1943-05-11

[Stage Direction]
On the order for motions:
Right Hon. W. L. MACKENZIE KING (Prime Minister):: I should like to make a brief announcement with respect to Canadian supplies for the Union of Soviet Socialist Republics. A protocol setting forth the supplies to be furnished to the U.S.S.R. by the United States, the United Kingdom and Canada is now under negotiation. The protocol will cover the supplies to be provided during the year beginning July 1, 1943. To avoid giving information which would be of great value to the enemy, the contents of the protocol must 
remain secret. It is expected that under it the three countries will undertake to make available for shipment to Russia stated quantities of munitions, war materials and essential supplies, subject to modification after consultation, in the event of unforeseen developments in the war situation.
Hitherto supplies have been furnished to the U.S.S.R. by the United Kingdom and the United States under annual agreements of this type to which the United States, the United Kingdom and the Soviet Union have been parties. The supplies which have gone to Russia from Canada, except for wheat and some miscellaneous commodities for which special arrangements were made, have been included in the commitments made by the United Kingdom or in some cases in those made by the United States. It has been agreed between the governments concerned that it is appropriate for Canada as an important producer of war supplies for the U.S.S.R. to become a direct party to the protocol now under negotiation. In this way Canada will be able to express once again her deep appreciation of the outstanding importance to the common cause of the contribution of the U.S.S.R. and her recognition of the vital importance of the Soviet front.



CANADIAN WHEAT BOARD


Hon. J. A. MacKINNON (Minister of Trade and Commerce) moved:: That the report of the Canadian wheat board for the crop year 1941 to 1942 be referred to the standing committee on agriculture and colonization.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the order for motions:
Hon. HUMPHREY MITCHELL (Minister of Labour):: On Thursday last the leader of the opposition asked if I would table the transcript of the evidence in the inquiry now under way by the national war labour board. I now table two copies of the evidence up to date, and as subsequent copies are ready I shall be glad to table them.

Parliamentary Assistants



THE PRIME MINISTER


[Stage Direction]
On the orders of the day:
Mr. GORDON GRAYDON (Leader of the Opposition):: Mr. Speaker, I should like to address a question to the Prime Minister.
A British United Press dispatch from Rio de Janeiro appearing in the Ottawa Journal last evening stated that "Prime Minister W. L. Mackenzie King of Canada is making plans to visit Brazil, possibly in June, it was understood here to-day." Based upon the above press report, I would like to ask the Prime Minister the following questions:	(1) Are
plans for such a visit under consideration?
(2)	Wheni does the Prime Minister expect to make such a visit? (3) Will he visit other South American countries as well as Brazil?


William Lyon Mackenzie King: Mr. Speaker, my bon.
friend was kind enough to give me notice of the question and I will answer him specifically in reference to the various clauses: (1) Are plans for such a visit under consideration? The answer is no. (2) When does the Prime Minister expect to make such a visit? The answer is, answered by the answer to No. 1.
(3)	Will he visit other South American, countries as well as Brazil? The answer is, answered by the answers to Nos. 1 and 2.


Gordon Graydon: Mr. Speaker, may I congratulate the Prime Minister upon being very specific in this particular instance. I hope it augurs well for the future.



PARLIAMENTARY ASSISTANTS


[Stage Direction]
On the orders of the day:
Gordon Graydon: I should like to direct a question to the Prime Minister concerning the appointment of parliamentary assistants. I have not given him notice of this question. In the orders in council, which I hold in my hand and will give to the Prime Minister so that he can look over them, the language is the same except in the order appointing the parliamentary assistant to the President of the Privy Council. There a change is made, and I would ask the Prime Minister to indicate whether it has any significance or whether it is merely a mistake in draftsmanship. In all the other orders in council the powers given to the parliamentary assistant are stated as
follows: "to assist the said minister, within and without parliament, in such maimer and to such extent as the said minister may determine." But curiously enough in the order in council appointing the parliamentary assistant to the President of the Privy Council a change ig made, and this language is used : "to_ assist the president of the privy council, within and without parliament, in such manner and to such extent as he may determine." That might refer either to the parliamentary assistant whose name was mentioned before or to the President of the Privy Council. I should like to know whether any significance attaches to that change.


William Lyon Mackenzie King: Mr. Speaker, I may say that I did not draft any of the orders. I think the same hand drafted them all. They have been drafted, of course, by the clerk of the council. I was not aware until this minute that there was any difference in the wording, but I can assure my hon. friend that the difference he has revealed does not disclose to my mind any point of significance. The clear intention is that the President of the Privy Council is meant where the word "he" is used.


Gordon Graydon: In other words, the Prime Minister has not delegated that power.


William Lyon Mackenzie King: Oh, no.



DAIRYING INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. G. K. FRASER (Peterborough West):: Mr. Speaker, I should like to ask a question of the Minister of Agriculture or of the Minister of Finance, who has charge of the wartime prices and trade board. Except for the urgency of this question I would put it on the order paper. Owing to the shortage of skilled help in the cheese factories of Ontario and the extra work and inconvenience caused by handling ration coupons for whey butter, many cheese factories are considering discontinuing the making of whey butter. Has the government considered the advisability of allowing the cheese factories to sell whey butter to their farmer patrons without surrender of butter ration coupons?


Hon. J. L. ILSLEY (Minister of Finance):: I shall make inquiry of the wartime prices and trade board and see whether the matter has received their consideration. It has not received consideration by the government.
Mutual Aid Bill



UNITED NATIONS MUTUAL AID


[Stage Direction]
The house resumed from Monday, May 10, consideration in committee of bill No. 76, for granting to his majesty aid for the purpose of making available Canadian war supplies to the united nations,-Mr. Usley-Mr. Bradette in the chair.
On section 1-Short title.
James Lorimer Ilsley: Mr. Chairman, last evening I promised to give as much information about the use of the billion dollar gift as seemed desirable in the light of security considerations.
This is a very complicated matter, and before I present the tables which I have before me I wish to give a brief explanation of how we worked under the legislation and of some of the difficulties. I wish first to remind the committee that the legislation did not contemplate that we should purchase so many tanks, planes or guns, and so many bushels of wheat or pounds of cheese, and turn these physical commodities over to Great Britain. Had it done so it would have been far easier for us to give the specific information which now appears to be desired by the committee. On the contrary it contemplated the gift of Canadian dollars to be turned over to the British government to enable it to purchase in Canada certain munitions of war, raw materials and foodstuffs, and to defray certain, expenditures incurred by the British government in Canada arising out of the war. These dollars so made available were to supplement Britain's supply of dollars available from other sources for the same purposes. If members will examine the main operative provisions of the War Appropriation (United Kingdom Financing) Act, 1942, subsections 1 and 2 of section 3, they will find the wording to be as follows:
3. (1) The minister may, subject to regulations to be made by the governor in council with reference thereto, pay out of the consolidated revenue fund to the Bank of Canada for the account of the government of the United Kingdom-
Let me emphasize these words:
-a sum or sums of money not exceeding in the aggregate one thousand million dollars ($1,000,000,000), to enable it to purchase in Canada aircraft, tanks, mechanical transport vehicles, guns, ammunition and other munitions of war, foodstuffs,^ raw materials, and other commodities and supplies essential to the conduct of the war and the maintenance of the people of the United Kingdom, and to defray other expenses incurred in Canada arising out of the war.
(2) Payments or advances may be made under subsection one of this section from time to time upon the minister being satisfied that the amount thereof is necessary to make the said purchases and defray the said expenses.

These two subsections, it will be noted, indicated clearly (1) a mechanism; (2) a purpose, and (3) a procedure. The mechanism was the payment of dollars not exceeding one billion into the account of the government of the United Kingdom in the Bank of Canada. The purpose was to enable the United Kingdom to buy munitions, raw materials and foodstuffs in Canada and to defray other war expenditures in Canada, supplementing the other dollar resources of the United Kingdom, in order that her purchases of necessary war supplies and services in Canada would not be limited by any shortage of Canadian dollars. The procedure was that the Minister of Finance was to make payments or advances from the appropriation into Britain's account with the Bank of Canada from time to time upon his being satisfied that the amount of said payments or advances was necessary to make the said purchases and defray the said expenses. In accordance with these provisions and to meet these requirements we had to work out a rather complicated system of requisitions for advances, certificates of necessity, reports on expenditures made, statements and forecasts regarding balance of payments, and so forth.
It will I think be immediately apparent from what I have said that there are real difficulties in presenting to this committee the detailed information which the committee would like to have about the expenditure of the gift. The most obvious difficulty results from the fact that, when dollars from two or more sources are placed in a common fund, they lose their identity, and strictly speaking it is impossible to say that a dollar taken out of the common fund to meet a given expenditure comes from one source rather than another. It is therefore only by certain arbitrary assumptions that we can allot the use of the gift to the purchase of a certain group of eligible commodities or expenditures-eligible that is to say under the terms of the United Kingdom Financing Act-and not to a different combination of eligible commodities and expenditures. For instance, if we attribute to the gift all the munitions of war purchased by Britain in Canada during the period, we are necessarily forced to attribute the purchase of a smaller volume of foodstuffs and raw materials to the gift; and contrariwise, if we attribute to the gift all the foodstuffs and raw materials purchased by Britain in Canada during the period, we have less of the gift to attribute to the purchase of munitions.
Take also the case of freight payments which was mentioned last evening. These freight

Mutual Aid Bill
payments to the Canadian seaboard had to be made by or on behalf of Britain; and if we regard them as being paid out of the gift, it merely means that fewer dollars from the gift could be attributed to the purchase of, say, foodstuffs or raw materials. Apart from this, there is no significance at all in the problem.
Again, it should be clear from what I have said how difficult it is to translate dollar expenditures into physical quantities of munitions or raw materials, number of tanks or planes, tons of aluminum or copper or zinc, and so forth, even if we were willing to take all the risks from the security point of view. My specific point is this, that if, for instance, for the first week of last July the United Kingdom had requisitioned us for $20 million out of the gift appropriation, demonstrating that this amount was necessary to enable her to meet, with the dollars she had already in hand, the payments for Canadian purchases and for other Canadian expenditures which she had to make during that week, including, let us say, part of the cost of a shipment of aircraft or aircraft parts, part of a purchase due of bacon or cheese or wheat, some freight payments, and so forth, it is practically impossible to convert into terms of physical magnitude, x units of this, that and the other items, the purposes for which the funds were used.
Finally, I think it will also be clear to the committee that to require information in too great detail, and to have it presented in such a form as to be intelligible and not misleading, involves very complete disclosure of the business affairs and operations in this country of another government. This follows from the point I have already made, that only by very arbitrary assumptions can we attribute specific expenditures to the gift, advances out of which were credited to. the British bank account in the Bank of Canada.
Taking all these considerations into account, I have had certain tables prepared which go as far as I think is practicable in revealing to the committee the information which it would like to have, and I hope the committee will find them satisfactory under all the circumstances. I have had the tables mimeographed, and I will have them distributed to hon. members so that they will be able to follow them if they wish.


Mr. HANSON (York-Sunbury):: Before the minister proceeds, were there any regulations made under the two subsections that he read into the record, with regard to the operations and the procedures?


James Lorimer Ilsley: Yes, there are regulations.


Richard Burpee Hanson: What were they? It would be interesting to have them.


James Lorimer Ilsley: I have the order in council passing the regulations.


Richard Burpee Hanson: If they are very long-


James Lorimer Ilsley: They are not very long. I can put them on the table and send them across.
It will be noted from the main table, showing sterling area purchases and expenditures in Canada during the period of the billion dollar contribution, that we have arbitrarily allocated to the contribution $689 million worth of munitions of war, and that the balance of $311 millions is regarded as having been spent on foodstuffs and raw materials. I am very doubtful whether I should be making that allocation and whether it is not a mistake to try to do anything of the kind, because I want to emphasize that that is purely arbitrary. It cannot be said that any particular commodity, any particular shipments which were sent to Great Britain, were covered by the billion dollar gift. It cannot be said, because our total sales, the total of our goods and services during that period1, exceeded by far the billion dollar gift. The billion dollar gift covered part of the price, and the money which Great Britain received, for her exports to Canada and the services she rendered Canada and so forth, covered the rest. It is impossible to allocate afterwards, or at any time to take any particular goods and say they are covered by the billion dollar gift. Perhaps it merely confuses the matter; or perhaps it clarifies the matter-I do not know

arbitrarily to allocate to that billion dollars a certain amount of goods, but I have done that on the table which I have circulated to hon. members.
I will explain a little more in reference to that. In addition to this, as shown in the lower section of the table, there was an expenditure for commodity purchases and services in Canada during the period amounting to $440 millions. I have broken down the category "Munitions of War" into six main headings, which I think is all we would be justified in giving, having in mind security considerations.
In the main table there are shown under the caption "Foodstuffs and Raw Materials" the expenditures made for the purchases of wheat, bacon and food products, cheese, lumber, and certain base metals attributed by us to the gift appropriation-arbitrarily, as I have stated. It would have been just as logical for me to show a larger amount of expenditures under the gift for foodstuffs and raw materials and a smaller amount under munitions of war. But we have for one reason or another always regarded all munitions as being supplied out of the gift. It is a habit of thought, I suppose,
Mutual Aid BUI

more than anything else. There is another and perhaps a better way in which the information might have been presented. From the first table one may calculate that the total payments made by the United Kingdom during the period for expenditures which were eligible under the United Kingdom Financing Act amounted to just over $1,400,000,000. A billion dollars is just over 71 per cent of this total. We might therefore have presented a table showing all the purchases of eligible supplies and other eligible expenditures by Britain in Canada during the period and stating that Canada financed this expenditure 74 per cent.


Richard Burpee Hanson: I have been able hurriedly to go over this order in council, P.C. 2607, which was passed on Wednesday, April 1, 1942, which would be the effective date of the beginning of the United Kingdom war financing measure. Under paragraph 1, which includes the regulations, it is provided that payments out of the consolidated revenue fund shall in the first instance be made as accountable advances to the government of the United Kingdom, and it concludes by stating that there shall be received a requisition "together with an undertaking to account for such advances in the form set forth in the next succeeding paragraph hereof." Then section 2 is a further regulation which provides that as soon as practicable after the end of each month the minister shall obtain from the High Commissioner of the United Kingdom a statement showing the amounts expended during the preceding month out of the accountable advances " made under paragraph 1 hereof " and the purposes for which such amounts were expended. I quote:
Such statement shall show separately the amounts expended in respect of:
(a)	Foodstuffs;
(b)	Raw material;
(c)	Munitions of war and other expenditure by defence departments;
(d)	Other expenses incurred in Canada
and shall show such further details as the minister may from time to time require.
It is apparent, from a casual reading of that, that the intention was that the advances should be accountable and should be accounted for. If that was followed out, I do not understand the minister's difficulty. I am not saying this in any critical sense. So far as I am concerned, I am satisfied that the money went to Great Britain and was used as part of a common pool for the common purpose of assisting in winning the war. I am wondering what difficulty the minister has had, having regard to the procedure indicated in paragraphs 1 and 2 of the order in council.
[Mr. Ilsley.J


James Lorimer Ilsley: The difficulty is that the amounts advanced exceeded the billion dollars -the amounts spent on eligible goods.


Richard Burpee Hanson: In the final result.


James Lorimer Ilsley: The. amount that was spent on eligible goods exceeded the billion dollars. Thus Great Britain paid a much higher price than the billion dollars. She paid the billion dollars out of the gift and the balance out of money she got for her exports to Canada.


Richard Burpee Hanson: I can appreciate that, and perhaps I did not make myself clear. Undoubtedly, at the inception, according to the statute itself and the order in council which was passed and which I hold in my hand, it was the intention that there should be an orderly procedure, that the -money when requisitioned Should be accountably advanced, and that when advanced, at the end of each month, the proper authority-the high commissioner being the channel-should return to the minister a statement showing what is indicated in paragraph 2 of the order in council:
And such statement shall show separately the amounts expended in respect of-
-(a), (b), (c) and (d). So that really I do not yet appreciate what the difficulty is, if that procedure *was followed out.


James Lorimer Ilsley: The procedure was this. An advance was made out of the billion dollar vote each month, and after the end of the month the United Kingdom rendered an account showing that more than that amount had been spent on eligible goods.


Richard Burpee Hanson: By them.


James Lorimer Ilsley: By them, yes.


Richard Burpee Hanson: In that way they would in a measure defeat the object of the regulation, or cloud it at all events. I do not say that in any critical sense.


James Lorimer Ilsley: The object of the regulation was to show that they had used up the money.
Mr. HANSON .(York-Sunbury): And they showed that they had used more.


James Lorimer Ilsley: For the right purposes.


Richard Burpee Hanson: That is all right.


James Lorimer Ilsley: They showed they had used more.


Richard Burpee Hanson: So that you cannot clearly allocate to the requisition the amounts they actually spent, and that is the difficulty.


James Lorimer Ilsley: That is right.

Mutual Aid Bill


Richard Burpee Hanson: Well, I can appreciate that.


James Lorimer Ilsley: Because there is not the same justification, based on security reasons, for failing to give greater detail in respect of foodstuffs as in the case of munitions of war and raw materials, we have prepared and circulated to-day a supplementary table showing in detail the quantity and dollar value of various kinds of foodstuffs exported to the United Kingdom during the calendar year 1942. It seemed to me that using the calendar year as a whole would give to hon. members a more revealing picture of the contribution made by the Canadian agricultural and the Canadian fishing industry than if I had attempted to give figures only for the period of the contribution, which was a broken period, beginning early in March and ending in the latter part of December, 1942. It would have been impossible in any case to secure the figures for precisely the broken period of contribution, and to have used the period from March 1 or April 1 to December 31 would have required much more time than was available. Furthermore, it is impossible to reconcile such a table with a table of expenditures out of the gift appropriation, because one is based on shipments during the period and the other is based on payments made during the period. As hon. members have the table before them, I do not think it necessary for me to take the time of the committee to comment on the various details.
Finally, I have taken my courage in my hands and have decided to present a table showing the best estimate we can make of what is in effect the sterling area's balance of payments with Canada during the calendar year 1942 and also the fiscal year 1942-43. It will be noted that for these two twelve-month periods the table shows the total amount of Canadian dollars needed by Britain and the rest of the sterling area for payments required to be made to Canada, broken down . under eight main headings, and also the various sources from which the Canadian dollars necessary to meet these requirements were obtained. Perhaps I need not emphasize that, particularly in respect of certain items, the balance of payments statements involve a great many complications and are very difficult to estimate. There are always certain inevitable errors and omissions, and in this connection I may say that this table shows a slight revision of certain figures I gave the house on Thursday last, this revision resulting from certain additional information required in the last day or two. Here again I do not think I need delay the business of
the committee by making any comments on this table. Hon. members who are interested in these matters will find that the table speaks for itself.


Richard Burpee Hanson: As I
understand it, we gave the United Kingdom dollars by depositing them to their account in the Bank of Canada, and they made returns for these accountable advances, showing expenditures in Canada-$1,882,000,000 for the calendar year 1942 and $1,867,000,000 for the fiscal year 1942-43. Did they make their purchases direct or did Canada then make the purchases? If Canada made the purchases, was it done through the Department of Munitions and Supply?


James Lorimer Ilsley: The great bulk of their purchases of munitions would be bought by the Department of Munitions and Supply as their agent in Canada. Wheat they would buy in a different way. I never remember whether the bacon board is their agent or ours, but they buy bacon through the bacon board.


Richard Burpee Hanson: So that
it is done in various ways?


James Lorimer Ilsley: Yes. Cheese contracts are
negotiated with the Department of Agriculture. Then there is private trading as well.


Richard Burpee Hanson: As a matter of fact they had control of the purchases, no matter what agents or avenues they used?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: They did the purchasing in Canada. But the fact remains that all the money plus what they were able to supplement it with was spent in Canada.	.


James Lorimer Ilsley: Oh, yes.


Richard Burpee Hanson: That is
the point I wanted to make clear.


Mr. CHURCH:: The minister has given
this afternoon the exact details for last year and the estimates for the coming year under what is known as the vest pocket edition of the American lease-lend. bill. The proposed bill for the mutual aid to our allies this year will include other nations than the mother country-Russia, China, Australia and New Zealand. Let it not be forgotten that this information should have been given within fifteen days of the assembly of this parliament. That is done in the British parliament and at Washington. I heard a radio address the other night in which the administrator of the lease-lend legislation at Washington gave
Mutual Aid BUI

by the United States under lend-lease now totalled some $10,000,000,000, that in one month alone it amounted to $688,000,000. This total covered the period from March 11, 1941. Up to that time, mark you, Britain had paid under the neutrality act for what she bought in the United States under the cash and carry policy; and that was only seven months before the Dieppe raid. At that time the United States were treating Germany and Italy just as they were treating the allies. In reporting to congress the administrator of lease-lend, Mr. Edward R. Stettinius, Junior, said on May 1 that goods transferred represented $8,494,135,000 of the total and that services, such as ship repairs, shipping and production facilities made up the remaining $1,825,383,000.
I should like to make a comparison between the way the administrator of lend>-lease aid in Washington makes his full report of details and the way it has been done here. The shipments under the lend-lease act in the last three months were divided as follows:
Per cent
United Kingdom	 38
Russia	 31
Africa and middle east	 16
Par East, including	India	   14
Other areas	 1
Without giving the actual figures, the administrator said1 that more lend-lease planes had been sent to Russia than to any other military theatre. It will be noticed that under our programme some $9,000,000 was given to Russia, and similar aid was charged up to Great Britain and then transferred to Russia. I believe there was a net of $18,000,000 given by the United States in aeroplanes to Russia. This report by the administrator concludes
with the following figures:
Munitions:
Ordnance	 $ 450,040,000
Ammunition	 943,742,000
Aircraft and parts	 1,405,744,000
Tanks and parts	 731,376,000
Motor vehicles	 467,668,000
Watercraft and parts		686,855,000
Industrial products:
Machinery	 370,655,000
Metals	 607,430,000
Petroleum products	 413,312,000
Other industrial products...'.	862,212,000
Foodstuffs:
Foodstuffs	 1,268,911,000
Other agricultural products.. 286,110,000
Before sitting down I should like to repeat the words of the Prime Minister of Great Britain, who said:
Let me make this clear in case there should be any mistake about it. We mean to hold our own. I have not become the king's first minister in order to preside over the liquidation of the British empire.

This bill and the bill of last year shows that Canada is not going to be talked out of the British empire. Canada will have to be fought out of the British empire before what was said the other day happens. If Canada could have been talked out it would have been done long ago. I shall not refer to the remarks of some of our friends from the province of Quebec. They have expressed their views and they have the right to express them. But I must tell them that they should try to see the cause and effect of all this. This fight down at Sussex did not originate the other day; it went back to the days of the South African war and the first world war. We must consider the cause and effect of the home defence remarks of some members from the province of Quebec yesterday and last Friday and on the stand of isolation taken in the past. We must consider the results of the plebiscite vote and the disunity it caused and all these other things. The country voted for a total war effort and. last year, acting on that, we gave a gift of a billion dollars. It was a gift, so-called, but it was of a very questionable nature, because Britain shared1 it in part with other allies. In some respects it was like a gift horse. It was not a total gift at all because the money given to Great Britain was used partly for the assistance of other suffering countries.
The spirit on the whole, though, of this bill is correct and I believe it will commend itself to the wisdom and judgment of the country. What was done last year had been delayed too long; it should have been done long ago. If Canada had taken this stand of aid and support to Britain at the last colonial conference in 1937 and had backed up New Zealand andi Australia, had told them that she was prepared to do this to the last man and the last dollar, we would have avoided this war.


Mr. PICARD:: I have one or two questions that I should like to ask the Minister of Finance, but I want to preface them with a few remarks which I think had better be made at this stage of the proceedings. I do not intend to answer the hon. member for Broadview (Mr. Church). I hold no brief for those who have voted against this bill, but I never like to see anyone, whether he comes from Toronto or elsewhere, cast doubt upon the loyalty of Quebec simply because some people in this house do not share the same views. I voted for this measure last night and. I shall explain why I am for it, but just the same I do not think it is a fair procedure to say that, because some people from Quebec express different views, the province of Quebec does not understand how the war effort should be run and how things in Canada should be run for

Mutual Aid Bill
the war. This sort of attitude should be left aside. When an hon. member does not hear just exactly what he would like to hear he should not cast reflection upon the loyalty of others.
I voted for this measure for many reasons which in my judgment are sound and good and which I will be able to justify to my constituents when the time comes. I repeatedly told my people that I would support the government in all the aspects of its war policy except conscription for overseas service. I shall continue to support the government, because of all the political parties of one kind and another that we now have, I have the most confidence in the Liberal party. Of all the leaders of the different parties, and I have much esteem for some of them, I place the Prime Minister and leader of the government above all. I have the conviction that by weakening the position of the Prime Minister on any of thelse issues we may very well contribute to the formation of a political combination the very existence of which would endanger the success of the war effort so harmoniously achieved under the present administration, and would probably bring about exactly the opposite of what those who oppose t'he present measure desire.
I gave my second reason for supporting this measure when I spoke in this house on February 16. I should like to be permitted to quote the remarks I made on that occasion so that they may be taken with what I have to say to-day. They are reported on page 485 of Hansard of February 16, and read as follows:
When a measure of somewhat similar nature was presented to us last year in the form of a grant of one billion to the United Kingdom, I agreed to it because I felt that a country that had been spared the actual sacrifices of war on its own territory, a country that had not been invaded and trampled and massacred as had Russia and China, and a country that had not been subjected to the most horrible aerial warfare, as had Britain, could make further financial sacrifices as a sort of compensation, I may say, to those who had been in the path of the monster and who had delayed so much, as to render it nearly impossible now, his direct assault on us. Those were the motives which made me accept last year's proposal. The way in which it was presented and the poor and insufficient explanations given to the public were such that many still think we took one billion in gold from our treasury and gave it to Britain. What we did was to provide the tools of war for those who were in the front line of defence and could not pay for it. That money was spent in Canada, provided work for Canadians and used Canadian materials. What I did not like about it was the way in which it was done, handing everything to Great Britain, which took the credit for transferring afterwards part of it to China and Russia. If there is truth in what has been published in a Canadian paper lately, to the effect that part of it was directed
by Britain to Australia and New Zealand who paid Britain for it out of their credit balances in Britain, I like it less.
But the way in which the lease-lend appropriation is presented to-day should not provoke the same objections. It appears to be an improved, more dignified and more nationally conscious form of financial help to world freedom. The motives are the same as last year, but the method of doing it is greatly improved. We thereby take one more step to manifest our complete independence from and equality with Britain. We appear no more as the vassal bringing tribute but as the equal partner who puts his assets in a common pool with those of his partners, the United States and the United Kingdom, so that they may jointly decide where they may be better used for the safeguarding and ultimate victory of the united nations. The deciding voice as to the allotment of the goods produced in Canada by Canadian workers and with Canadian materials will remain in the hands of the Canadian government, and rightly so. This makes me more enthusiastic for the vote I shall give, if needed, in favour of this appropriation.
Those are the words I used' in February, and following what I had said I voted and supported and am ready to go on supporting the measure. But in voting to support the government, one should not do it blindly without expressing one's views on different aspects of the questions involved. After all, when a government proposes a policy it is taking as a whole the responsibility for a suggestion of one of its members arising most of the time from advice given by departmental experts. Those experts may be most competent but they are not infallible. They are human beings and they may err. It is therefore perfectly understandable that members of parliament who after all, if we may say so, still represent something and1 are the elected representatives of the people, should when their views are not entirely in accord with those of the experts voice their opinions in the house if their role is to amount to anything.
I for one have the greatest confidence in the judgment of the Prime Minister and I am ready to follow him on this as on most of the other questions that come before the house, but I would consider that I was neglecting my duty if I did not express my personal views and those of my constituents on some of the aspects of this measure.
With the proposal that for the duration of the war we should help and facilitate transactions in order to forward to Britain and our allies the implements of war I am in accord; I approve of it ' entirely. However, our first objective in a Canadian parliament should remain the interest of our own country, Canada. What we have to consider is, can a country like ours afford to do what we are doing any more than Britain can afford to compensate us for our monetary disburse-
Mutual Aid Bill

merits? No matter how good may be my motives to support the measure, to my mind a billion dollar debt will weigh very heavily on the people of Canada, probably more heavily than it would on the people of Britain no matter how much the war may have cost Britain up to this moment. I perfectly understand that Canada should! finance all these charges during the war, but I would expect that we should be compensated in some tangible form so that this further burden imposed upon our people should at least profit us not only in the way of defending our liberties and those of the peoples of the world but also in material compensation.
The ray of hope-and it is upon this that I base my remarks-is contained in paragraph 2 of the resolution which was introduced on May 6 by the Minister of Finance, and which will be found at page 2436 of Hansard, it reads as follows:
That the governor in council may determine the terms and conditions upon which such war supplies are made available to any of the united nations and may require in certain cases payment or repayment in kind or property or reciprocal action or provision of supplies or other direct or indirect benefit as may be deemed appropriate.
This shall be the theme of my remarks just now. What, for instance, is the situation regarding our Canadian securities held in Britain? There has been some talk about it in the press and elsewhere, but we have yet to receive a definite answer as to what is being done so far as the repatriation of these securities is concerned and the kind of repatriation that was done when we did1 repatriate some of them. If we look at the Canadian balance of international payments dated 1939, we find that in the last year for which we had figures at the time and for which we have definite figures now, namely 1937, the debt of Canada held by British citizens or by the British government totalled $2,718,900,000, of which $1,399,200,000 constituted the funded debt of Canada, the provinces and miscellaneous corporations in bonds and debentures.


Mr. MacNICOL:: Is that pounds or dollars?


Louis-Philippe Picard: Dollars. All the figures I am about to give are in Canadian dollars. Stocks and bonds, in railways only, amounted to 321-6 million dollars. Stocks in industries wholly controlled by British firms or British interests amounted to 367-2 million dollars. The portfolio investments, that is in companies in which British interests were the second largest investors amounted to 346-2 million dollars, held in Britain, and other securities amounted to 284-7 million dollars.
Another way of dividing this amount is to be found in an article that was published I

think in 1939 in the Financial Post. It divides the amount in a slightly different way, into the following major items:
Dominion, provincial and municipal
bonds	 $514,200,000
National railways securities		513,100,000
Canadian Pacific Railway securities
(stocks and bonds)	 596,600,000
The balance of the investments was spread between wood and paper companies, metal industries, the mining industry, manufacturing industries, merchandising and service comr panies, insurance companies, finance and mortgage companies. The total business capital in Canada for that same year, 1937, is estimated by the same source as 18 billion dollars, of which $2,280,000,000 is the total of the direct investment of British and foreign capital in Canada. By direct I do not mean the total investment in our stocks and bonds. The direct investment would mean investment in companies in which the control resides in Britain or elsewhere abroad. When I said earlier in my remarks that $2,280,000,000 was controlled outside of Canada, that was not only what was held in British or foreign hands. That meant only the direct investment, the amount of capital in companies controlled entirely by British or foreign capital. Of this sum about $367,163,000 was a direct British investment. Britain had a controlling interest in 402 Canadian companies. That is to say, in 1937 four hundred and two Canadian companies were controlled by British interests to the amount of $367,163,000. That is 16-2 per cent of the total of her direct investment in Canada. There were also 2,440 Canadian companies in which the control was held outside of Canada. Of these 2,440 companies, there were 2,062 wherein British capital came ahead of Canadian capital. British investments were the second largest in these companies, and. this amount in 1937 reached $346,217,000.
These figures represent such important amounts that it is worth while to talk of the repatriation of some of these securities. Not all of them could be repatriated, but some of them could be, and would compensate for what we have done. I said a moment ago that in 1937, $2,718-9 millions of securities were held in Britain. The Minister of Finance, speaking on April 1, said, in answer to the question of an bon. member, as reported in Hansard, at page 1750:
From an estimate recently made it would appear that the market value of these securities-
That is, securities held by residents of the United Kingdom..
-is slightly in excess of $1,000,000,000.

Mutual Aid Bill
This would mean a difference of $1,718-9 millions which, according to these figures, should have been repatriated. I admit that I looked here and there and, from the meagre information which I could get, could not reach that figure. That is one question about which I should like the minister at some time to inform, us-the different figures relating to repatriation, and as to what has been done. I have here a report published by the Department of Trade and Commerce, the "Canadian Balance of International Payments," issued this year as to payments in 1941. Of the total amount which was financed to pay for British purchases in Canada, $189 millions was provided by official repatriation, by the redemption in advance of maturity of certain dominion and provincial guaranteed Canadian National bond issues held in the United Kingdom. According to the statement which was given us this afternoon, to provide the amounts which, have to be supplied to pay for what was required by Great Britain in this country, we see that under item 7, section (b), on page 4, for the calendar year 1942: official repatriation of securities, $296 million for the calendar year 1942, and. in the fiscal year 1942-43, $73 million. That stilll leaves us far from the difference between the two and a half billion dollars mentioned in the official report of 1939 and the figures cited by the minister early this session.
I see also, according to the report of the Canadian National Railways, that there is quite a difference in the payment of interest on bonds held in private hands, in 1942 and 1941. A substantial amount of these bonds has been given over to the Canadian government. I mean that the Canadian government had advanced to the Canadian National Railways the sums necessary to repatriate these bonds, or call them before maturity, because the amount of interest on loans from the government has risen by the same amount in the same year as the reduction on privately-held bonds. This kind of repatriation of securities, which seems to have been done as far as the Canadian National Railways is concerned, is just a shifting of figures in books, but it comes out of the pockets of the Canadian people. Unless I am entirely mistaken, it does not in any way improve our financial position. It has helped greatly in the purchase of munitions and supplies for Britain. We have paid these people for their bonds; we have applied the value of these bonds thus repatriated to the purchase of goods for Great Britain, and the Canadian National Railways still owe this amount to the government instead of to British investors. It is not the British government which bought these
securities in sterling from their people and then sent us the bonds so that we might at least have that amount on our books.


Mr. HOMUTH:: What would you have them do?


Louis-Philippe Picard: If the hon. member does not mind, I will go ahead with this and talk about repatriation and the way I think it should have been done. I have just explained that the British government should themselves purchase out of their sterling funds the securities held by their people and put them into a certain account which would finance their purchases here in Canada. Take the Canadian Pacific bonds and other bonds which are of value; the British government could pay for them and transfer them here in payment of what we send over there. These bonds and stocks have a value on the market. If the British government purchases and pays for them and- sends them to us, at least we have securities to compensate us for what we do.


Karl Kenneth Homuth: They have been defending us for hundreds of years.


Louis-Philippe Picard: That is outside the question. I am talking of the financing. The other matter has been discussed and can be discussed for a long time. I am getting at the figures to see what sort of financial deal we are getting out of it. We have just displaced the debt, as evidenced in the case of the Canadian National railway securities. The Canadian government has called the bonds before, in many cases, they matured; the money due to British investors on that account was paid to them by the Canadian government; these bonds and stocks were given back to us, and thus the moneys paid out by the Canadian government were used to finance purchases made here by Britain; and in the Canadian National railway's books the entry was changed from privately-owned securities to sums due to the Canadian government. It was for the Canadian National railway a matter of bookkeeping. For the Canadian government it meant further disbursements to finance British commitments here. Now this amount, coming out of the funds of our own country, is not the kind of repatriation I would have expected to have been made. I did not think the sum was included in the billion dollars; that is why I looked into the question. Now I see by the report submitted to-day that it is not in the billion dollars, because it is item 7, while the billion dollars is item 12. So that this means a repatriation of moneys above and aside from the billion dollar amount. I am in favour of the billion dollar appropriation; I voted for it. But I am trying to get at the question to see why we should be doing things
Mutual Aid Bill

of this kind, while Britain has capital and assets which could be transferred and which would benefit our financial position at the end of this war.
The whole control of the common stock and of the majority of the bonds and preferred stock of the Canadian Pacific railway is over there. Some people have said to me, do not propose the repatriation of these securities because it would mean amalgamation. It would of course facilitate facing that situation some day, but it need not be dealt with wholly to the advantage of the Canadian Pacific railway, as some have suggested in the past, but could be handled on terms which would be advantageous to this country. Others say, with regard to the Canadian Pacific railway, that if the government controlled the stock we would be in a bad financial position after the war because even if the economic conditions would bring about a failure of the Canadian Pacific railway, we would have to reimburse the bondholders one hundred cents on the dollar; there would be a repetition of what happened upon the amalgamation of railways under the Canadian National. Of course that might be an objection. On the other hand it can be argued that if the time ever comes when the Canadian Pacific railway cannot face its obligations abroad, the government would have to meet them in order that our credit abroad should be maintained. Therefore I do not think that we would lose much by repatriation, because in any event, if Canadian Pacific railway bonds were in default, the same people who to-day object to my proposal would say that we had to compensate people abroad whose investments were affected in order to maintain the credit and good name of the country. Furthermore, if we had the securities we would be in a position, if we wanted to do so, to dictate the terms when it comes to merge the Canadian Pacific railway and the Canadian National railway.
Some people seem scandalized because, although I approve the grant, I talk of practical money questions. I think it is our duty to do so. Take, for example, the present situation of Montreal. The people of that city will have to pay more in taxation connected1 with these two billions of dollars than the value involved in recent negotiations between Montreal and the financiers of London about the municipal debt which was floated in England. These negotiations have been going on for a long time, and as I say, the citizens of Montreal will pay more in the taxation involved in these two billion dollars than the amount represented by the suggested plan of refund for their municipal bonds. We might ask that

these matters be taken into consideration. We might even discuss the considerable wealth abroad of Britain, which is vastly richer in international investments than we are.


Mr. BLACICMORE:: I do not like to
interrupt the hon. member's excellent speech, but can he tell us whether or not bonds of Montreal are held in Britain?


Louis-Philippe Picard: Mutual Aid Bill


Mr. DIEFENBAKER:: I followed with a good deal of interest the remarks of the hon. gentleman who has just taken his seat. I cannot agree with his peroration when he indicates that in time of war, when our defence is at stake in all parts of the world, commercial considerations should be before us. I rise to say a few words this afternoon because of some of the provisions of this bill which for the most part have not yet been referred to, although in his concluding remarks the hon. gentleman did refer to one of them.
I think the minister has not given us a full and complete explanation of this bill. An examination of its provisions leads me to believe that it is an epoch-making measure, one of the most important that has come before this parliament, and its implications are such that they become apparent only after careful scrutiny and examination of the various sections.
In its inception this bill is an application of the principles of the lend-lease legislation in effect, in the United States, and the mutual aid legislation in effect in some other countries. Lend-lease is the foundation principle of this bill. As to the principles of mutual aid no one can have any difference of view. Mutual aid among the allied1 and united1 nations had its part in the victories won in the last few days in Tunisia and North Africa. This bill is an adoption and adaptation of the lend-lease legislation. In order to arrive at a conclusion as to what this bill actually means other than the provisions for defence it becomes necessary to consider the lend-lease

Mutual Aid Bill
legislation of the United States and the comments that have been made thereon by the President of the United States and other officials.
The bill has three phases or aspects. First is the phase of national and international defence. The second has to do with the integration of production amongst the various nations. The third, and to me the most important phase requiring elucidation, is the part relating to post-war rehabilitation in the international sphere.
So far as contribution to the united nations is concerned I give to this bill absolute and unqualified support. It is but a continuation of the legislation of last year under which Canada, in assisting Britain by the billion dollar vote, was in fact assisting herself. The legislation of last year showed empire solidarity. This legislation, in so far as it consists of a defence contribution of $1,000,000,000 to the united nations, shows the solidarity of the united nations. It shows also that the people of Canada realize that this is a people's war; that it is not a national or British empire war but a war of all the peoples within the united nations, the contribution of each to be measured by the fact that all we have shall be placed in the common pool for victory. It shows that we are in partnership with the freedom-loving nations and that to this partnership we will give our all. It means in effect that to-day Canada recognizes that this war is world^wide in scope; that we in common with the other united nations must mobilize our efforts on the same front line and the same production line; that by cooperation among the united nations there will be strength; that through collaboration there will be power; that through the mutual distribution of goods and services an irresistible wall of offence and defence will be built up within the united nations, and that this mutual contribution on the part of the nations within the empire and the united nations is the result of a grand strategy to prevent jealousies and economic difficulties arising after the war.
The extension of lend-lease, which started in the United States as assistance for Great Britain, to include the other united nations, came as a result of negotiation with the various countries, and it is interesting to note that in framing this legislation, in many particulars, consciously or unconsciously the actual words of the lend-lease legislation in the United States have been used. I am going to refer in particular to article 7 of the lend-lease legislation in the United States, which contains words very like those used in
72537-162J	[DOT]
the preamble of the bill now before the committee. It provides that the terms and conditions of that settlement-
. . . shall he such as not to burden commerce between the two countries-
It started off as between Britain and the United States.
-but to promote mutually advantageous economic relations between (the signatories) and the betterment of world wide economic relations. To that end, they shall include provision for agreed action by the United States of America and the United Kingdom, open to participation by all other countries of like mind-
I take it that now Canada comes within the ambit of those words, "countries of like mind."
-directed to the expansion, by appropriate international and domestic measure, of production, employment and the exchange and consumption of goods, which are the material foundations of the liberty and welfare of all the citizens;-
Then it goes on to say:
-to the elimination of all forms of discriminatory treatment in international commerce, and to the reduction of tariffs and other trade barriers; and in general, to the attainment of all the economic objectives set forth in the joint declaration made on August 12, 1941, by the President of the United States of America and the Prime Minister of the United Kingdom.
In other words the Atlantic charter.
A't an early convenient date, conversations shall be begun between the two governments with a view to determining, in the light of governing economic conditions, the best means of attaining the above stated objectives by their own agreed action and of seeking the agreed action of other like-minded governments.
I pause here to point out that as yet parliament and this country have not received any information from the minister as to whether there has been any collaboration between Canada, Great Britain and the United States in reference to a plan for after the war, within the framework of the lend-lease system. At this point the following questions occur to me, and I should like the minister to answer them in due course. Is this bill part of a general scheme among the united nations for the attainment of the objectives named in article 7? If so, will the minister produce the correspondence and give the house a record of the negotiations that have taken place in order to achieve these purposes? I pause here to say this. If this bill went no further than to provide for aid to the united nations to the extent of $1,000,000,000, these questions would not arise; but this bill, in its import and in its terms, lays the foundation for a commercial organization among the united nations after the war. In
Mutual Aid Bill

the allocation of foodstuffs and munitions and supplies, will there be a central director among the united nations who will determine the nature of the contribution to be made by each nation? Is Canada's contribution to be allocated by a central board of direction, or is Canada's contribution to be haphazard, dependent only upon the decision of the members of the cabinet comprising the committee? Will it be distributed after consultation with the other united nations?
At this point let me say that I cannot understand why Canada, occupying an increasingly important position in the national and international world, does not have representation on all the major boards that operate in Washington. Why have we no representation on the food board? Just in that connection, next week we are sending representatives of Canada to attend a food conference in the United States, but they are not to be accompanied by a minister of the crown. At that conference the future of agriculture and food production may well be determined, yet not a member of this House of Commons knows what powers these men possess; not a 'member knows what they are going to do when they get there, or has any conception of the course or policy that is to be followed by them.
The second aspect in connection with lend-lease and mutual aid is in the scheme for the integration of production, something that has not been dealt with as yet by the Minister of Munitions and Supply. It was dealt with in part the otheT day by the Minister of Finance, who used these words at page 2439 of Hansard:
This system of Mutual Aid will enable our great productive power, industrial and agricultural, to be most fully and effectively used in the prosecution of the war. It will enable us to exert a balanced effort in accordance with the nature of our own resources-the type of effort that we are best able to make quickly and effectively.
Then a little further down:
The products of our factories, of our mines and forests and refineries, should go where they are most immediately effective in winning the war. . . .
There is reference there to the question of the integration of the industrial production of this and the other united nations in such a way as to maximize the power of the united nations.
I turn now to the attitude of the United States of America on this question in an effort to ascertain exactly what their attitude is. The purpose of the extension of the lend-lease act and the creation of the committees that have been set up in Washington is to secure an intregation of production to the
end that each of the united nations will produce those commodities or munitions which it is peculiarly able to do. I ask this: What is Canada's production to be in this great productive effort, in this mobilization of the resources of the united nations? What is Canada's plan to be?
Have we arrived yet at the place where the government can say to the people of Canada-I think the time has come having regard to the catastrophic position in which man-power in Canada now is-this will be our contribution; we will contribute so many men to the armed forces, so many to munitions production and so many to agriculture. In debating the principles of lend-lease by Canada to the other united nations and the integration of the production of the united nations, we in this parliament should receive from the government the plan or the blueprint-there must be some blueprint-of our production. This must be done if we are to integrate our production with that of the other united nations. I ask the minister if negotiations are now under way to the end that Canada shall produce only certain materials or munitions of war? What is the plan in so far as Canada is concerned?
Within the last few weeks there has been a change in the war-time production of Canada. I am not going to deal with this phase at the moment, but we all know that there has been a suggestion that there is to be a reduction in tank production and that Canada is to devote far more of her productive capacity to the production of ships. Now, as to the production of aeroplanes, I refer to Lancasters in particular, my information is that after months of tooling and preparation in one great factory in this country, there was suddenly a discontinuance of production without any explanation. Was that on account of the fact that a new plan has been evolved among the united nations, whereby Canada's production will be limited to production of .those things most needed and producible in Canada such as agricultural products, certain munitions and shipping?
What opportunity is Canada to have under this scheme to dispose of her agricultural products? As I read the debates and the reports issued by the United States government, that country has gradually arrived at the point whereby agricultural products make up only 3 per cent of what is advanced under lend-lease. Is Canada under this system to devote herself more and more to agricultural production? If that is the scheme, we should be told. When Canada is prepared to contribute a billion dollars to the united

Mutual Aid Bill
nations, is it not proper that in the purchase of agricultural products for transshipment to the united nations under this bill the farmer should receive a fair and proper parity price?
That is the picture we have in so far as integration is concerned. Never have we in this house, within the last year or at any other time, been given a picture of what the plan is, how our man-power is to be distributed and just what Canada's contribution will be. In this connection I should like to read what the President of the United States said in the report he mpde to congress some three months after March 11, 1942. He said:
The programme of lend-lease arrangements is also emerging as a factor in the combined effort of the united nations to weave a pattern for peace. Those agreements are taking shape as key instruments of national policy, the first of our concrete steps in the direction of affirmative post-war reconstruction.
At no time has the minister in explaining this legislation indicated that it forms a basis, such as was suggested by the President of the United States, of post-war reconstruction. It is to this phase of the bill that I intend to direct considerable attention. The President continued:
We are now in the war, as we were not in March, 1941, when the lend-lease act was passed. We have pledged our resources without limit to win the war and the peace which will follow it. We look forward to a period of security and liberty, in which men may freely pursue lives of their choice, and governments will achieve policies leading to full and useful production and employment. If the promise of the peace is to be fulfilled, a large volume of production and trade among nations must be restored and sustained. This trade must be solidly founded on stable exchange relationships and liberal principles of commerce. The lend-lease settlement will rest on the specific and detailed programme for achieving these ends which are, as article 7 of the agreements with Great Britain, China and Russia points out, "the material foundations of the liberty and welfare of all peoples."
This is the significant portion of the President's statement:
Cooperative action among the united nations is contemplated to fulfil this programme for economic progress, in the many spheres where action is needed. It is hoped that plans will soon develop for a series of agreements and recommendations for legislation, in the fields of commercial policy, of money and finance, international investment and reconstruction. . . . We have affirmatively declared our intention to avoid the political and economic mistakes of international debt experience during the twenties. A lend-lease settlement which fulfils this principle will be sound from the economic point of view. But it will have a greater merit. It will represent the only fair way to distribute the financial costs of war among the united nations.
Then Mr. Sumner Welles in a speech referring to the significance of agreements and mutual aid schemes, such as the present one, said that the master lend-lease agreement is the first important milestone on the road to the achievement of the objective set forth in the Atlantic charter. The report to congress contains words to the effect that "the form and terms of this agreement represent the culmination of many months of study and negotiation, and the solution they foreshadow promises to contribute substantially to the post-war reconstruction in which the United States has so large a political and economic stake."
I ask the minister to tell us the post-war plans that are contemplated under Bill No. 76. What decisions have been arrived at by the government? What deliberations have taken place in order to- bring into a unity of purpose and aim the various united nations? This bill has been designed as a means of assistance through national and international contribution to the united nations, and with that aim and principle I agree. But there are so many terms in this bill that go beyond the matter of contribution and assistance that one wonders why they should ever have been included, in the bill unless it was intended that it should operate as an abdication by parliament of its right to control the making of commercial treaties and arrangements both now and after the war. Mr. Sumner Welles has pointed out that the united nations have agreed that the principles of lend-lease shall be the basis upon which the post-war reconstruction of the worldi shall take place, and "will be a cooperative mechanism not only for war but for peace and reconstruction.." He indicated that for a period of from three to four or five or six years after hostilities end there might be no- peace treaty made until reconstruction has taken place among the nations of the world, and that during that period of time the principles and policies of lend-lease might well be carried into effect in all parts of the world. I am sure, Mr. Chairman, that you appreciate the significance of this matter. It means that if parliament passes this bill in its present form, it turns over to the members of the cabinet who are on this Mutual Aid committee the right to determine the commercial policy of this nation with others of the united nations and with other nations outside the united nations not only until the conclusion, of the war but until the conclusion of the peace treaty.
Let us look at the terms of this bill. If the bill does not mean what I suggest, that sliows how dangerous it is in drafting a bill to copy
Mutual Aid Bill

the terms of some other legislation, which carries with it the significance I am now attaching to this. Let me read the preamble of the bill. It states:
. . . and whereas it is essential to the defence and security of Canada and to the cause of world freedom that Canada should make the utmost contribution to the victory of the united nations; . . . and whereas it is expedient that the conditions upon which Canadian war supplies are made available to other united nations should not be such as to burden post-war commerce or lead to the imposition of trade restrictions or otherwise prejudice a just and enduring peace.
The united nations are defined as those nations which were signatories to the agreement whereby the expression "united nations" came into being. But the -bill not only includes them; it permits the governor in council to designate any other nation or authority which has been associated with Canada in the prosecution of the war. Is that supposed to cover the ambit of lend-lease in the United States where the President has the power to give assistance not only to nations within the united nations but to others believed to be of assistance?
Then I turn to section 3 which provides for the determination of the distribution of war supplies under this bill. Section 3 reads:
There shall be a board to be called the Canadian Mutual Aid Board consisting of the Minister of Munitions and Supply, the Minister of National Defence, the Minister of Finance, the Minister of Agriculture and the Minister of Justice . . . which shall be charged with the administration of this act.
It was the hon. gentleman who just took his seat who put his finger on this clause which is the most dangerous of all in the matter of parliament relinquishing its power to require the government to submitting trade agreements to this house. Section 4 reads:
The board may on behalf of His Majesty, in accordance with the strategic needs of the war, contribute . . . and make available war supplies to any of the united nations.
Then subsection 2 of section 4 continues:
It shall be good and sufficient consideration for making war supplies available to any of the united nations hereunder that the said war supplies are to be used in the joint and effective prosecution of the war

My submission is that no other principle should apply, and that these supplies should be made available only upon the strategic ground of common defence Whereby contributions are made to a common pool of supplies for common defence. But this same subsection goes on to say:
-but no war supplies shall be so made available to any of the united nations except upon terms and conditions approved by the governor in council or by regulations, and the governor

in council may require, in respect of specific classes of supplies or any specific transfer of supplies under subsection one of this section, such payment or repayment in kind or property or such reciprocal action or provision of supplies-
Then here -comes the significant part:

or such other direct or indirect benefit as the governor in council deems appropriate.
That provision in my opinion takes this bill outside the ambit of qualification depending upon the necessities of war and exigencies of strategy, and places in the hands of the governor in council the power to enter into trade arrangements and trade relations which may remain effective not only throughout the war but until the signing of the peace treaty. In other words, by the addition of those words parliament hands over to the governor in council the right to determine what trade relations shall be entered into as a quid pro quo for the contribution and assistance given hereunder by Canada. If it is otherwise, why not end the sentence in this way: Good and sufficient consideration for making war supplies under this bill, and the only consideration for making war supplies available to any of the united nations, is that the war supplies are to be used in the joint effective prosecution of the war? Why add a provision that enables the governor in council, on the recommendation of members of this cabinet, to say to any nation within the united nations: You shall receive assistance from us if in return you give to us some trade consideration either now or after the war? If parliament passes this bill as it now stands, parliament is giving the power to the governor in council, upon the recommendation of this Mutual Aid board, to enter into any trade relations which may bind Canada both now and after the war, and parliament will have abdicated her right to have brought before it any agreements so entered into.
Why, the bill even goes so far in section 8 which to my mind is the most astounding section of the whole bill that it provides -that:
As soon as practicable after the close of each fiscal year, the board shall prepare and lay before parliament a report of operations under this act except such information as the governor in council deems it incompatible with the public interest to disclose.
The governor in council, the members of the cabinet, exercise that right every day in this house now. When we ask questions from this side of the house, how often we are told that it is not compatible with the public interest to disclose the information. We have resisted that course, but now we are asked to place upon the statute books of this country the right, which the government already possesses, of denying information to members of this

Mutual Aid Bill
parliament. What are its implications? The governor in council could enter into a reciprocal agreement with any one of the united nations in return for support and assistance under this bill; and if we were to ask for information as to what agreements had been entered into, whether any reciprocal transactions had been arrived at, or what decisions had been made, the doors would be closed by ourselves having placed parliamentary approval in advance of the circumstances arising. As I understand this clause, parliament is to tie its own hands, to shackle itself by depriving itself of the right to receive information to which it is entitled. Hon. members, when they were met with the answer, "It is not in the public interest", have invariably realized that the responsibility for the decision whether the disclosure of a matter is or is not contrary to the public interest, rests with the government. To-day we are asked by legislation to show that we have gone far along the road to the denial of our rights as members to obtain information. Section 8 means that the governor in council can enter into agreements which will bind governments after the war is over. The bill specifically empowers the governor in council to enter into any agreements and any relations whatsoever binding parliament after this war. Parliament might well be in the position of not knowing what arrangements have been entered into, what tariff decisions or conclusions have been arrived at.
I ask the minister to make changes in this bill. No one objects to the power conferred on this board to give assistance to all or any of the united nations. We on this side have always stood for that principle. Often we have been ridiculed because we believed in an ever-widening war effort. We support this bill unreservedly in so far as it makes effective the determination of parliament to uphold and aid the power of the united nations. Speaking for myself, I say that I object to parliament abdicating its right to have placed before it treaties, agreements or transactions, other than on strategical matters, in connection with the operation of this measure. I ask the minister to make alterations in the bill to provide that if trade treaties or other commercial arrangements are entered into, they shall not be effective until they have been approved by parliament; they shall be effective only in so far as they consist of the granting of assistance for military defence-that power we have to hand over to the government-but they shall not be effective to bind the people of this country, its industry and its labour, without parliament first having an opportunity of passing thereon.
I believe this is the first time that legislation has been brought before this parliament so contrary to the principles of parliamentary government. Even before Pearl Harbor, when the United States was neutral excepting that she knew who her friends were, her lend-lease measure contained- no such provisions. To-day it contains no such provisions.


The CHAIRMAN:: Order. The hon. member has spoken for forty minutes.


James Lorimer Ilsley: I have been very much interested in my hon. friend's speech; and I wish to congratulate him upon his imagination. As brick after brick -was piled and this great edifice of apprehension was built up, I myself began to wonder what the object of this bill was. I have a much simpler mind than my hon. friend. I certainly never suspected that there were all these alleged possibilities of conspiracy against the independence of parliament and so forth which my hon. friend-


John George Diefenbaker: I never made any suggestion of conspiracy.


James Lorimer Ilsley: -has worked out of it. I have been most frank, direct and straightforward in explaining the bill, its objects, and the reasons for the various clauses. Perhaps a more appropriate place to discuss them would be as we come to these clauses; but my hon. friend has, apparently after a great deal of work, built up a tremendously complicated case of interrelated parts, and worked into his argument section after section; with the result that I think I shall have to refer to a few of these sections.
I may start with the one which he spoke of last, namely, section 8. Section 8 -was not in the bill as first drafted. It was an afterthought. I got the impression somewhere, I think it was from something somebody said in this chamber, that parliament would want to know what was being done under this bill and that there ought to be reports to parliament. Accordingly section 8 was drafted so that there would be reports by the board to parliament, and much consideration was given as to how often these reports could be made and what these reports should contain. If the committee would like to cross out section 8, the bill will then stand as it stood at first.


Richard Burpee Hanson: We do not want that. We want the minister to leave out the exception.


James Lorimer Ilsley: I thought my hon. friend would like us to leave that out. That clause
Mutual Aid Bill

is taken, verbatim from section 5 of the lend-lease bill of the United States, which states:
The President from time to time, but not less frequently than once every ninety days-
The time is shorter there.
-shall transmit to the congress a report of operations under this act except such information as he deems incompatible with the public interest to disclose.
I understood my hon. friend to say there was nothing like that in the United States act. Well, I have read the portion of the United States act from which these words were taken; and for some reason or another the congress of the United States does not seem to have been outraged by the suggestion that strategic considerations in the time of a bitter wrar would make it necessary for certain information not to be placed on the record. That was the reason, and the only reason why these words were inserted. It is of the utmost importance that we do not at times give certain information about certain assistance which is extended to our allies. To give that information would help our enemies. Anybody who knows anything about it knows that, and for that reason we cannot put in the statute a direction to the government, to give all the information about what we are doing along certain lines. We cannot do it, and we have to insert a guarding clause. This idea, that it was put in to prevent us from telling the house about some sinister commercial trade agreements that we might enter into with various nations of the world, is a figment of the imagination. It is so far-fetched that it is hardly worthy of serious consideration in this house.
My hon. friend says that under an earlier clause of the agreement we have power to enter into trade arrangements, and he wishes to make it clear that parliament will have the right to reject any trade advantages that we might get. That is what it comes to-that there must be power of rejection of trade advantages. Certainly I did not have any intention of entering into trade agreements under this clause. It might be that it would be possible to get some trade advantage, but certainly we are not approaching this whole problem in that spirit. What we had in mind was mainly in regard to certain equipment that would be of value after the war, certain goods that might be of value after the war, perhaps merchant ships which it might reasonably be stipulated' would be returned to us if of value; and I do not think there would be anything wrong about

that. There would be nothing harsh, unreasonable or niggardly about such an attitude. But one cannot foresee all the reasonable requests of that kind which it might be desirable to make, and that is the reason for the somewhat general language of the section. My hon. friend asks us if this is part of a lend-lease scheme, a concerted or concocted lend-lease arrangement.


John George Diefenbaker: There is no suggestion of concoction. The Minister of Finance is in the habit of becoming truculent when questions are asked. There was no such suggestion. Truculence is no substitute for information.


James Lorimer Ilsley: That is all right, but the whole edifice built up was one of nations getting together and planning upon the launching of some great new trade policy, in concert behind the backs of parliaments, and of our coming into this parliament and saying nothing about it-because I said nothing about it at all, for the reason that it was not in our minds at any time-and getting the authorization of parliament to remake the world commercially. That was the whole suggestion of my hon. friend. Nothing is further from our intention. It may be that under the lend-lease legislation of the United States it is the policy of the United States government to use the assistance which they give to other nations in order to get down the tariffs of other nations and to avoid discriminations in tariffs. I believe they have announced that as their policy. It has been our policy to get the tariffs down abroad, if possible. That has been our policy, and as a matter of fact we made an agreement in November last with the United States. It had no relation whatever to this legislation. We did not have this legislation prepared or drafted or in contemplation at the time, in November last, but we were approached by the United States and we entered into an agreement with the United States, practically in the words of article 7 of the lend-lease act of that country. It was an agreement under that act. But we are taking no lend-lease assistance from the United States, and this for -various reasons. We do not believe it desirable to do so, or that there would be any particular interest in our doing so.


Richard Burpee Hanson: Was that agreement approved by parliament?


James Lorimer Ilsley: It was tabled.


Richard Burpee Hanson: But not approved. That is a usurpation of the functions of parliament.

Mutual Aid Bill
Mr. ILSLEY": It was an exchange of notes. That is really what it was.
Now in answer to the specific question whether we are fitting this measure into the lend-lease acts of other countries, I say no. We decided this year that this would be a better way of doing our part, that it would be a more desirable way, than by the gifts we made , last year, and we set up a body of our own ministers here to work out the arrangements under which we are to render this assistance. What there is dangerous about it, I do not know.


Mr. GREEN:: I understand that the United States-Canada trade treaty expires this year. If that is renewed, will it be renewed in the ordinary way, subject to approval by parliament, or will it be renewed under this bill we are considering?
Mr. ILSLEY': In the ordinary way. To begin with, we have not the power to enter into a trade treaty with the United States under this legislation. Think what that would mean. If we did anything for the United States to help them, the consideration for that would be lower duties on something going into the United States; or if the United States did something for us that tied in with the war, there would be a consideration. There will be nothing of that kind at all.


Howard Charles Green: The trade treaty would be negotiated in the ordinary way subject to approval by parliament?


James Lorimer Ilsley: Oh, yes.


Mr. GAUTHIER:: I regret that I was not here for the second reading. Had I been here I would have voted against it, and I would not have witnessed the display we have had in this house, of hon. gentlemen speaking for twenty or forty minutes against a measure for which they voted. I do not like that sort of thing Furthermore, I would have voted in favour of the amendments moved by certain members yesterday. I did not think such an important measure was to be discussed on a Monday or on Friday, because the general view is that we do not discuss such measures on those days, nor do we take votes on those days.


Mr. ROSS (Souris):: Why not?


Pierre Gauthier: I believe it is generally regarded as a gentleman's agreement. At least, that is what I have always understood in the years I have been here. If anyone in this country, however important his position in the public administration, had dared to ask during the first year of the war that Canada lend a billion dollars to the mother country, our
72.537-163
budget being a little over 8500,000,000, he would have been described as insane. If during the second year of the war, our budget having doubled, the same man had dared to ask the country for a second billion, we would perhaps have considered him as a public enemy. If the same man had said in ' 1939 that the country's budget would have doubled during the fourth year-and Canada's debt was two billions in 1920-that man would have been branded with some new unenviable qualification. Nevertheless, such is our country's posi-' tion now, and no sign is visible that gives us any hope for a stop in this whirlwind race. This second billion dollars is going through the different stages of parliamentary procedure without meeting with that numerical opposition which one would expect from the representatives of a country with a population of twelve million. We are far from that free, voluntary and moderate effort which was promised us at the beginning of this war by a party in its first act of treachery. Forgetting, or pretending to forget its anti-participation promises and nationalistic sermons doled out to us during a period of twenty years, this party was putting into operation the most accurately and cleverly organized propaganda in order to prepare public opinion in Canada little by little and bring it around to accept willingly or by coercion the most exhausting war effort ever imposed on any country. I said by coercion because, if coercion was not applied as crudely as in 1917-18, nevertheless it exists. By means of different small pressures a whole population, practically against its will, is brought to admit, almost as an accomplished fact, what yesterday was looked upon even by its masters as an impossibility. As a matter of fact, our men are forced to volunteer for overseas service.
In order that there be a free effort, a minimum of existing liberty is necessary, including the radical power to choose. Were we not allowed to choose between neutrality and participation? Hansard shows quite clearly that when a group of hon. members spoke of neutrality our important statesmen were greatly scandalized. If the terms applied to those who now dare to make use of their right to discuss had been invented four years ago, this belittling that is so often practised against us on the radio and at public meetings by those who are badly in need of the people's forgiveness would be four years older. Ireland could remain and has remained neutral, but Canada several thousand miles distant from the conflict, was not given this liberty.

Mutual Aid Bill

A declaration of war was made en vitesse, without a vote-Hansard registers "on division"-in spite of the pressing demand of the late chief of the Cooperative Commonwealth Federation party, Mr. Woodsworth. The next day participation was announced by the demand for a subsidy of 8100,000,000. Those who wanted to oppose participation- there were sixteen of them-had to move three different, separate motions (two of which, those moved by the hon. member for Beauharnois-Laprairie and the hon. member for Montiporency, were ruled out of order) to get a vote in committee. Parliament had decided and was ruled by the manufacturers of promises against participation. But honour was safe; parliament had decided.
Having entered the conflict, Canada was no longer free to choose between neutrality and participation. She could not possibly withdraw from that conflict in which the avowed imperialists had deeply engaged her.
The second meaning of liberty lying in the exercise of this power to choose, the position thereby accorded us made it solid and identical with the first.
The third meaning of liberty is the state in which an intelligent and free being exists and where those who surround him facilitate the exercise of his will, or at least do not erect any barriers to it. The history of the present war in Canada proved beyond doubt that the governmental, imperialist and financial propaganda not only did not facilitate the exercise of this right but hindered its manifestation down to the smallest details. We are no more free to choose between giving or refusing this second gift of one thousand million dollars. At least morally speaking we are not free to choose.
The plebiscite demonstrated that only those who favoured the "yes" were accorded the right to use the Canadian broadcasting system, our national system financed by public funds. Those who favoured the "no" had to be content with the private stations, and this small group of ours had to multiply itself to cover the territory in the limited time allotted them. It is the just right of our group to make use of the national network, and it will claim this right as long as this complete liberty, on which our country is supposed to have a claim, as a result of its gifts of billions and an exaggerated participation, is not accorded it on the same footing as other existing parties.


Mr. HANSELL:: You can claim it, but it
is another thing to get it.


Pierre Gauthier: We claimed it several
times and we will continue to do so. We are far from having a Hyde park or an Albert

hall in Canada. Most of our speeches in public meetings are carefully followed and sometimes reported in) shorthand. There must be a master in psychology among the members of the present government. He must also be a master of political history and excel in the manipulation of public opinion, on the one hand relying on excessive imperialism, which has always been foremost in the minds of a certain number of so-called Canadians, for whom Canadian soil is but a particle of the motherland, and on the other hand relying on the belief of a part of the population in those men whose reputation as autonomists and real Canadians helped to hide for many years this real, deep-rooted colonial spirit, awaiting the proper time for a sure birth and change to an exaggerated imperialism.
One cannot change in one night the mentality of a whole population. One cannot erase from the mind of a whole province the memory of a promise, reiterated a thousand times, not only that never again would conscription be imposed for overseas service, but even that her armies would never again participate in any external war. In 1917 the Liberals, during a political campaign, heaped upon the then Conservative conscriptionists the sourest reproaches. If at that time any man had dared to speak of a gift to England not of 835,000,000 but of $500,000,000, he would have had to face a crowd readiy to* stone him. Nevertheless these same Liberals or their political descendants to-day try to put us under the ban of public opinion; although our only wrongdoing is to continue to preach the doctrine of which they professed themselves the convinced apostles. Strange to say, during the last forty-five years our soldiers have seen fighting in different theatres of war, having been three times called and sent beyond' the limits of Canadian soil. Two of these occasions, the South African war and the second world war, were under a Liberal government and the other under a Conservative government. Even then, a certain number of Liberals were united for conscription; a fine record for anti-participa-tionists and amti-conscriptionists!


Joseph-Arthur Bradette: I would call the hon.
member's attention to the fact that we are dealing with a certain bill, and I would ask him to confine his remarks to the subject matter of that bill, which is the making available of Canadian war supplies to the united nations.


Pierre Gauthier: I am just coming to it, Mr. Chairman; I have to make a little explanation first. I am speaking of the billion dollars and of those who promised to

Mutual Aid Bill
keep away from external wars. Now that they find1 themselves at the limit of our Canadian effort, not only do they ask us to go ahead, but they ask us to give a billion dollars, and soon they will ask us to give half a dozen billions. That is what I am trying to prove. We are far from the promises we were given in 1939 and 1940, of a moderate, voluntary war effort. Now we are giving billions, so that I think I am absolutely in order in coming to that gift of a billion dollars after having explained' what the Liberal party has done before.
Circumstances came to the help of these champions, and the first military budgets- not for a billion-were voted in this house in 1937-38, framed by protestations of loyalty to promises and categorical declarations during three by-elections, in Bonaventure, Lot-biniere and St. Henri. Then war broke out, and the great master of history and psychology of the cabinet must have scrutinized the political history of Europe and, in particular, English imperialism, whose diplomatic ability had reached its apogee during the period 1903 to 1914. France had not as yet forgotten the Dreyfus case and the unlucky adventure of Fashoda. The third republic, which was imposed upon France by powers from without, did not succeed in making the French people forget a century and a half of strife. We are on the billion dollar gift, but the billion dollars cannot make us forget the years of nationalist preaching, and I have to explain that. Only eleven years of neighbourly intercourse was necessary to have France accept the war of 1914 as a revenge and a recovery of territorial possessions. France won the last war, but notwithstanding her enormous sacrifices she found herself cut off from the indemnity due by the aggressor. That is the truth; she was cut off by a series of intrigues, pacts, understandings and treaties which she had to accept. I have read the history of the year 1922, and I know what I am saying now is the exact truth.
In Canada, all that the master psychologist had to do was make the people forget twenty years of anti-participation and anti-conscription, preachings. It was not found necessary to multiply the testimonials of affection to have parliament decide to declare war. A well organized propaganda and a single but far-famed phrase were all that were necessary: "We freely declare war and will fight side by side with England and her allies. The effort will be free, voluntary and moderate." That was the phrase; but in giving this billion we are not fighting side by side; we are going ahead of England.
72537-163*
No other country is making the effort Canada is now making, and the truth of that statement is shown in the recent, budgets of several nations. The old anti-conscription war-horse remained [DOT] in the race, and the federal election of 1940 saw him nose in first, leaving behind promises, words of honour, oaths and so on. It was then, I believe, that the country witnessed the handshake of the two old parties. One continued its propaganda of total war effort; the other feigned to give in to the first, though not without regrets; taking good care, however, not to offend the susceptibilities of a large portion of the Canadian people who had been their pillar and strength during at least a decade.
During the course of the debate on military credits in 1937, amidst the muffled laughter of statesmen to be, and protests of fidelity to sworn promises, we said, "A country of ten million men, caught up by the fever of war and by imperial enthusiasm, raised a considerable army in a few months. Public men categorically opposed to participation in external wars voted the sending of troops to help out the empire." The same men, who were opposed to any participation twenty years ago, now want another billion. "These sacrifices were made by an unprepared country. The vote we are being asked to cast on the increased military credits is a vote that will increase our defence capacity but also our capacity to contribute when the tocsin sounds. If history should repeat itself and emergencies become stronger than the will of the leading men, there will no longer be time to oppose armaments and manifest our desire to be nonpartisans in any external war in which the empire might be interested." We said that in 1937, to warn the government not to go to war and not to go too fast. I have to explain that if the government had listened carefully and paid attention to what we said, we would not be so deeply involved now in an exaggerated war effort. I have to explain this, Mr. Chairman, in order to show the committee that we have a right and we, are entitled to speak against this measure providing for a second gift of a billion dollars. We went on to say at that time, "How much more alluring it will be for the lords of the admiralty, helped by circumstances and events"-we should 'have added, helped by a wisely organized propaganda-"to force Canadian sentiment whenever the country may be ready to assume a contribution more adequate to its means."
We were called faint-hearted men; in certain quarters, not openly but behind the curtain,
Mutual Aid Bill

we were denied the privilege of speaking on international questions. Apparently we did not know enough about them.
Years went by, but propaganda continued to have its way with political parties. We witnessed the spectacle of hon. members fanatically opposed to participation who scarcely dared to raise their voices, but who welcomed the opportunity to cast a vote or made a short speech against conscription. Yesterday and to-day we had the spectacle of an hon. member voting for the second reading of this bill and then speaking for forty minutes against this gift.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Pierre Gauthier: Mr. Chairman, when
the committee rose at six o'clock I was getting closer and closer to a discussion of this gift of one billion dollars, the second gift we have presented to England and our allies. Some say, in the province of Quebec especially, that we are always opposed to conscription, but our soldiers are to be found in the West Indies, Newfoundland and other countries, including Alaska. A few billions are handed out here and there, but there still remains that order in council which gives a one-way fare straight to England. It is said that we must not defeat the present government, because, it is asked, where could we find men to replace it?
Even history is distorted in order to accuse us of having voted against the national defence credits. Someone, through what I would deem to be ignorance, has gone further and said on the radio that not one member of our group has voted against participation. We will let Hansard refute these false accusations. We will say to those in the province of Quebec who say that the French Canadians ought to do more than the others that we do not intend to ask forgiveness for having been born French Canadians. Those who excel in zealousness must realize that zealousness is next to subservience. To those who speak on the radio and pretend that we harm French-Canadian groups in. other provinces we say that we cannot understand this reproach for -wanting to make free use of our rights when they themselves have struggled for the recognition of the same rights and the maintenance of their schools, their language and their faith. It is the Quebec nationalists who came to their help and who will do it

again notwithstanding the reproaches which have been offered. The argument against having too many political parties in this country falls flat when we consider that the victorious France of 1914 had at least eight different parties. The reason why they exist in Canada is the failure of the old parties to find a real, thorough and sincere Canadian policy.
It is no longer a matter of thinking of Canada first, of minding our own business and of letting European countries settle their own quarrels. While the present government tries to make the public believe by a national security and reconstruction programme that it intends to take care of Canadian problems after the war, we hear other propaganda in favour of mass immigration which would only add to our domestic problems. It is then that we will need our billions which, have been given away to prevent the long heart-rending bread-lines which were to be found during the last unemployment crisis.
The first war costs us over $50,000,000 in pensions. It is only fair that the wounded and the sick soldiers who return should be properly treated, and this will mean that an equal amount, if not a greater amount, will be needed' after this war. These gifts would be welcomed then if they had been controlled before. What are we doing to prepare ourselves to face a possible epidemic similar to that of 1918? Every war brings an epidemic which spreads as fast as the wind through the remotest countries. What is being done to meet this eventuality? We shall need the billions we are giving away now to carry on public works which would help to remedy the crisis that inevitably follows all wars. Shall we again be answered, with the statement that there is no money except to provide a dole for the unemployed? Shall we again open up concentration camps where men will be paid twenty cents a day as a palliative?
Two. of the most perplexing problems that will occur after the war will be in connection with agriculture and labour. It is a known fact that work in factories or army life diverts men from agriculture. Shall we be able to offer anything but a disorganized agriculture to our returned men who were born farmers or farmers' sons? Shall we be in a position to offer the labourer but a foot when the cannon merchants decide to take a holiday and when there is no employment to be found in the non-essential industries which will have been disorganized? Some one will say that I am a defeatist, a saboteur of the war effort. Little care we about such state-

Mutual Aid Bill
ments. We. have learned to' think as Canadians, to see the interests of Canada before the interests of other countries.


Mr. HANSON (Skeena):: The hon. gentleman is reading his speech.


Pierre Gauthier: I cannot hear what the hon. gentleman is saying.


Richard Burpee Hanson: He says that the hon. member is reading his speech.


Pierre Gauthier: I am just consulting my notes because I am not used to speaking in English. There are those who may think we have not the courage to go on, but we will keep on. offering warnings, criticizing if necessary, and trying to bring about a proper Canadian policy in the administration of the country. If other nations have their problems, so have we. If we are to face them, it must not be with disorganized public works, with a destroyed economy or with an anaemic population whose courage is gone. It is all right to give billions, but some day we shall have to pay. Others have suffered and died to find out that gratefulness exists among the masses, but the .petty interests of the profiteers will erase all gratitude.
Some say that it is but the surplus of our production that we give. If we have a surplus of production,, let us give back to the farm those hands which are lacking and which are necessary to produce the food needed by our people. Perhaps we do not suffer rationing to the same extent as the nations directly in the conflict, but with the expanse of tillable land we have in Canada there is no reason why the labourer who toils night and day in. a more or less sanitary factory should be rationed. There is no ' reason why we should ration the farmer who grows his own food, and there is still less reason why we should ration, the sanatoriums and the hospitals which care for a large portion of our population, and the educational institutions which have the care of growing children. Some of these establishments will have to close their doors and send back to their families the sick, the infirm and even the patients with contagious diseases. Wonderful results in a country that hands out money by the billion!
Just now thousands of families are unable to find suitable lodgings, and others have to put up with miserable huts. A marvellous situation for a country which could use its surplus of production to benefit its own people but which prefers to give it to others! Imperial enthusiasm and war fever are the two spiritual ailments which have been suffered by our leaders since 1939. Let us hope that these
things will soon disappear in the face of the bare realities which wall be imposed, by force of circumstances and by the awakening of the people, upon those from whom so much has been expected and by whom we have been so pitifully deceived.
Air. LaCROIX (Quebec-Montmorency): May I make a suggestion to the Minister of Finance? Why does he not include in this bill a clause which will enable this government, through the British government, to bring back to Canada all Canadian securities now in the hands of the English people? I am mentioning that fact, not because I am in favour of merging the Canadian National railways with the Canadian Pacific railway, but because necessities after the war may force the government to act. The railway surplus is no doubt good at the present time, but conditions will change after the war, so why not include in the bill now a clause which will force the return through the British government of our Canadian railway securities now in the hands of the British people. It is no secret that the majority of the shares of the Canadian Pacific Railway company are in the hands of British shareholders, and if we had such a clause in the bill we could take advantage of it to protect ourselves in case the amalgamation of the Canadian National and Canadian Pacific became a necessity later on. I make that suggestion.


James Lorimer Ilsley: The answer is that we do not regard the contribution we are to make under this bill as a sale to Great Britain. We regard it as our contribution to a common cause. That is the fundamental difference, I presume, between the hon. gentlemen on the one side and myself and the government on the other. If this were to be regarded as a commercial transaction, that what we contribute to this war from now on be regarded as a sale to Great Britain, then we ought to get paid for it; but if it is regarded as a contribution to the common cause, we should not. That is the simplest way in which I can answer my hon. friend.


Richard Burpee Hanson: This bill does not provide for a gift to Great Britain. It is specifically stated by the minister that this is a contribution to the common cause.
The hon. member for Lake Centre this afternoon made an analytical and what I considered to be a very constructive speech. The minister on the spur of the moment sought to disparage the suggestions made by the hon. gentleman, who had no doubt given careful study to the interpretation of certain sections of this bill, or particularly sections 4 and 8. I
Mutual Aid Bill

suggest to the minister that he do not lightly discard the logic of the hon. member for Lake Centre, but that he review his suggestions in the calm light of moderate reflection, and then I think he will agree-I am trying to be as moderate as I can-that there is room for the interpretation which the hon. member for Lake Centre placed upon certain of these sections, having regard to the background which he established. Therefore I am suggesting to the minister that he might very well consider a revision of the language used in the draftsmanship of this bill.
There cannot, I think, be very much objection to subsection 1 of section 4, but in the view of some of us the implications contained in all that part of subsection 2 which follows after the word "war" in line 45 are such that the government might conceivably do what the hon. member for Lake Centre indicated in his view they could do under the authority contained in the latter part of that subsection. But the minister immediately reacted to that suggestion adversely, and he gave it as a statement of fact that the government never had any such intention as was suggested might arise out of the operation of that section. I want to give the minister credit for being absolutely honest and sincere when he made that statement., but I say to him frankly that on a first reading of this bill I was a bit uneasy about that section. I thought the powers contained in it were exceedingly wide, and I still think they are very wide. They are powers that the government should not ask parliament even in war time to give them. Therefore I would suggest to the minister that he review the latter part of subsection 2 of section) 4 in the light of the observations which have fallen from the lips of the hon. member for Lake Centre.
I have not made any study of the bases of this legislation, such as the United States lend-lease bill, but I can understand that on a liberal construction and interpretation of this section it is capable of the implications suggested by the hon. member for Lake Centre. If that is not in the minister's mind, and I take it for granted from what he told us before the dinner recess that no such intention exists as to enter into negotiations with any of the allied nations in connection with the giving of war supplies whereby they would be bound to make reciprocal arrangements which in the days to come might carry over through the post-war period and create a situation which parliament itself never contemplated and would not have sanctioned if it had contemplated it, then I suggest that he ought to restrict the application of section 4. That is the suggestion I make to him. Indeed, he

could in my view very well end subsection 2 at the word "war" in line 45; but if he is insistent that certain powers should be conferred upon the executive with respect to terms and conditions, then the section might read something like this: that the supplies , are to be used in the joint and effective prosecution of the war upon such terms and conditions in respect of those supplies as the governor in council may impose with respect, we will say, to the return at a subsequent period of supplies not used or with respect to a contribution in kind or of some: other nature, or w-ith respect to sending us supplies which an allied nation might have available for use by" us during the war period. But as it is now, there is no doubt that upon a wide interpretation of the section the government could do almost anything it wished. Therefore I suggest to the minister that if there must be limitations, they should be specific limitations rather than couched in terms of such a wide and general character.
That suggestion is offered in a friendly spirit. I have a simple mind, and I did not read into the sections of this statute suggestions which have since arisen, but I had a vague, intuitive, uneasy feeling that the government were, perhaps, taking undue powers, and that there was not, we will say, with all charity, full and frank disclosure. Perhaps I should not go even that far, because I supported this bill on a statement of the Minister of Finance and on a supplementary statement of the Minister of Munitions and Supply with respect to the question of operating under the statute; and unquestionably I approve what the government is primarily seeking to do, namely, to make a contribution, not a sale, based on the theory" that we all are part and parcel in a common cause and our contribution should be to the common cause; that Canada can do it, and that we should not look upon this as a matter in which we should exact a quid pro quo from anybody. Heaven knows, any contribution which Canada makes to Britain has been amply paid, and was amply' paid in 1939, 1940, 1941, and down to the very day in 1943 when the battle of Tunisia was won. It has been paid not only by the fighting men of the British army, but by the magnificent bravery and achievements of the British navy and British airmen, reinforced by" the Canadian navy and by the noble band of young men whom we have sent overseas to join their forces to defend Canada and to keep this war away from our shores.
There is one other observation I wish to make with respect to section 8.


James Lorimer Ilsley: Mr. Chairman, should we not
take this up under the sections?

Mutual Aid Bill


Richard Burpee Hanson: I am not going to speak at length. If I am out of order I would crave the indulgence of the committee for three minutes.


James Lorimer Ilsley: It is contrary to the rules.-Everybody will be ranging all over this bill.


Richard Burpee Hanson: I submit that, on section 1 of a bill, when one has not spoken on the second reading, it is open to, and advantage has been taken of the opportunity this afternoon by many hon. members, to make some general observations. I wish to make a constructive suggestion to the minister.
He stated this afternoon that, as originally drafted, section 8 was not in the bill, but, that, having heard discussions from some quarters which he did not indicate, he decided that there should be provision for a report to parliament. I congratulate him upon the change of mind, because a billion dollars, whether it be by [DOT]way of gift, barter, sale, or what-not, is a transaction of great magnitude, and when it comes out of the taxpayers or through borrowings from our citizenship, and when it is expended by a committee of the cabinet, the taxpayers through their representatives are entitled to some kind of report, good, bad or indifferent. The minister has yielded to what he heard and has included in this bill section 8, which provides:	[DOT]
As soon as practicable after the close of each fiscal year, the board shall prepare and lay before parliament a report of operations under this act. . . .
I submit that the section should stop right there. In peace time it would stop there, and in peace time there would be no limitations on it. Now what have we? We have the limitation imposed by the second clause of this section 8, which provides that the report shall be prepared and laid before parliament, but that it shall not contain-*
. . . such information as the governor in council deems it incompatible with the public interest to disclose.
I regret the use of that language. It is a cloak behind which governments, ever since this war began, and perhaps anterior to' this war, have sought to refuse information to parliament. "It is not in the public interest"; that is the only answer you get; and I submit that it is not an answer, it is an arbitrary dictum.
I have a suggestion to make. If it is considered in the interests of public safety, of national safety during war time, of war strategy that certain information shall not be divulged to parliament in the report which it is proposed shall be made under section 8, it should be guarded in that respect and
limited to these two aspects, but it should not be left in the language of this clause to be refused by the arbitrary ipse dixit of the ministry, based upon no other consideration than arbitrariness. I do not assume that information would be refused on a purely arbitrary basis, but it is possible. The matter ought to be based on some reasonable grounds, and I am suggesting two reasonable grounds to the minister. I have not taken the time to draft a substitute clause, but I suggest this as a basis for his consideration overnight, that the clause proceed as it does in lines 39, 40 and 41, down to the word "act," that the limitation now there be expunged, and that there be substituted in lieu thereof an exception or a limitation which would provide "if, in the view of the governor in council, it is inexpedient for reasons of public or national safety or for strategical considerations that such information be brought down in the report tabled to parliament." I suggest to the minister that this is a wholly reasonable view and that he ought to accept the suggestion.


Mr. SLAGHT:: What is the distinction?


Richard Burpee Hanson: There is
a substantial distinction. If the hon. gentleman followed me he will have observed that I took exception to the limitation contained in the last three lines, which provides that no information shall be brought down which the governor in council deems incompatible with the public interest. Well, anything goes as being "incompatible with the public interest." Only yesterday it was stated here that the names of young men in the wartime prices and trade board eligible for military service shall not be disclosed in a return, as not being in the public interest; and I could quote to the hon. member, if I had the time to delve into the records, perhaps twenty-five cases wherein the same statement has been utilized as an excuse for non-disclosure of facts. I do not think that is quite good enough. I believe the clause is too wide and that the exception should be based on very exceptional circumstances, which should be stated in the bill. I offer the suggestion for what it is worth. I think I know what is in the mind of the draftsmen. The government should not bring down, in its report to parliament on transactions incurred under this bill, a statement of fact which would, for instance, give aid or comfort to the enemy. We understand that. That is one of the bases of national safety. But I do not think it should be left wide open to the arbitrary decision of the ministry ; it ought to be based on some principle, and principles should bv.
Mutual Aid Bill

based1 on reason. Therefore I have suggested two bases on which this limitation should be made, namely, the safety of the state-which is, of course, paramount and fundamental- and questions of strategic consideration, because that wordi "strategic" is one of the bases on which the bill is framed and is found in the preamble. I offer that suggestion in the utmost good faith to the minister. If accepted and adhered to, it will not constitute in any degree a defiance of parliament.


Mr. MAYBANK:: I agree to a certain extent with the hon. member with reference to the draftsmanship of the bill. If some change could be made in the words to- which he has been directing attention, it would be well, for this simple reason, Several times, when information has been refused the house on the ground that it was not in the public interest, that decision has been, really arbitrary. I do not think these cases have been very important. An illustration of them is the one mentioned a few minutes ago, that it was not in the public interest to disclose the names of certain persons in the wartime prices and trade board who were subject to military service. I regard such a refusal, coupled with such a reason, as insulting to the intelligence of the house. I can say frankly to all and sundry that in my opinion, if any such information is refused1 on such a ground, the government is just making fun of us in giving an answer such as that.


James Lorimer Ilsley: That was not the question that was refused.


Ralph Maybank: May I interpose. I was only taking the example which had been offered by the last speaker. I am not stating that it did occur. I am. assuming that the illustration he gave was correct. However, if it is not correct we can take it as a hypothetical case. All I say is, I believe that there have been, times when mere lethargy has induced members of the cabinet to refuse information, and instead of giving lethargy as the reason they have stated, "not in the public interest". I do not think most of these refusals have been very important; nevertheless I believe we have seen that from time to time. Therefore, if any change can be made to satisfy the criticism that has been offered, it will be well. I do not agree with that particular criticism, in this way, that I do not think there would be much chance of important information being withheld on that account. In other words, I have pretty complete trust in the government on the. more important matters. But whenever there is something which a minister views as not

very important he will just pull our leg and say it is not in. the public interest for him to give the information. I have great trust in the government on the main issues, but ' on all these details I have not very much trust at all. I think they just kid the house along at- will.
The chief reason why I wish to make a few remarks with respect to the terms of the bill is my desire to deal with the general question of the repatriation of securities and one or two of the reasons given against repatriation of these securities and other paper of that kind. Perhaps I can most easily and quickly express the ideas I have in mind by saying that the hon. member for Bellechasse (Mr. Picard) this afternoon made what I consider to be a most reasonable, unusually lucid and logical speech, with which I entirely agree; or if I do not entirely agree, at any rate, certainly in the main, what he said is in accord with the views I hold. Probably he knew, when he started, that it would not be very long after he had got going before his loyalty to the empire would be impugned; and if it has not been seriously impugned as yet, we may depend upon, it that he will be charged almost with sedition before much time goes by. Naturally, it would be rather difficult for the superimperialists to swallow the sound logic which the hon. member exhibited in that speech. For my part I entirely agree with him when he says that if it is convenient, if it does no one of our partner nations any harm, then there is nothing wrong with obtaining some quid pro quo for what we give.
Of course, I do not think we can give these supplies to Britain or to any other country on the basis of cash-on-the-barrel-head, for the one simple reason introduced by the minister last evening when he said that it would be unthinkable for us to extract pay on every occasion, when the United States had already got away from any such attitude in the matter of giving supplies. Nevertheless there is no reason why a sound business attitude cannot be taken with reference to the contribution which we are to make.
I wish to follow up these remarks by adverting to one of the reasons given for not obtaining certain securities from, say, the old country, and that reason is that it would be well for Canada to remain in debt-not as indebted to a government, but as individuals in debt to individuals-so that there will be a balance of payments with respect to interest going from Canada to the old country. It is said it would be well that we should be in debt in that fashion to the old country, because if

Mutual Aid Bill
we are not thus in debt to the old country she will not perhaps buy from us to the extent that she would buy from a nation which was in debt to her. And plenty of other nations will be in debt. Therefore, when the time comes, it will be thus more difficult for Canada to sell her goods to the old country than would be the case if she were a debtor.
It seems to me there is another reason why a nation like Britain would buy from Canada, and that reason is that Canada would buy from her. These are two of the agencies that contribute toward the creation of trade between nations: one, that they have to take up a balance of payments arising from the debtor position of the country which desires to sell; the other reason being that a nation will buy from a country which has effected a balance of payments by making purchases from it, or which will make purchases from it. I think it is quite clear to a large number of people who are watching the situation from western Canada, which is the great exporting section of the dominion, that there are others who want to have a debt flowing over to the old country in order to have them buy from us, because if they do not have that situation, then the customers of this country will be able to put up the argument, with the greater force, that we had better buy, that wfe had better let some of those other goods in. Those people who want to keep the debt situation in being and keep the securities in Britain realize that, if we do not, the exporters in this country will have a stronger argument in favour of importing from the country that they call the mother country.
So far as this bill is concerned I will support it if we make up our mind never under any circumstances to take back any securities. I would support this or any other measure giving everything we have. But I would not have any industrialist think we are completely blind to what is in his mind when he is talking patriotism and mother love and urging that we should not take securities back into this country. The real reason for that attitude is to keep this country in debt to another country, individual to individual, to keep the balance of-payments with respect to debt, so that the exporter in this country will not be given an additional argument as to the wisdom of importing here. Hon. members can talk about leaving securities in the old country because that is the patriotic thing to do, but the real reason in the mind of almost all the people who want securities left there is that they do not wish to take any chance of an exporter having an argument in favour 'of importing the other country's goods. There may be some hon. members who are fooling
themselves, but I want to tell them now that so far as the large majority of the people in western Canada are concerned they are not being fooled. The reason behind this argument is not patriotism but to keep for themselves the preferred position they have hitherto been able to keep in this country.


Louis-Philippe Picard: I am not rising a second time during the day only for the purpose of thanking the hon. member who has just spoken for having approved what I said this afternoon, but I will avail myself of the opportunity to do so. I am glad that there is at least one hon. member who shares some of the views I have expressed.
While not at all qualifying my approval of the bill but in order to insist that we should avail ourselves of subsection 2 of section 4 of this bill to get some reciprocal benefit, I intend to mention again the question of Labrador for fear that opportunity may not be given to me again, and I ask the indulgence of the committee to carry on for a few minutes on that matter. In fact, had I known the rules of the house better, I would have been able to conclude my remarks this afternoon.
In the first few days of the session when I stated my approval of the bill in principle, I mentioned that we might, well avail ourselves of this occasion to enter into some negotiations with the government of Great Britain for the return of the lands handed over to Newfoundland by the privy council in 1926-27. A few days afterwards the question was brought up in the Quebec house, and a few days later again the hon. member for Gaspe brought it up here. The Prime Minister said then that this question would have to be decided by the people of Newfoundland. I have the greatest respect and the greatest admiration for my leader, but I venture to say that Newfoundland is now a crown colony, not by an act of God but by action of the parliament of Newfoundland.. In 1929 the parliament of Newfoundland, on account of the fact that they could not meet some of their obligations, appealed to the dominions' office for an investigation. A commissioner-I think his name was Amulree-was sent over; he made a report, and upon that report the parliament of Newfoundland presented a petition to the British government to put them in the status of a crown colony. They passed an act of their parliament to that effect. This was afterwards ratified by an act of the British parliament. In regard to that, what I said this afternoon about reciprocity and about consideration in a sentimental way of practical questions should be kept in mind. When the bill was brought before the British parliament asking that the
Mutual Aid Bill

mother country, as she is still called in Toronto, would assume the debts and obligations of Newfoundland, the labour leader, Mr. Clement Attlee, rose in his place in the British house and said, "We will give approval to the bill but what we do not want is to guarantee the money lent to the government of Newfoundland by its lenders, who probably investigated what they were doing before they did it; these lenders concluded a transaction which at the moment may look bad, but they knew what they were doing, and now they want the people of Britain to protect their investment." That was their attitude then. That was not a sentimental objection. Newfoundland had always been a. devoted and loyal crown colony and it had become afterwards a loyal dominion; yet a gentleman, who is now a member of the present government in Britain and who was then the labour party leader, interposed to say that the British people should not be made responsible for investments made by some people in Newfoundland bonds.
I would also mention the fact that certain military bases were given by Britain to the United States in return for a certain number of destroyers; a fair business exchange. Let us say they were leased for ninety-nine years, but there is great danger that this might last longer. Anyway this is the span of a few generations. Were the people of Newfoundland consulted by plebiscite or otherwise before giving those bases? I do not think they were.
A reason advanced in favour of the measure we are now debating is that it would contribute to the victory of the allied nations. We have already done so handsomely. We voted $2,135,000,000 last year besides the grant of a billion dollars and we will vote more this year. I am in favour of what has been done, but that should not stop us from remembering that there are other considerations to be taken into account. Why should not some contribution be expected from Newfoundland, and why should not the government of Britain, which now through the dominions' office controls this crown colony, be expected to enter into negotiations with us? Labrador was not regarded as being worth a billion dollars a few years ago. It is known that in- 1924, before the case reached the privy council, there was a meeting in Montreal at which were present representatives of the federal government, and of the provincial government of Quebec. Mr. Taschereau and his deputy minister were present, and one legal representative was Mr. Plaxton of the federal Department of Justice.
[Mr. Picard.)
These people represented the Canadian interest. Prime Minister Munroe of Newfoundland and his colonial secretary were present, as was also Mr. Magratb who was later in charge of this Labrador case for Newfoundland before the privy council. At that time it was disclosed, and later more officially, that Mr. Munroe mentioned as a possible price for the acquisition by Canada of any rights Newfoundland may have had to Labrador, an amount of $30,000,000, which- later was possibly reduced to $15,000,000.
I have personal recollection in my early days, when I was a humble. secretary to the then Minister of Justice, of a man entering my office and to my great amazement saying to me, "What about buying Labrador?" Of course that was great news to me. He produced letters authorizing him to negotiate with- the Canadian government authorities for an agreement for the purchase of Labrador by Canada. At that moment they were down to $15,000,000, or at least that is what I was told. That man- was not then heard by the minister or, I think, by the government, but he put his proposals in writing, whether in a private letter or otherwise. I remember -him very well, because his name was the same as that of the founder of Quebec; it was de Champlain. He came to the government privately warning us, "You know, we will get a favourable judgment from the privy council in a couple of years, and the price will go up." In the senate in 1935 the Right Hon. Mr. Meighen admitted that in 1931, a few years after the judgment of the privy council had been rendered, the government of Newfoundland wanted $100,000,000 for Labrador. Therefore that judgment raised the price; when they were sure Labrador was theirs, the price went up. Even if the price remains at $100,000,000, that is far less than $1,000,000,000; and if we are willing to give a billion, I should think the people of Newfoundland might be willing to sacrifice ten per cent of what we are giving.
This question of Labrador might be looked at also from the historical point of view. Newfoundland had been British for fifty years before Labrador became British. At that time Newfoundland had no control, over Labrador, which was part of the French territories which were ceded to Britain by the treaty of Paris in February, 1763. It was only eight or nine months later, in October, 1763, that the British government by proclamation placed Labrador under the jurisdiction of Newfoundland instead of under

Mutual Aid Bill
the British governor of Quebec. In 1774 Labrador was again transferred from the governor of Newfoundland to the governor of Quebec, or the local legislative council or sovereign council that then existed Then, after being governed by the sovereign council in Quebec under the British governor for thirty-five years, Labrador was again transferred by the British government to the jurisdiction of the authorities of Newfoundland. That was in 1809. So that there has been a constant transfer of that territory which we might well repeat at this moment. There is nothing disloyal in making this suggestion. Sixteen years later, in 1825, this arrangement was not found adequate for part of Labrador, and that part on the shores of the gulf as far down as a place called Blanc Sablon was again transferred to the jurisdiction of the government of Quebec. Of course it will be said that this was before Newfoundland had dominion status, but it goes to show that these territories have been handed back and forth between the Canadian and Newfoundland authorities, so that there is no reason for surprise that we should now ask for a reconsideration of the arrangement. I do not think any Canadian should oppose it, because the values there are immense. Remember that Alaska was bought by the United States from Russia in 1867 for $7,500,000, and it was not long before Alaska was bringing in that much and more in income each year from the fisheries, the mines and so on; and Alaska is now one of our greatest bases for offence and defence on the western end of our hemisphere.
Therefore, I do not think it would be a bad thing for this country to negotiate in an attempt to secure the resources and wealth to be found in Labrador, which has immense forests, water power, mines and what-not I do not think anyone should blame me for bringing forward this question. It is not the matter of a sale. I do not want to place any new items in this bill, as was suggested a moment ago by one hon. member, so that this will look like bargain hunting. I am perfectly satisfied with what is in the bill now, but I am suggesting that the government might avail itself of one of the sections already in this bill, which I read this afternoon, section 2 of paragraph 4, and enter into negotiations with the British government who might be called to act in the same spirit of charitable enterprise, in an attempt to get back these territories and these resources which, after all, will offer some compensation for what we are doing in this bill. I do not recall nor do I qualify my approval of this
measure. I am simply suggesting that we should act in a practical way, as other nations do, and proceed on a sound basis, at the same time contributing to the victory of our allies and to our own safety.


Thomas Langton Church: There are three or four features of this bill to which I should like to refer for a few minutes, dealing with sections 4 to 8 particularly. We are in our infancy in this lease-lend legislation; I believe we are the first dominion to have such a bill. As I mentioned this afternoon, in the United States they have an administrator of their lease-lend programme. We had the same principle in the last war; we had private administration in the munitions board, with a chairman, which handled all the work now being carried on by the Minister of Munitions and Supply.
This bill provides that "united nations" shall mean the signatories to the declaration made at Washington on January 1, 1942. Let us not forget that twenty-six nations signed the Brussels agreement and the Nyon pact about the Mediterranean sea and piracy, and Great Britain was the only one to carry them out. Let us remember that several nations signed an agreement with respect to Poland, and then left Britain to hold the bag. Do not forget that certain other nations may be brought within the terms of this legislation by order in council. We must remember that Russia is not at war with Japan, that China is not at war with Germany, and that since January 1, 1942, several South American countries have come into the war. What about them?
Last November, December and February some questions arose in Britain as to the distribution of certain funds and over priorities in the various theatres of war. We all know that the distribution and administration of funds often bring about great difficulties. It was said in the British house that the Lady Cripps fund for China was not being administered in the proper way and should be left for distribution to the International Red Cross. In a recent report as to distribution to the government at Washington, the American Red Cross in 1938 recommended that the distribution of certain supplies in China should be handled by the International Red Cross.
I may say that I agree with the hon. member for York-Sunbury in regard to the set-up of the board, and that the board should have power to make supplies available to the united nations; it is thus giving orders in council the force of statutes, and I agree that section 4 (2) should end with the word "war" in line 45. In regard to the set-up of the board, I think it is a great mistake in the
Mutual Aid Bill

fourth year of the war to adopt a principle, in regard to lease-lend which will no doubt apply after the war, to be applied to rebuilding the devastated countries. Do not forget that when the war is over, we may have, with the other allied nations, to supply all these nations in Europe with foodstuffs, munitions and everything of that kind. Under this Bill No. 76 the same principle will apply after the war. The same principle will apply to the rebuilding of those nations which have been destroyed by the axis powers.
This question was raised in the British House of Commons last fall and early in January. After the fall of Singapore the question was brought up in that house. The government was asked who was to decide on the priorities to be granted to the various theatres of war regarding the army, navy, air force and munitions. There had been considerable criticism in New Zealand and Australia and throughout the far east as to these decisions being given against them without their knowledge of what was going on. The Prime Minister of Great Britain said that there was not sufficient to go around and that it was his duty as head of the government to decide the countries that should receive supplies and priorities. We are going to fall into the same pitfall in connection with this particular bill.
It is set out in section 3(1) that a committee of the cabinet will be set up as a Canadian Mutual Aid board, but I think that is wrong. I would point out to the Minister of Finance that to-day there are four neutral countries in Europe. One is the Irish Free State. The other is Turkey which is thinking of coming into the war. Then there are Spain and Sweden. These four neutrals have stayed or sat on the fence so far. Turkey was against us in the last war. How are supplies that may go to these countries to be treated if our board says so later? Under this bill the governor- in council can lay down rules and regulations which would permit these countries or any others later to receive supplies. Spain has received supplies since the war started because it was thought that this was necessary in order to keep her in line. There are also the other republics to be considered.
I think the annual report should be made to parliament within fifteen days. The principal raised by loan under this bill and the interest thereon are to be a "charge upon the consolidated revenue fund. There are other objections to this particular set-up. The reason why we won in Africa is that proper preparations were made. When we started that cam1 paign under General Waved, that great soldier, there were not sufficient munitions or tanks or
supplies. These had to be brought around the cape of Good Hope, up through the Indian ocean, through the Red sea and the Suez canal. After they got the proper equipment they were able to march 1,600 miles to win the campaign.
Objection has been made in England to having a set-up like this. As Sir Robert Borden once said, the governor in council in any event is a political board under the constitution and it will always remain one. I think it would be better if -the government made some changes in the bill. In my opinion there should be an independent body to decide how the fund will be distributed. After all, that is the gist of the whole bill. Military strategy, not political strategy, should be the first consideration. This is what New Zealand and Australia are complaining about in the far east when they wanted to revive the empire war cabinet of the last war in this war.
I fail to see why the neutral nations which sat on the fence should be able to come in under this bill the same as other countries. I think -the bill in its present form will prove dangerous in the future when we are assisting in the rebuilding of Europe and as to what later on the South American countries will get. No doubt that work will have to be carried out under lend-lease, mainly by Great Britain, Russia and the United States, but the dominions will be brought in. I fear that this will be taken as a precedent in the future.


Mr. JACKMAN:: I should like to ask the minister a number of questions. These are general in character and are chiefly applicable to section 1, and I think I should be allowed to ask them now. First, would the minister explain at somewhat greater length than he did this afternoon why there has been a change in the mechanism of our contribution under Mutual Aid. Under the billion dollar gift we allocated a certain sum of money to Great Britain which she used freely to purchase what she chose in Canada in the way of goods, supplies and foodstuffs. We have discarded that method and are now allocating to Great Britain, and to other united nations, such goods as are deemed to be strategically necessitous. We in Canada, through this board which is to be set up, will handle the actual allocation instead of granting a certain sum of money and leaving the choice of the materials to the countries which are to use them. I think the reasons for this change should be stated fully to the committee.
I should like to know whether the fact that Great Britain was criticized for sending some

Mutual Aid Bill
of the materials which she received from Canada to others of our fighting allies, perhaps with some financial offset in the complicated international transactions which are taking place, was one of the reasons for this change in the mechanism to be used under this Mutual Aid bill.
My second question is rather a minor one.
I should like to know who bore the marine risk in connection with goods which were sent to Great Britain and to the other financial fronts under the billion dollar gift. Were all goods sent at Great Britain's risk and none at Canada's? I should like to know also how we service our own troops in Great Britain and other points in the world wherever they may be. Do we bear the marine risk of sending foodstuffs and munitions to our troops? Is this done by means of sending goods to England and then having England look after our troops? In other words, has Canada had any risks or any losses on account of enemy action on the ocean? I am speaking, of course, of ships not owned by ourselves. Do we carry marine insurance and pay premiums? If so, do we come under the British government scheme of marine insurance?
The next question is: What if the tide of international payments goes against Canada in favour of England?


An hon. MEMBER:: How?


Harry Rutherford Jackman: Do I hear someone ask "how"? I shall read a short paragraph from a publication as follows:
The conditions which were met by the U.K. financing act are not expected to recur. A European offensive in 1943, bringing the Canadian first army into action from its British bases, would mean a sharp rise in Canadian army expenditures in Great Britain. This is counted on to reverse the trend that has created a huge British deficit of Canadian dollars.
In other words, I think this committee is entitled to know what is the reasonable expectation in regard to Canadian dollars versus sterling if our troops should see action this year.
The next question is, will this committee get a break-down of the balance of exchange payments with the United States similar to the table which the minister presented to the committee this afternoon in regard to our exchange with Great Britain? Some years ago we had this question of United States exchange versus the Canadian dollar before the house during a budget debate or a debate on one of
the special acts that we passed, and at that time the matter was treated with great secrecy, perhaps needlessly so in the light of subsequent events. But now that we have been given a break-down of sterling exchange as against the Canadian dollar, surely we are entitled to a break-down of United States exchange as against the Canadian dollar.
I should like to know just what effect this new method of allocation will have in regard to our United States exchange. Under the Hyde Park agreement I believe Canada was very favourably treated. I shall not go into details, because they may be mostly surmises on my part as to exactly how they operated, but I have always understood1 that Canada was given specially favourable treatment in order that she might have enough United States exchange to meet our payments to the United States.
A question which arose out of the billion dollar gift to Great Britain last year and the taking of securities back, in particular the loan of $700,000,000 against the collateral of British-held Canadian securities, is this. When that loan was made I understood, perhaps wrongly, that the amount of the loan, namely $700,000,000 was about equal to the then total value of the remaining securities in England. We have heard in the minister's speech introducing the resolution that the value of that loan is about two-thirds of their present value. Does that two-thirds relate to the value as of the time the loan was made, or does it reflect the fact that with the prospect of victory being closer, the values of many securities have risen in Canada and that, therefore, the $700,000,000 is two-thirds of the present value rather than of the then value of the loan? These are questions which I should like to have answered so that we might proceed with the various sections more intelligently.


James Lorimer Ilsley: Mr. Chairman, before I
answer the hon. member's questions I should like to place on Hansard the information which I distributed this afternoon in mimeographed form. I think my remarks will not be easily understood unless that information is placed on Hansard. By inadvertence I did not request the consent of the committee to place it on Hansard this afternoon, so that, if there is no objection, I will do so now. The statement is as follows:
Mutual Aid Bill

Sterling Area Purchases and Other Payments in Canada During the Period of Use of the
Billion Dollar Contribution
(Millions of dollars)
A.	Portion attributed (arbitrarily) to the contribution
I.	Munitions of War
Aircraft and parts	 31
Armoured fighting vehicles and mechanical transport (including tanks)___	343
Chemicals and explosives	   32
Guns and small arms	  50
Shells and ammunition	 I79
Other, including naval and other vessels, instruments, communications
equipment, etc	 54


 689
II.	Foodstuffs and raw materials
Wheat	 87
Bacon and pork products	 75
Lumber	 28
Cheese	 20
Base metals (part only)	   101
* -... 311
LOOO*1'
B.	Remaining portion, attributed (arbitrarily) to other sources of Financing
I.	Commodity exports
(a)	To the United Kingdom:
Foodstuffs	 60
Base metals	 19
Wood products	 29
Miscellaneous	 12

	140
(b)	To the sterling area other than the United Kingdom	 79
II. Services, etc.
Freight	 70<2>
War Services (including air training, etc.)	 91
Interest and dividends	 9
Capital expenditure for the production of munitions	 28
Other capital payments	 11
Miscellaneous	 12

 221
<i>
Of this total, supplies to the value of $61,000,000 are known to have been transferred to Russia (including tanks and armoured fighting vehicles to the value of $49,000,000, shells and ammunition to the value of $3,000,000, and base metals to the value of $9,000,000), and mechanical transport valued at $71,000,000 to Australia, New Zealand and other parts of the sterling area.
Not including $18,000,000 in freight included in the value of munitions of war above.
TMr. Ilsley.]

Mutual Aid Bill
Exports of Food, Tobacco and Animal Products to the United Kingdom from Canada
Calendar Year 1942
Commodity
1.	Agricultural and vegetable food products-
Apples, fresh	
Strawberries, fresh	
Apples, dried	
Jams, jellies and preserves	
Apples, canned	
Fruit juices and syrups	
Vegetables, dried	
Pickles, sauces and catsups	
Beans, canned or baked	
Tomato paste pulp and puree	
Tomatoes, canned, n.o.p	
Vegetables, canned, n.o.p	
Beans	
Buckwheat	
Corn	
Peas, whole	
Wheat	
Bran shorts and middlings	
Oat meal and rolled oats	
Flour of wheat	
Meal, n.o.p	
Biscuits and bread	
Cereal foods, prepared	
Macaroni, spaghetti, canned	
Macaroni, spaghetti, n.o.p	
Candy	
Confectionery, n.o.p	
Molasses and syrups, n.o.p	
Vegetable food products, n.o.p	
Total	
2.	Tobacco and its products-
Burley tobacco	
Bright flue cured tobacco...
Dark cured tobacco	
Cigar leaf tobacco	
Cigars	
Cigarettes	
Tobacco, manufactured, n.o.p
Total	
3.	Animal and fish products-
Fillets, fresh cod, etc	
Codfish, green salted	
Herring, sea, canned	
Salmon, canned	
Sardines, little fish in oil...
Fish roe	
Fox skins, black and silver, raw
Fox skins, n.o.p., undressed...
Mink skins, undressed	
Seal skins, undressed	
Furs, n.o.p., undressed	
Furs, dressed	
Fur manufactures	
Hair and bristles	
Glove leather	
Sole leather	
Upper leather, n.o.p	
Leather, unmanufactured, n.o.p.
Moccasins, Indian slippers	
Boots, shoes and slippers	
Cut soles of leather	
Gloves and mitts of leather.... Leather manufacture, n.o.p	
Unit of
quantity	Quantity	ValueBrl.	81.888	$ 243,747Lb.	1.186.640	117.340Lb.	5,222,204	248.701Lb.	52,981	4,717Lb.	6.508.148	266.321(jral.	947.789	422,107Lb.	147,607	50,290903Lb.	21,450	858Lb.	4.201.540	279,136Lb.	666.312	26.280Lb.	26,310	9.381Bush.	94.422	227,253Bush.	12.877	12.429Bush.	321	1,580Bush.	28,814	139,155Bush.	90,086.714	77,518,820Cwt.	824	1.889Cwt.	272.141	1,086,486Brl.	4,666.781	20,742,992Cwt.	550	1.103Cwt.	48	1.320349,679Lb.	19,500	1.035Lb.	350,840	17.684Lb.	13,895	4,23373Gal.	ii	898$101,775,618Lb.	1,391,053	$ 286.878Lb.	8.654.341	2.817,514Lb.	286.969	84.601Lb.	14.667	1.907Lb.	64	265M.	4.240	10,739Lb.	1,216	1,294

Cwt.	40.256	$ 485,892Cwt.	480	3,960Cwt.	493,367	4.414,994Cwt.	738,518	13.S60.849Cwt.	67	1.500331No.	2,066	54.136No.	91	723No.	371	5,013No.	468	3,27693.109184145205,075Sq'. F.	63.7 is	10,998Lb.	67,362	34.569Sq.F.	1,507,804	470,12211,011Pair	66,755	105,829Pair	53,823	159,526Lb.	28.645	21,425459,63616.116
Mutual Aid Bill

Commodity
Bacon and hams	
Canned meats, n.o.p	
Soups, n.o.p	
Edible animal entrails....
Meats, n.o.p	
Cheese	
Milk powder, whole	
Milk powder, skim	
Milk, evaporated	
Cod liver oil	
Pilchard oil	
Fish oil, n.o.p	
Animal wax	
Eggs, dried	
Eggs in the shell	
Glue	
Honey	
Sausage casings	
Animal products, n.o.p....
Total	
Unit of quantity	Quantity	ValueCwt.	5,249,519	99,723,878Lb.	5,6S1,112	1,491.462Lb.	20,613	7,077Cwt.	106,430	964,848Cwt.	1,132	28,757Cwt.	1,313,740	24,558,965Cwt.	5,024	146,379Cwt.	3,337	94,767Cwt.	1,073	7,553Gal.	10,080	12,600Gal.	12,175	13,423Gal.	179,033	1,058,408Lb.	300	137Lb.	7,661,817	7,733,195Doz.	4,374,640	1,367,900Cwt.	56	915Lb.	1,888,484	216,297801,348118$158,646,446
Canadian Dollar Requirements of Britain and the Rest of the Sterling Area and how they were Financed
(In millions of dollars)
A. Canadian dollars required by Britain and the rest of the sterling area for payments to Canada.
1.	For purchases of munitions in Canada	
2.	For other exports by Canada	
3.	For war activities in Canada, including air training, etc	
4.	For freight payments to Canada	
5.	For fixed capital expenditures in Canada for the production of
munitions	
6.	For other capital payments to Canada	
7.	For interest and dividend payments	
8.	For other services and miscellaneous	
Total	
B. How these Canadian dollars were obtained by'Britain and the rest of the sterling area.
1.	From receipts for Canadian imports from sterling area	
2.	From freight payments made by Canada to Britain	
3.	From interest and dividends paid by Canada	
4.	From other services and miscellaneous current receipts	
5.	From Canadian war expenditures in the sterling area	
6.	From private capital payments by Canada, including purchases of
securities or redemptions, estates, gifts, etc	
7.	From the official repatriation of securities	
8.	From interest-free loan of $700 million-nothing was available for
financing British requirements during these periods as loan was used to wipe out a corresponding amount of sterling balances owned by Canada at the beginning of these periods...
9.	From transfer of United States dollars to Canada by Britain	
10.	From the purchase of munitions plants by Canada	
11.	From adjustments in respect of previous transactions and other
special transactions	
12.	From billion dollar contribution	
13.	Less expenditures and transfers included above made from sterling
balances held at beginning of period and therefore not providing Canadian dollars during the period	
Total	
C.	Balancing item (apparent errors and omissions due in part to the use of preliminary figures)	
Calendar	Fiscal
year	year
1942	1942-43
873	896
695	706
127	132
113	113
58	31
5	5
12	10
16	15
1,899	1,908
226	200
36	34
61	59
42	42
191	248
51	48
296	73
23	166
	40
74	106
1,000	1,000
-118	-149
1,882	1,867
17	41

Mutual Aid Bill
The questions asked by the hon. member for Rosedale are the .following. First explain why the change in the mechanism has been made; why not follow the practice of last year's bill and make another billion dollar gift? I tried to answer that question in advance in the speech in which I. introduced the resolution. After I pointed out that we have now diplomatic relations with many of these countries, including Russia and China, as well as the British dominions, I said:
This will make direct assistance to them easy. Moreover, our potential transactions with several of these countries are quite substantial and we feel it is desirable in matters of such importance that we ourselves give full consideration to the terms on which such transfers should be made.
That is reason No. 1. We wanted to determine the terms instead of leaving it to someone else.


Harry Rutherford Jackman: The destination as well as the terms?


James Lorimer Ilsley: Yes; the destination as well as the terms.


Harry Rutherford Jackman: May I ask why the minister feels that we can more usefully determine the destination here than it can be done by the allocation boards sitting in Washington or London? Not that I am not a supporter of Canada becoming a full-fledged nation in every way. Nevertheless there are export boards dealing with supplies on a vaster scale than our own contribution, and looking at the board to be set up under this act, while it is an eminently capable board in many ways, it is perhaps more capable in other fields than in the allocation of supplies for military purposes. Is this to satisfy our sense of sovereignty, or is there some real reason for setting up our own allocation board rather than having this done by the allocation boards sitting in Washington and London?


James Lorimer Ilsley: I do not think it will be done less well by us, and if there is no inequality in efficiency we should certainly do it ourselves. This Mutual Aid board will have to be closely in touch with the munitions assignment boards. We must control the destination and terms, we think, but w'e must not cross wires with these munitions assignment boards, and that means that it would be absolutely necessary to be closely in touch with those boards, especially the one sitting in Washington.


Mr. MacINNIS:: Would not the boards sitting in Washington and London first indicate the need before the matter came to the board in Canada?


James Lorimer Ilsley: I prefer to put it in this way. We shall have to keep closely in touch with them as we do now, with the one in Washington particularly. I am not familiar with the duties of these two boards and with the line between them but I know that we regard the operations of the munitions assignment board at Washington as of vital importance to the Dominion of Canada, and we shall continue to do so.


Mr. NOSEWORTHY:: Just what does the minister mean by saying that we must control the terms?


James Lorimer Ilsley: There will be terms. Section 4 of the bill enables the Mutual Aid board and/or the governor in council to fix the terms and conditions on which the war supplies are furnished. It is provided that they shall not be supplied except on terms and conditions approved by the governor in council or by regulations. That is what I mean by terms and conditions. I have given as an instance two or three times that ships might be returned. It is hard to visualize all the terms and conditions that one might wish to stipulate. In some instances it might be some privileges in the country concerned, the use of some ports or air fields on certain terms, or something of that kind. I am just speculating. One does not know what might arise. But at any rate the determination of the terms should be a matter for the dominion government rather than for another government.


John Horne Blackmore: This change from the procedure of last year to this new procedure is a definite step toward the establishment of Canada's greater sovereignty, is it not? We are taking over the control by ourselves of the allocation of these supplies?' Is that not a step toward our own greater sovereignty?


James Lorimer Ilsley: I do not think there was any sacrifice of sovereignty last year. I do not think there has been any difference ini the degreee of Canada's sovereignty. We preferred to do it the other way last year, and we prefer to do it this way from now on.


John Horne Blackmore: This is a clear indication that the Canadian government is quite confident it can manage Canada's affairs itself a great deal better than any board can. I trust the government will keep that attitude when there is talk of supra-national government.
Mutual Aid Bill


James Lorimer Ilsley: If we can do it as well, we should do it. That is about the position I am taking.


John Horne Blackmore: Hear, hear. I agree entirely.


Harry Rutherford Jackman: We feel sorry for the ministers in the amount of work that they heap upon themselves when they create one board after another and constitute themselves members of it. All these things require not only a tremendous amount of work but a specialized background. Coupled with my feeling of sympathy for ministers who become members of these boards, and particularly the leading ministers, is a feeling of despair as to how the affairs of the country can be well managed when so few try to do so much. It seems to me it might be better to have a greater division of the work; and if there is a system functioning reasonably satisfactorily already under present allocationary boards, I am not one who would be eager to heap more work on the shoulders of already overworked ministers.	[DOT]


Arthur Graeme Slaght: The hon. member is
forgetting the under-secretaries.


James Lorimer Ilsley: There does not seem to be any way of escaping taking on more work from time to time. It is, I think, a good quality to be able to do it. Here, I believe, the choice is between setting up a board consisting of ministers and setting up a board not consisting of ministers here in Canada. I think that is the choice. We are continually reading in the press criticism of the number of boards which are set up by the government, which are said to be irresponsible, and which are entrusted with great powers, and we are trying to meet that criticism.


Gordon Graydon: It must be a just one,
if you are trying to meet it.


James Lorimer Ilsley: I do not admit that. Sometimes, for more peace and rest-


Harry Rutherford Jackman: A change is as good as
a rest, I suppose.


James Lorimer Ilsley: -and for a quiet life you try to remove grounds for criticism, whether it is just or unjust. The second reason is that we think it is important that the Canadian source of this assistance should be clear to the countries receiving it and that Canada should deal with them direct. That may not be a tremendously substantial reason, but I think it is desirable that when fairly large quantities of our munitions go to countries, they should go from Canada, and that the source of them should be known as Canadian;

that they should not be channeled or routed through another country. Those are, I think, the main reasons for making the change in the mechanism.


Gordon Knapman Fraser: As the minister has set out the facts, this arrangement will work to some extent like the lend-lease bill of the United States?


James Lorimer Ilsley: Oh, yes.


Gordon Knapman Fraser: And Britain or the other countries will pay us to some extent in goods of like kind?


James Lorimer Ilsley: Well, perhaps.


Gordon Knapman Fraser: As
they have to the United States.


James Lorimer Ilsley: If there is opportunity for
reciprocal aid we certainly will accept it, I should say. But we do not know whether there will be or not.


Gordon Knapman Fraser: This
is what I am getting at. It is said here that in the six months from May until November the United States saved in transportation 1,200,000 ship tons through what the British have given to their armed forces.


James Lorimer Ilsley: Yes.


Gordon Knapman Fraser: That
was saved in supplies to United States troops over in Great Britain.


James Lorimer Ilsley: Yes.


Gordon Knapman Fraser: That would work in this way: Britain, perhaps, would also help our troops by supplying them with munitions and goods as they are needed.


James Lorimer Ilsley: Of course they do so, now.


Gordon Knapman Fraser: Yes, I know.


James Lorimer Ilsley: But the balance is against
us: we supply more to them than they supply us, if you consider it separately in that way. But that is not at all the theory of this legislation. They are doing what they can, as much as they can, and we are doing what we can, as much as we can; that is the theory of the legislation.
The next question is, who bears the marine risk of the shipments? The answer to that is that Great Britain does. And, how do we service our troops? We send the goods to Great Britain; Great Britain supplies the troops, and furnishes other requirements we have in England, and the accounts are adjusted in the way I have tried to explain in the various speeches I have made. That means that if in the coming year the amounts

Mutual Aid Bill
obtained in Great Britain are very much greater than they were in the past, the amount transferred in dollars to the British government will be very much greater than it was in the past. It therefore means that their deficit will be very much less than it was in the past, and consequently the amount supplied them under the Mutual Aid measure and chargeable to the Mutual Aid appropriation will be less than it was in the past. If there are operations on a very great scale or on an expensive scale in Great Britain, it might mean such a large payment of Canadian dollars to Great Britain that this billion dollars would be cut down below a billion dollars; that the Mutual Aid would be very much less than that.


Harry Rutherford Jackman: Has the minister made an estimate of what might happen if we got engaged in battle?


James Lorimer Ilsley: I did not give any dollar estimate. I put that very carefully. If the hon. gentleman will look at the speech I made last Thursday he will see that I worded it very carefully. I cannot refer now to the exact section of the speech, but I outlined the probabilities and the effects of an engagement of troops.


Harry Rutherford Jackman: Before the minister goes on to the next question, would he be more explicit with regard1 to this marine insurance? As I understand it, Canada has had no loss whatever in connection with the transfer of any war materials or foodstuffs under the billion dollar gift or in connection with her own troops or any troops overseas; that all the sinkings have been at the risk and to the loss of Great Britain alone?


James Lorimer Ilsley: What the hon. gentleman means is, have we suffered no shipping losses?


Harry Rutherford Jackman: That Canada financially
has suffered no shipping losses.


James Lorimer Ilsley: I do not know. If the hon. member will wait until the Minister of Munitions and Supply comes in-he will be here before long-we will ask him that. I believe the British assume the risk.


Mr. COLDWELL:: Are not most of the ships under British registry?


James Lorimer Ilsley: Yes; most of them are. The hon. gentleman wanted to know whether I would place on record a break-down of our balance of payments with the United States of America for the same periods. I would not care to do that so soon. That is a different situation, and there must be quite a time lag there before information is given.


Harry Rutherford Jackman: I do not know when we had the figures here of the balance of payments in connection with the act the minister put through to conserve United States exchange-two years ago probably. We were then given only piecemeal information, and one could make a whole picture out of it only by getting information from commercial and financial sources. But I notice that the Economist of February 20 gives the balance of payments between Canada and the United States, showing that over the four-year period there was a deficit of 8720 millions against Canada. In 1941, the last year given, we had $1,042,000,000 of credits and $1,372,000,000 of debits, and for the three-year period $720,000,000 against us.
If it is not information to the enemy to give the balance of payments as between Canada and Great Britain, surely it is not information to the enemy to give the balance as between the United States and Canada. I would ask the minister, therefore, to be good enough to table these figures at his early convenience.


James Lorimer Ilsley: The 1941 figures given in the Economist were published in Canada, and the 1942 figures will be some time, but not very soon. I do not wish to make this public now.


Harry Rutherford Jackman: Is the minister prepared to say how the exchange is running between Canada and the United States? After all, some of these goods which are the subject matter of this bill will go to the United States or will be at the disposal of the United States for use where the United States troops are. Will he let us know something about the United States situation at the present time?


James Lorimer Ilsley: I have said at least once in the budget speech and once since that the exchange position is very much easier. The way I put it was that it is no longer one of our major worries.


Mr. POULIOT:: I have read in the British Hansard that Sir Kingsley Wood has stated in the British house that customs duties were paid on shipments in virtue of the lend-lease bill in the United States and in virtue of the Mutual Aid legislation also. On all that they were receiving they were charging duty. My first question will be: Is that the case? If so, was the duty paid by the Canadian government to the British government on shipments made in virtue of the gift legislation of last year, and is it proposed to do the same this year in virtue of this legislation? My second question is this: Did the government include the amount of our shipments in virtue of the
Mutual Aid Bill

gift legislation of last year, and what was voted in March and so on, in the lists of our exports that have been given to the Canadian public?


James Lorimer Ilsley: I did not get the second question. The first question was, did the Canadian government pay duty to the British government on goods sent by the Dominion of Canada to Great Britain?


Jean-François Pouliot: Yes.
Mr. ILSLEY': The answer is no. Whether the British government paid itself duty on the goods I do not know. We do quite a lot of that ourselves. Departments of our government importing goods from the United States pay to the Department of National Revenue duty on those goods, but that does not hurt the exporter. These figures do not take that into account. If the British government paid itself duty, that is something it did for purposes of its own bookkeeping and does not concern us. What is the second question?


Jean-François Pouliot: We have totals of exports to Great Britain, so many millions of dollars. Do those totals include exports in virtue of the gift legislation of last year or of the lend-lease act?
Mr. ILSLEY':	Our export figures would
include all that we exported, whether paid for out of the billion dollar gift or not. It would include those.


Jean-François Pouliot: Does the minister not think a distinction should be established1 between exports of Canadian manufactured goods that are sold to other countries and those that are given? When they are given away for war purposes there should be some distinction to show that such trade is not the same as ordinary trade when something is given in return.
Mr. ILSLEY': It should be given consideration. Up to date there would be no reason for doing that under the billion dollar gift because Great Britain bought the goods. True, they used the amount which was placed to their credit by the Canadian government to pay for a large part of it; nevertheless they bought the goods and those were exports sold by an exporter to an importer in every sense of the word. When we begin operating under this act we shall be really delivering goods for considerations other than monetary considerations, and there will not be a price chargeable , by the exporter in this country to the importer in the other country in the same sense, so that the question will arise as to how the return should be made. One way would be to let them go into our figures of exports as usual
[Mr. Pouliot.j
and indicate the price that we pay the producers here, but it may be that this would not be a good way. It is a matter that should receive consideration.


Jean-François Pouliot: I have another question. As a rule, with regard to external trade, shipments are made by A in Canada to B in a country abroad, and A and B may mean respectively an individual or a firm or anybody who is in business. With regard to the gift legislation, by whom were the shipments made and what were the distributing agencies in England? Who was receiving the gift in Great Britain and how was the distribution made of food and ammunition? It is easier in the case of ammunition, because ammunition could have been sent direct to the British government; but to whom were the edible exports sent to Great Britain and how were they distributed?


James Lorimer Ilsley: The money was placed to the credit of the United Kingdom government in the Bank of Canada, and shipments were made to the appropriate agencies or departments of the United Kingdom government. Some shipments would go to the food ministry, some to the admiralty, some to the war office, some to the ministry of supply and so on. But it had to go to the United Kingdom government, because it was the United Kingdom government that was buying it.


Jean-François Pouliot: It was sent direct to the British government?


James Lorimer Ilsley: Y'es.
Mr. LaCROIX (Quebec-Montmorencv):	Is
the marine insurance premium covering oil and cargo paid entirely by the Canadian government?


James Lorimer Ilsley: I think entirely by the British government. They take delivery of these goods at seaboard or the factory-at some point in Canada.


Major James William Coldwell: Does the minister not know? Are we collecting from the British government the amount of the freight from the factories to the coast? It would make a material difference to the cost of the goods.
Mr. ILSLEY': I am informed that we have been collecting the freight between the factory and the coast from the British government.
I want to answer one question of the hon. member for Rosedale which I did not answer with regard to securities in Great Britain. In the speech I made last Thursday I said that the $700 million obligation is about two-thirds of the value of the securities outstanding in Great Britain. The latest and best estimate that I can get of the value of the Canadian

Mutual Aid Bill
securities held in Great Britain is $1,066,000,000. Various estimates have been made from time to time of the value of the securities held there. On the basis of the valuation given by the hon. member for Bellechasse this afternoon it would be hard to understand why that figure is not larger than this. But those figures were based upon the last estimate of the dominion bureau of statistics made in 1937 or 1938; it was either made in 1938 based on 1937, or made in 1937, and none has been made since. There may have been a considerable volume of selling. of those securities before the war. There may have been also a considerable change in the value of the securities since that time. I think those 1937 values were high; I think in a great many cases they took the values at par or when stocks were far below par; they took book values and one thing and another, and got too high a value.
Mr. LaCROIX (Quebec-Montmorency): Has the minister any idea what percentage of the capital of the Canadian Pacific is held over there?


James Lorimer Ilsley: No; I do not know. Of course there has been a very substantial repatriation. Those railway securities, a list of which the hon. member for Bellechasse read this afternoon, included Canadian National railway securities. Including private repatriation, we have repatriated $800 million worth of those securities. When all these things are considered the figure of $1,066,000,000 that I have given, which is, as I say, the very latest and best valuation I can get of the securities, is explained. Of that amount, $586,900,000 are Canadian dollar securities and $479,200,000 are sterling securities.
The hon. member for Rosedale said he understood me to say last year that the $700 million covered the value of the securities in England. Apparently I made a very conservative statement; I said the 8700 million covered the dollar securities. I now find that the value of the dollar securities is $5S6,900,000.


John Ritchie MacNicol: Ever since the war broke out, Russia has been an increasingly great purchaser of machine tools, and will continue to be. Under this new lend-lease bill will Canada be in a position to ship machine tools direct to Russia? If so, what effort will be made to provide Canadian manufacturers of machine tools with opportunity to supply Russia? To-day we .are one of the great machine tool manufacturers of the world; perhaps the United States and Great Britain alone surpass us in capacity. If Canada can now deal directly with Russia under this bill, what I should like the minister to tell the committee is, what effort will be made to see that
our machine tool manufacturers supply direct to Russia the machine tools that she very greatly needs and will continue to need?


James Lorimer Ilsley: Under this bill what would happen is, the representative of the . Soviet union would come to the Mutual Aid board and state their requirements of machine tools. If the manufacture and supply of those machine tools could be arranged, and it was deemed to be the most appropriate use of our production and transportation facilities, having in mind the war needs, the Department of Munitions and Supply would arrange for the manufacture of those machine tools, and between the board and the Soviet union they w'ould see that the tools werq transported there on such terms as might be agreed between the board and the government of the Soviet union.


John Ritchie MacNicol: Could we not go a step further? Instead of waiting for the representative of the Soviet union to apply to whatever board is set up to administer this legislation, why could we not approach the Soviet union? No doubt they know the capacity of our machine tool factories to-day. One of the largest in the world is the Bertram plant at Dundas, Ontario, and there are other great manufacturers of munitions which, of course, after the war will go into machine tools.


James Lorimer Ilsley: I do not think it is a case of going looking for orders. I think the governments of the united nations are all very much alive to their needs and very much aware of the possibilities of having those needs met. I would anticipate that if there were any need for machine tools by Russia, and Canada could make them, Russia would know' it and would approach us.


John Ritchie MacNicol: And they could purchase them under our lend-lease legislation?


James Lorimer Ilsley: As I said before, that would depend upon a number of factors. I do not know' whether they could or not. If the board decided that that was the most appropriate and suitable use to make of our production and transportation facilities, having in mind the wrar needs as a whole, then I have no doubt they would get the tools on such terms as might be agreed on.


Mr. ROSS (St. Paul's):: Would that be in conjunction with the other allied nations? Would there be cooperation between the allied nations in connection with supplying such a thing as that? The Soviet government would not just come to our board. Would our board
Mutual Aid Bill

be in cooperation with the other allied nations so that there was a just allotment between the allied nations, of scarce articles for instance?


James Lorimer Ilsley: Yes; a just allotment as far as we can make it.


Douglas Gooderham Ross: Is there any board that takes care of that among the allied nations?


James Lorimer Ilsley: Yes; there is a munitions assignment board at Washington and a munitions assignment board at London.
What about passing this section? We are talking about everything; all afternoon, and evening we have been talking on every section of the bill apd have not passed one section yet. I do not mind this so much, but I submit that it is not in order.


Joseph-Arthur Bradette: On the short title it is almost impossible to have anything but a very wide discussion, and I have no power to restrict the discussion too sharply on this section.


Arthur Graeme Slaght: The minister will tell me
if I am trespassing on the time of the committee, and if he says so I will pay heed to him, but this afternoon he was good enough to furnish the committee with a statement which contains two tables that are not clear to me. On the first page, in the upper part, we have the break-down which brings it out at exactly 81,000,000,000. Then under the heading, "Remaining portion attributed arbitrarily to other sources of financing" we have an additional $440,000,000. May I ask whether that $440,000,000 so styled was a gift in addition to the billion dollars, or whether that amount of money was paid by Britain, and if that is what the title means?


James Lorimer Ilsley: Yes; that was paid.


Arthur Graeme Slaght: So that we came out precisely square on the billion dollars.


James Lorimer Ilsley: Oh, no. This covers substantially a period of nine months, from April 1 to the time the gift ran out, which was in the latter part of December. During that time we supplied $1,440,000,000 worth of goods, services and so on, or we were paid $1,440,000,000 for the particular purposes set out on this page. Nobody can say what was covered by the billion dollars and what was not covered, because the $1,440,000,000 came from two sources. It came from the billion dollar gift, and it came from the other normal sources which Great Britain has for Canadian dollars, namely exports to Canada, the supplying of services and so on. Therefore, with many apologies this afternoon, I explained
[Mr. Douglas G. Ross.l
that while I was putting this on record, I had no right arbitrarily to place those items under the billion dollar gift. I could have taken almost any other items and put them under it. I did not know whether this would make it clear or more confusing.


Arthur Graeme Slaght: I notice base metals are included in both tables.


James Lorimer Ilsley: Yes, because if you put all the base metals in one you would have more than a billion dollars, so that we had to take some out. This is more illustrative of the procedure, and perhaps has some value in that way. That would be all the value it would have, because I want to make it abundantly clear that you cannot attribute any particular article to the billion dollar gift. You cannot attribute any dollar paid to us by Great Britain as coming from the gift, as distinguished from a dollar coming from some other source.


Harry Rutherford Jackman: I understand that the
supporting tables are quite accurate, are they? For instance, they show 5,249,000 hundredweight of bacon and hams with a value of $99,000,000. That is a value, and would be accurate?


James Lorimer Ilsley: Yes; those were the shipments during the calendar year. You see, it is for a different period.


Harry Rutherford Jackman: It is just the allocation on the front page that is indefinite?


James Lorimer Ilsley: Yes. The other tables are
as accurate as we can possibly make them. There are two columns, one for the calendar year and the other for the fiscal year 1942-43. The first page, however, refers to the period of the gift and is just an illustration of what v might have been done with the billion dollars if we had possessed the power to allocate certain articles to it. As a matter of fact, we always talk as if munitions were covered by the gift, while other things perhaps were and perhaps were not. All the munitions are put in there.


Mr. GRAHAM:: I take it from what the
minister has said that there is nothing supplied by Canada to Britain that could not be included in the billion dollar item.


James Lorimer Ilsley: Except that if you put them all in, the total would be too large.


Roy Theodore Graham: I understand that. I recall the discussion that took place with regard to the sale of our wheat to Britain, and I notice that it is arbitrarily put under the billion dollars. Am I right in assuming that you do not now preclude any item of supplies?

Mutual Aid Bill


James Lorimer Ilsley: No, we do not exclude any item, nor do we necessarily include any item.


Mr. STIRLING:: I should like to ask the minister with regard to the first two items in the agricultural schedule, fresh apples and fresh strawberries. How did they come to be enumerated in this list, when the United Kingdom war transport board declined to supply bottoms for any fresh fruit going to Britain?


James Lorimer Ilsley: I do not know. There must
have been some apples; according to this table 81,000 barrels were sent to Great Britain in the calendar year 1942.


Grote Stirling: I suggest to the minister that he knows none were sent from his province, and none went from my province. The point is that the transport board said that bottoms should not be used for the shipment of fresh fruit, that they desired dried fruit and things of that kind. The amount of strawberries shown, over a million pounds, makes one wonder still more how they could have been sent over in fresh form.


James Lorimer Ilsley: There was one year in which fresh apples were sent over; was it not the season of 1941?


Grote Stirling: But this deals with the calendar year 1942.


James Lorimer Ilsley: Some of the apples would be shipped in January or February of 1942, in all probability, from the 1941 crop.


Gordon Knapman Fraser: Could the Minister of Agriculture not answer that question?


James Lorimer Ilsley: I do not think so.


Major James William Coldwell: Are not fresh strawberries sent over to -the big jam companies in Great Britain, for the manufacture of jam?


James Lorimer Ilsley: I cannot give any information on the strawberries.


Mr. HOWE:: Perhaps I may add a word or two to shorten the discussion. Britain can buy anything she likes in this country. What we gave a year ago was a credit of a billion dollars. Britain, of course, creates certain credits of her own in various ways, by exports and by counter-expenditures for Canada in the United Kingdom; and beyond that her credit is good. If she wants to go in debt to us beyond that, she can do so. The result is that we sell Britain what Britain asks for from this country, and I think it is very difficult to give a list.
The discussion leads me to believe that many hon. members think we do a sort of retail business in munitions; that we take a gun off a shelf and give it to Britain and say, "Here is a gun." As a matter of fact, what
actually happens is -that we permit Britain to place an order in Canada with some Canadian factory. I am the authorized agent for Britain, as Minister of Munitions and Supply, to handle those matters. If Britain wants 500 guns here, she authorizes me to place a'contract with a Canadian factory for 500 guns. A Canadian inspector then takes charge of the order and follows it from the raw metal -through to the finished product. Then Britain may instruct us to put them in storage in Canada or send them to Halifax for transhipment overseas. They are her guns, from the time they start as molten metal until they are delivered. She is simply a buyer in our factories, so far as the mechanics of the -thing go. I do not think you could trace the billion dollar credit into the actual munitions covered by that credit; I do not think you can distinguish that credit from other credits Britain has in this country. I think that is the difficulty of saying that it does include this and does not include that.


Gordon Knapman Fraser: Before Canada bought them, Britain had certain munitions plants in this country?


Clarence Decatur Howe: Yes.


Gordon Knapman Fraser: Those were included in the billion dollars, were they not?


Clarence Decatur Howe: I dare say they may have used some of it for that. We operated these factories as agents of Great Britain. The raw materials that were used were paid for out of Britain's credits, and the labour in the factory w'as paid for out of Britain's credits. The products of the factories belonged to Britain. As a matter of fact, in actual operation there was no difference between a plant owned by Britain and one owned by Canada. They were all contractors selling at cost-that is the British plants- but the factories were operated with funds supplied from British credits.


Gordon Knapman Fraser: On page 4 there is an item of fixed capital expenditures in Canada for the production of munitions, $58 million, for 1941-42. That would include some of these munitions plants?


Clarence Decatur Howe: That is right.


Gordon Knapman Fraser: Then, for this year, 1942-43, the amount is S31 million.


Clarence Decatur Howe: That is right.


Gordon Knapman Fraser: Those plants would be Canadian plants now?


Clarence Decatur Howe: That is right.
Mutual Aid Bill


Gordon Knapman Fraser: Therefore they should not be included in this, should they, because Canada has taken them over?


Clarence Decatur Howe: They spent money for the construction of the plants, and later on, as late as the spring of this year, we took over the plants. In other words, we paid Britain in the form of credit in Canada the exact amount that Britain had paid for the plants out of her credit in this countiy. In other words, we washed out the transaction.


Mr. DOUGLAS (Weyburn):: They were paid for over and above the billion dollars?


Clarence Decatur Howe: That was a separate
appropriation.


Gordon Knapman Fraser: (Peterborough West): What does this $31 million for 1942-43 include?


Clarence Decatur Howe: That was money that Britain spent to finish the factories which they had started earlier, or perhaps to build new factories. That is how they paid for thc-m. At some considerable period later on we bought the factories that Britain owned and for which she paid the $31 million of which we are speaking.


Gordon Knapman Fraser: If Canada owns those factories, that should not be included in here.


Clarence Decatur Howe: Oh, yes.


Thomas Clement (Tommy) Douglas: Item 10.


Clarence Decatur Howe: We are talking about when the billion dollar gift was current. Britain spent S31 million for the factories, and at a later period we bought all the factories that she owned and she paid for them out of credits she had here.


Gordon Knapman Fraser: That would take in the $58 million and the $31 million; you bought those back.


Clarence Decatur Howe: That is right.


John Ritchie MacNicol: Now that the Minister
of Munitions and Supply is willing to answer questions-I do not mean for one moment that he has been unwilling-I should like to ask him a few. I thought we were to refer our questions to the Minister of Finance. I am not satisfied with the completeness of the answer given by the Minister of Finance with regard to the machine tool industry being able to supply the wants of any of our allies under the new lend-lease arrangement. The Minister of Munitions and Supply is familiar with the machine tool business. I am also thoroughly familiar with that industry, and I know many manufacturers are

looking with anxiety to the future and wondering whether they will be invited to supply, say Russia and other allies. I should be glad to hear from the Minister of Munitions and Supply, for I know he knows, just how the manufacturers of machine tools in Canada will be able to operate under this new lend-lease bill. There are many factories in Toronto, Hamilton, Galt and elsewhere in Canada which manufacture fine machine tools and which are able to go outside Canada for business along some lines, if not along all at the present time. Will Canada now be able to solicit business from those of our allies who may want machine tools?


Clarence Decatur Howe: Applications from allied governments will come to the board being set up under this bill. It will be the duty of that board to discuss with other producing countries, mainly the United States and Britain, whether the request should be met and also decide which country should meet the request. We might get a request for machine tools which would overlap a request made to the United States, and in that event the duplication would be cleared. A request may come to Canada, and it may be found that for shipping reasons or idle capacity it would be preferable to fill the requisition in Britain or the United States. If it should be decided that the transaction is properly an item that Canada should fill, and Canada agrees that she is able to fill it, then the Department of Munitions and Supply would arrange for its manufacture and shipment to the government to which it is assigned. The solicitation of foreign governments is a thing of the past. Whether we keep the machine tool industry operating at capacity will depend upon whether that' is the most urgent production. We have only so many men, and we have only so much raw material. We may decide that it would be better to devote the productive capacity of the machine tool industry to the building of ships or the manufacture of aircraft. That is a matter which would have to be determined, in the first instance by the board and in the second instance by the Department of Munitions and Supply. The day of competitive business for profit does not exist at all at the moment. The main effort will be to get the greatest and most useful capacity out of Canadian industries.


Ernest George Hansell: I think the ministers
have cleaned up an important point with respect to the schedule which is to be placed on Hansard and around which much of our discussion has revolved. Personally I cannot see that it makes a particle of difference what commodities are included in this bill.

Mutual Aid Hill
So far as I am concerned it is a financial transaction; credits are being given here and there, and Canada is paying the bill. For instance, on page 3 of this schedule is an item covering cod-liver oil, so many gallons at a certain amount. If you took cod-liver oil out of there and put in men's underwear, it would not alter the picture at all. It is simply a matter of finance, simply a matter of accountancy so far as the Department of Finance is concerned.


John Ritchie MacNicol: The underwear would
keep out more cold.


Ernest George Hansell: I am not concerned about what commodities go into this account. If Great Britain wants something, let her have it. It is the value of the commodities that we must be more concerned about in connection with this gift.
I should like to ask the minister a question which has been upon my mind for some time and which was brought up again by a letter I received from one of my farmer constituents and having to do with this particular matter. It is not so much the total amount of the evaluation of these commodities that I am concerned about as a representative of the people. The minister and his department are, I know, concerned about the administrative end of the bill, but the people of Canada look at this matter in a different manner. They say: We are giving so much to the united nations; how much are we getting for it? How much is the total amount valued at on the books of the department? For instance, we find that ninety million bushels of wheat were sent to some country or another in the sterling area and that about $77,500,000 was received for it. The question that concerns the farmer is, how much do I get for that? These goods are given to Britain.
The point I am coming to is this. This year's bill not only involves gifts to Britain but grants power to extend this plan of making gifts to any of the united nations. The United States is doing something very similar to this, the same in principle, shall I say, through its lease-lend operations. The question in the farmer's mind is this: We are all fighting the same war; all the united nations are attempting to defeat the same enemy. Why is it, therefore, that the farmer of the United States should get, say, $1.75 for his wheat that goes through the same channel as my wheat, and yet I and the other farmers in Canada are getting only, say, sixty-five or seventy cents a bushel for our wheat going to the same destination? That is a question which I think should be answered. I have never been able
to justify the position. I know the Minister of Trade and Commerce has often told this house that he cannot reveal the price that we are getting for such a thing or the price involved in some trade agreement. But the position is simply this. The Canadian people are heavily taxed; they are asked to subscribe to war loans; they find themselves part of the general war scheme; and yet here is a certain industry in Canada which is very largely, I think I am right in saying, responsible for supplying most of the commodities that are figured in this account, because the foods, those agricultural and vegetable products and animal and fish products, come for the most part from the basic industry of agriculture. And the farmer of Canada is asking: Why cannot I get more for my products? It is hard for me to get through. My farming neighbour to the south of me across the line is getting twice as much as I am. That is a deserving question, and I hope the minister will throw some light upon it.


Joseph-Arthur Bradette: A point of order was raised by the Minister of Finance. I cannot see how the minister can answer the question put by the hon. member for Macleod. Standing order 58 (2) reads:
Speeches in committee of the whole house must be strictly relevant to the item or clause under consideration.
I think the question asked by the hon. member for Macleod is not even relevant to the bill, and I oannot see how an answer can be given to it on the clause before the committee at the present time. This may be only a fervent wish, but I hope that hon. members will keep within the limits of the bill at the very least.


Harry Rutherford Jackman: Perhaps now that the Minister of Munitions and Supply is here, he will answer the question I addressed to the Minister of Finance as to whether Britain or Canada pays the marine risk insurance on Canadian shipments going to Great Britain. I assume from what the minister of munitions has said to us that any purchase in Canada by Britain is at Britain's own risk, and that that applies not only from the time the ore is being smelted but also to its shipment across the ocean and to the whole proceedings under the billion dollar gift as well as to every dollar's worth of supplies bought under any credits which Britain may have established in Canada. If I am correct in that assumption, I should like the minister to confirm it, and to ask him more particularly who bears the marine risk in connection with the supplies of war materials and foodstuffs which we send to Britain and perhaps to other parts of the

Mutual Aid Bill

world to maintain our own boys in our own army or navy or air force. Does Canada bear that risk of submarine warfare, or does Britain bear it by reason of the fact that she gets foodstuffs through the billion dollar gift, and then allocates some of them for the use of Canadian troops in Great Britain?


Clarence Decatur Howe: It depends upon who owns the material at the time the ocean is crossed. If it is British material bought in this country with the credit that has been established for Britain in Canada, the material is shipped not only over our own railroads but over the ocean at the expense of Britain. It is her material and she makes her own shipping arrangements. She not only pays the cost of transportation across the Atlantic but pays the insurance, if she insures. Similarly, if it is Canadian material being sent over for Canadian account to our own troops, all shipping arrangements are made by Canada. Canada charters the shipping space, pays the cost of insuring the goods, if she insures them, and pays the cost of transportation. It all depends upon who owns the material at the time it is shipped.


Harry Rutherford Jackman: Now' that the principles are established, I wonder if the minister would illustrate the actual facts of the case. I am in entire agreement with the principles. Have we in Canada suffered the loss of any shipments by reason of submarine warfare? I do not want to know the amount. Have the losses been extensive for Canada, or has practically all the ocean-borne traffic that has been lost been for the account of Great Britain? I think the minister will understand what I am driving at.


Clarence Decatur Howe: Of course we have our own Canadian ships plying across the Atlantic and usually carrying Canadian-owned material. That fleet, I am happy to say, is still intact, but we have shipped material on other ships that have been sunk, and we have, of course, collected insurance on the cargo.


Harry Rutherford Jackman: Who feeds our Canadian army?


Clarence Decatur Howe: It is fed by arrangement with the British government, and we pay the British government for the supplies. That is the only practical way.


Harry Rutherford Jackman: We do not know just how terrific the losses of shipping have been through submarine warfare. It is a very great problem, and it is of considerable interest to the people of this country to know whether or not we bear any share of that loss, or if it is all borne by Great Britain. If Great Britain feeds and clothes and otherwise looks after our Canadian

troops, of whom there is a very goodly number in Britain, and we only pay for those goods and foodstuffs that are safely delivered, there must be a tremendous loss to Great Britain by reason of submarine warfare and also by reason of the fact that we are only paying a fair price for the delivered article which does not take into account the risk of loss which is occasioned in getting the goods over there. A great many of the goods go to the bottom of the ocean. Is what I have stated a fact, that Great Britain has, virtually at any rate- we will not quibble about the exceptional case here and there-borne the whole risk of the ocean transportation in regard to the feeding, clothing and equipping of our troops overseas?


Clarence Decatur Howe: Surely the insurance would be an item of cost that would be reckoned in the price of the goods on the other side.


Harry Rutherford Jackman: Well, under present conditions it is hard to know.


Clarence Decatur Howe: The price of wheat in Britain would be the price of wheat in Canada, plus freight and insurance to Britain, plus loading and unloading charges. It always has been, and I think it still is. If the losses are heavy, assuming that the insurance rates are adequate, they would be high and the price would be more; if losses are light, the insurance and prices would be adjusted accordingly.


Harry Rutherford Jackman: That would be so if it were a straight business transaction. But presumably it is different now.


Clarence Decatur Howe: No different now from what it ever was. The rates vary with the risk.


Harry Rutherford Jackman: But governments now
run all this business. Apparently the Minister of Munitions and Supply runs most of the business of Canada-more than half of it- and perhaps deserves credit here and there for doing so. Nevertheless, to take one example, our air force in Great Britain must consume a tremendous amount of gasoline. The price of gasoline in peace time, when there is an abundant supply and competition obtains, is readily determined. At the present time I should think the price of a gallon of gasoline in England is almost any price which the government cares to set on it. As I see it, there are no fixed commercial competitive prices for these articles which must be supplied to our armed services overseas. Prices must be fairly arbitrary, fixed by the British government. We did not have the submarine risk prior to the war, and since then we have had the great cost of this additional risk that must be put into the cost of the article, but at what rate one does not know. There is no

Mutual Aid Bill
competition to regulate it. It must be an arbitrary price. It seems to me that if Britain wanted she could charge, for a gallon of gasoline servicing one of our aircraft over there, whatever price she liked in sterling, so that the result might easily be that England would not be owing us money, but that we would be owing Great Britain money. I think the minister will understand that there must be something in my contention. We are not familiar with the actual operation, just how things go, but ordinary business principles do not obtain.
I am particularly interested in knowing whether we are bearing directly or indirectly any of the risk of ocean transportation, because it is a major factor in the cost of the supplies to-day. In fact, the minister might even bear me out if I were to make a supposititious statement and say that the risks of ocean insurance double the ordinary cost of goods in Great Britain, which goods must be used in large part for the servicing of our own troops. I am endeavouring to measure, as closely as one can approximate things, what the contribution of Great Britain is to this war in regard to servicing Canada. We have given Great Britain a sum of money, a credit, for which we are entitled to credit, and now we are allocating goods to Great Britain. I want to find out, in regard to our own troops, just what contribution Britain is making and what losses she is suffering through ocean transportation.


Clarence Decatur Howe: We maintain a large staff
of chartered accountants in England to determine exactly what the costs are. Certainly it is the intention of the Canadian government and of the British government that the costs will be the actual costs and that no losses shall be involved to anyone. For instance, if gasoline is charged at a certain price, I think our accountants will ask the British government to establish the basis of the cost, and that will certainly include insurance. I can assure my hon. friend that it will not be forgotten. I know something about war risk insurance myself, and I know it is a very, very considerable item in every transaction. Just as every shipment in this country is checked for cost from the source to the delivery point, I am sure that every consignment from this country to Britain is checked for cost.


Harry Rutherford Jackman: The minister, who at one time held the portfolio of Minister of Transport, knows that even in our own railways there is no basis for fixing freight rates except what the traffic will bear. We cannot be scientific about prices at all times. What you can get for a thing is the ordinary deter-
72537-1641	[DOT]
minant of price. Here we are at war; and what Britain can get for goods in the old country where they are required, or in Africa, is just about whatever price she wants to fix, except that we trust to her fairness. But I do not think any set of accountants, cost accountants or others, can possibly fix prices by actual costs. Who knows what it takes to keep up the Royal Navy, the air force and all these other indirect items which the minister knows so well must be allocated over the units. He will understand the accounting language, anyway. The whole thing must be arbitrary. What I am trying to arrive at is, how do you establish costs in Great Britain? It is done, I suppose, with some relation to what pre-war costs were, and I am trying to find out who it is that actually bears the cost of the ocean-borne traffic which is necessary to service our own troops overseas. Will the minister admit that my contention is correct that pricing is not a scientific business, that the only fair way in ordinary times is what the traffic will bear, with competition keeping the prices reasonable, and that in war time it is fairly well arbitrary. And I am asking him, does it bear any relation to pre-war prices? How do they do it? Frankly, I do not know.


Clarence Decatur Howe: Ocean rates have been established as universal; they are fixed for Canada and fixed for Britain, and that is an item of fixed cost. War risk insurance rates vary from time to time, depending upon the activity of submarines, and I think it is just as easy to determine the cost of an article to-day as it would be in ordinary times; that is, direct cost. The hon. member speaks of indirect cost, the cost of convoying. Canada is doing about half the convoying on the Atlantic route. I see no reason to believe that Britain's contribution in the matter of convoying is greater than that of Canada. My hon. friend seems determined to make me believe that Britain is getting the worst of the transaction. That has not been my experience in dealing with Britain. But I think they are just as anxious as we are to determine the actual cost. We have experts on the ground there who should be able to agree on a cost which is the real cost. I cannot believe it is unfair to either party.	[DOT]


Ernest George Hansell: Just before we close, I am afraid that if the minister does not give some answer, if not to-night, at some future time, to the question I asked, agriculturists in this country will wonder why they cannot get the answer. I appreciate the rules of order in this connection, and, I am simply suggesting to the minister that he get out his pencil and paper and make a little notation that he can

Mutual Aid Bill
answer my question under section 6 of the bill, where the board are given powers to prescribe rules to determine the value of war supplies.


[Stage Direction]
Section agreed to.
On section 2-Definitions.
Mr. PERLEY:: In the statement which the minister tabled to-day there is an item with regard to wheat, 90,0S6,000 bushels, the value being $77,518,000. Where has Britain been taking delivery of this wheat? If we calculate this 90,086,000 bushels on the basis of the figures given, we find that it works out at eighty-six cents a bushel. I should like to know where Britain takes delivery of the wheat. In the monthly statements issued by the Minister of Trade and Commerce there is an item in connection with United Kingdom offers which shows that for practically every month, in the year 1942 and now in 1943, wheat has been quoted at Saint John and Montreal ports at over $1.10 and as high as $1.12 and $1.13 a bushel in some instances. It will make quite a difference as to where the British are taking delivery of the wheat. Eighty-six cents is what this amounts to, and if they take delivery at eastern ports, Saint John or Montreal, adding the freight across the lakes, this would amount to only about ninety-three cents, so that there must be a considerable loss, because the wheat board is paying the farmer at Fort William on the basis of ninety cents. Has the United Kingdom any representative in Montreal representing the cereals import commission, and does that representative stipulate where the wheat shall be delivered, how it shall be shipped, in what vessels and when? Those are questions which I think ought to be straightened out. The matter of freight is something else that should be discussed. I should like the minister to give a breakdown of the item so as to clear up the part of the question I have asked him with reference to the price.


James Lorimer Ilsley: These are trade figures. I do not know what point is taken for delivery, and I do not understand what the hon. gentleman means by a break-down.


Ernest Edward Perley: I am referring to the price on the basis of the figures given. The Minister of Trade and Commerce is present, and he must know where they have been taking delivery of the wheat.
. Mr. ILSLEY: These are ordinary trade figures of export values and quantities, but I do not know what point is taken.


Ernest Edward Perley: Take ninety million bushels, and the figure of $77,090,000, and it works out at eighty-six cents. The board has been

paying the farmer ninety cents at Fort William, so that there must be a considerable loss, and the participation certificates issued to the farmers will not be of much value. Surely the minister would know where they are taking delivery of the wheat, whether at Liverpool, Saint John, Fort William or Montreal. That is a fair question. I have not been holding up this bill, and I think the Minister of Trade and Commerce should answer the question.


James Lorimer Ilsley: I am informed, and I believe, that it is the normal practice to calculate the export price at Fort William. That is my information, but I would not vouch for it.


Ernest Edward Perley: Then, if the figure is eighty-six cents, there is something wrong there._ It should work out at ninety cents.


James Lorimer Ilsley: Is it all No. 1 northern?


Clarence Decatur Howe: And how can you be sure it is all No. 1 northern?


Ernest Edward Perley: The great bulk of it is.


Clarence Decatur Howe: How does the hon. member know?


Ernest Edward Perley: I know from the percentage. This would be about feed wheat. Has the British cereals import commission a representative in Montreal who is regulating shipments, and does that representative not say where they will take delivery of the wheat? What is the answer to that question?


James Angus MacKinnon: We have no knowledge of any representative in Canada of the cereals import commission. I believe-this is indirect knowledge-that there is an agent at times in Montreal whom the cereals import commission use in connection with shipping arrangements, a forwarding agent, but we have no dealings with him.


Ernest Edward Perley: Is it not true that exporters cannot export a bushel of wheat without direction from Britain as to the port from which it shall be shipped, and do they not designate what ship shall carry the wheat, and so on?


Clarence Decatur Howe: That is organized by the
ministry of war transport? Shipping arrangements are in their hands.


Ernest Edward Perley: Do they not work in cooperation with the representative of Britain? How could they do otherwise?


Mr. COLD WELL:: Is wheat sold directly from the Canadian wheat board to the cereals import commission in Great Britain? Is it a direct sale by the wheat board to the cereals import commission in Great Britain, without going through what is sometimes called in this house the usual channels of trade?

Mutual Aid Bill


James Angus MacKinnon: It goes through the usual channels of trade, the grain exchange.


Major James William Coldwell: Who buys and sells it on the grain exchange?


James Angus MacKinnon: The wheat board, through agents on the exchange.


Major James William Coldwell: Who pays commission to the agents?


James Angus MacKinnon: We have had this up.	[DOT]


Major James William Coldwell: Not to-day. Are they still paying commissions to a grain exchange which simply manipulates grain through the exchange, when they could deal directly as between the wheat board and the cereals import commission? Are we paying that cost out of this account, or are the poor British people paying to keep in operation something that is not operating, if I may use an Irishism?


Clarence Decatur Howe: The buyers like to use the machinery as a matter of convenience. It suits them to use the facilities of the exchange, and they are willing to pay the price.


Ernest Edward Perley: The minister told us last year before the committee that the British cereals import commission insists on dealing through brokers, and that therefore the board has to sell to the brokers. They themselves cannot sell. The wheat board own all the wheat but cannot sell it, because they claim that the cereals import commission insists on dealing through brokers, but no broker in Canada can load a ship unless the cereals import commission directs where it shall be loaded.


Clarence Decatur Howe: The fact of the matter is that wheat is bought in bulk sale. Wheat is bought in the form of options as a matter of convenience. In other words, the cereals import board does not like to handle the actual ' wheat, for a very good reason, as will be recognized by anyone who knows what is involved. It is a simpler transaction for them; they prefer to buy their wheat in the form of options. To convert options into wheat on the seaboard requires the services of a broker.


Major James William Coldwell: I cannot see the point.
Here we have the Canadian wheat board and the wheat. Surely the British cereals import board could arrange with the wheat board to take a certain quantity of wheat at a given time and pay for it and ship it.


Clarence Decatur Howe: How are they to fix the time to ship it? It depends upon many things.


Major James William Coldwell: But surely the commission agent would be in the same position?


Clarence Decatur Howe: No. He has a document
that he can transform! into wheat any day he likes.


Major James William Coldwell: But he has to go to
the wheat board for the wheat.


Clarence Decatur Howe: His document is worth wheat.


Major James William Coldwell: Why cannot the wheat board handle the document?


Clarence Decatur Howe: My hon. friend has lived for
many years in the west. Surely he knows the difference between handling actual wheat and handling an option. An option is a very flexible document to handle.


Major James William Coldwell: I know the people who handle the options in Winnipeg have become millionaires on the wheat grown by the poor farmers on the prairie.


Howard Charles Green: Now that we are through
with this controversy about wheat-


Some hon. MEMBERS:: We never are.


Clarence Decatur Howe: You are an optimist.


Howard Charles Green: -for the time being at least, there is one question which arises under this definition section of the united nations Mutual Aid bill; that is the question of Canada's shipping policy or her lack of shipping policy. Paragraph (d) of section 2 defines war supplies, and paragraph (i) of that subsection reads: "any weapon, munition, aircraft or ship".
Which means, I take it, that under the provisions of this bill it will be possible for the Canadian government through the Canadian Mutual Aid board to transfer or give away merchant ships. I believe that at the present time very few of the ships we have been building in Canada are operated by this country, either by the government or an agency thereof or by a private company. I may be wrong in that, but there does not seem to have been any definite shipping policy announced by the government. In any event, the time has come when there should be a shipping policy and it should be definitely made known to the Canadian people.
I say that for several reasons. In the first place, many years ago in the days of wooden ships Canada was both a great shipbuilding country and a great shipping power; one of the great shipping nations of the world. As hon. members know, in those days, the bulk of our shipbuilding was done in the maritime provinces. Then in the last war we did a
Mutual Aid Bill

great deal of shipbuilding, including the building of steel ships. The Department of Munitions and Supply have put out a very interesting publication called "The Industrial Front," which contains production facts revised up to January 1, 1943. At page 64 of that publication we find it stated that in the last war Canada built sixty-three steel ships totaling 380.140 dead-weight tons under the programme started during the great war and completed in 1920. So much for our steel shipbuilding in the last war.
In this war there was quite a long delay in starting to build steel cargo ships. On June 14, 1940, which was after the huns had struck in western Europe, I suggested to the Minister of Munitions and Supply in the house that the time had come for Canada to inaugurate a steel shipbuilding programme, and his reply then was rather remarkable. He said, as reported at page 785 of Hansard of that year:
Whether at a time like this w'e should divert the productive capacity of Canada to the peacetime occupation of building merchant ships is, I think, questionable.
Accordingly, in the summer of 1940 the government declined to take any steps to start building steel ships in Canada. However, later in that year or early in 1941 conditions became so serious with regard to shipping that they decided on a steel shipbuilding programme. Reference to that will be found at page 216 of this booklet, "The Industrial Front", w'here it explains that on April 4, 1941, a government corporation was set up known as Wartime Merchant Shipping Limited whose job was to take charge of the building of steel cargo ships in Canada.
The plan apparently is that this nation shall build 300 steel cargo' ships with a total value of about $500 million. Most of those ships are to be of 10,350 tons.
On March 1 of this year an answer to a question was placed in Hansard showing that at that time or within a few days of that time there had been delivered to the Canadian government ninety-seven cargo ships of 10,350 tons dead-weight carrying capacity and one ship of 4,700 tons, making a total tonnage of over a million. The booklet goes on to show that we have been building ships at a rate equal to the building in Great Britain, and it says that Canada has reached the greatest shipbuilding capacity in her history, in fact, at page 62 it is stated that Canada ranks as one of the world's foremost shipbuilding nations. I think there can be no question of the truth of that fact.
In addition, we have taken up the training of mercb-.nt seamen. The minister can correct
fl
me if I am wrong; but reading from the booklet, "Training for the Merchant Navy", issued by the director of merchant seamen, we find that we have two training schools, one being St. Margaret's sea training school at Hubbards, Nova Scotia, to train men to be junior ordinary seamen, and the other the marine engineering instructional school at Prescott, Ontario, to train men for the duties of trimmers and firemen. I believe we have raised in Canada about 38,000 to 40,000 seamen; those figures I obtained from press dispatches; they may not be entirely accurate, but the minister can give the proper ones when he replies.
That is the position; we are building several hundred of these ships and are training merchant seamen to man them; yet apparently we have been turning over practically all our ships to either Great Britain or the United States, and of those that we do not turn over to those nations many are being operated by the British government or some agency of the British government rather than by'Canada. I believe Canada is operating very few, probably under ten, despite the fact that on April 8, 1942, the government set up a government company known as the Park Steamship Company Limited, whose duties are the control and operation of newly built Canadian cargo vessels.
Apparently, too, when Canada requires shipping for her needs she has to go to the shipping board to which the Minister of Munitions and Supply referred when he spoke the other night as reported at page 2471 of Hansard. I believe further that Canada has no representative on that shipping board, which has its headquarters in Washington. In other words, we have no voice in the allotment of shipping, despite the fact that we produce so many ships.
There is a very large "why" to be answered by the government with regard to this question of shipping. Canada has a background in shipping. We build ships; we train seamen; w'e are a two-ocean nation, bordering on both the Atlantic and the Pacific. We can only live by our exports; we must export goods and will always have to export goods. Such being the facts, it does seem to me that Canada should be not only a great shipbuilding nation but also a great shipping power.
I hope the government have gone much further than I have suggested in my remarks.
I hope I am wrong in my facts, but I do suggest that it is high time Canada had a shipping policy both for the war and for the post-war period; that this is vital to the development of this nation; that the government is wrong in turning over all the ships

Supply-Falconbridge Nickel Company
to other nations and in being so hesitant about setting up a Canadian mercantile marine. I suggest that this is one of the most important questions to come before the house during the present session, and I would ask that the Minister of Munitions and Supply, or whatever minister is in charge of shipping in Canada, give the house, and through the house the Canadian people, a full statement of the policy of the government in this regard.


James Lorimer Ilsley: Perhaps that matter can be
considered and a statement made at the appropriate time, but I would move now that the committee rise, report progress and ask leave to sit again.
Progress reported.



FALCONBRIDGE NICKEL COMPANY-STATEMENT AS TO OPERATION OF NORWAY REFINERY

[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved that the house go into committee of supply.
Major James William Coldwell: Before you leave the chair, Mr. Speaker, there is a matter to which I wish to refer. Recently there appeared in the press a statement by the president of the Falconbridge Nickel company. I did not raise this matter on the orders of the day, because one is pretty well restricted ip what one says at that time, but I think this is a statement of which the government should take notice.
At a meeting of this company in Toronto on, I am told, April 28, the president, during the course of his remarks, is reported to have made a statement which in my opinion is definitely against the best interests of the country and of our war effort. I am going to read the statement as it is reported in the press:
Incidentally you will be glad to hear-as I was-that through indirect channels it is reported that your Norway refinery is safe so far and is being maintained.
It is in operation by your Norwegian staff, under German control, on the same Norwegian nickel-copper ore-production that we formerly handled on toll basis.
It seems to me that a statement of that description ought not to go unchallenged by the government. It is as much as to say that the nickel company and the men who operate it in Norway are operating it with the company's approval, in the midst of a war that is bitter and that is endangering the whole of civilization. I draw this to the attention of
the government because I feel that it is a matter of which note should be taken. I,am sure that if some individual should come to this country from Norway and say "You will be happy to know that our brother is safe and fighting on the side of the Germans," he would be treated immediately as a dangerous and subversive individual. It seems to me that we should not tolerate statements like that to which I refer. Indeed, some of these corporations with their international associations were a menace to our civilization before this war broke out, and it seems altogether probable and likely that even now they are maintaining some association with some of our enemies. We know they did that during the' last war, and we have had reason to fear it is being done in this war. I am not forgetting, of course, that even after the present war had been in progress for months these companies shipped nickel to Japan. Whether or not they did so on contracts made prior to the war, I do not know. It is true that we were at peace with Japan; nevertheless it was quite obvious that events were leading up to a conflict in the Pacific, and I think this parliament and this government should take note of this situation.
Now, Mr. Speaker, I have one or two other matters I should like to bring up in this connection, and I do not know whether or not to go on with them to-night. Jt is just eleven o'clock, and I believe it would be best to call it that.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Wednesday, May 12, 1943