which is necessary for the war effort, and instead of its being set up as a national industry under the jurisdiction of the national war labour board, who have the steel controller in Ottawa and are in possession of all the facts and figures with regard to wages and so on pertaining to steel, and where difficulties could be ironed out expeditiously with the heads of the union, the position is taken that steel is a secondary organization, and regional boards are set up across the country. In each province there is a regional board, and steel comes under these boards. These boards are dealing with matters in connection with which there are great difficulties in getting the facts. The thing should be coordinated. It is a national industry, and it should be taken under the wing of the national war labour board.
To show how silly these regulations are, or how silly somebody is who lays them down, let me mention this. Steel, a national industry, is handled by regional boards; but when we come to a little isolated salt mine in one corner of Nova Scotia, making application to the regional board for an adjustment of grievances at Malagash, the minister of labour of the province, or one of his officials, advises these people that salt mining is a national industry and comes under the national war labour board. One lone little salt mine has
to come to Ottawa for redress, but a great national industry stretching across the country and essential to the war effort has to be taken apart piecemeal in the different provinces, with considerable loss of time, confusion and friction. I suggest to the minister that he should consider bringing that organization under the national war labour board.
Another thing I would express my opposition to is the manner in which the cost of living bonus has been handled. Bad as it is, it was some compensation to workers in the war industries. Under order in council P.C. 7440 they were given something to compensate them for the rise in the cost of living, and at least they held their own. They were not worse off than when the war broke out, as far as the basic rates were concerned, and in the war industries wages are to some extent higher than in the non-essential industries. Take truck drivers, clerks for your department stores, and so on-a large group of people making up a considerable percentage of the wage-earners of Canada. Their wages have always been very low. They received no cost of living bonus, and many of them have received absolutely nothing in the basic rates. When order in council P.C. 8253 was passed there was a proviso in it that led these workers to believe that they were being brought in and were to be given the equivalent of a cost of living bonus, equal to what the workers in war industries were receiving. Then there was a lot of happiness on their part. But after P.C. 8253 was passed, another order was passed that added a clause which completely wiped out any benefits that might accrue to the workers in the categories I have mentioned.


Humphrey Mitchell: I should correct that at once. It is not right.


Clarence Gillis: It is correct.


Humphrey Mitchell: Take my word for it; it is not correct.


Clarence Gillis: They were included to this extent, that they would receive whatever increase there was in the cost of living from the last base period. But there was no increase from the last base period.


James Lorimer Ilsley: But that was all in P.C. 8253.


Clarence Gillis: Yes, but there was an amendment-I do not have it here, and I am speaking from memory-whereby they would not receive it except in the first terms of P.C. 8253. One could read into that order in council or infer from it that these other industries would get whatever cost of living bonus was awarded to the workers who came
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in under the original order, P.C. 601, I believe. I am not sure whether the last order was P.C. 601 or P.C. 609, but the point I make is that these very low-paid workers in nonessential industries, as they are now classified, have suffered the same increase in the cost of living in the last three years as other workers have suffered and they have received nothing by way of compensation to offset it. In many instances, they are working for lower wages than the wages paid workers who have been receiving the bonus. That is a rank piece of injustice. In Canada the cost of living has affected practically everyone, and it seems to me that everyone in the country should be treated on the same basis. Old age pensioners and those receiving mothers' allowances, with fixed incomes in the low income brackets, who have suffered through the increase in the cost of living, should have been compensated in exactly the same way as those who have been receiving the cost of living bonus.


James Lorimer Ilsley: Those receiving bond interest?


Clarence Gillis: If the income is sufficiently low, I would have no hesitation in saying that. If someone has an income of $1,000 or $600 in that group, received from bond interest, that person should certainly get the cost of living bonus. There should be no discrimination on that basis if that is all they take in. I have no hesitation in making that statement.
There is another matter in regard to which I would ask the Minister of Labour to tell me something. I wish he would interest himself in it. I have tried the Minister of Munitions and Supply for the last eighteen months but have not been successful. He has been very nice about it and I am not going to quarrel with him, but I have received no satisfaction. There is a machine-shop in Glace Bay. It is owned by the Dominion Coal company and employes from 300 to 400 mechanics, trained, skilled men as good as will be found in the country. In the last war that shop was engaged in producing war machinery, turning out bomb casings for one thing. It has not been utilized for that purpose in this war. The other day I made representations to the minister, pointing out that it is working on short time. The men are prohibited from taking employment in any other essential industries unless they are released. They requested, and I requested the Minister of Munitions and Supply, if it were possible, that he look into the shop and find out what use could be made of it. I made that request a considerable time ago. 
The minister wrote stating that an inspector was being sent for the purpose, but I never received the report. A few days ago I wrote again, and the minister said he would have the inspector go and see what could be done. At the present time the minister, or his department, is trying to adjust the grievances of the men on slack time, who are also petitioning for a release from that plant so that if they cannot be used there, they can go to another.


Humphrey Mitchell: A man can quit if he wants to; there is no prohibition.


Clarence Gillis: He cannot go into another industry unless he can show a release from the one he is in.


Humphrey Mitchell: No; that is not so.


Clarence Gillis: Well, I distinctly remember at Windsor at the Chrysler plant a number of skilled men were laid off due to a strike, and these men were on the road for months and months trying to get their registration changed so that they could get employment in some other industry. There must be a regulation to that effect. As I read Mr. Little's speeches, he makes that statement distinctly.


Humphrey Mitchell: I assure my hon. friend that there is no regulation to the effect he has stated.


Clarence Gillis: Have I the minister's word
that I can write to these men, some 300 to 400 trained skilled men, and tell them that they are free to leave that shop, come to central Canada and take work here?


Humphrey Mitchell: As long as they are in a war industry, there is at the moment no law or regulation that prevents a man moving around.


Clarence Gillis: Well, they have that impression, and I had, too, that before they changed their employment they had to make a/pplication to their unemployment insurance office and get a permit to leave that industry and go into another. That is not a war industry. What I have stated is my understanding anyway, and the understanding of the men. They have appealed time and time again to the company for a release and cannot get it.
In any event I do not think it is good business. When we endeavour to lay down regulations and organize our man-power, we should know where they are going and should be prepared to place them and have a record of where they are. If they are allowed to

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drift from one part of the country to another and take employment where they can get it, the registration will not be much good.


Humphrey Mitchell: My hon. friend would not object if we did that? He would think that is in the national interest?


Clarence Gillis: I certainly would. It would be in the national interest. I want the minister to take under consideration the possibility of using these men somewhere else, or using that plant. It is well equipped and is certainly not doing much war work, no work which could not be replaced very easily, the repair of cars and some locomotive repairs. There is a large body of men there, well trained, who could take their place in war industry anywhere in Canada.
I am sorry to have occupied so much time. There is much more I could say, but I will reserve it for another time.


Humphrey Mitchell: I will endeavour to cover most of the points mentioned by my hon. friend in his informative remarks. Of course he will appreciate that with the vast amount of work being done by the national war labour board and the regional boards it is impossible to carry in one's head all the details of the complicated negotiations beween the Nova Scotia miners and employers. I would say, however, that both the miners and operators requested that the books of the firm be gone into by an independent firm of chartered accountants. I do not know of any objection being raised by either side to the firm selected, McDonald, Currie and Co., of Montreal, one of the outstanding firms of chartered accountants in the dominion. Frankly, what they found was that there was no money in the till. My hon. friend has read from another publication. It might be the advertising medium of some bond house. It must be clearly understood that nothing I would say about coal miners would be anything but to their credit, because the men who go into the bowels of the earth have a hard job. Very few people would care to undertake it, although miners get it in their blood, and men who come from the old country drift into the mines again even when there is opportunity to get employment elsewhere. I am not saying that their wages are high enough, but they are the highest ever paid in the history of the industry, and the full cost of living bonus is being paid. There are twro exceptions, two subsidiaries where there is some back pay coming. That was made possible by an increase in the price of coal to the consumer.
That is the picture as we saw it. I have no brief for the kind of advertisements issued by the company. I think they are unnecessary under present conditions. The most important thing in Nova Scotia is, to my mind, to get the negotiations based on what I think is the only basis on which trade union negotiations can be successful; that is, on character and good faith on both sides. If the national war labour board has done anything to assist in that direction, I believe its institution has been well worth while.
My hon. friend knows of the trials and tribulations that have existed between employers and employees in the coal mines of Nova Scotia. He can rest assured that if in my small way I can assist in having negotiations carried on in a more friendly manner than in the past, I will do everything I can.
I was very much impressed with his suggestion as to the possibility of shipping some of this coal to the United States. If my hon. friend had the information that the government has, he would see the difficulties, matters over which we have absolutely no control, due to lack of certain transportation that existed in past years. We hope that difficulty will pass away, but at the moment it is a problem that neither I, nor he if he were in my place, could overcome.
The hon. member also brought up the question of steel being a national employer under the national war labour board. I played some part in drafting the order in council and the regulations that set this, what I consider a courageous policy, in motion. We had to decide what would be national organizations and what would be'regional organizations. We came to the conclusion that certain dominant trades or callings that in years prior to the outbreak of the war had come within the jurisdiction of the Industrial Disputes Investigation Act were probably about as much as the national board could handle. I feel that after the war the provinces will demand their constitutional rights and prerogatives, and wages and hours of labour being generally understood to be within the jurisdiction of the provinces, we considered that it was much better to let the provinces work in their own field rather than that the federal government should invade it. I might say also that the attitude adopted by the provinces, their willingness without exception to cooperate, is an exemplification of the will of the Canadian people to give every aid possible to the successful prosecution of the war and the formulation and undertaking of such policies as we think necessary in that regard.
Might I also pay tribute to the employees' organizations as well as the employers'
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organizations? I never thought I would live to see the day when the three dominant labour organizations of this country would even sit down together in a room, let alone sit round a table and carry out the arduous duties arising out of decisions on applications from labour organizations and employers' organizations in connection with the very difficult problem of wage negotiation. I may add this, that up to date the national and regional boards have rendered decisions in over five thousand cases; and I think this should be said in favour of the employers, for goodness knows they are hammered enough, that, strange to say, the great majority of the applications have come from employers who want to increase the wages of their employees.
May I add this, incidentally. I believe that on the basis of trial and error we can fashion, through the instrumentality of the national and regional boards, a wage policy which will reflect credit on our good sense and lay the basis of what one might term a permanent institution of wage negotiation in this dominion. I might say also-and I think history will judge us in this regard-that the launching of the price and wage policy of the federal government was the most courageous legislative act on the home front in the history of this or any other democratic country. Let us not forget that we can lose a war by inflation just as easily as we can lose it through lack of equipment with which to fight the war.


Clarence Gillis: If the minister would answer one question, what does he mean by inflation? Does he mean that increasing wages would cause inflation?


Humphrey Mitchell: I know many people are afraid of the word "inflation". From the viewpoint of the working class, inflation is the high cost of living; that is how I would express it.


Clarence Gillis: What would bring it about?


Humphrey Mitchell: Perhaps the hon. member will wait until I have finished. I am trying to give an extemporaneous talk, and I do not want to lose the thread of it. The price and wage policy treats everybody alike; it is based on equality. I belong to a powerful trade union, as the hon. member for Vancouver East does. It is no great trick for my organization-


Angus MacInnis: Yours is far more powerful than mine.


Humphrey Mitchell: Certainly it is; and I am speaking about a trade union, not the labour department.	-


Angus MacInnis: The wages are higher.
[Mr. Mitchell.)


Humphrey Mitchell: Certainly they are, and that is why I am going to make this point. It would be no great trick for my organization, when the cost of living began to rise, to go to the employers and say, "Stand and deliver."


Thomas Miller Bell: Is that the cabinet?


Humphrey Mitchell: No; it is the engineers. This policy treats everybody alike. It treats the lowest paid and the highest paid worker in the same way. I think that is equality of treatment, based on the fundamental practice which we regard as one of the corner-stones of our civilization; that is, that you cannot have different laws for the rich and the poor dealing with the same subject. I think it can be fairly said that some people are inclined to be disappointed if a policy works. I believe this policy is working on all six cylinders to-day. During the same period in the last war the cost of living increased by something over 12 per cent. Since last October the cost of living has increased by -4 per cent, which in effect is an increase of 12 per cent in the purchasing value of real money.


Angus MacInnis: If the cost of living remains stationary, and wages remain stationary, does the minister say there is an increase of 12 per cent in purchasing power?


Humphrey Mitchell: In comparison with the last war.


Angus MacInnis: But we are not dealing in comparisons with the last war.


Humphrey Mitchell: That was what I said.


Angus MacInnis: The fellow who was only getting 30 cents an hour is still getting only 30 cents an hour.


Humphrey Mitchell: He would not be getting 30 cents in purchasing power if the cost of living had gone up 12 per cent.


Angus MacInnis: But his wages might have increased also.


Humphrey Mitchell: That is so.


Thomas Clement (Tommy) Douglas: The cost of
living did go up between the outbreak of war and the introduction of the government's policy.


Humphrey Mitchell: Yes, by fifteen points.


Thomas Clement (Tommy) Douglas: And the
poorly paid man received no compensation.


Humphrey Mitchell: That is what I want
to develop. I want to be very frank about this. I would not support this if I did not think it was going to benefit the chap who cannot help himself. That was why the policy appealed to me. Take the people on old age

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pensions, the people receiving mothers' allowances, the men and women receiving workmen's compensation benefits, the dependents of soldiers, sailors and airmen, the soldiers, sailors and airmen themselves, and that great class in the country who live on fixed incomes-I am not talking about incomes in the higher brackets-those people who are almost defenceless when there is an increase in the cost of living index. I sincerely believe that through this policy we have maintained the morale of those people at a level which did not exist in the last war.


Joseph William Noseworthy: On the basis of the
minister's reasoning, should these people not be entitled to the cost of living bonus that industrial workers are paid, at the initial stages?


Humphrey Mitchell: It is permissible under
the order, but not mandatory.


Thomas Miller Bell: But the government
has not implemented it.


Humphrey Mitchell: Oh, absolutely.


Thomas Miller Bell: Not for old age pensioners, soldiers' dependents and the other people of whom the minister was speaking.


Humphrey Mitchell: I agree with that, but
the hon. member will see the force of my argument, and he will appreciate the effect on the morale of the people. Just suppose we let the cost of living go, as we did in the last war, when it increased something like 97 per cent between 1914 and 1920. I have a very clear recollection of that; and even the most powerful trade unions on the north American continent never caught up with the cost of living. I think it is far better to stabilize conditions, as we are trying to do, than to permit a condition similar to that which existed during the last war. After all is said and done, if you see a thing in operation it is much more vivid than any idea you get from reading a book. I have a very clear recollection of some of the conditions created in Germany after the last war by the inflationary movement.


Thomas Miller Bell: In 1924.


Humphrey Mitchell: Yes. I want to say also that when the Dawes commission went to Germany and asked the opinion of the trade union leaders on the subject matter of their discussion, those leaders said, "We will suffer anything but a return to inflation." I am not suggesting for a moment that we would have an inflationary movement similar to that which took place in Germany. I would say, however, that if inflation could be controlled anywhere in the world, it should have been
controlled in Germany, because the German people lend themselves to discipline and regimentation more than do the people on the
north American continent.


John Horne Blackmore: They lacked goods.


Humphrey Mitchell: I am not going to get into that argument; some other night.


John Horne Blackmore: I will be ready for you.


Humphrey Mitchell: I will be ready for you, too. I can tell you a good story about the inflationary movement in Germany. Do not forget this, that money is not money unless it is hard to get.


John Horne Blackmore: And money is no good without goods behind it.


Angus MacInnis: Some people get it quite easily, and get along very well.


Humphrey Mitchell: That is quite true. Perhaps some would say that my hon. friend and I get it too easily.


Angus MacInnis: Perhaps we do, relatively.


Humphrey Mitchell: I just leave that thought with hon. members. I think I have covered all the points raised by my hon. friend, and later I shall be glad to take up the question of the shipment of this coal. If I have missed anything, I shall be glad to endeavour to answer it.


Angus MacInnis: Before the section passes-


The ACTING CHAIRMAN (Mr. Ross, Calgary East):: Order. The hon. member for Queens-Lunenburg has the floor.


John James Kinley: I was interested in the remarks of the hon. member for Cape Breton South, who comes as I do from Nova Scotia. I was particularly interested in that part of his remarks which suggested that he had foreseen the difficulty of getting Nova Scotia coal into central Canada, and that under present conditions it would be a good thing if we permitted the United States coal to come into this part of Canada, and find a market in the New England states for part of the Nova Scotia product.
For many years I have heard about the New England market for Nova Scotia coal, but I never saw it realized.


Clarence Gillis: We had it until the last war.


John James Kinley: I was interested in provincial government, and I heard many controversies about the coal situation in Cape Breton. I never believed that the Boston market was very good for Nova Scotia coal.


Richard Burpee Hanson: I saw
it going from Springhill, when I was a boy.
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John James Kinley: In the days of wooden
ships. One way to allow United States coal to come into this part of the country is to stop the subvention on Nova Scotia coal. Every ton of coal which comes here from Nova Scotia is paid for, to some extent, by the government of Canada. It is a national policy in connection with coal, in order to bring coal to this part of the country. It seems to me that the people of Cape Breton would be loath to have any arrangements which would stop any of the subvention on coal coming into this market.
We are told that the difficulty is connected with shipping. It is said that there is a lack of floating bottoms to take the coal. If we are to get the Boston market now, we must move the coal by rail to Boston, and naturally that would require a subvention. Anyone who knows anything about the difficulties in connection with customs, trade agreements and that sort of thing would hardly suggest that we could give a subvention on coal going into the United States market.
My opinion as to the success of the Nova Scotia coal fields is that as far as possible we should procure the upper Canadian market, and that involves water-borne transportation. It may be that some of our lake shipping that is not subject to the hazards of the Atlantic could now be used for the purpose of bringing that coal to central Canada in the summer time.
The hon. member also speaks about the bridge across the strait of Canso. That is an old subject, too. I think members of this house have asked for a bridge, and I have heard the matter discussed in the legislature of Nova Scotia. The gut of Canso is a rather deep waterway. Ice conditions in the spring are considered to present an engineering difficulty. While I believe everybody in Nova Scotia would like to see a bridge across the gut of Canso, in order to serve Cape Breton, I think the difficulties were such that engineers were slow to move. Our Canadian National Railways were so burdened with debt in the last decade that no one would suggest that they should take on more obligations by way of capital expenditure.
The hon. member speaks about the release of men. He suggests that the government should release men from a certain plant to work in another. In so far as I know, labour moves freely in Nova Scotia from one plant to another.


Clarence Gillis: You do not know much about it, then.


John James Kinley: They move freely when
they can get better wages. While there is a wage ceiling in Nova Scotia, as in the rest of

Canada, it must be realized that the wage ceiling to which the employer and employee are tied is the wage ceiling of the locality in which the employee lives, and the wages paid in that locality during a certain period. So it may be seen that when other industries are at a higher wage level they can entice men. As far as steel and coal are concerned, I believe there is a wage scale at least as high as almost any other in Nova Scotia, with the exception of a restricted area round Halifax, where many of us do have a complaint in that the government through the naval department breaks its wage ceiling and entices men who are repairing ships in private plants to come to the government's service. They are or were not restricted to the price ceiling.


Richard Burpee Hanson: That is all through the government service.


John James Kinley: My hon. friend has complained about the cost of living bonus. That was a difficulty, but I do not think it depends on a man's prosperity or his salary. I think it was 25 cents a week for each point that the cost of living index went up, and a company that paid before a certain time had to raise their index. Companies which paid nothing must justify their position before the regional wage board, because either the men or the company can apply to the regional board for the purpose of fixing the cost of living bonus. The man who receives $2,000 a year gets the same cost of living bonus as the man who receives $1,000.
My hon. friend said that the salt mines were considered a national industry, and that steel was under regional labour boards in Nova Scotia. He may be right in that. I know that the regional labour board is composed of men representing employers and employees in Nova Scotia. If you take the steel industry out of the industrial life of Nova Scotia, you are taking out a big part and you1 would scarcely have a representative board, or one which would be representative of the activities of Nova Scotia.


Clarence Gillis: I should like to correct the
hon. member, if I may.


John James Kinley: All right; I do not know
what the hon. member wishes to correct, but-


Clarence Gillis: If I wanted to, I could tell him a lot.


John James Kinley: Well, if the hon. member wishes to ask a question, all right.


Clarence Gillis: I would like to have a chance to reply to him, when he has finished.

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John James Kinley: I was speaking about the steel industry-and I do not know what my hon. friend should take exception to. I had said that if you take the steel industry away from the regional boards in Nova Scotia-


Clarence Gillis: I will tell you, when you have finished, what you do not know about it.


John James Kinley: When you take away the steel industry you are taking away a big percentage of the industry of Nova Scotia. There may be some point in what the hon. member has said with respect to salt, and that steel is as much a national industry as is salt. That may be true.
In so far as steel and coal are concerned, I was always led to believe that coal did carry steel. That was the story in Nova Scotia many years ago. But we must all realize that the steel industry was a hard industry to start in this country. Years ago this government bonused steel, to a great extent. I think the people of Cape Breton felt that with the natural resources of coal they would build up a secondary industry with steel, and the reason they could build it up was that they had the coal.
I am not for one moment saying a word in defence of the corporations in charge of steel and coal in Nova Scotia. I had to deal with their problems many years ago when I was in the Nova Scotia legislature. Many changes were made from time to time, and it may be that the repairs they say they are putting on their plants, to show a loss, are the result of present-day auditing methods which have become so important and so specialized in these days. At the same time the hon. member's remarks relate to the regional boards in Nova Scotia. I believe both steel and coal are represented. With a local knowledge of conditions and with men on it who represent the industry, I believe the miners of Nova Scotia will get a better deal from their own people than they would from the outside.
I cannot think of anything else the hon. gentleman said in so far as Nova Scotia is concerned with which I cannot agree. He was rather reasonable in his presentation. He has spoken from the point of view of those he represents, and it is commendable that he should do so. At the same time there are economic problems that do not always appear on the surface, and it seems to me that before a discussion of this sort goes out to the public we should be careful that the thing is analysed in an intelligent way that is representative of the true idea of what the people want.


Clarence Gillis: It is no surprise to me, after listening to the hon. gentleman, to find * out
exactly why Nova Scotia ends at Halifax. It is also not surprising that everything east of Halifax is back about fifty years in comparison with the rest of Canada. The hon. member makes the observation that he has heard this question of bridging the strait of Canso raised in this house for a number of years. I raised it two years ago, and it would be very handy to-day as a war measure. I think the hon. gentleman either misunderstood what I said or has attempted deliberately to put another construction on my words. He seldom speaks in the house until someone else bases an argument for him. I notice he is touchy when one begins to analyse Dominion Iron and Steel and Coal. Perhaps he is closer to them than I am.


John James Kinley: No; I am not.


Clarence Gillis: When he sets himself up as their defender with respect to the marketing of coal in the United States I say that he deliberately misconstrued what I said.


Some hon. MEMBERS:: Order.


John James Kinley: The hon. member cannot say that I deliberately misconstrued what he said. I did not intend to misconstrue anything.


Some hon. MEMBERS:: Withdraw.


Clarence Gillis: What is the matter? Withdraw what?


George Henry Ross: The hon. member should withdraw his charge that' the hon. member deliberately misconstrued his remarks.


Clarence Gillis: I will withdraw. When the hon. member tries to ring in the question of subventions, which he knows is a touchy one in Nova Scotia, he does it for political purposes. I did not mention subventions in any way, shape or form. I realize that the fuel situation in Canada was an emergency, but apparently he does not. When I suggested the transfer of markets I did so in order to facilitate Canada's war effort. I was not thinking in terms of after the war or profits for corporations or subventions or anything along those lines. Some of my hon. friends who preach a good-neighbour policy seem to have very little faith in that policy. They say that we may not be able to do this after the war; that we may not be able to do that after the war. If we do not get busy and do something about the war, we shall not have anything to say about what we shall or shall not do when the war is over.
I mentioned the transfer of markets as something that would take care of what I considered was an emergency fuel situation.

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I have no criticism to make of the audit that was made except to say that one cannot examine Dominion Iron and Steel and Coal and determine the wages of coal by simply making a partial examination of the coal end.


Humphrey Mitchell: I might say to my hon. friend-and this is not said in any spirit of criticism-that there was no objection by the miners. They did not raise the contention he has raised. They asked for the audit, and there was general agreement that the company that was employed was a fair company. The thought the hon. gentleman has brought into the discussion was never raised before the national war labour board.


Clarence Gillis: The workers representatives are far from satisfied with the decision of the board. The argument I am making to-night is my own, based upon my knowledge of the situation. My criticism of the audit was not that the auditors were incompetent-


John James Kinley: I did not say that.


Clarence Gillis: The minister implied it. My criticism was not that they did not do the job they were sent to do. I simply observed that one cannot determine the ability of the Dominion Coal Company to pay without considering their twenty-six subsidiary organizations across the country. They can transfer capital from one to the other; they can plough back money from coal into steel, into wire nails, into timberlands, into railroads and shipping or into anything else that they control and show it as operating costs against coal. If you do not probe coal and steel and consider their relationship to the subsidiary organizations, you do not get a true picture of the financial standing.
I think it is a small job for a member from Nova Scotia to sit down with his pencil and attempt to pick flaws in anything I may have said with reference to the interests of the province. Dominion Iron and Steel and Coal has a large staff of experts who are quite capable of taking care of their interests without that kind of cooperation from a member from Nova Scotia. I do not care where a member sits in this house or to what party he belongs; if he is advocating something in the interests of Canada, I am with him.


John James Kinley: Does the hon. member not believe in free discussion? I was most courteous to him and simply pointed out that the subventions had enabled us to get coal into these markets. I suggested that if we wanted to get United States coal into this country, all we needed to do was to take off the subvention.
I said that I did not think the people of Nova Scotia wanted the subventions taken off.


Clarence Gillis: The hon. member fails to recognize the fact that the mines in Nova Scotia are working only three days a week.


John James Kinley: Take away the subvention and how many will they work?


Clarence Gillis: The hon. member has not the slightest idea of what he is talking about. You are subsidizing United States coal right now into those two markets and you are rationing your fuel.
Section stands.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Tuesday, June 9, 1942