1944-03-28

STANDING COMMITTEES


Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That the name of Mr. Bence be substituted for that of Mr. Graydon on the standing committee on public accounts.


[Stage Direction]
Motion agreed to.


William Lyon Mackenzie King: I wish to table the final
report of the subcommittee on housing and community planning of the advisory committee on reconstruction.


Mr. NICHOLSON:: May I ask the Prime
Minister whether consideration could be given to having this report referred to a special committee of the house? I might mention that in 1935 a committee of the house was set up and brought in a report on housing which has been very valuable.


William Lyon Mackenzie King: I shall be glad to see that consideration is given to the question and give my hon. friend a further reply later.



STATUS OF MEMBERS OP CANADIAN KISKA FORCE

Hon. C. W. G. GIBSON (Minister of National Revenue):: Various members of the house have made representations concerning the tax status of members of the Canadian Kiska force. I have much pleasure in informing the house that on March 17, His Excellency the Governor General in Council approved an order in council under the War Measures Act that the members of the expeditionary force sent from Canada in 1943 to the island of Kiska in the Pacific ocean be dealt with as provided for in section 4, paragraphs (t) and (v) of the Income War Tax Act, and for the purposes of the said section the island of Kiska shall be deemed to be outside the western hemisphere.



FARM LOAN BOARD


Mr. D. C. ABBOTT (Parliamentary Assistant to the Minister of Finance):: I beg leave to present parliamentary return, reference 150, asked for by the hon. member for Mackenzie (Mr. Nicholson), for a copy of all letters, telegrams and other documents with respect to the resignation and reappointment of J. L. Dougans.
While there is no objection to the production of the correspondence in this case, nevertheless it is not considered generally in the public interest to produce inter-office correspondence, and the production in this case is not to be taken as a precedent.
It is to be noted that the Canadian farm loan board has been constituted by parliament as a body corporate and politic and is vested with full control over the employment and dismissal of all its employees other than chief executive officers whose appointments are subject to the approval of the governor in council. The board, moreover, is charged with the responsibility of carrying on its operations on a self-sustaining financial basis and does not come to parliament for an appropriation of funds for administrative expenses.



BEEF CATTLE


[Stage Direction]
On the orders of the day:
Mr. M. C. SENN (Haldimand):: Having regard to the recent announcement by the Department of Agriculture officials that arrangements have been made to export three million pounds of poultry, and its beneficial
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effect on the Canadian market, will the government consider similar treatment to overcome the congested and emergent situation in the cattle market by removing the embargo against the export of beef cattle to the United States?


Mr. SPEAKER:: I should think this is a question that should be placed on the order paper for a reply by the minister.


Mark Cecil Senn: Mr. Speaker, it is an emergent situation. The congestion is bad.


Thomas Vien: The minister is entitled to some notice in order that he may be able to reply to the hon. member.



WAR APPROPRIATION BILL


[Stage Direction]
The house resumed from Monday, March 27, consideration in committee of a resolution to grant to His Majesty certain sums of money for the carrying out of measures consequent upon the existence of a state of war-Mr. Usley -Mr. McCann in the chair.

["Mr. Chairman, I have followed with the greatest interest the question of civil aviation ever since the last war, during which eighteen thousand cadets and mechanics of the Royal 'Air Force were trained in the city of Toronto. After the war many prominent people, including the late Colonel Barker, V.C., Air Marshal Bishop, Sir Frederick Handley Page, Air Marshal Collishaw and others came back to Toronto-and as mayor I discussed the matter with them for months-that Canada, which had done so splendidly in the last war, should continue with a programme of civil aviation during the time of peace. As an example, I refer to the progress that had been made three hundred years before on the high seas, when Britain, of her own volition, went out and created an oceanic empire through sea power, when she had only one rival, Portugal, and later on the Dutch. Britain gained command of the sea and built up her magnificent empire.\nI am very much disappointed with the secret policy of the government in this connection. Why did Canada not seek first a conference with the other dominions in order to formulate an empire policy as a unit? What was the need for all this secrecy in regard to a public matter such as this, which is of the utmost importance to the future of the world and the future of our empire? Why were all these star chamber proposals made, when w'e had the minister and his staff in London at a time when there were also in that city representatives of nearly all the countries of the world trying to devise some definite plan for the progress of civil aviation and the progress of the world in general? One objection I have to this internationalization of bases is that Russia, our great ally, will have nothing to do with the idea, because they believe in collectivism. The United States will have nothing to do with internationalization; Washington almost shudders when one mentions it and international aviation. They are going to act separately in civil aviation. It is all very well to come here and appeal for this sort of thing, but after all we are only a nation of ten million people. Why should we go outside the empire and make international treaties with these world powers on one of the most important matters ever to come before the people of this country? It is dangerous to plan to share these bases with any other and give them sovereignty, while allowing user. I referred to this matter on July 15 of last year, when the estimates of the Minister of Trade and Commerce were under consideration. At page 4868 of Hansard I said:\nIf we had had an international policy which meant the giving up of empire ports like Gibraltar and Suez, the Cape, the far east and\n\nthe West Indies, where would we be to-day? The empire would have been destroyed, and that would have meant the fall of civilization.\nAlready we have given the United States bases for ninety-nine years, reaching from Newfoundland to British Guiana, and no doubt they will want to hold on to them. Let us see what that will mean to this country. The bases which it is proposed to share are the backbone of the British empire on the seven seas. Upon them the security of the British empire has depended for some two hundred years, as it will depend in the future. Just fancy what would have happened to the mother country in the present war without these bases! The commonwealths and colonies would be adrift; the empire would become a perfect absurdity on the map; it would be a body without arteries. Just imagine what would have happened in 1940 if we had been compelled to share Gibraltar, Malta, the Cape, Alexandria and these other bases around the seven seas with the United States and Russia, two neutral powers for two years, and all the other powers that were afraid to provoke Germany. Our position would have been impossible. We should have been under pressure to keep neutral. Internationalization presupposes a perfect world of the future. It is one of those dangerous principles. The policy of the government is one of the most dangerous for the mother country that we have had in the last two hundred years. We are prepared to let trusted allies use our bases, as I said on July 15 last-even in peace. But beyond that concession there are dangers. We have to get back and look at the basic principles behind this policy of internationalization. We have to stop and listen, and go back to the very concept of the British nation, united and strong, to defend itself as a unit, existing as an influence among the powers of the world, and ready to cooperate with others on a self-respecting and honourable basis.\nImperial defence should be strengthened. I spoke in the house on July 15 last, after April 2, when the Prime Minister announced the policy which, in my opinion, has prevented an empire conference since then on this important matter of civil aviation. Civil aviation is to be the transport of the future. The Prime Minister practically threw cold water on the whole thing through the following words, which have been quoted in the British House of Commons. He said on April 2:\nThe Canadian government strongly favours a policy of international collaboration and cooperation in air transport and is prepared to support in international negotiations whatever international air transport policy can be demonstrated as being best calculated to serve not\n\nWar Appropriation-Transport\nonly the immediate national interests of Canada but also our overriding interest in the establishment of an international order which will prevent the outbreak of another world war.\nWhat was the result of that policy, which was quoted in England, in the British House of Commons? In my opinion, it was quoted by the acting leader of the government as one of the reasons why no empire conference on civil aviation should be called. True it is that some time in October, I believe it is the minister and some of his staff went over and had a conference over there. But there were no practical results from that conference. It was said then that under the statute of Westminster each of the dominions is responsible for its home defence, to three miles outside boundary lines. In addition to that, each dominion retains its status, autonomy and sovereignty, and has to look after its own domestic affairs. So much is that so that even in its air policy the domestic policy of Canada is that, following the statute of Westminster we are to set up a vast monopoly in this country, with hidden subsidies, something which will lead to untold error in connection with this work of civil aviation.\nI referred to this speech of the Prime Minister when, speaking in the house on July 15 last, I said that the domestic policy of Canada in the air should be based on a well known policy in navigation laws and lease-lend, and that", "We should be ready to cooperate with our allies and allow them to use these air bases, but we should not give away sovereignty over them. The empire has thrown back its enemies from without and in my opinion she will go on to destroy them. Now is the time that we should try to recapture the spirit of empire and our faith and pride in our dominions and in our trade and commerce. The empire is a living thing and should not be allowed to go by default or into liquidation.\nThat is what you are prepared to do now. You are prepared by this policy to allow this empire to go by default and into liquidation with a war on, instead of being a unit as an empire as to civil aviation. I said further on the same date:\nThe mother country and the dominions fought this battle alone for two years. Our soldiers carried on with those from India, New Zealand, South Africa, Australia and the empire training plan. We stood shoulder to shoulder in the snows of Labrador and Newfoundland and in the heat of India and the far east.\nIn the days before the war you could go into any large port and find fifteen or sixteen ships from different parts of the empire carrying on their trade.\nI have seen that in Halifax, Victoria and Vancouver.\nI believe that this same spirit of empire co-operation will continue in the years that are to come. Canada should be ready to go along\nwith the dominions and the empire. The time has come when the Minister of Trade and Commerce should tell this committee and the country what our relations are with the other sister dominions who fought along with us for two years to save civilization. One of our great allies stood aside for two years with Germany, but Russia has since made a glorious record. To-day she is practically fighting her battles alone except for some supplies and munitions that are being sent in.\nI went on record to the effect that the policy should be to allow these bases to be used by all the world in the future. But sovereignty-no. They should be retained by the mother country and by the British empire. That is why I have objected to such secret policies in the house.\nHad the same energy been put into civil aviation in the period between the two wars that has been put into it in the empire air plan since the war started, we never would have had a second war. I have followed this civil aviation question, right from the start of the last war, and I have been very much disappointed in what I have seen.\nThe minister of Munitions and Supply on the 17th if this month gave a fine history of civil aviation. He placed on record a splendid summary of the progress of civil aviation. He pointed out what had been done by private , enterprise and private initiative. Then he went on to refer to many other matters, pointing out that a reduction had been made in the estimates in 1935, and then went on to a reference to Trans-Canada Air Lines, and how Canadian Pacific Air Lines would not come in.\nDid this international agreement he quoted ever come before the other dominions? I am referring to this international agreement given out secretly at Washington, over the heads of parliament, behind our back, when parliament was in iession, which decided on a domestic policy involving the greatest monopoly this country has ever seen, and for the payment of hidden subsidies to a corporation whose civilian heads had had very little training. There was one exception, because the head of Trans-Canada Air Lines, Philip Johnson, had come from the United States, and was an able business man who had had experience in aviation.\nBut Canada's policy of not calling an empire conference on civil aviation will have unfortunate results, because she has been advocating a policy of internationalization. No definition has been given with respect to what internationalization is, and no one understands what it is. The House of Commons has never seen this particular agreement, and I doubt if some of the dominions have ever\nWar Appropriation\n\nTransport", 'read it. I doubt if the British parliament has ever seen it or discussed it, because they had a debate over there last June.\nSome forip of internationalization is no doubt necessary. Some form of private enterprise, or a mixed form of private and public enterprise, might be considered. But I believe the whole policy of the government is entirely wrong and a leap in the dark, and it is one which will not commend itself to the wisdom of the country. After all is said and done, if that is the view of the government, then there is very little hope for civil aviation in Canada in the future of Canada or the empire. I never have been able to see how this secret conclusion was ever reached. Civil aviation should not be a political question, nor should it be the plaything of any political party. It should be considered on its merits. In the great future which lies before this country we must wrap ourselves up with the mother country and the dominions, as a unit, in a joint empire air scheme, as we did in war.\nAs far as domestic aviation goes it is wrong to create a monopoly in this and other countries. The government is just drawing red herrings across the track, with a war on, and creating unnecessary dog-fights between these two companies. All this is being done when the war is not yet won. We should get back to basic things, namely, what the British empire as a unit should do in connection with civil aviation with an all-empire plan.\nInstead of sticking to the main policy and the main task that is before us, instead of considering what is best to be done, we start off by creating a dog-fight between the two transportation systems in this country which have been doing glorious work in this war.\nI was interested in civil aviation many years ago in connection with the policy of the present government and the government before it. Little or nothing was done, before the two wars, about civil aviation; it was left to private enterprise. The means by which we were able to obtain a technical victory in the battle of Great Britain were made possible by the information obtained in the Schneider race in 1931. The British government were able to obtain information which laid the foundations for the winning of the battle of London in 1940. The low-wing monoplane was born in that race, and this was the ancestor of the Spitfire and the Hurricane. Many great inventions followed out of the information obtained from those races. But there has been a complete lack of policy on the part of this government and that of the mother country in connection with civil aviation.\n\nI am dissatisfied with the policy of this government because it will not solve the problem. The two transportation companies are to be put\'out of existence in the air and all surface road transport, and a new company is to be substituted. They do not say how Canadian Pacific Air Lines are to be liquidated, and they fail to recognize the findings of the council of British shipping. This is an important body which has done much to help to win the battle of the Atlantic and keep the empire trade routes open in war. Their experience dates back for 200 years in providing sea services, and they outline the part they feel they can play in civil aviation. The report of that body in 1944 reads:\nOur problem in this matter is greater, hut our opportunities are also greater than those of any other great power. The shipping industry does not pretend to any specialized knowledge of aviation, but it possesses experience of travel.\nWhat it does possess and what it offers as a practical contribution to this task is a wealth of experience derived from our generations of successful management of overseas services; an efficient organization already dealing with those classes of passengers and freights likely to be borne by air; and a network of branch offices and agencies all over the world.\nThat contribution, the result of vast experience, W\'as at first gained in monopoly before other countries took to overseas ventures, and then in competition with shipping subsidized by foreign governments. Having watched the effects of subsidies and of monopoly, the shipping companies believe that they should not be established for the air. They also believe that "persistent subsidy would retard genuinely healthy progress." ...\nThe war itself is both a forcing house for the development of the aeroplane and an agent for the wholesale destruction of ships. What might therefore have been a gradual, will become an abrupt transition. British shipowners, when tackling the rehabilitation of their traditional services after the war, will be presented also with an unusual opportunity to convert them spontaneously from the old medium to the new, in whatever respects and in whatever proportions their respective characteristics and the requirements of each trade or group of trades may suggest.\nBut any such spontaneous conversion is faced immediately by two obstacles. First, there is the risk under present legislation that shipowners may find themselves in competition with their qwn government in the shape of British overseas airways corporation.\nThis corporation holds a legal monopoly of all British services which are subsidized from public funds. The council of British shipping hold that their experience is of great value to the future.\nA far wider and more varied deployment of experience, resources and individual enterprise would appear to be required, and British shipowners, in technique and experience and in their long established position in international transport, should be able to make certainly not\n\nWar Appropriation-Transport\nan executive but a substantial contribution to the sum total of British air commerce. Ships and aeroplanes are by no means mutually exclusive. On the contrary, experience has shown that they can, and ideally should, be operated in a sense complementary to each other.\nThe conduct of a regular air line and that of a regular se& line have wholly systematic characteristics. Each calls for long term policies; each requires an international outlook; in each rigid technical discipline is essential to public safety; each finally succeeds only by capturing and retaining the goodwill of the travelling public or the consignor of freight.\nIn this remarkable memorandum the council of British shipping have made a real contribution to our understanding of the subject of air and sea transport. They end with suggesting that there should be a national empire board and they say;\nIn its twenty-five years of existence the national maritime board, on all questions of seagoing conditions and pay, has not only acquired confidence and authority, but has developed within itself a happy combination of mutual respect, eommonsense and an absence of rhetoric.\nNew Zealand and Australia have attempted to do something in connection with air routes and civil aviation. Mr. Curtin and Mr. Fraser appealed to Canada, last January when they met, to hold a meeting in order to bring about a unified policy for the empire. When I spoke on this matter here two weeks ago I quoted the speeches of Mr. Curtin and Mr. Fraser of January last and also referred to what the war correspondent of the Sunday Times said in his dispatch dated January 16. I repeat:\nIt is not generally realized at home that America has a Pacific air route which is marvellously well organized. On the day after war ends the same pilots, planes, air crews, ground organization, wireless and meteorological services will be available to begin commercial air services between Canada, America, Australia and New Zealand.\nThe British empire will not be in this lucrative traffic because nowhere on the Pacific route during war is there one British plane, pilot, meteorological expert or radio operator. Unless Britain places air crews on this route in 1944 she will be left at the post as far as experience and good will of services go, if peace comes in 1G45.\nThe Prime Ministers of Australia and New Zealand made an appeal to Canada to send delegates to an empire conference, and urged that serious consideration be given to the question.\nThe United States have been progressive in civil aviation. Many of the prominent men in this industry gained their experience in the R.A.F. in Toronto during the last war. The Americans have a tremendous hold over the Pacific, and they did not get it by accident but by enterprise, at a time when Canada\nwas asleep. They have made great concessions to travellers. The United States air service over the Pacific is free, every military or civilian traveller having the benefit of that route at no cost to himself.\nThe Prime Ministers of Australia and New Zealand had a conference on the 17th of January at which they agreed on an airways plan and made an appeal for an empire air policy. Canada has ignored it all, and has done nothing about it. Now Canada announces an international air policy as though she were a first-class power. I can tell you this, that America will have nothing to do with internationalization, neither will Russia. Russia has an agreement with the mother country for after the war to which the dominions are not a party.\nI am very much disappointed with the whole air policy of the government, and I do not believe it will ever be consummated. In Canada we should have a chair in civil aviation in every large university, especially after the glorious record that Canada has made in this war with the empire training plan, which cost the taxpayers of this country close to a billion dollars. But we shall get little value out of it all under the domestic and international policies of this government. How does it come about that this policy is announced over the head of parliament and that a secret international document like this was produced in Washington over our heads and put into the record? It was done over the head of this parliament while in session, and over the head of the mother country, over the head of Australia and New Zealand and the other dominions which have been fighting with Canada in this war. Imagine the future for our young aviators coming back from this war if we have no settled air policy! This policy has been got up by a minister of the crown over the head of parliament. How many members have read this secret international proposed agreement? I have read it three or four times and I as a simple Canadian citizen am shocked by it. It gees over the head of Britain, which stood alone in the battle of Britain. This policy is got out over the head of parliament while our young aviators are fighting overseas. I doubt if few members have read the policy. It is, in my opinion, a shock to the people of the empire, and I have made a study of civil aviation ever since the magnificent record Canada made in the air in the last war.\nI have waited for over twenty years for this day, to see that civil aviation would at least get a break here and that we could have\nWar Appropriation-Transport', "a discussion in this house of this matter. Hitherto we have had no chance to discuss the future of aviation and the place it will occupy in our life when our young men come back from the war. How many of them, when they return, will have one hundred dollars in their pockets to finance a feeder line? What is the use of talking about their coming home as o-wners to enter an air industry? They will have twenty-five dollars in their pocket to buy a suit of clothes, but not sixty dollars, and yet we have squandered millions on camps all over this country without suitable sewers or water in them. Is that what our pilots are fighting for? Is that what we are doing for them, instead of calling a conference with the other dominions with a view to action along the lines I have indicated?\nWe have a navigation policy under which any ship can enter our harbours and land its cargo. They cannot enter our coastwise trade on the Atlantic or Pacific, but they can land their goods at our ports. That policy has proven in navigation a success for two hundred years, and has made Great Britain the great ocean-going country she is. The same principle should be applied to civil aviation, which should be free the world over. I regret that, instead of sticking to the large issue, the government has brought in these irrelevant matters when the war is on, and at a time when the railways are doing magnificent work they are to be deprived of any share in civil aviation. At a time when railway facilities in this country are choked, the ministry says: Nobody shall engage in civil aviation except the government, and they shall have a monopoly of it. I am not a Canadian Pacific man or any other kind of man, but one of independent mind, but I do say that this policy is a mistake. The government has got out a political feport on civil aviation in the domestic and in the international field. Civil aviation should rank next ,to agriculture in providing work and employment for our young men when they return from this war after writing the most glorious page in the lpstory of the world. I still have ten to fifteen minutes, Mr. Chairman, and I will continue my remarks when this question comes before us again, since I see it is now eleven o'clock.\nItem stands.\nProgress reported."]
Mr. CHURCH:: It is not my desire to delay the proceedings of the committee but may I say there are two or three important matters which have come before the house during the past year. The ministry have made certain proposals with regard to two or three matters in which I am interested, namely, coal, housing, shipbuilding and one or two others relating to the city of Toronto. The minister made a long statement with regard to the coal question. It is now proposed to appoint another royal commission to go into the whole question of our fuel resources and what is to be done during the remainder of the war and long after the war.
This is not a new question or a new topic. The question of a national fuel supply has been raised on other occasions. I hold in my hand a volume of Hansard for the year 1923. During that year a debate of two or three days' duration took place on a resolution regarding a national coal supply. I brought that resolution before the house on March 19, 1943. In it I asked that the fuel requirements of Canada should be obtained as far as possible from the British empire, from Alberta, the maritimes and Wales. During the debate it was shown that we were sending 850,000,000 a year to Pennsylvania to obtain anthracite coal from the mines there and in that way we were supporting those mines. The proposal was that Canada should establish a system of bonuses, subventions and subsidies in order that our coal [Mr. Senn.l	.
producing provinces may be able to provide us with coal, thereby relieving us from becoming absolutely dependent on a foreign supply of coal from Pennsylvania and other coal producing areas of the United States.
The resolution I proposed at that time was not referred to a royal commission to waste time but was sent to the standing committee on mines and resources. I do not think that committee has held a meeting since the war started. Surely with all the information we have in connection with the problem of a national fuel supply we do not need to send this question to a royal commission. We were fortunate last winter in that we did not have one of the winters that we have experienced in the past when the Canadian people had to fire their furnaces eight or nine months in the year. I remember a few years ago we had to put coal in our furnaces right up to the end of May. There were many other winters just as bad. The government should have formulated a policy long ago. We have heard of meetings with the provinces and the municipalities. As a result of my resolution the government of the day, three or four years late, instituted a policy whereby they paid subventions and subsidies on coal from Nova Scotia to the central provinces. This coal was moved partly by rail and water and all water to the head of the lakes. Hundreds of thousands of tons have been moved by that route in years gone by. Subsidies of a dollar a ton and sometimes more than that, and occasionally less than that, have been paid through the railways by the country.
The production of coal in Alberta is only in its infancy. There was a proposal that we should utilize pipelines for oil and all these things. That started away back in 1923. Little or nothing has been done about it. Inasmuch as it is the poor people who suffer I do hope that something will be done. I should like to refer to the larger cities, and more particularly the city of Toronto. Some
830,000,000 have been spent on the whole waterfront and in the vicinity of Ashbridges Bay to establish facilities for handling coal in that industrial district. Nearly five or six hundred thousand tons of coal are piled in the eastern end of the waterfront in a year. That has helped greatly to relieve the coal situation in that district, but the supply is dwindling. Owing to the strikes and the situation which exists in the United States and the demands of the war we do not know what is going to happen. We do not know whether we are going to have any supply for next winter owing to the changing conditions in that country and the changing war. Where are we to get our substitutes? The other evening the minister referred to a pile of

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wood at the head of the lakes. We should like to get some of that wood in Toronto. We understand that during the coming summer barges are going to move that wood to some of the ports down here.
The fuel situation is a world situation. So far as Canada is concerned it depends largely on transportation and the labour situation. I am not going to say very much more on this question but I do hope that some substitutes will be found.
In 1923 I advocated a system of a national hydro policy for this country. It was shown in the returns that were brought down at that time that we had a potential horse-power of
42,000,000 with only about 7,000,000 horsepower developed. Part of it was seasonal, used only in the summer time. Only one sixth or 7,000,000 horse-power had actually been developed. It was shown then that we had not been progressive enough as a country. There should be a further utilization of our hydro resources for heating purposes where possible. There should be a national hydro policy. On my last visit to British Columbia in 1927 I was very much surprised to find that the rich natural resources of waterpower that that province enjoys were not utilized in that way to the extent that they should be in public ownership thereof. We have to do something because before many months are past our fuel supplies will have been exhausted. Many cities and towns are now living from hand to mouth. The control board has brought about more confusion than relief. Delivery is a very important factor to many small dealers in the cities and towns of this country. With the labour situation as it is, particularly in the mines, and with the income taxes which have been imposed on mine workers both here and in the old country, it is difficult for some of the mines I know to secure the proper help. What are w'e going to do next winter? We are not through this winter yet; we seem to be headed for a belated cold spell during the latter part of March and April, which are the most dangerous months for many of the diseases that prevail in this country, such as pneumonia and so on. There is not a day to be lost in getting ready for next fall. The appointment of a royal commission has been announced, but you might just as well save jmur money. I see no reason why the committee on mines, forests and waters should not have been meeting throughout the war dealing with questions of this kind. The fuel situation has been made a political football; it has been discussed by three or four committees and commissions which have called witnesses and made reports. One of these was the 100-121
select committee on reconstruction and security after the war, but I know of no reconstruction which has been brought about in regard to the national fuel policy as a result of the work of these committees. We have the committee on mines; we have three or four departments or branches of departments all interested in the same questions, but nothing seems to be done. I do urge upon the house that this is the most important question we have to face in Canada, especially in connection with the working classes. I do not know how they came through last winter, and no one knows what is going to happen by next September, with our supplies of coal from the United States being curtailed all the time.
Now I should like to say a word with regard to the housing situation. I admit that any discussion of this question is limited to item 3 of the minister's estimates, which deals with housing development in war time, and the amount of which has been reduced to $11,000,-
000.	I would remind hon. members, however, that last Sunday evening the Prime Minister of Great Britain set a goal of 500,000 prefabricated houses for the returned soldiers and working people of his country, and I imagine that actually nearly a million homes will be required. Why are we not doing something about housing in a practical way? We appointed a rent controller, but he has simply tied up real estate in a worse knot than ever, with the result that now no one in the cities and towns wants to own real estate. With all the artificial burdens and barriers placed on home ownership it amounts practically to the confiscation of real estate. According to the assessment commissioner of Toronto, when war broke out over sixty per cent of the people of that city owned their own homes. I believe the latest figures indicate that at a conservative estimate more than one hundred thousand people have been driven from their small homes into apartments. When the war is over these people will want to find small houses in which they may live with their wives and families. Many of these houses will be required by returned soldiers. I understand that according to a recent survey in Toronto some sixteen thousand families will have to find new homes on May 1, and many of them are the families of soldiers who are now overseas. I have some of them in my own constituency, which was referred to in the report on housing prepared under the direction of Lieutenant-Governor Bruce away back in 1934.
I believe the Prime Minister of Great Britain has said on many occasions, in connection with this housing problem, that homes

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built during the war should be of such style and construction, and contain such appliances and improvements, as will enable them to fit into the scheme of things when the war is over. Away back on January 24, 1935, I moved a resolution in this house regarding the housing situation and the construction industry. It brought about a very thorough investigation by a committee of the house which sat for some five months, heard witnesses and made a report to parliament. This is the resolution I moved:
That in the opinion of this house Canada should inaugurate at once a national housing, building and reconstruction policy adapted to its circumstances, and that such a policy is an economic and social necessity and in the best interests of the people of our country.
The debate on that resolution lasted well into the evening, when Mr. Bennett, who was then prime minister, proposed the appointment of a select committee to go into the question. That committee recommended the construction of a large number of small houses. I was a member of the committee; we heard witnesses from all over the world, and the report is just as applicable to-day as it was then. When the present government came in they adopted the suggestion I had made in the committee, that instead of the government creating a large housing department the work should be done by private industry and loans made through the banks. I want to give hon. gentlemen opposite a great deal of credit for what has been done in that connection. Some $83,000,000 has been invested in small homes, with the banks loaning the money and the loans guaranteed by the government. These small homes were well constructed on standard plans at low cost; you can see them all over the city of Toronto now, and they are a credit to the present government and to Mr. Bennett, who supported the scheme.
I wish to help the minister; I do not want to sit here as a private member of the opposition and raise unnecessary objections, because I know what this war business means. I have seen two great wars, and I know the difficulty of carrying on, but I do say that in connection with the housing situation we have had too many people taking a hand, too many committees, too much red tape and too few houses being built. We should get down to some system along the lines suggested by Mr. Churchill the other evening, under which we will provide houses for soldiers and civilians. I would not say twenty-five thousand houses in the Toronto district would be enough; I do not think that number would meet the situation at all, but I think we should do something before we adjourn for Easter, because on May 1 a great many people

will be put out by the bailiff. People do not want to own houses to-day, with all the controls that are in existence. You cannot get enough revenue to pay the taxes and interest on the investment, let alone the depreciation, so you make nothing out of the property. In many cases real estate has become a burden because of excessive taxation.
We will have to get down to brass tacks and decide three things in regard to housing and reconstruction. First, what is Canada going to do to see that the industries of this country furnish a large share of the building materials and supplies which Britain will need for the manufacture of these half a million prefabricated homes proposed by Prime Minister Churchill last Sunday evening? We will have to come to a decision in regard to tariffs. What is to become of preferential trade within the empire; what is to become of favoured nation treaties? We have the cart before the horse in appointing these committees; we have to solve these other problems first. Are we going to get the large share we should get in connection with the construction of these homes in the old country and, if so. how is it going to be done? I say to my hon. friends to the left that they have to give the Conservative party credit for a great many things which have been done in the city of Toronto, though of course the Liberals also and others were equally active in public ownership there. Toronto was the pioneer and leader in many of these advances; by its guaranteeing of bonds it financed seventy-five per cent of the initial hydro cheap light, power and transportation programme under which the city went into the building of roads outside the city, purchased the street car lines, gave an improved water supply, developed a fine harbour and provided facilities so that coal could be brought from lake Ontario and lake Erie ports, and in fact right to Mr. Baldwin's own plant in Ashbridge's bay from Swansea, Wales, in 1915-16. . During that period many services in transportation were extended to the counties of Ontario and Peel, where my hon. leader lives, by purchase of the radials and by new buses; in fact Toronto took the lead in supplying transportation and other services through the Toronto Transportation commission throughout the area.
What has been done there? We have a housing situation, a coal situation, and a situation respecting improved roads. I do hope something will be done about it. Sometimes the committee on reconstruction seems to be away up in the clouds. It seems never to get down to terra firma. It never gets down to the ground to discuss how houses are to be built so as to house these 16,000 people who are to be out of their homes on

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the first of Maj'. Nothing is being done to provide for those among them who may be soldiers.
Sometimes it is and sometimes it is not advisable to criticize the government of the day. But it is a function and a duty of the opposition to criticize, and it is certainly a duty to criticize when we find that when faced with this situation the government does not do anything. We shall have to decide about these problems before very long. So far the government has put the cart before the horse in what it has done. However, this coal and housing question is a world problem.
There is one other matter to which I should like to refer. Some hon. members seem to be able to discuss civil aviation, while others are not allowed to do so. The whole field of civil aviation and its proper solution should be discussed. I believe the leader of the opposition deserved a great deal of credit for his decision that the opposition should give thorough study to the matter before coming to any definite conclusion. I understand an agreement has been reached over parliament's head, as to both domestic and international aviation. For twenty years I have studied the matter, and I believe that before the imperial conference is held some policy should be decided. I shall not discuss it now, because no doubt an opportunity will be given later. But I do believe there should be a discussion before the imperial conference is held. The high court of parliament is meeting, and we must have something to say about it. There was a statement by the prime minister on April 2, 1943, which, in effect, is the gist of the proposals of the present minister on civil aviation with respect to domestic and international affairs. I believe at some other time we should have an opportunity to discuss this matter, and a time should be set aside for the purpose. We should go into all aspects of it, because it is a very involved question. I remember at the close of the last war discussing it with the late Colonel Barker, V.C., and Sir Frederick Handley Page, who came t'o our city. More than twenty years passed between the two wars; Canada left it to private initiative and forgot all about it. In my view something should be done about it. I do not see why my friends to the left should be permitted to discuss a matter of this kind, while others have to wait until a later time.
A large shipbuilding industry was brought to our city in 1917. At that time I was one of the heads of the harbour development. I remember discussing with the late Mr. Hazen, then minister of marine and fisheries, the matter of shipbuilding in Toronto. At that 100-121i
time a large number of wooden ships were built. One of those ships was of about 9,000 tons. I hope the minister will do something so that wooden ships may be built on the great lakes. The government has spent about
S125,000,000 on the deepening of the Welland canal and the improvement of inland waterways in Canada. In view of the coal situation, and many other matters of that kind, I believe the time has come when some of these plants should be converted to peace-time plants, and that the government should consider establishing a system whereby wooden ships would be built to carry the traffic on the inland waterways and coastal traffic along the Atlantic coast after the war.
In 1917 one of those ships was named after me, but unfortunately in 1939 it was sunk on the Atlantic by the Germans three or four days after it put to sea, after the Athenia was lost. I am not much good at having things named after me, because when I was head of the municipality and the Toronto Transportation commission was started to take over the street railway, it was decided that they be called the Toronto Civic Lines. But after the matter was considered I told them they had better not use that name, because sometimes they might be called Tommy Church's lines-which they were, more or less,
I may say.
But I do say to the government that all along the great lakes it should get ready for the close of the war, and have these shipbuilding industries established, if we are to be ready for the great trade which will flow to this country after the war by means of water-borne traffic and shipment by rail.
These are the only suggestions I have, and I hope the minister will consider some of them. I should like to see something of a practical nature done immediately along these lines before the end of the war.


Mr. GRAYDON:: Before the item carries there is one' matter I should like to bring to the attention of the minister. This arose from the debate which took place just before the recess yesterday, in which the hon. member for Yukon took part. He is out of Ottawa this afternoon on important parliamentary business, and has asked that I draw the attention of the minister to an item which deals with a matter often discussed, namely the Canol project.
It would seem that some of the ministers are not completely informed at the moment respecting certain details. For this reason I draw to the attention of the minister an item which appeared in the Alaska Weekly, published at Seattle, Washington, on Friday,
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March 17, 1944, which, I believe, throws some light oa the matter under discussion. This item, under an Ottawa dateline, states:
A vast bloc of territory in the Canadian northwest, including all the Yukon Territories comprising nearly 1,000,000 square miles, has been set aside as an oil reserve for exploration and drilling exclusively by the United States War Department for the duration of the war.
This has been disclosed in official documents relating to the Canol project and other military developments involving United States expenditures in northern Canada.
This, I think, is the important point in the dispatch, and the one concerning which the hon. member for Yukon expressed more than usual interest:
Half of all oil discovered wrill become the property of the Canadian government within six months of the end of the war.
Nominee of the United States Army for exploration and drilling of oil wells at U.S. expense in connection with Canol has been Imperial Oil Company Limited, which already held leases around Norman Wells area on the Mackenzie river.
The U.S. contract with Imperial Oil was declared by the Truman committee of the U.S. Senate to be improvident, and it is being renegotiated.
The item goes on to deal with other matters. I believe it brings to the attention of the committee some information in addition to that which appears in the Votes and Proceedings of Friday, January 28, where we find mention of an exchange of notes between Canada and the United States, constituting an agreement for the construction of a pipeline and refinery in the Yukon Territories, as well as the subsequent exchange of notes between the two countries for the establishment of an oil supply line from Skagway to White Horse. I bring this to the attention of the minister at the instance of the hon. member for Yukon who, because of the business I have mentioned, is unable to speak to the committee at this appropriate time.


Mr. WEIR:: I should like to refer to one matter which I do not think has been discussed up to now. I do not see any place where it might properly be discussed later. I refer to the distribution of lumber in the western provinces. It has been brought to my attention, and I have observed myself, that there is a situation developing throughout Canada which is proving to the disadvantage of certain types of lumber dealers. I refer to the independent dealer. There seems to be a distinct difference between the position of the independent dealers and that of the line companies. My own observation has been that the independent lumber dealer cannot get lumber, while the line companies, perhaps 
because of better connections or something of the kind, seem to be able to get substantial supplies.
In certain communities there is only the one type of dealer, the independent, and the result is that the farmers in those communities are unable to secure lumber for repair work or for the building of granaries and so on. In other communities where line companies are operating they are able to obtain the lumber they require. I do not know whether it is the fact, but complaint is made that the suppliers of lumber are more interested in exporting to the United States than they are in supplying the local market, particularly in the western provinces. Another claim made is that dealers, particularly the independent dealers, are being forced to take off-sizes, boards of the wrong widths, and dimension stuff which is not suitable for their operations.
The lumber dealers are concerned about the situation. Many have spoken to me and pressed for a clarification. Is the minister in a position to tell us just what the situation is with respect to the supply of lumber or the controls that are operating, particularly the controls that affect the independent dealers and the line companies?


Mr. HOWE:: The problem referred to by my hon. friend has been receiving the continuous attention of the timber controller for a good many months and every effort has been made to provide adequate supplies of lumber all over the prairies. The difficulty has been to obtain proper distribution. My hon. friend is quite right when he says that the producers of lumber are interested in getting export prices. As hon. members know, prices within Canada are governed by price ceilings, while those across the line are much higher. There has been some trouble with producers cutting lumber to sizes suitable for the export market and unsuitable for the Canadian market. The timber controller in these cases has ordered the lumber recut, and I think the practice referred to is being broken down,
As my hon. friend knows, lumber is cut in the northern part of the three prairie provinces, and the problem has been to get good distribution in the southern part where freight charges are higher. A procedure has been adopted which I think has worked out in the main. Out of four cars produced, a producer may sell two where he likes, and if he ships the third into the southern part of the province as directed by the timber controller he *may export the fourth car. That is an arbitrary rule but I think it has worked out fairly well.

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We have been informed by reliable sources in Saskatchewan during the past two or three weeks that there is sufficient lumber on the prairies, and requests have been received from there to permit a greater volume of exports. However, the timber controller is not satisfied that there is sufficient lumber on the prairies. and this request has not been acceded to. I think the situation has improved. I see no reason why local yards cannot buy as freely as the line companies, because the transactions are between the producer and the retailer. I shall be glad to have my officers make inquiries to see whether there is a real difficulty, and if there is, to take steps to overcome it.


William Gilbert Weir: It appears that these people generally buy through brokers, but now that lumber is in a tight position the larger outfits are buying direct and short-circuiting the commission men. The result is that certain dealers cannot get any lumber at all while others are short-circuiting the regulations. Is the minister in a position to state the approximate quantity of lumber that will be available to the western provinces during the coming season?


Clarence Decatur Howe: I am afraid I cannot give the figures. I shall look up that information and try to have it before we finish this evening.


Mr. WRIGHT:: Will the minister also
inquire about the quality of lumber being distributed in western Canada as compared with the quality of the lumber being shipped to the United States? We have found that the quality of lumber has deteriorated seriously during the last two or three years. Apparently they are exporting the better grades of- lumber and leaving the poorer quality for the home market, which is not altogether fair.


Clarence Decatur Howe: I shall be glad to look into that.


Mr. ROSE:: I should like to make a few remarks about the shipbuilding industry. We are very much interested in this industry in the province of Quebec and we have made a considerable contribution toward the success of the war in this connection. Our riveters have set up some fine records, but these workers are beginning to wonder what is going to happen in the future. Are we going to have a merchant marine worthy of an independent and strong Canada?
The minister stated that by March 1 we had completed fifty-four 10,000-ton ships, including ten tankers and thirteen 4,700-ton ships, and that these had been delivered to
the Park Steamship company. He also estimated that by the end of August an additional thirty 10,000-ton ships, including three tankers, would be added to the Canadian merchant fleet. Therefore by the end of August the Park Steamship fleet will consist of the following: 71 dry cargo vessels of 10,000 tons; 13 tankers of 10,000 tons; 13 dry cargo vessels of 4,700 tons.
The dry cargo fleet will approximate about three-quarters of a million tons dead weight. The minister admits that the 4,700-ton vessels are useful only in the coasting trade. The 10,000-ton vessels, even the Canadian Victory ships, are of a type that will be in tremendous oversupply after the war. They will be utterly unable to compete with the United States, British and other foreign vessels. The Canadian Victory ships are slow-I am informed they can make only ten to eleven knots at best-and are not to be compared with the United States ships of the same name which are of an entirely different type. These United States ships have a speed of from sixteen to eighteen knots and are now being turned out in United States yards in large volume for use both during the war and in the post-war period. The Canadian Victory ship compares with the American Liberty ship, which is now generally known to have little post-war value. Why did we in Canada not turn to the production of a more useful type of vessel for post-war trade, especially as the yards have been cutting down production?
I read a statement in the report of the Canadian Pacific Railway company that they have ordered a number of ships of the Beaver type in England. I do not know the exact speed of these ships; could the minister give it? The recently announced reconstruction programme of the United States Maritime commission for the year beginning next July includes 213 C-type ships whose speed will be faster than that of the Victory ships; 1,131 Victory ships, 372 tankers and only 194 Liberty ships. Other types make up a total of 2,359 ships. The fact is that in the United States they are concentrating on the faster ship, the Victory ship and the C-type ship. But we are to have only slow ships and I am very much afraid they may be useless. We shall only be able to operate them as tramp vessels carrying cargoes at bargain rates, and there will always be arguments over the wages paid on such ships, because it will be said they take so much longer to complete a trip, and the tendency will be for wages on these ships to be lower. We have still time to correct the situation. It is true that we must
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build as many ships as are required for victory, but other countries, while producing ships for victory, have also in mind the postwar and are preparing for it by building a faster type of ship. The picture I am painting does not appear to be very bright, but these are the facts.	-
An article in the Shipping World of December 22, 1943, points out that before the war there were about 10,000,000 tons of tramp shipping and that that figure would be increased easily to 21,000,000 at the end of the war. Of that total, 5,000,000 tons will be privately-owned and the rest government-owned. The figures are as follows: United States government, 12,000,000 tons; Canada,
2,000,000 tons; United Kingdom, 1,500,000 tons; continental governments, 500,000 tons. The United States and other countries will have plenty of fast tonnage, and if necessary they will do away with the tramp tonnage altogether, while we shall be left with nothing but tramp tonnage.
An article in the London Economist of January 1, 1944, points out that any large scale selling of these ships by the government to private owners would push the bottom out of the freight market as effectively as an attempt by the government to keep these vessels in operation.
I repeat that I am not raising this issue to argue that it was not necessary at a certain time to build the kind of ship we have as rapidly as possible to carry supplies and munitions of war to the armed forces. But we have reached the stage where we must think of the future, and it is only right that Canada should have a government-owned merchant marine. We had one in the past, the C.G.M.M. They were old ships, and we must have better in the future. We should have shipping to be prepared for any emergency. We have the trained men, and we ' should build up a merchant marine that the Canadian people can be proud of. Young and old would be proud to see a fast fleet of Canadian government merchant vessels flying the flag of their country; and I hope that our ships will fly a truly Canadian flag.


Mr. BLACK (Cumberland):: Mr. Chairman, I notice that the first item of the minister's estimates provided the sum of $195,000,000 as the estimated requirements for 1943-44, for additions and extensions to plants with estimated expenditures for 1943-44 of $149,033,690.74, and estimated requirements for 1944-45 of $60,000,000. I would like the minister to give the details of these expenditures as completely as he can.
I Mr. Rose.]
I do not wish to enter into another discussion with respect to the maritime provinces; I think our position is pretty well understood. I want to express my appreciation of what has been done in developing some industries in the maritime provinces during the war, although only a small portion of the war expenditures have been spent in the maritime provinces. It is recognized by the people of the maritime provinces, and I think by people all over Canada, that the maritime provinces and the outlying portions of Canada have not shared in the war expenditures as they should share if there is to be equality of industrial development in Canada. This is unfair to the west, but much more so to the maritime provinces, inasmuch as the west never had established industries, while the maritimes had scores and scores of industries which no longer exist or exist only as very small establishments. They have been absorbed by industry in central Canada or have been crowded out by mass production and mass merchandising. There never was a better opportunity given to a government than during the war years to restore an equilibrium of industrial enterprise in Canada by establishing industries in the maritime provinces. These enormous expenditures by the government have totalled up to the end of 1943 the sum of $714,258,389 in government-owned industry and in assisting private industry. If the manufacturing and industrial situation in the maritime provinces is not improved during the war years by establishing industry with post-war prospects, I do not see that there is any hope in the years that are ahead. I say that it is the responsibility and the duty and the opportunity of the minister and the government to equalize industrial development in this country and establish and revive industries in the maritime provinces.
Unfortunately many of our products in the maritime provinces are basic commodities, such as iron and steel which sell for two or three cents a pound and are shipped elsewhere and manufactured into products costing as much as one or two dollars a pound. The same is true of lumber. It is largely produced and sold as a basic commodity. That applies also to the salt industry. Salt is sold as a basic commodity in our province at from three to four cents a pound, while it should be the basis of a great chemical industry. Our salt industry should be producing at the plant refined salt, soda ash and related compounds, salt cake (sodium sulphate), hydrochloric acid, caustic soda, chlorine, potash and other chemicals which are contained in our big deposits at Malagash. I hope that in these

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appropriations we are now considering provision will be made for the development of a chemical industry based upon our salt resources.
Another big product in Nova Scotia is coal. Our coal is shipped at from four to five dollars per ton. Much of this might be converted and made into chemical products, valued up to a thousand dollars per ton. It appears to us that there might be established in Nova Scotia, on the basis of our raw materials, industries that would tend to equalize industrial activities in Canada and to some extent restore the position we held prior to and in the years following confederation. I hope that in the estimates now being considered provision is being made for development of our raw materials, which would be of benefit to Nova Scotia. I shall be glad to have from the minister a schedule of what he proposes under the very large appropriations that are now being considered by the committee.


Clarence Decatur Howe: The expenditures from April 1, 1943 to December 1, 1943 under the general programme would be:	General munitions,
$75,855,905.39; aircraft, $12,741,249.55; shipbuilding, $7,248,972.33; acquisition of United Kingdom plant, $5,000,000. That is the balance of a transaction carried through a year ago, making a total of $100,846,127.27. For the three months since, bringing it to the end of the fiscal year, it is estimated that $48,187,563.47 will be spent, making a total of $149,033,690.74, as shown in the column under estimated expenditures. It will be noted that the amount is $45,966,309.26 under estimated requirements. This amount represents commitments which will be carried into the new fiscal year, so that the estimated requirements of $60,000,000 for the fiscal year 1944-45 includes $45,966,309.26, left over from commitments made in the vote in 1943-44.


Percy Chapman Black: Included in the $60,000,000?


Clarence Decatur Howe: Only $15,000,000 of new money is in the $60,000,000.


Percy Chapman Black: In regard to the communication and signal programme, the minister reported to the committee, as appears at page 1696 of Hansard. May I ask what proportion if any of these large expenditures has been made in the maritime provinces? I will quote from the minister's statement at page 1696:
The value of our production in communications in 1940 was one million dollars, in 1942 60 million dollars; and in 1943 136 million dollars. The radio and communications industry is now operating at a level some eighteen times
greater than in 1939. We have orders on our books to the value of 400 million dollars, and we do not expect to reach peak production until the second quarter of 1944. To illustrate the diversity of the programme, I might point out that there are approximately 4,500 different items in current production by some fifty prime contractors and several hundred subcontractors.
And the next paragraph:
Some twenty major types of radar equipment have been developed for a variety of applications, ranging from one type for antiaircraft defence having 60,000 components, and 270 radio tubes, mounted in several large trucks, to small compact airborne units used for submarine detection at sea and target location on land.
What proportion of that large programme amounting to $400,000,000 has been undertaken in Nova Scotia? I do not want to be sectional; still I wish to point out to the committee and emphasize the fact that for many years we have not progressed industrially in that province. In manufacturing we have lost our position in relation to the rest of Canada. This is an opportunity such as we have never had since the decline of industry in that province, for the minister to do something for Nova Scotia. It is an opportunity that has come to no other government or minister to rectify the unfair conditions under which we have, existed in that province. Again I would inquire as to what proportion of this enormous development has taken place in Nova Scotia, a development involving in 1943 $136,000,060 and on our books, for the current year, the enormous sum of $400,000,000.


Clarence Decatur Howe: I do not know that I can
give the exact figures, but all that production is being obtained from existing manufacturing plants. The hon. member knows how many such plants there are in the maritime provinces and from that he can compute the probable output there. All suitable facilities of the country are being used for that purpose, including those in the maritime provinces, if any.


Mr. COLD WELL:: Following the hon. member for Cumberland, I think it is borne in upon the members of the committee that what should be undertaken without delay is a thorough survey of our resources in various parts of the country. The war has tended to concentrate industry more and more in a few places, and just as in Nova Scotia so in the western provinces, particularly Saskatchewan, we are going to feel after the war increasingly dependent on those parts of Canada where manufacturing industries have been established during the war. It seems to me that without delay there should be a thorough survey of
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the resources of the country and we should endeavour to base, upon those resources, any further industrial development we undertake, on the principle of spreading them across the country instead of concentrating everything in one or two areas.
That was not what I rose primarily to say, however. This morning I placed some questions on the order paper and the Clerk of the House, quite properly I think, returned them to me because the questions involved the giving of some information. As we know, the rules of the house do not permit members giving information in the form of questions. But I wanted to find some information which comes under this particular item of the war appropriation, and so, instead of endeavouring to redraft the questions in a manner that might not be altogether satisfactory, I thought I would ask those questions now in the form in which I am going to put them.
I might say to the minister that I put the questions on the order paper because I did not want to prolong the discussion here. But I have had a number of inquiries lately as to whether or not there has been a change in the ownership of one of the companies with which we have been doing some business both in shipbuilding and in manufacturing of war equipment in Montreal. I refer particularly to the Canadian Vickers Limited. What is suggested to me is that a very considerable amount of stock of Canadian Vickers Limited, either a majority or a minority amount, I am not sure which, has passed into the control of a corporation known as Losanac Limited. In turn I am informed that Losanac Limited is a subsidiary of the Solvay Company of the United States; that this company is controlled by a corporation located in Basle, Switzerland, and that the holding company there is a company with a German name in which it is suggested to me there is a considerable amount of German capital even at the present time.
In my opinion it is in the public interest that the government of Canada should endeavour, if possible, to look into this situation to discover the facts, because Losanac is now the largest holder of preferred1 or common stock, I am told, of the International Nickel Company, and has substantial holdings in the Hollinger mine and other gold mines in the country, and also in the Dominion Steel and Coal Company and Asbestos Corporation. It it is, as I am informed, connected with the Solvay Company, that company had very large and important holdings in some fifteen or sixteen countries, including Great Britain, Japan, United States, Argentina, Brazil, Germany and others. In view of what we have learned during this war, particularly from
EMr, Coldwell.]
the investigations of the last twelve months or so in the United States regarding the associations of companies in all these countries with companies that engage in the provision of vital war material, it seems to me that the time has come to make every investigation that we can, to follow every lead that is given to us, in order to protect ourselves in future from the kind of thing that we have suffered from in the past. While this may not fall directly within the estimates of the minister, yet we are dealing with the war appropriation estimate as a whole. What I am about to say now will be said to save time in order to give the government the opportunity to look it up. In a recent official publication I came across a study made for the subcommittee on war mobilization of the committee on military affairs in the United States senate. It goes carefully into the associations of some of the corporations. The ones I refer to now are the I. G. Farben company and a British company known as Sterling Limited, of which some time before the war two of its directors were members of the I. G. Farben corporation. I want to read a statement in order that it may be looked up. The statement is as follows:
I G. Farben and Sterling also undertook to evade the tax laws of Canada. Under basic contracts, the profits of the Canadian Bayer Company were to be divided equally between Sterling and I.G. To reduce taxation, the payment to I.G. was misrepresented as a royalty, and charged as a cost of doing business. Remittances to I.G. were accompanied by the following statement:
You will note that the compensation paid to you has been deducted as an expense of the business. In the eyent that the Canadian government should ever determine that such payment to you is not properly deductible as an expense, and in consequence should require us to pay an additional tax, such tax will, of course, be charged against the total profits of the year in which such additional tax is required to be paid.
A similar practice was followed in the United States between 1920 and 1930. Eventually, however, it was disallowed by the income tax authorities and Sterling was required to pay half a million dollars in back taxes. Thereafter this method of accounting was discontinued in the United States but not in Canada.
I thought that later on when the appropriate minister is before us he might have looked into this situation. If we are able to collect some back taxes from this corporation, it would assist our war effort and our method of raising additional funds therefor. That is why I raise the tax suggestion at this time.


Clarence Decatur Howe: I might say that the department has no knowledge of the stock ownership of Canadian Vickers. There has been no change in the management of the plant since the war began. Like my hon. friend, I saw some references in the newspapers to a

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change in control. That affects only the stock ownership of the company, and as none of the stocks of Canadian Vickers have paid dividends for a great many years, it would not affect in any way the financial position of the company, or the interest of my department. So far as the second matter is concerned, I shall be glad to call it to the attention of the Minister of National Revenue.


Mr. COLDWELL:: It might be of interest to our combines investigation department.


Clarence Decatur Howe: Possibly.


Major James William Coldwell: It it were drawn to
their attention.


Mr. BRUCE:: I do not wish to delay passing of the minister's estimates for more than a moment. I should like to ask a question or two which I think will be of considerable interest to the public. My first question is with respect to a substance known as penicillin, a valuable therapeutic agent which is now being produced in Canada. It is being produced at the Connaught Laboratories in Toronto, I think, at the instigation of the minister himself. This discovery, perhaps one of the most important in recent years, was made by a British scientist. It is on a par with the discovery of the sulpha drugs, and has carried us one stage farther in our armamentarium which enables physicians to deal more effectually with certain heretofore frequently fatal diseases.
Will the minister tell the committee what arrangements he has made not only with the Connaught Laboratories at Toronto but with other laboratories or companies in Canada for the production of the substance known as penicillin? Second, when does he expect there will be a sufficient supply to meet the requirements of our armed forces; and third, when will a sufficient supply be made available for the civilian population?
Will the minister also give the committee an explanation of the crown company known as Defence Communications Limited? I believe it was set up by order in council, but I have not seen the order. Perhaps the minister would explain why this company was organized, what its purpose is, and if it will cease operations at the end of the war. Will he also make available to the committee a copy of the order in council?


Clarence Decatur Howe: With regard to the matter of penicillin, we have been acting under the guidance of the committee of the national research council whose responsibility it was to determine the requirements both of the armed services of Canada and of other uses, and to guide the department in the steps
taken to produce penicillin. On the advice of that committee we have established two sources of supply, one, the Connaught Laboratories in Toronto, and the other, a government-owned plant in Montreal operated for the government by Ayerst, McKenna and Harrison. We are now producing penicillin in a considerable quantity. I think we have fairly well taken care of the requirements of the armed forces from our own sources of supply. Production will be greater than was anticipated when the plants were organized. A committee in Washington, on which Canada has representation, is studying the supply situation in order to determine when penicillin can be released for other than military uses. No decision has been reached as yet, but it is my belief that within the next five or six months it will be possible to release penicillin for other than military uses. Does that answer the question?


Herbert Alexander Bruce: Yes.


Clarence Decatur Howe: To answer the other question, Defence Communications is an outgrowth of the requirements of the armed services for communication systems in the eastern provinces. Each service was building its own communication system independently, and it was found that there was a great deal of overlapping. Finally the three services joined in requesting the Department of Munitions and Supply to undertake to provide communication services for all three branches of the armed forces. A crown company was formed called Defence Communications Limited, with which were filed the requirements of the armed services. Appropriations were made from the funds of the three armed services, and through that crown company a unified system of defence communications has been built. The work of the company is practically completed, and it is expected that the organization, which was a construction and not an operating company, can be dissolved within the next few months. I believe the operation of the company has resulted in a very considerable saving to the taxpayers, and I know the armed services are well pleased with the communication system that has ben worked out. The problem was not wholly one of construction; there was a certain amount of construction, but the problem was more particularly that of coordinating the services of private communication companies and combining with them the new construction that was necessary, so that the whole would give satisfactory service for defence purposes.


Mr. ADAMSON:: Before the minister leaves the question of penicillin, what is happening to Knox college in Toronto? Is it being rebuilt to manufacture penicillin?
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Clarence Decatur Howe: It was taken over by Connaught Laboratories for the manufacture of penicillin, and for that purpose is being remodelled at government expense. It is just a building used by Connaught Laboratories for that purpose.


Agar Rodney Adamson: That is the sole use made of that building now?


Clarence Decatur Howe: Yes, as far as I know.


Agar Rodney Adamson: Has the minister any idea what the remodelling has cost?


Clarence Decatur Howe: It was three or four hundred thousand dollars; I do not remember the exact figure. I believe our investment with Connaught Laboratories for equipment and for remodelling the building is about $350,000.


Agar Rodney Adamson: Has the minister any idea of the expected output?


Clarence Decatur Howe: It is a unit with which I am not very familiar. I can tell my bon. friend there are a great many ciphers in front of the unit, but I am afraid I cannot go beyond that. It will be substantial.


Agar Rodney Adamson: Will the production in Toronto be greater than the production at the Ayerst plant in Montreal?


Clarence Decatur Howe: The intention was to have it about fifty-fifty.


Mr. NOSE WORTHY:: I should like to revert for a moment to the question of coal, which was discussed this afternoon by the hon. member for Broadview. I should like to ask the minister two questions. First, what steps have been taken by the government to investigate the possibility of producing smokeless domestic coal from our bituminous coal by the low carbonization or other process, and are steps to be taken under any policy adopted or to be adopted by the government for further investigating the possibilities in this field? Second, what has been done, and what does the government propose, in regard to the production of oil from coal by the hydrogenation or any other similar process?
In connection with the first question I placed a question on the order paper last year; the answer was brought down on March 22, 1943, and appears at page 1418 of Hansard, as follows:
Studies of the more promising low temperature carbonization processes in operation in Europe and the United States were made by the mines branch of the Department of Mines during the period 1920 to 1930 when low temperature carbonization was a subject of particularly wide interest. Most Canadian coals were tested on a laboratory scale at the fuel research laboratories and the results of these tests were published in departmental reports.
	1
Subsequently arrangements were made to test Nova Scotia coal by one of the most promising processes developed up to that time and operating in South Wales. This test is reported in mines branch report No. 721, investigations of fuels and fuel testing 1929. The report concludes with the following statement:	"In
conclusion, it might be stated that it appears to the writers that in the case of the Sydney coal field there is an exceedingly good chance of converting bituminous coal into a domestic product, comparable to the existing fuels used for heating in central Canada, economically."
Then the answer goes on to explain that-
The hoped for development in Nova Scotia did not materialize and the anticipated expansion in low temperature carbonization generally did not take place.
As to the second question, I should like to direct the attention of the minister to information contained in a report made to the United States senate subcommittee on war mobilization, already referred to in this debate-


Clarence Decatur Howe: On a point of order, Mr. Chairman, I would point out to my hon. friend that there is no item in these estimates referring to the carbonization of coal. That would come under the Department of Mines and Resources, and though it is an interesting subject, it has nothing to do with the discussion being carried on to-day. I wonder if my hon. friend would mind waiting and bringing up his question when the estimates of the Minister of Mines and Resources are before the committee.


Mr. PERLEY:: The minister made an important statement last Friday, and I should like to have it cleared up a little if I may. At page 1818 of Hansard for March 24, 1944, he is reported to have said:
During the last few months we have had sufficient steel for all reasonable purposes and the restrictions on use of steel in agricultural implements have been removed.
He also said that there was sufficient capacity for the manufacture of malleable castings in Canada to take care of the demand. Are we to understand from this statement that manufacturers in Canada now may obtain sufficient steel to take care of the demand for new agricultural implements, particularly in the west? During what we speak of as the depression years the machinery on the farms were not kept in repair; then the war came along, and much of the machinery is practically worn out. There is quite a demand now for new machines, and they are very difficult to get. Before I left home in January I had some experience with the permits required by the prices board in order to purchase new machines, but if this statement means that the manufacturers will be

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allowed sufficient steel to take care of the demand I think it will be a splendid thing, particularly in view of the man-power situation. In the last two years particularly the use of power equipment in the production of grain has considerably increased, and I hope the equipment will be forthcoming to enable this development to continue. It would be a splendid thing also if enough repair parts could be supplied to take care of the requirements in that line.
While I am on my feet I should like to say a word or two with respect to the production of alcohol from grain. There has been a good deal of discussion in that connection, and we know what is happening in the United States.
I hope the minister will keep in mind the possibility of permitting some industries to be established in the west, right where the grain is produced, to provide facilities for the production of alcohol from grain to be used in the manufacture of synthetic rubber. I may say also that with the power we will have when the men come back from overseas, and the increased man-power which will be available to operate power equipment, it will be possible to produce grain cheaper than it is being produced to-day. It is not fair to compare the price of grain to-day, when we are considering the cost of producing alcohol from grain, with what the condition will be after the war, because we will be producing grain much cheaper than it is being produced to-day. The committee would be surprised if I were to state the price at which one of my constituents produced 18,000 bushels of wheat last year. He has a record of it. I would not like to say exactly what he produced it for, because it might cause the Minister of Agriculture or the Minister of Trade and Commerce to refrain from increasing the price, as we would like to see it to-day.
This afternoon, the hon. member for Macdonald referred to the lumber question. Certainly the independent dealers have not been getting as much as they would like. But the lumber they are getting, that which is being distributed in the central part of Saskatchewan, is not of the quality it should be. The hon. member for Melfort discussed that question this afternoon. Some action could be taken by those who are in control of the lumber supply to see that the people in the southern part of Saskatchewan get a better quality of lumber. It is available. Of course I can appreciate the fact that for the export market the large dealers have to have a high grade of lumber. I believe, however, that if a check-up were made on those producing lumber in the northern part of the province, a better quality could be produced and could be made available to the interior.
I would ask the minister to make a statement with respect to the supply of steel to the implement companies manufacturing in Canada. Do we understand from his statement that there will be a more liberal distribution of implements available for production in western Canada?


Clarence Decatur Howe: In 1939 the steel used by implement companies amounted to 30,150 tons. For 1944-45 we have released 81,750 tons of steel to the implement companies, which is an increase of 271 [DOT] 1 per cent.


Gordon Graydon: In the report of subcommittee No. 4 of the war expenditures committee, which appears in Votes and Proceedings for Wednesday, January 26, 1944, there are set out certain shortages which still exist and which retard the production of ample quantities of farm implements. That report shows shortages of malleable castings, ball and roller bearings, seasoned fir and oak required for the production of certain types of farm machinery, and experienced man-power.
I am quite sure that the minister has given some consideration to the recommendations of this committee. I never could quite understand why this committee in its deliberations and in the taking of evidence should have been sitting behind closed doors, as was the case with some of the other committees. That is my view, after looking over the report. I cannot see that much comfort could be given to the enemy by anything that would be discussed so far as farm implements were concerned.
That brings me to this one point: Was it the suggestion of the minister or of the government that rubber production, or synthetic rubber production, particularly the operations of Polymer in Sarnia, should be submitted to the war expenditures committee at this time for consideration? I understand that one of those subcommittees is about to deal with Polymer and synthetic rubber.


Clarence Decatur Howe: I have never at any time made any such suggestion, and I think it is a very improper suggestion to say that I have. These committees are investigating my department. They investigate where they like and as they like. It certainly would be improper for me to send them on a wild goose chase, or otherwise. I do not like the suggestion.


Gordon Graydon: The minister is picking up every kind of question that is directed to him, as a suggestion. If he will go over my remarks carefully he will find that I did not even hint that he had made any such suggestion. I only asked him at whose suggestion it was made, and whether he had made it. Because it would seem to me that with the Polymer plant only
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starting, and with synthetic production getting under way, there are very many other things at which the war expenditures committees might more properly be employing their talents, and this was one of the things which might perhaps be left over. I never have heard any serious complaint about synthetic rubber production or about the set-up of Polymer- except in some quarters, with respect to the whole mafter of government crown companies, which is a general subject, or might be described as a general line of policy which some take. I am glad to hear that it was not the minister who was sending the committee on an investigation of that kind. Even if it were necessary to have this particular matter investigated prior to other matters, it did not seem to me that there was much reason for investigating this plant.


Mr. REID:: I am one member of the committee which is going to visit the synthetic rubber plant. I think the suggestion was made -because I was there when it was made- that the product was so good and the output so wonderful that the committee should visit the plant merely in order to see it, not to investigate the output or what was being done.


Gordon Graydon: That just raises the whole question. I do not know whether this means now that the war expenditures committee is going on a lot of joy rides so far as this whole question is concerned, that is the way the hon. member indicates it. If this is one of those wonderful plants, I know of no reason why the war expenditures committee, which might be putting its time to better use, I think, need to be taking a trip of that kind at the country's expense.


Thomas Reid: A statement of that kind is very much uncalled for. I have been a member of the committee for three years, and I have never had any joy trip yet. But if I took a trip, or took it upon myself at any time to visit a plant, just because I was anxious to get information and see how the work was done,
I would resent its being called a joy ride. I say it is most uncalled for to refer to it as a joy ride. Personally I want to see what is deing done.


Gordon Graydon: So far as a joy ride is concerned, the hon. member himself was the one who gave the description which led me so to designate it. I was not suggesting that the hon. member was taking a joy ride because of the work he had to do on the committee. It does not reflect upon him. But if the facts are as he has indicated, that we are going to some of our best plants to see what is going 
on, then surely that is carrying the work of the war expenditures committee much farther than was intended.


Thomas Reid: It is going too far to say that the war expenditures committee is to have no Opportunity to see what is being done. I believe it would pay you to go and see it. You do not seem anxious to go to see what is being done.


Clarence Decatur Howe: I suggest that this debate is entirely out of order. I cannot see the impropriety of the war expenditures committee, set up to protect the taxpayers of Canada, looking into the expenditure of $45,000,000 of the taxpayer's money. I think that is a very proper excursion.


Mr. ROSS (Souris):: I pointed out that there was a variation between the figures of the war expenditures committee and those of the minister. If we could have it clearly stated by the minister that there is no shortage of steel or of other raw materials going into the manufacture of farm implements, then when we come to the Minister of Labour and national selective service and the wartime prices and trade board we may be able to get to the root of this matter. A greater production of farm implements is sadly needed at the present time. We have been led to believe that the chief difficulty is the shortage of steel and raw materials. The farmer has been willing to labour under almost any disadvantage if steel and raw materials are not available, but more labour-saving implements should be made available as soon as possible. If these materials are available, then we can take up the matter when we are dealing with the other departments.


Clarence Decatur Howe: I have just given the figures.
I have nothing to do with the production of farm implements, other than to release certain strategic materials, one of which is steel. This year we have allocated 271-1 per cent as compared with what was used in 1939, which was a fairly good year. That is quite a bit of steel, and I dare say that if more is needed we shall be able to allocate more.


James Arthur Ross: More labour would help production.


Clarence Decatur Howe: I do not know about labour.


Mr. GOLDING:: When we made our inquiry into the production of farm implements we received the assurance of the steel controller that he would see to it that the implement producers received sufficient steel to carry on their programmes. But there is a definite shortage of ball bearings and malleable castings. Ball bearings are not produced in Canada, and I know that the plant at home

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has had extreme difficulty in obtaining this product as well as malleable castings. We had the officials before us; we endeavoured to point out as best we could the situation in connection with the supply of both these products, and we had their assurance that they would give every consideration to seeing that the implement producers obtained supplies.
I must say that we had the best of cooperation from all officials who appeared before the committee. We carried out an inquiry which I think was very useful. We presented the situation from the manufacturers' viewpoint and we received representations from farmers and from the federation of agriculture. I have spent a good deal of my life in this business and I think I know something about it'. I believe I know what the implement manufacturers are up against in getting supplies of certain items. That is one reason why we made the recommendations we did. Because of the greatly increased use of tractors and other implements of the kind, the time has come when Canadian manufacturers should see that more of these items are produced in Canada. I hope that the recommendations we made will have some effect.


James Arthur Ross: I placed most of the names of those officials on the record when I was speaking previously. Is the hon. member of the opinion that ball bearings and malleable castings will be produced in Canada in the near future?


William Henry Golding: Malleable castings are
made in Canada at the present time, but they are in short supply both here and in the United States. We felt that it would be in the interests of the farm producers to recommend that a subsidy be paid in connection with the production of malleable castings. We know there is a tremendous shortage of labour and if our farmers are going to produce what we want them to produce they must have these implements and labour saving devices. Every official before us intimated that he would cooperate to the fullest extent.


Mr. WOOD:: 
Gordon Graydon: Brantford roofing.


George Ernest Wood: That would be the very best you could possibly put on a farm building if you wanted roofing of that kind. The trouble is that where you have a barn with open siding it is not as satisfactory as the steel roof. The steel roof will stand higher winds. I know of many buildings that need roofs badly. We are producing many products which must be kept under cover, and serious consideration should be given to this phase of the matter. I have often wondered why more pressure has not been brought to bear upon the minister in connection with this matter.
Another matter was brought to the attention of the committee on Tuesday, March 21, by the hon. member for Lake Centre. He wanted to know what disposition would be made by the government of the temporary buildings which had been built for war purposes. Then he said, as reported at page 1716 of Hansard:
I would point out that I have not yet received an answer to the question as to whether or not it is the intention of this government to operate any industries after the war in opposition to private enterprise.
I consider that that question should not go unanswered. I think the people of Canada are anxious to know which way we are drifting. H have no hesitation in stating where I stand. I take the position that we must do everything possible to protect the principle of free enterprise in the main. Only where free enterprise cannot function in the best interests
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of humanity should the government lend its support. I know where the people whom I represent stand on the principle of free enterprise. They are in favour of maintaining this principle which has brought Canada to the high standard of living now enjoyed by our people. True, there must be corrections made from time to time, and I have every reason to believe that we can make those corrections. But I think the minister would be wise in making a declaration of policy, particularly since he has shown himself a master of organized enterprise in accomplishing what he has accomplished in this war. It has been largely done under the policy of free enterprise. Perhaps the fact that Canada's contribution is the greatest per capita of any of the united nations is because in no other country has free enterprise had full sway as it has in Canada. Furthermore, what we have accomplished has been done at far less expense than what has been accomplished in other countries. In spite of our magnificent effort we have kept the per capita debt of our people down; it is much less than the per capita debt of our neighbours to the south and of Australia, New Zealand and almost any other country. That in itself is a credit to the policy of free enterprise under which we have worked and a tribute to the minister in organizing industry in Canada. I have always stood for the principle of free enterprise, and L hope that we shall be able to maintain it in this dominion.
I noticed that the hon. member for Lake Centre, when he asked the minister to make a statement of policy, seemed to have qualms as to the position of his own party on free enterprise. I noticed that the Globe and Mail in November last reported speeches in which the Hon. George Drew and his minister of agriculture stated that it was the intention of the Progressive Conservative party in Ontario to go in for making refrigerators, bathtubs and such like, at cost, for the benefit of the farmers. So that we know which way they are going.


Gordon Graydon: Are you objecting to that?


Ernest Edward Perley: You told us about bathtubs in the first speech you made in this house.


George Ernest Wood: I take issue with the hon. member for Qu'Appelle hecause I did not. I am afraid he, too, must be suffering from qualms of conscience to bring that up.


Gordon Graydon: You have not answered my question yet.


George Ernest Wood: One at a time.


Gordon Graydon: Are you objecting to the proposal of lower cost of refrigeration and bathtubs for the farmers?


George Ernest Wood: I did not say that.


Gordon Graydon: I think you are wise to-keep away from it.


George Ernest Wood: The hon. member has not shown too much wisdom himself, so that I do not think he needs to give advice, much as I respect him and enjoy his friendship. But he does blow a fuse quite often in his remarks.
I was going on to say that the Globe and Mail reported the Hon. T. L. Kennedy, minister of agriculture in the Ontario government, as having said:
It is my idea that the government would finance the manufacture of these-[DOT]
That is refrigerators.
-and sell them to the farmers at actual cost price.	.


Gordon Graydon: Is that what you are objecting to?


George Ernest Wood: That is not the point. I am speaking of the principle involved.


Gordon Graydon: Are you objecting to the principle?


George Ernest Wood: I would object because I do not think the government can manufacture and sell them at cost as well as private enterprise. I want the farmers to get the best deal possible and I believe it is better to let them get these things through private enterprise. The Retail Merchants' Association was concerned over this proposal of the Ontario government and considerable correspondence passed between them and the minister of agriculture in the Ontario government about it. What I am drawing attention to is that we now have the Progressive Conservative party declaring itself on the principle of going into the manufacture of articles which private enterprise has made a fairly good job of manufacturing in the past. We now know where the Progressive Conservative party stands. We also know where our Cooperative Commonwealth Federation friends stand, because they have declared themselves definitely for the nationalization of industry.


Mr. LOCKHART:: What item are we on, Mr. Chairman? How long have we to put up with this?


George Ernest Wood: I do not take up very much of the time of this chamber. As a quiet member, maybe I do a little more thinking than some other hon. members, and these are some of the matters I have been thinking about. I

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thought it wise to draw to the attention of the committee the road we are travelling. All we can judge a party by is the things it does, not what its members talk about. I was saying that under the principle of free enterprise we have made a magnificent effort in this war. On the other hand, if the Progressive Conservatives have declared themselves for the nationalization of the refrigeration and bathtub industry and such like-


Gordon Graydon: Haldimand-Norfolk, the county next to yours, seemed to like it.


George Ernest Wood: I am not so sure. I would not take too much glory to myself over that. One sparrow does not make a summer by any means.


Mr. STIRLING:: Did a sparrow ever?


George Ernest Wood: The fact of the matter is, I think, that the minister should not let this opportunity pass to make a statement of his viewpoint on the principle of free enterprise. Ours has been a magnificent accomplishment to the extent of around live billion dollars under -more or less of a mixed policy.
I believe we have a right, to know what the future has in store for us, and I hope we shall hear from the minister.


Mr. FRASER (Peterborough West):: On
March 21 I asked the minister for the total amount of purchases for the United States that had been made by the United States purchasing branch of his department.


Clarence Decatur Howe: I told my hon. friend that I did not care to give that figure.


Gordon Knapman Fraser: 
Clarence Decatur Howe: That problem is not in my department. It comes under the administrator of services, which is under the wartime prices and trade board.


Gordon Knapman Fraser: Does it not come under transit control?


Clarence Decatur Howe: Not trucks.


Gordon Knapman Fraser: I have another item. This is from the Department of Munitions and Supply, being one of its releases in regard to construction and alteration of plants. They have jumped the value from $2,500 to $5,000. Up to $5,000 a permit
is not needed. The same change applies to the installation of equipment in plants. What I want to get at is this. There is an order, which I believe is 284, which does not allow a plant to be extended with new machinery being put in. You cannot put new machinery in a new space. Does this do away with that order?


Clarence Decatur Howe: No. If it is all one project it should be so named. If the project extends the plant and installs machinery in the extension, and should it cost more than $5,000, a permit is needed. On the other hand, if it is simply a question of installing machinery in an existing plant, that machinery can be installed up to $5,000 without a permit being required. But each must be a complete transaction.


Gordon Knapman Fraser: Yes; but suppose a firm own a building next to them. They could not take a machine from the building in which that machine is already installed and put it into the other building. Here you are extending the plant; you are allowing them to extend the plant and put in new machinery.


Clarence Decatur Howe: The safest thing for my hon. friend's friends to do is to apply for a permit. Permits are not hard to get.


Gordon Knapman Fraser: This firm applied before the order came out and they were refused permission to put one of their machines into another building which they owned. I want to find out whether this order that has now come out cancels the controls that formerly obtained.


Clarence Decatur Howe: It amends the control order. That is the order my hon. friend has been referring to, but I cannot give interpretations of even' order put out.


Gordon Knapman Fraser: Neither can the manufacturers, and that is the trouble. Sometimes they are held up for months, while the firm is anxious to go ahead and manufacture, in most cases munitions.


Agar Rodney Adamson: A few days ago I asked the minister about the programme of subcontracting machine shops in mining companies in Canada. They were doing rather extensive retooling work. Was the programme successful or was it gone into?


Clarence Decatur Howe: Yes, the programme was very successful. We have had a great many ship components made by machine shops of the mining industry as well as by machine shops of the pulp and paper industry. That capacity not only has meant a considerable saving in the installation of new machine tools but has

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distributed the work where the man-power was available and has been helpful in the whole programme.


Agar Rodney Adamson: Is it still going on?


Clarence Decatur Howe: Yes.


Mr. DIEFENBAKER:: I should like to secure information in connection with the availability of man-power. The Minister of Labour (Mr. Mitchell) yesterday referred to the need of combing industry in order to secure the necessary men for the armed forces during the months to come. The first question I want to ask in that regard is this: Is there to-day, or has there been within the past three months, any shortage of man-power in any of the key industries under the minister's control? If so, in what industries and to what extent is there or has there been a shortage?


Clarence Decatur Howe: We always have shortages in certain industries. Shortages vary from time to time. In the last two or three months the most acute shortages have been in the malleable casting industry and in the motor vehicle industry. As far as I know, the motor vehicle industry has never had all the men that could be used. There are other industries in which there are shortages from time to time. Certain shortages develop and are corrected, but the main shortages of the past three months have been in the two that I have mentioned. Of course, in lumber we could always use more men than were available. The cut of lumber is proportionate to the number of men engaged in the industry, and if we had twice as many men we could perhaps cut twice as much lumber. There is a demand at home and abroad for all the lumber that can be cut. In base metals the situation was acute but has been largely straightened out. The man-power situation is not bad in the base metal mines; the shortages are in the rougher and heavier jobs.


John George Diefenbaker: What is the amount of shortage from month to month?


Clarence Decatur Howe: I cannot say; the Minister of Labour could tell the hon. member that.


John George Diefenbaker: Well, the minister is in charge of the department and he was able to give information to the press as to the shortage a few months ago.


Clarence Decatur Howe: What did I say?


John George Diefenbaker: In the Toronto
Star, the minister is reported as having stated on December 2, 1943:
There is a shortage of 55,000 male workers and 16,000 female workers in the highest priority war industries alone.

These figures apparently were available to the minister then. He must have figures showing the situation from month to month in regard to man-power. The allocation of man-power naturally falls on the shoulders of the Minister of Labour. The responsibility for mobilization is his. The question I am asking the Minister of Munitions and Supply is this. Is there a shortage to-day of male and female workers in the war industries? If so, what is the latest available figure on such shortage?


Clarence Decatur Howe: Does my hon. friend wish me to give him the statistics of the Department of Labour? He can get those from the Department of Labour. It happens that I have them, but I do not know why I should give them to him.


Gordon Graydon: If the minister has the information, surely he has no objection to giving it.


Clarence Decatur Howe: They are given to us as confidential; I do not know how confidential. However, I will give the figures. On March 10, 1944, unfilled vacancies in A priority industries were 30,411; in B priority industries, 24,408; in C priority industries, 6,115; in D priority industries, 10,158. The total of priority labour requirements was 71,092.


John George Diefenbaker: I do not know whether this information can be given, but is the minister in a position to advise what is the nature of A, B, C, and D priorities? What industries fall under them?


Clarence Decatur Howe: That is confidential.


John George Diefenbaker: Well, I will not press that because I can understand that there might be such a situation. The minister is reported to have stated recently that certain single-purpose plants have been closed down and in particular that one or more explosive factories have been changed into fertilizer factories. Have any explosive factories been closed down; if so, where? Which ones have been changed into fertilizer factories? I believe this is the first example of a transition from war-time to peace-time production.


Clarence Decatur Howe: The only plant manufacturing explosives that has been closed down .that I know of is the plant at Nobel. We had three plants manufacturing propellants and explosives, one at Winnipeg, one at Nobel and one at de Salaberry. The operation at the Nobel plant was of a type that could best be spared. It was a question of operating each of them at half capacity or closing one and operating the other two at a rate of capacity that would mean efficient production. It was therefore decided to close down

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the Nobel plant. The other plants to which my hon. friend refers are plants manufacturing ammonia for explosives. One plant is at Calgary. It is government-owned, and the other is at Welland, also government-owned. The full production of ammonia from those plants was not required for explosives. All surplus ammonia is now being used in making ammonia nitrate by a process worked out in the plants themselves. The ammonia nitrate is found to make a very good fertilizer. The two elements required in the synthetic fertilizer are ammonia and nitrate. The product of these plants has a wide sale at attractive prices.


John George Diefenbaker: The plant at Calgary is not a government plant?


Clarence Decatur Howe: Oh, yes.


Mr. LACOMBE (Translation):: Mr. Chairman the scandals and the shameful favouritism which have been brought to light in war industries are such as to make the government conscious of the distressing deficiencies of the national selective service. An investigation should be held at once by a royal commission about employment at the Bouchard plant. The investigation should also bear upon the administration of the Sainte Therese local office of the national selective service. The government should not elude their responsibility by arguing that private companies are involved. The government give those companies financial assistance running into hundreds of millions of dollars. Let the government insist on calling them to account, and the people will be satisfied. Since we are fighting for the triumph of justice and right, unfairness should not be rampant as regards employment in war industries, nor should it prevail in other fields.


Gordon Knapman Fraser: Would the parliamentary assistant to the minister give us some indication with regard to the supply of tinplate for making cans for canning vegetables? Is there a shortage and what will the situation be this year?


Mr. CHEVRIER:: I presume what the hon. member for Peterborough West is asking about is galvanized plate.


Gordon Knapman Fraser: No; tinplate for canning fruit.


Lionel Chevrier: The position is that tinplate is in short supply all across the country and there is very little hope of its being released.


Gordon Knapman Fraser: When I visited Deep Brook training camp and some of the other training camps I noticed that the
canned milk which was supplied to the men was given to them in quart tins, and in one place just before the meal hour they dumped the milk into jugs. There must have been hundreds and hundreds of these quart cans. Would anything be saved if that milk were given to them in gallon cans? I think a lot of tinplate would be saved if the milk were put in gallon cans.


Mr. ROSS (St. Paul's):: I do not know whether the minister has made any statement in connection with the importation of domestic coal into Ontario for the coming winter and what the situation is to be. What is the prospect for obtaining coal in large cities like Toronto? I think the citizens of Toronto used a great deal less coal last year than they would otherwise have used, and that was owing to the request that was made. Would the minister make a statement as to what the prospects are?


Clarence Decatur Howe: The coal requirements of Ontario are necessarily imported from the United States. Last year we were able to obtain sufficient bituminous coal for oui requirements. In the matter of anthracite we obtained the same proportion of our total requirements as was issued to the citizens of the United States. There was a shortage. I think actually we received about three-quarters of our requirements. I presume that the United States will treat us as one of their own in the matter of coal in future as they did this year. If there is a shortage in the United States we will expect to share that shortage. Whether there will be a shortage or not I cannot say. I referred to the matter when I made my statement in the house and I urged users of domestic coal, particularly in the central Canada area, to be as economical as possible with their coal.


Gordon Knapman Fraser: With regard to coal, I have a letter here from one of the largest dealers in anthracite. It is addressed to one of his dealers and reads in part as follows:
The new programme readjusts each dealer's tonnage for the current season to approximately eighty-two per cent of his last year's shipments. Until about December 15 . . . anthracite went forward on the basis of a ninety per cent programme. . . .
That would be eighty-two per cent of what they received last year, which was only ninety per cent. The complaint in the city of Peterborough is that some of the coal they are getting there now is unfit to burn. We have practically no anthracite in Peterborough. The burning of soft coal means that at the end of the season practically all homes will have to be
War Appropriation-Supplies

redecorated, because the soft coal makes a mess of the home. They are very anxious to get some of the Alberta coal.


Mr. NEILL:: For many years past the government have been paying a subsidy on coal produced at the Comox mine in Cumberland, British Columbia, and possibly also in Nanaimo. That has nothing to do with war services. I should like to ask the minister if they are receiving or if they will receive any subsidy under the war measures that he is handling, and whether it would be affected in any way by the orders in council to which he referred yesterday? I refer to the orders in council which make changes in the war subsidies.


Clarence Decatur Howe: There was no provision for subsidies in the statement I made in the last day or two. It covered only the mainland and prairie mines. I am not sure of the position of the British Columbia mines, but I shall be glad to get the information from the . coal emergency board and advise my hon. friend.


Douglas Gooderham Ross: In connection with plants manufacturing munitions of war, and especially in connection with subcontractors, when it is anticipated that some particular article may not be needed in the near future does the department advise the contractor or subcontractor a reasonable length of time ahead, so that the necessary adjustments may be made? As the minister knows, from time to time there have been rumours as to lay-offs at the Toronto Shipbuilding Company, and I understand the mayor of Toronto has taken up the matter with the minister. What is the position there now? What is the backlog of orders? How long will the Toronto Ship-buildirig Company be in full operation? Is this advance information, which I think is important, given to the plants concerned, in order that they may adjust their processes accordingly?


Clarence Decatur Howe: When we are notified of a programme change the plant that is interested in that programme is advised immediately; and if a lay-off is contemplated in the near future, selective service is advised at the same time. The hon. gentleman asked about the backlog of orders for the Toronto Shipbuilding Company. Unless there are further cancellations, the Toronto Shipbuilding Company has all the work it can do this season.


Douglas Gooderham Ross: The minister said that his department notified selective service. In order that the organization within the plant may be kept together instead of having

the men go elsewhere to work, is any endeavour made by the department to substitute the manufacture of some other article which may be in short supply?


Clarence Decatur Howe: My hon. friend was referring to the Toronto Shipbuilding Company. There is no problem of substitution in that case; the yard is busy at the work for which it was organized. Any lay-offs in the past resulted from the fact that the yard was overstaffed, and in the reorganization of the management the staff was brought down to a normal operating level. There is no shortage of work there.


Douglas Gooderham Ross: I could have mentioned several other plants. For instance, what about the Sutton Horsley plant, where the staff has been reduced by about fifty per cent? The minister stated that this plant had been engaged in the manufacture of instruments for training planes. Is there any reason why it could not have been given other orders instead of laying off those employees? I was not referring particularly to the Toronto Shipbuilding Company; I was using that just as an example. While I am on my feet, the minister said he did not think the great lakes yards would be able to build freighters because of the tonnage and draught.


Clarence Decatur Howe: I did not say anything of the kind.


Douglas Gooderham Ross: Last evening, in answer to a question I asked, the minister said, as reported at page 1896 of Hansard:
The type of boat which can be built on the lakes is restricted, either to tonnage for the great lakes, or to tonnage which can pass through the St. Lawrence canals.
The tonnage really does not affect it; the lake boats are of all sizes, some of them quite large. I was wondering whether in future these yards would be capable of manufacturing lake freighters economically.


Clarence Decatur Howe: The lake yards have built all the lake freighters there are; they are still at least as efficient as ever they were, and I think they will continue to build the lake freighters.


Douglas Gooderham Ross: They have not built them all.


Clarence Decatur Howe: Oh, yes.


Mr. McGARRY:: I should like to ask a supplementary question, in regard to the manufacture of tools and small parts by some of the mining plants throughout Canada. At the beginning of the war the mining company at Inverness, which has an efficient

TFar Appropriation-Supplies
machine shop, made application for work of this kind. I understand that the plant was investigated, but no contracts have been offered. I wonder if the investigation disclosed that this work could not be done economically or satisfactorily, or that the requirements could not be met. Could the minister give some information as to why this plant was not given any contracts?


Clarence Decatur Howe: Of course there are thousands of subcontracts, but I shall be glad to look up the report on that plant and advise my hon. friend later on.


Douglas Gooderham Ross: The minister told us what had been done in connection with coal. Does he know what the prospects are for the future?


Clarence Decatur Howe: No. Future prospects in connection with coal for the Toronto area are beyond my control; we are dependent upon the United States for that coal. We shall do our very best to get the largest possible supply that can be made available.


Douglas Gooderham Ross: The distribution of the coal and the quantities allotted to individuals come under the control of the minister, and people wish to know the prospects of getting coal from the United States. Is the supply going to be long or short? People want to make their arrangements as early as possible.


Mr. TUSTIN:: A few moments ago the parliamentary assistant partly explained the situation in regard to tinplate. Last year there was a considerable shortage in the production of canned vegetables in particular. Was there any carryover of tinplate or cans last year? Did I understand the parliamentary assistant to say that tinplate was still in very short supply and there was little chance of an increase in the supply this year?


Lionel Chevrier: I did say that tin was still in very short supply. I said nothing about the chance of an increase this year, but I shall be glad to look into the matter.


George James Tustin: Then could the parliamentary assistant say whether there was a carryover last year of manufactured cans or of tinplate? There is a great shortage of canned fruits and vegetables at the present time, and there was a short crop last year. This year the government is urging greater production, and is increasing the subsidy oil some of these commodities. If production is to reach the point it should, it will be absolutely necessary to have a greater number of cans or a greater amount of tinplate for the manufacture of cans.


Lionel Chevrier: The Department of Munitions and Supply allocates the raw material used for that purpose, but the question directed to me by the hon. member really deals with a matter under the jurisdiction of the wartime prices and trade board. Since I replied to the hon. gentleman a moment ago I have been advised that there is very little chance of the tinplate situation easing any this year.


[Stage Direction]
Item agreed to.
3.	Housing development, $11,000,000.
['The Department of Munitions and Supply allocates the raw material used for that purpose, but the question directed to me by the hon. member really deals with a matter under the jurisdiction of the wartime prices and trade board. Since I replied to the hon. gentleman a moment ago I have been advised that there is very little chance of the tinplate situation easing any this year.']
Percy Ellis Wright: I believe the hon. member for Mackenzie, who is attending a committee meeting this afternoon, desired to have this item left over until this evening so that he might discuss it. I understand he made some arrangement with the minister in that regard.


Lionel Chevrier: Would the hon. gentleman allow the item to go through now, with the understanding that the hon. member for Mackenzie will be permitted to discuss the matter on some other item?


Norman James Macdonald Lockhart: Would the minister say just what this item covers, and give us some details in connection with it?


Clarence Decatur Howe: It covers commitments for wartime housing made during the past year, together with SI ,000,000 for new expenditure if required.


Norman James Macdonald Lockhart: Expenditures on what? Mr. HOWE: On housing.


Norman James Macdonald Lockhart: Wartime housing only? Mr. HOWE: Yes.


Norman James Macdonald Lockhart: And nothing to do with
any other type of housing?


Clarence Decatur Howe: No.


[Stage Direction]
Item agreed to.
4.	Land and other miscellaneous physical property, $3,000,000.
['No.']
Percy Ellis Wright: Will the hon member for Mackenzie be permitted to discuss this matter when he returns?


Clarence Decatur Howe: Yes, on any other item before the committeee when he comes in.


[Stage Direction]
Item agreed to.
5.	Production subsidies and other miscellaneous war expenses, $25,000,000.
['Yes, on any other item before the committeee when he comes in.']
Mr. GREEN:: Will the minister explain the present position respecting the iron mine at Steep Rock. What progress has been made; what money has been spent, and what are the commitments?

War Appropriation-Supplies


Clarence Decatur Howe: The mine at Steep Rock has nothing to do with these estimates. It is a project brought before the cabinet as a whole by the Canadian National Railways. One difficulty about opening up the mine was that existing freight rates were not competitive with freight rates from the Mesabi range to Duluth. Government assistance was given to equalize freight rates for a period. The rate was equalized for the movement of the first 5,000,000 tons, and by assistance to the extent of twenty cents a ton for that movement. In addition, the government undertook to finance for the railways an ore dock at the head of the lakes to permit ore to be transferred from rail to boat.


Howard Charles Green: What progress has been made?


Clarence Decatur Howe: I know very little more than my hon. friend; all I know is what I have read in the press. I understand, however, that the dewatering process is well advanced. In the last statement I saw, it was predicted that ore would be produced from the mine in August.


Howard Charles Green: In August of this year?


Clarence Decatur Howe: Yes.


Howard Charles Green: I have one other question, respecting subsidies paid on coal. As I understand it, when wages were raised last fall a subsidy was paid on coal imported from the United States which, of course, is used largely in central Canada. The price to the consumer remained what it had been before the increase in wages. But in the west the price of coal was allowed to go up. Will the minister explain why that was done, and whether that is still the position? It would seem to have been an unfair move, so far as the western consumer is concerned. However, there may have been some reason for that action.


Clarence Decatur Howe: The government is subsidizing practically all domestic coal production in the west to-day. I have read in this house the revised subsidies, some of which are substantial. They were built up in order to keep uneconomical mines in operation during a period of great scarcity. I read in the house two or three days ago a revised schedule of subsidies which provide for subsidies varying from sixty-five cents down to fifteen cents a ton. These arose out of increases in the cost of living bonus and in wages, prior to the wage increase to wffiich the hon. member has referred, which increases were beyond the capacity of the mines to meet. The operators could not stand the increased cost of production, and to keep the mines in operation the government paid a subsidy. It was felt that the government could not be put in a
rMr. Green.]
position of being forced to subsidize every time a mine found it necessary to increase wages. When the increase came last summer it was pointed out that if more wages were necessary an increase in the price of the product would also be necessary. Then the hon. member referred to a bonus on imported coal in central Canada.


Howard Charles Green: The point I have made is that the price to the consumer was raised in the west, but not in the east.


Clarence Decatur Howe: There was no similar situation in the east. Bituminous coal brought into the central provinces from the United States is not bonused. It is bought by dealers at the going rates, and is resold to the public without any bonus. On anthracite there is a small subsidy.


Howard Charles Green: Is a subsidy paid on it.


Clarence Decatur Howe: No, not on bituminous; but there is a small subsidy on anthracite, amounting to about twenty or twenty-five cents a ton. I cannot tell my hon. friend just how it arises. I think there was at the source of origin an increased cost, which, it was felt, could not be passed on to the producer at the time. The subsidy amounts to something less than twenty-five cents a ton-possibly twenty cents a ton. Certainly it is not more than twenty-five cents. So that the subsidy paid in the east, even on anthracite, is less than the subsidy paid in the west or in the mari times.


Howard Charles Green: The trouble was that the price went up in the west and it did not go up in the east.


Clarence Decatur Howe: Yes, but when a gun is put
to our heads in a time of great emergency, sometimes we have to take what comes. The government cannot be placed in the position of subsidizing a product every time it becomes necessary to raise wages.


Howard Charles Green: What was the basis for subsidizing in the east?


Clarence Decatur Howe: The same basis as for subsidizing in the west. We subsidize western coal to-day, anywhere from fifteen to sixty-five cents a ton.


Douglas Gooderham Ross: The basis for subsidizing soft coal in the east was not the same, because stoker coal has gone up from about $7 or $8 a ton before the war to a present price of $11.


Clarence Decatur Howe: It is not subsidized.

War Appropriation-Supplies


Douglas Gooderham Ross: And the same with steam coal?


Clarence Decatur Howe: It is not subsidized, either.


Douglas Gooderham Ross: The public have to pay the extra cost; that is the answer. I do not quite understand why eastern coal, under the same circumstances, should not have been subsidized.


Clarence Decatur Howe: Eastern coal is subsidized.


Douglas Gooderham Ross: Eastern coal is?


Clarence Decatur Howe: Maritime coal, yes.


Douglas Gooderham Ross: I do not mean that.
I mean central coal. Our people in the central provinces have to pay for it. It is a matter of keeping the cost of living down; that is the idea of the subsidy. It is a serious problem, especially in the city of Toronto where rentals are frozen. ,The Toronto Housing Company, a philanthropic organization with which I am connected, cannot get more rentals, and we are faced with $5,000 or $6,000 a year more than we used to pay in our outlay for coal. The east and the west are subsidized, but we in the central provinces are not. That does not seem to be a position of equality.


John George Diefenbaker: Will the minister give particulars respecting the estimated total of about $31,000,000 in the current year? To whom were those subsidies paid, and in respect of what production? I refer to the estimated expenditures for 1943-44, amounting to $30,995,435.35.


Clarence Decatur Howe: The total expenditure, to the end of last year, is $24,303,981. My hon. friend will realize that the full period has not yet elapsed.


John George Diefenbaker: What is the end of the year?


Clarence Decatur Howe: The figure my hon. friend is looking at is that for the end of the last calendar year. The estimated expenditure for
1943-44 is for the fiscal year, which is not yet ended.


John George Diefenbaker: What are the particulars?


Clarence Decatur Howe: Emergency coal production board, $4,581,198.


Norman James Macdonald Lockhart: What kind of coal? In some instances there were drawbacks on bituminous coal and I am just trying to find out what they were.


Clarence Decatur Howe: I cannot give all the details, but I can say that the subsidies provided by
the emergency coal production board during the nine months to which I referred were $4,581,198.73. The details are as follows:
Experimental development costs.. $1,205,588 92 Production measures, relocation of
oil storage	
350,489	11Duties and taxes re United Kingdom government	
1,553,125	2G
War risk insurance carried by
government plants	 1,312,019	00
Administration expenses of nonproducing government owned
companies	 1,641,619	46
Miscellaneous-interest on bank
overdraft	 972,544	99

plant payment____	981,800	00Sundry payments	
2,095,662	84


John George Diefenbaker: Would the cordwood subsidies come under that?


Clarence Decatur Howe: I imagine that they would fall within the period which is not covered. My hon. friend will undertsand that I can bring my figures up only to the end of the calendar year, and I imagine the cordwood subsidies would fall in the last three months of the fiscal year.


John George Diefenbaker: Then it is correct to say that no cordwood subsidies are included in the $24,000,000 up to December 31 last?


Clarence Decatur Howe: I would not say that.


John George Diefenbaker: That is what I am trying to get.


Clarence Decatur Howe: I do not know how much they would amount to, but I hardly think they would be large. I have a statement made up to the end of the calendar year and there is no amount included for that purpose. Possibly it may be in the suspense account. Until we get the full record to the end of the fiscal year I cannot give my hon. friend any worthwhile figures on that. The chances are the payments have been made in the last three months.


John George Diefenbaker: Can the minister not give an approximate figure as to the amount of subsidies paid on cordwood to date?


Lionel Chevrier: I put those figures on Hansard the other evening in answer to a question asked by the hon. member for York-Sunbury.


John George Diefenbaker: That was only the amount expended, not the amount for which the department is liable.


Clarence Decatur Howe: I have it as of February 29, 1944, which is later than the figures I was giving my hon. friend. At that time the total subsidies paid amounted to $757,664.15 and the transportation subsidies amounted to $257,639.71.
War Appropriation-Supplies


John George Diefenbaker: I should like to get some information, with regard to the cordwood situation, but I realize that the minister will not be able to give this offhand. I wish to know what quantity of wood has been purchased and delivered in each province since the commencement of the wood subsidy and the announcement of the policy by the minister. How much is on hand in each province and how much has been contracted for but is not yet delivered? Also, how much wood has been purchased in each province from wood dealers and is still on hand? I should like this information about the following types of wood:
Softwoods- Jack pine Poplar White birch Soft maple
Hardwoods- Hard maple Yellow birch Oak Beech
I want a statement as to the prices paid in each province for these different kinds of wood, what quantities have been sold by the government and at what prices. I should like a little further information in regard to the 75,000 cords of cordwood produced at the head of the lakes. How much is still on hand; how much was sold as pulpwood; to whom was it sold and at what price?


Clarence Decatur Howe: I can give my hon. friend some information on that. The amount shipped to Winnipeg was 8,733 cords; the amount sold to pulpwood companies was 12,000 cords; the amount at present in storage at the lakehead is 40,000 cords, and the amount shipped east during the winter months was 14,267 cords.


John George Diefenbaker: Where was that
shipped to?


Clarence Decatur Howe: It was shipped to a number of points. I can in time give my hon. friend the freight rates and the selling prices, but it will take some little time to obtain the information.


John George Diefenbaker: I am not concerned with that at the moment. It was shipped to different points?


Clarence Decatur Howe: To various points.


John George Diefenbaker: How far easf?


Clarence Decatur Howe: I think some was shipped to Toronto. Wherever there was a need that could be supplied more cheaply from Port Arthur than from any other point, it was shipped from Port Arthur.


Grote Stirling: Can the minister give me the information I asked for yesterday about the Granby company?


Clarence Decatur Howe: The hon. member asked for particulars of the $27,582.30 expended on the Granby Consolidated Mining and Smelting Company's plant. They are as follows:
Fine ore bin extension	 $12,164	40
New fifteen-foot air compressor.. 5,192	72
Installation of 400-horsepower
motor	
3,339	15Fine ore bin	
1,252	09Ball mill extension	
1,027	28Ball mill installation	
4,606	66

The Canadian government has no financial interest in the production of the Granby mine. As my hon. friend knows, the ore is shipped to the United States, and is bought by the Metals Reserve Corporation. Canada was requested by the Metals Reserve Corporation to step up, at its expense, the production of ore by the Granby company. The Metals Reserve Corporation advanced $200,000 for that purpose. Expenditures were made to the extent indicated, but it was found that a shortage of labour prevented any real stepping up of output. When the expenditure noted was made the Reserve advised us that they wished the return of the unexpended balance of the money, and it was returned to them.


Grote Stirling: So that the $172,000 would not be spent?


Clarence Decatur Howe: No.


Grote Stirling: Would the minister say even approximately at what date this arrangement was entered into? Was it in 1943?


Clarence Decatur Howe: It was on February 3, 1944, that the Metals Reserve Company advised us that they wished the unexpended balance
returned.


Grote Stirling: As recent as this February?


Clarence Decatur Howe: That is when the expenditure was stopped. It was authorized on December 8, 1942.


Mr. HATFIELD:: What are the regulations governing the export of wood from New Brunswick to the United States, and what is the quota basis?


Clarence Decatur Howe: I could not say offhand. The export of fuel wood is by permit and is based on a proportion of the export of earlier years. I shall be glad to get the information for my hon. friend.


Gordon Knapman Fraser: With regard to fuel wood which the municipalities buy, you allow them something for transporting the wood into the municipality, and are they also allowed the one dollar subsidy?

War Appropriation-Supplies


Clarence Decatur Howe: Yes. Cities are classified as dealers if they are actually buying and selling wood. The wood is sold in the locality at the ceiling price there and is resold by the dealer at the retail ceiling price in the locality. We bonus the dealers to the extent of one dollar a cord to keep them in business.


Gordon Knapman Fraser: You do not classify all the cities as dealers?


Clarence Decatur Howe: Not unless they buy and sell wood.


Gordon Knapman Fraser: They have to buy and sell?


Clarence Decatur Howe: Yes.


Gordon Knapman Fraser: And deliver themselves?


Clarence Decatur Howe: Not necessarily.


Mr GRAYDON:: Is the recommendation of the war expenditures committee which was tabled on January 26 for a temporary subsidy on the production of malleable iron castings being acted on? Has any subsidy been paid?


Clarence Decatur Howe: No. My hon. friend means for local production in Canada?


Gordon Graydon: Local production of agricultural implements.


Clarence Decatur Howe: No; we do not bonus that. The obvious method of helping would be to increase the ceiling price.


Gordon Graydon: You have not done that?


Clarence Decatur Howe: It is not in my department. I do not know.


Gordon Knapman Fraser: The dollar subsidy on wood runs out in March?


Clarence Decatur Howe: No. June 30.


Gordon Knapman Fraser: Is it to be extended?
' Mr. HOWE: I could not say.


Gordon Knapman Fraser: Does the department buy back from the different municipalities wood that might be left on their hands?


Clarence Decatur Howe: We undertook to do so, but we have had no request to do so.


Gordon Knapman Fraser: It
has to be done by a certain date?


Clarence Decatur Howe: No. We undertook to buy back the wood after a certain date if requested to do so, but we have had no such request. I think any municipality that has wood will be glad to have it on hand for next year.


Gordon Knapman Fraser: They have until May 31, 1944, to apply?


Clarence Decatur Howe: Yes.


Gordon Knapman Fraser: On
what basis will you buy back the wood? At cost, or the ceiling price?
kr. HOWE: I imagine at the same price as we sold it to them.


Grote Stirling: Certain financial assistance was given to coal mines in the Princeton area to assist in the production of coal in the four or five coal mines in that neighbourhood. Has the minister the details?


Clarence Decatur Howe: Would my hon. friend say what colliery he is interested in?


Grote Stirling: There is the Princeton colliery, the Tulameen, the Nine Mile, and there is one other whose name I have forgotten at the moment. Has the minister not got them by localities?


Clarence Decatur Howe: The total paid to Princeton Tulameen was 868,447.31.


Grote Stirling: Is that a finished figure, or is it continuing?


Clarence Decatur Howe: All subsidy arrangements run out on March 31 and are subject to the new regulations I gave here. There has been paid to Telkoal total subsidies amounting to $23,135.60; to Merritt Coal Mines Limited, $5,323.40; to Tulameen Colliers Limited. $13,361.79; to Gething Mine, $3,323.45.


Grote Stirling: Is that based on the output?


Clarence Decatur Howe: They are straight production subsidies, worked out to cover the cost of operation. It is an unsound basis.


Grote Stirling: It has no relation to the tonnage produced?


Clarence Decatur Howe: No.
At six o'clock the committee took recess.
__ After Recess
The committee resumed at eight o'clock.


Mr. HANSELL:: Under this item I should like to refer to the announcement that the minister made yesterday with respect to the revised subsidy policy affecting the western domestic coal fields. I imagine that the outline he gave of subsidies is over and above the regular subsidies that are given for the movement of coal in Canada.


Clarence Decatur Howe: Yes.
War Appropriation-Supplies


Ernest George Hansell: I am very happy to hear the minister say that, because I believe that in war time we have discovered that certain subsidies have to be paid in connection with the coal mining industry. With the announcement of these subsidies the minister also stated that the government will appoint a royal commission charged with the duty of studying all aspects of the production and distribution of coal in Canada and to report to the government with recommendations for such alterations of the pre-war coal policy as its findings may indicate to be necessary or desirable.
I have no objection to another coal commission being appointed to go into the various aspects of the coal mining industry, but I would point out that, as the minister is well aware, this is not the first commission that will have been appointed for work of this kind. If we look back over the history of the coal mining industry in Canada we shall discover that a good many coal commissions have been set up, and I cannot quite understand why it should be necessary now to set up another one. I am not opposing it, but I know that in the past commissions have studied every possible aspect of the coal mining industry. They have investigated1 and studied the matter of freight rates, the matter of subventions on coal, the matter of the various kinds and types of coal, and I believe the national research council has done considerable work along similar lines. I am tempted, therefore, to ask what action governments of the past have really taken as a result of these various commissions on coal.
Some action may have been taken, particularly with reference to subventions, but I suggest that there is no use in appointing commissions if the government is not going to be sincere in accepting their findings and bringing about, on the basis of those findings, such legislation as will benefit the coal mining industry and the consumers of coal, meaning, of course, everybody.
I said a moment ago that I was not going to oppose the setting up of another commission; but I cannot help feeling that, coming at this time as it does, this is nothing more or less than a political move on the part of the government in order to give the people of Canada the impression that it is going to do something in connection with the coal mining industry. I consider that that is all it is, because if the government wanted to do something it could take the findings of commissions in days gone by and upon those findings bring about a national coal policy.
That is something that Canada has never had. Not only have commissions worked oh these matters in the past, but the coal mining industry itself has worked hard to put the
TMr. Howe.]
industry over in Canada. I recall not so many years ago, since I became a member of parliament, that coal miners and coal operators in various sections of Alberta got together-and that is something, when operators and miners get together on a project-and attempted to form an organization for the purpose of securing markets for Alberta coal.
That was an admirable thing and they tried their best; but the coal situation in Canada being what it was, with various, shall I say, combines, their efforts amounted to very little. The only solution for the coal mining problem is that Canada should have Canadian markets for Canadian coal, notwithstanding anything that anyone might have said with reference to the type of coal that is mined in this country. I am confident that until Canada is reserved as the market for coal mined in Canada the national coal problem will not be solved.
I wish to ask the minister this question: In what way has the situation changed in Canada to necessitate the appointment of another commission? Is the coal situation any different from what it was before the war started? I do not believe it is. If the minister can enlighten us on it, well and good, but I do not think the situation has changed one bit. The war has done something to increase markets for Canadian coal because of the very high productive capacity of Canadian industry at this time; but as far as consumption of coal and employment in coal mines in Canada are concerned, would the minister tell us in what way the situation has changed; what the changes are, and whether the position is any different now from what it was in pre-war days? If he can tell us of the change, then we shall recognize the need for another commission. If he cannot, why not take the findings of past commissions and work on them? Once again I say, unless he can explain that to the committee I regard the setting up of this new commission as a political move to make the people of Canada feel that something is to be done in order to let them down as they have been let down many times before; and we shall still find the coal mining industry trying to get along on crutches. That is the position. I should like the minister to answer that question for us.


Clarence Decatur Howe: The coal situation has changed materially in the course of the war. The principal change has been in the greatly increased cost of producing coal, which increased cost is general in our Canadian mines. The loss of skilled miners has had an effect, and other factors have entered into the situation, so that the markets which can be reached on a competitive basis are quite different to-day from the competitive position of before the

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war. Before the war the mines in the maritime provinces shipped coal as far west as Toronto, Sudbury and the lake St. John area. The western limit for maritime coal to-day is about Riviere du Loup; and the maritime mines are hard put to supply the demands of their own provinces.
The western mines have been handicapped, not only by the increased cost of the product at the pit-head, but also by shortages of transportation, owing to the burden that has been put on the railways to move other high priority commodities. To keep the mines going to meet unusually heavy demands, a system of subsidies has been built up, on a more or less haphazard basis. We have been in the position of not wishing to allow any producing mine to close down, and, as costs have risen, we have tried to keep the mine open by paying whatever subsidy has been required. The recent mild winter has allowed us a breathing space to review the situation, and we are revising subsidies that are obviously out of line. We are studying subsidies for other cases which require considerable accounting and auditing, and further revisions of subsidies in those areas will be made. But having in mind the changes in marketing conditions, the change in economic areas for marketing, and the changes in the cost of production, the government believes that a commission is needed now more urgently than at any time in the past. I have every confidence that a commission that can study every aspect of the production and marketing of coal in Canada will bring down a report which will be helpful to the government in formulating a new coal policy for Canada.
While I am on my feet I shall give the hon. member for Comox-Alberni an answer to the question he asked. The new subsidy arrangement does not apply to mines on Vancouver island. Canadian Collieries on Vancouver island is on the old form of subsidy, which will not be changed until the present audit, which is now proceeding, is completed.


Mr. JOHNSTON (Bow River):: The
minister spoke of assistance by way of subsidies being given to coal mines that are finding it difficult to operate. Does he mean that the assistance was given to them by allowing them to increase the price of coal? Is that what he refers to, or is it a direct subsidy to the mine? The government allowed an increase in price to some of the mines that were finding it difficult to operate. Is that what the minister meant when he spoke of a subsidy?


Clarence Decatur Howe: We have given considerable direct assistance to the mines either by way of subsidy, or by way of new equipment for expanding production.


Charles Edward Johnston: That was in addition to allowing them to increase their price?


Clarence Decatur Howe: The increase in price resulted from one incident, namely, a strike at a critical time. The result of that was an increase in wages. That is compensated for by an increase in the price of the product being permitted.


Charles Edward Johnston: What is the amount of the subsidy paid on imported coal?


Clarence Decatur Howe: I have been over that at least five times to-day, but I shall go over it once more. There is no subsidy paid on imported bituminous coal. A small subsidy, in the neighbourhood of twenty-five cents a ton, is paid on anthracite coal.


Alexander Malcolm Nicholson: When item 3 was
reached this afternoon I was in the railway and shipping committee. I wish to thank the minister and the committee for permitting me to discuss the question of Wartime Housing at this time. Each year since Wartime Housing was organized I have discussed the activities of this important crown company. I have made my critical remarks on the score that the cost per unit was excessive, that temporary houses were being built in centres where an acute shortage of permanent houses existed, and that slum areas were being created. However, my protestations were not successful in changing the government's policy. The building activities of Wartime Housing are coming to an end, and therefore I do not think any good purpose will be served by a further reiteration of the points I have made in previous years.
I should like to say, however, that I believe the people of Canada appreciate the fact that the federal government recognized that a serious shortage of housing in the early stages of the war was having an injurious effect on our war production. The people also appreciate the fact that living quarters provided by Wartime Housing were more satisfactory than other quarters available at comparable rents in the centres where Wartime Housing have carried on their activities. It is unfortunate that, after having spent over 870,000,000 and after having built over seventeen thousand units, the Department of Munitions and Supply is not making some plan to extend the activities of this corporation into the post-war period or making some plans to have some government agency prepared to go into the field of providing housing accommodation for people in the lower income brackets, people who cannot hope to find suitable living quarters provided by the private builder. In this country as

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in every other country at least one-third of the families are not receiving in peace time and in war time an income sufficiently large to enable them to pay an economic rent. As a consequence, society must provide substantial sums of money every year to maintain slum areas. We pay for these areas in one way or another. At the present time in Canada we are paying to maintain our slum areas through excessive fire protection costs, excessive juvenile delinquency costs, excessive police protection costs, the excessive cost of hospital and medical services to care for people living in slums.
Just before Christmas I had the good fortune to visit a number of centres in the United States where the public authorities have embarked upon slum clearing projects. I understand that the general manager and president of Wartime Housing also visited some of these centres, and after I have finished I should like to hear something from the minister in regard to any reports he may have received from these gentlemen. The committee might be interested to hear something of the development in the city of Boston, for example. I understand that the minister was a student at M.I.T. a number of years ago, and possibly he will recall the very large slum area out in the Charlestown district. If you go to this area and drive down Bunker Hill you will find on one side of the street the century old slums that have been a disgrace to that country for so long, and on the other side a twenty-five acre plot where the slum dwellings have been levelled to the ground and modern fireproof apartment buildings erected, so designed that every family has sunlight at some time during the day. They have running water, frigidaire, heat and light, all supplied by the Boston housing authority, which is supported partly by federal funds and partly by funds of the city of Boston. The housing authority was required to build according to certain regulations, which stipulated that the cost of a housing unit should not exceed a specified amount. Consequently the units are more crowded than people accustomed to the wide open spaces of Canada might wish, but the remarkable thing is that living quarters have been provided at such reasonable rentals. A family enjoying an income of $750 a year can rent a modern four-room apartment foT $15 a month, with light, heat and other services supplied. A larger family occupying a five-room house would pay $16 a month. If you had a larger income you would pay $24. The largest apartments, which have six rooms, rent for from $17 to $25 per month, and in all cases the rental includes light, heat and all other services. In addition to these very comfortable quarters, people living in the project

have access to playgrounds so that children may be kept away from heavy traffic. In the summer time the children may use wading pools, and fountains play while they bask in the sunlight. In the fall of the year the boys play rugby on the project grounds. At three o'clock I found some of the children, whose parents were working in war industries, in a bright room under the supervision of a trained nurse. Three of the little tots were fast asleep on cots provided by the authority. At four o'clock I saw the children hurrying from school to the library, which is located in the basement of one of the buildings; in another room teen-age girls were being taught sewing, while in the community theatre the boys were rehearsing a minstrel ' show. It is true that the federal government provides a subsidy to bridge the difference between the rents paid by the people in the community and the cost of amortizing the entire project over a sixty-year period, at very low interest rates, but my information is that if the cost of maintaining those slum areas were taken into consideration the federal subsidy would be of very small proportions.
Near Washington there is another project that is of great interest. I refer to the Green-belt community, twelve miles from the centre of Washington. Again federal funds were used to make it possible for people in the low income brackets to have up-to-date, convenient quarters at rents averaging not more than twenty per cent of their monthly income. Several thousand acres of farm land were purchased at a low cost and a modem community has been planned, with something over one thousand units to begin with; but recently the size of the project has been doubled. The housing units are situated around the rim of a horseshoe, in the form of a garden city, with underpasses under busy thoroughfares, which make it possible for the children to travel from home to school in safety. Shopping areas have been planned as part of the project, and the people living in the community have been allowed to operate their own cooperative stores in buildings erected with federal funds. It is true that the cost per unit in the Greenbelt area has been higher than in most other centres in the United States, but experimental work has been carried on there which will be of real value in the post-war period.
I appreciate that with Canada at war, the Minister of Munitions and Supply could not have been expected to build houses of the style of those in the Greenbelt area, but greater precaution might have been taken to see that the rows upon rows of houses erected in Canada should not have been built in areas

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where there is a serious shortage of permanent houses, and where the tendency will be for these units to develop into slum areas. I do not see how this parliament can separate the work which has been done by Wartime Housing from the work which must be done very soon by some department of government to provide homes for those who are fighting for our freedom. It was originally planned that the houses built by Wartime Housing would be demolished within six months after the conclusion of the war. I should like to remind the committee that seventy thousand people are occupying these houses at the present time and that with very few exceptions, which would be in isolated places where war industries have been located, there is a serious shortage of houses in every centre. It just would not be practical to ask these seventy thousand people to move to the parks or on to the streets while their houses were being demolished in order that the terms of the contract might be fulfilled. It seems to me that now, when we are having layoffs in many industries, many of those who otherwise may be in the ranks of the unemployed should be able to find work in providing suitable housing in strategic centres of this country, as part of a national, provincial or federal plan.'
Unfortunately governments in Canada have not had very much imagination in dealing with housing needs. In my province we had some experience in rural housing when hon. gentlemen to my right were in office a number of years ago. Several hundred families were reestablished in the northern part of Saskatchewan during the depression years, when a great many builders were out of work and Canada's construction programme was practically at a standstill. The most ambitious rural housing programme that the federal and provincial authorities could provide in those days called for an expenditure of $50 per unit. Of course the logs were available, free for the cutting; but all the hardware, windows, shingles and flooring had to be purchased with the $50. It does not require much imagination to visualize the type of quarters built for hundreds of families in Saskatchewan under the plan worked out jointly by the Bennett government in Ottawa and the Anderson government in Regina.
When I was home at Christmas I stayed in one of those $50 homes, located twenty-seven miles from the nearest railway station and the nearest doctor. The family living there had enjoyed prosperity in Saskatchewan some years ago. They had gone north in the early thirties when the drought and the depression 100-122J
made prospects in the south look very dull. While they are having more prosperous days now than they had when they first came in, they are still living in the $50 house. They do not know whether to go back to the prairies or whether to stay, in the hope that conditions may improve.
In Saskatchewan we had a change in government in 1934, and there was a change at Ottawa in 1935. More generous housing programmes were then introduced. The ceiling for rural housing was increased from $50 to $75. This increase did make possible a considerable improvement in living quarters. It meant that one could put shingles on the roof, instead of slabs from the nearest sawmill. But I hope that people in Canada will not be compelled to live in a country where $50 or even $75 houses are the order of the day.
I find that two valuable reports have recently been released in the United States, dealing with their immediate housing needs. One, by the C.I.O., is entitled "A Housing Programme for an Economy of Abundance." It points out that the primary responsibility for filling shelter needs of the people of the United States is a public one which must be met by government action. They call for 500,000 units of so-called public housing a year, and more if private housing fails to do its job. That is the whole question -whether private builders can make good their boast and be able to make good the housing needs of the country. If they cannot, public housing and cooperative housing will have to take that responsibility.
Further on in the report they say:
In respect to shelter, such production levels call for a completely new orientation. The fundamental question will no longer be: What kind of housing can we afford? The issue before us will be: What kind of housing, within reason, do we desire? . . .
The conditions of life which have dictated this attitude of submission to private interest and accidental circumstance no longer exist. It will shortly be within our power to determine for ourselves the nature of all the surroundings amid which we live our lives.
Then, Harry C. Bates, chairman of the housing committee of the American Federation of Labor presented before the house committee on public buildings and grounds in Washington on February 10, 1944, a most interesting brief. In it he says:
Housing has long remained the most neglected part in the improvement of the American standard of living through either private or public action. Before the war we were too far behind in the volume of housing construction to even hope to catch up with the need in the near future. The war has set us back even farther.
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Then he points out it was not until trade union leaders forced the issue that a national survey was carried out in 1940, to find out really what the housing situation was in the United States. They found that:
A dwelling either in need of major repairs or without a private toilet or private bath, was classed as substandard. If the American standard of living means anything, this test is certainly sound. The census showed that in 1940 in our town and cities alone there were over 6 million homes classed as substandard by this test. In addition, there were over 5 million non-farm homes in rural communities in this substandard condition. To top this we also had nearly 7 million farm dwellings which failed to measure up to this simple minimum standard. In the case of farm homes, even if we disregard the absence of sanitary facilities, 34 per cent or over 2J million farm houses, were in unsafe and unlivable substandard condition.
We have not gone as far as they have in the United States. We have not compiled any accurate statistics showing the number of housing units built in Canada in the thirties. While some progress was made'in connection with the 1941 census, there still is not available in Canada any satisfactory picture of the housing needs of the country.
However, I must congratulate the government upon making a start. I have not had a chance to look at the very large volume tabled to-day by the Prime Minister, but the table of contents suggests that it is at least a start. I find in the contents a reference to housing legislation in Canada, housing legislation in Great Britain and in the United States, urban housing, post-war housing needs, town planning, home ownership and related programmes, low rental housing, farm housing, reduction in housing costs, and so on. I hope that this report may be printed and made available to hon. members and those who are interested, as are other reports which have been tabled by the Prime Minister.


Gordon Knapman Fraser: It is only a report.


Alexander Malcolm Nicholson: I am glad the hon. member mentions it is just a report. It is on paper, and I think at this stage we should be much farther along than we apparently are, if any action is to be expected in time to meet serious trouble in the post-war period.
Before concluding, I should like to congratulate, as other hon. members have done, the Minister of Munitions and Supply upon the imaginative job he has done since taking over his portfolio. Only members of his department and members of parliament who have had an opportunity to travel from coast to coast and to visit some of the war industries have any adequate appreciation of what has been done in his department. But I would

suggest that if the minister would like to make a permanent name for himself in the annals of Canadian history, he might do so by showing the same imagination in facing up to a housing programme for the years which are to come. He might be able to keep the present government in office, and he would find thousands of people across this country who, for the first time in a lifetime, would be able to say, "Well, at last we are able to have a decent house, thanks to C. D. Howe."
But this is not going to happen by accident. Unless the minister is going to make plans and spend funds in the same reckless fashion as has obtained in connection with the huge expenditures which have been made for war purposes, his munitions achievements will have been forgotten in a very few years. It is only natural that many people working in these industries see the local problems, and find it difficult to see the larger picture of Canada's production.	They know something of the
bottlenecks. They know something of the problems which develop when materials have not moved along in time, and when it seemed as though they were being paid for very little work. But I thing, if we look at their picture, we shall understand that and appreciate the difficulties experienced. Those who are working in these large industries will not remember very long the Minister of Munitions and Supply, who has provided leadership in this particular field. But if he could carry out the programme suggested by the Minister of Labour, that of having 100,000 houses built each year for the next ten years, he would have a million families in Canada in a ten-year period, or 100,000 a year who would be living in better quarters than ever before. I do not think there is a chance in the world to have such a programme carried out by private industry or by the machinery set up under national housing. I need only remind the committee that in the past under its activities our best performance was about 6,000 houses a year and a total of 25,000 houses for some eight years. Wartime Housing has built only 17,000 houses in two and a half years, or at the rate of less than 10,000 houses a year. How small this total is when compared with the figure of
100.000	houses used by the Minister of Labour.
I should like now to make some recommendations to the minister. A conference should be called immediately at which provincial, municipal and federal authorities could discuss housing problems exclusively. I think one of the mistakes that Wartime Housing made was to fail to recognize that under the British North America Act certain powers belong to the federal government, certain powers belong to the provincial government

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and certain powers belong to the municipal government. No federal authority should ride roughshod over either the provincial or the municipal authority without due consultation.
My second recommendation is that plans be made for a complete revamping of the National Housing Act and reorganization of the national housing administration. , When the government found it necessary to build houses to meet war-time needs, for some reason or another the staff at national housing administration headquarters were not satisfactory. That was a question of government policy. If the national housing administration staff were not sufficiently efficient in 1941, some policy should be laid down by the government for a reorganization which would make available a satisfactory administration.
A research staff should be set up to go into the different aspects of housing and find out whether home ownership is the only method that should be adopted. They should find out whether there is not a place for low rent houses and they should do some work on town planning. Consideration should be given to the improvement of rural housing, for of all our houses in Canada those which cry out most loudly for improvement are our farm homes. Plans should be made for the extension of the home improvement plan and research should be carried on in building designs. A recent number of Engineering and Contract Record contains an article in connection with increasing the efficiency of the construction industry. Men in the construction industry are seriously considering new techniques that must be used if Canada is to keep pace with modern trends and modern requirements. They suggest that research should be carried on for the manufacturer with a view to (a) Eliminating duplication in stock sizes; (b) A solution for the problem of standardization which various industries manufacturing building supplies are trying to solve individually; (c) A stimulated demand for stock sizes in preference to special sizes, as a result of their more convenient and economical field erection; (d) Lower costs of manufacturing against stock as compared with the custom manufacture of special sizes and details; (e) Improved precision and uniformity of quality that result from improved manufacturing processes; (f) A market for standardized building materials where the cost of special detailing or field cutting would be prohibitive; (g) Standard assembly details which would help the manufacturer to control the installation of his products and thus avoid complaints that arise from faulty workmanship. Research is suggested also for the architect and the builder and contractor as well as for the consumer.
If the cost of housing can be reduced, more houses will be built and more contented Canadians will be living in them. I notice the national housing administration and the code and specifications section of the national research council have put out an interesting book on the national building code. However, it seems rather difficult to secure a copy of this book. This is one of the few instances where I have asked for a copy of a publication and been requested to state whether it is for myself. That is a most unusual question to be asked by any government authority issuing a publication. Publications like this should be supplied to members of parliament as a matter of course.
Could the minister make some statement as to what the plans are at this stage with regard to disposing of the 17,000 houses built by Wartime Housing? Could he give a report to the committee in connection with the findings of the president and general manager of public housing in the United States? Has any consideration been given to retaining the staff of Wartime Housing with a view to having them engage in the type of research I have outlined?


Clarence Decatur Howe: My interest in housing is confined to Wartime Housing, which programme has been largely completed. It has been the duty of this deparment to find housing for employees in war industries, in order to make sure that war industries can operate efficiently. The government as a whole is greatly absorbed in the matter of a post-war housing. Other departments are conducting studies of the type referred to by my hon. friend. I do not know that the complete post-war programme of the government can be announced, but I think I am safe in saying that the housing of Canadian citizens will have an important part in that programme.
My hon. friend asked _what our plans are for the disposing of war-time houses after the war. Our agreement with practically every municipality in which wartime houses have been built provides that at the end of the war, the houses will be dismantled and moved away. I am not sure just what will be done when that day comes. These are quite comfortable houses, and I imagine that the eventual disposal will be to put good basements under them, install heating plants and regard them as permanent houses. However, that will be up to each individual municipality. The government will be prepared to carry out its agreement if the municipality so
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desires. With that uncertainty, it would be quite improper for me to discuss any disposition of the houses, other than to carry out the agreements which stipulate that the houses will be removed1 at the end of the war.


Alexander Malcolm Nicholson: I understand from the minister that the programme of Wartime Housing is almost completed, and I should like to know if he is retaining the staff and, if so, what type of work he has in mind for them to do from now on?


Clarence Decatur Howe: The staff of Wartime Housing has been reduced, to some extent. This has not been done deliberately; the reduction has taken place in this staff as in all staffs which are not being expanded. My hon. friend will understand that there is a considerable administration work involved in operating our housing projects. Studies have been made in the past, along the lines suggested by my hon. friend, and these will be made available to whatever department assumes responsibility for the post-war programme. I have no doubt that a number of the staff of Wartime Housing will be needed by the department which takes this programme in hand. In my opinion the staff of Wartime Housing has been most efficient, and has used excellent judgment in its operations. Personally I would' be sorry if the talents of that organization are not used to the fullest extent.


Gordon Graydon: The minister has referred to the possible cessation of the activities of Wartime Housing. Will this apply to Malton, for instance, where staff houses are to be erected in connection with the influx of further employees in the Victory aircraft plant?


Clarence Decatur Howe: My hon. friend will have
noticed that we put in an additional one million dollar appropriation. When I said that the programme had ended, I did not mean a sharp cut-off. We have a small provision for new facilities that may be required, and Malton is a place where new facilities may be required. ,We have a programme there which will be going on for some time. The need for housing reaches somewhat beyond the local situation. If the employees are housed in Toronto, and are moved to Malton by rail, we shall not require additional facilities at Malton; but if we move in new em

ployees from a distance, requiring additional housing there, housing will be built.


Howard Charles Green: I realize that the minister
is not responsible for the administration of the national housing act, and that his department is not responsible for the administration of the home improvement loan plan. But is

it not a fact that restrictions on building materials come under the Department of Munitions and Supply?


Clarence Decatur Howe: Yes.


Howard Charles Green: I believe that a little less
than a year ago the department placed restrictions on the building of homes, making it practically impossible at that time to get the materials required for home building. More recently some change has been made in those restrictions, presumably as supplies became available. Could the minister tell the committee this evening just what the present position is with regard to the availability of supplies and equipment for building homes in Canada? Then we shall have a better idea of what can be done now in the way of starting to rehouse the Canadian people. I urge upon-the minister that he review these restrictions again to see whether it would not be possible to relax or wipe out altogether some of these restrictions. If that were done, private contractors would greatly increase the number of homes built, and many of our people would be given some place to live. The minister realizes, I suppose, just as well as the rest of the hon. members do, that the present housing situation is very difficult. People are living in garrets, garages and basements, and whole families are living in one room. This must have an effect on the war effort because it lowers the morale of our people, and I am sure it is seriously injuring the health of the Canadian people as a whole. In addition, it would be very difficult under present conditions to reestablish the men who come back from the war. . I would be the last one to urge any action that would interfere with the war effort, but surely the time has now come when we should start on a deliberate campaign to rehouse the Canadian people. It would be well worth while. In some centres-I know it is the case in Vancouver, here in Ottawa and certainly in Halifax-the positon is almost impossible. Some consideration might be given to declaring certain areas emergency areas and allowing special housing provisions to be made applicable there. Would the minister tell us the present position with regard to the restrictions on the materials and equipment needed for the building of homes?


Clarence Decatur Howe: The policy of the department has been to encourage the building of small homes to the full extent that the materials situation would permit. Even in the days of greatest scarcity, the department has recognized emergent situations in particular localities and has diverted available supplies of materials to those areas in preference to less urgent areas. The shortages to-day are

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more particularly bathroom fittings, and certain other essential components of a modern home. The supply situation has eased to a point that permitted us in January to relax the restrictions and increase the size of home that could be built without a permit. I think we have been able to supply the necessary materials for the homes that have been built, and as the supply of materials permits there will be a further relaxation of the restrictions. We are just as anxious as my hon. friend to encourage the building of small homes as rapidly as possible, and the only purpose of the regulations to-day is to distribute the available supplies fairly.


Howard Charles Green: That is, permanent small
homes?


Clarence Decatur Howe: Yes. We do not wish to
encourage the undertaking of home building that cannot be carried out for lack of materials. That is not helpful to anyone. I can assure my hon. friend that we shall take steps to encourage home building just as soon as we can increase the supply of materials.


Howard Charles Green: Would it be possible to
arrange for some factories in Canada to step up the production of bathroom fittings and other materials in short supply, just as was done with certain urgently required war materials?


Clarence Decatur Howe: As my hon. friend knows, the factories that make bathroom supplies also make shipbuilding components. We can hardly divert effort away from the war to undertake peacetime requirements. It seems reasonable to ask our people to undergo discomfort for a little longer, in order that the war programme may not be dislocated. My hon. friend also knows that the man-power situation is still difficult in most areas. We do not wish any large diversion of man-power to the building of homes. But the house building is enlarging each month and will continue to do so.


Howard Charles Green: Is there any intention of extending the provisions of the National Housing Act so that ninety per cent instead of the present eighty per cent can be borrowed from the government for the building of a home? Is there any prospect of having the interest rate on the loans reduced?


Clarence Decatur Howe: I understand that a new
national housing act will be brought down this session, and I would prefer my hon. friend to obtain the information when the bill is brought down.


Liguori Lacombe: Mr. Chairman, I would draw the attention of the government and of parliament to a grievance of a serious nature.
I refer to the disastrous situation falling upon the producers of maple syrup and maple sugar caused by the new regulations of the wartime prices and trade board.
The rationing of these products and the necessity for the producer to request coupons from consumers means that the producer either cannot develop his sugar bush or can sell only a very small portion of his products.
On March 13 last, the Minister of Trade and Commerce, in asnwering questions I put on the orders of the day, stated that Canada exported during 1943 only 3,959,647 pounds of maple sugar and 181,596 gallons of maple syrup. Why, then, ration these products in Canada? There is no reason for doing so. Therefore I request the government to redress immediately this unfortunate state of affairs caused by the rationing of maple products both for -the producers and for the consumers.
(Translation): There is another matter with which I desire to deal briefly. It is the necessity of sending back to the farm all farmers at present in the army. If the army and the civilian population are to obtain necessary supplies, it is imperative to take such a step.
Agriculture is deprived of more than 600,000 workers, male and female. These persons were absorbed by the army and by war industries. However, the government continues to call up farmers' sons for training. Even when they have been granted deferments, they must undergo another medical examination which is given the ridiculous name of "revision." When will the authorities realize that more than ever agriculture needs all available help? Why did they not leave the medical examinations of called-up men to the family physician, as was formerly the case? No matter how well qualified he may be, a medical officer can never replace the family physician who is well acquainted with the personal history of the men who are called up. Thus, the government causes a heavy loss of time to agriculture and to over-burdened farmers. Must I once more point out to the government that agriculture is in urgent need of help and that it would be preferable to return to civilian life all the farmers now in the army? This would be one of the best ways to avoid the numberless pitfalls of the post-war period. In the course of the transition period, for which we should prepare immediately, agriculture must play a major part in the world's economic reestablishment. Losing sight of these facts would constitute a fatal mistake. Let us now return to the land those farmers who have been forced to forsake it on account of the war.
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Mr. Chairman, before closing my remarks, I shall quote an extract from Hansard of March 30, 1939. In it the Right Hon. Prime Minister (M r. Mackenzie King) opposes Canadian participation in the war. Let us not forget, that he made this speech only five months before his government assumed a share in the world conflict and before they bought two destroyers from Great Britain. Here are the words of the head of the present government, on this occasion, as reported on page 2426 of Hansard for 1939:
One strategic fact is clear: the days of great expeditionary forces of infantry crossing the ocean are not likely to recur. Two years ago, I expressed in this house the view that it was extremely doubtful if any of the British dominions would ever send another expeditionary force to Europe.
He had previously said, as may be seen on page 2419:
We have tremendous tasks to do at home, in housing the people, in caring for the aged and helpless, in relieving drought and unemployment, in building roads, in meeting our heavy burden of debt. . . .
At that time it stood at one and a half billion dollars.
... in making provision for Canada's defence, and in bringing our standards of living and civilization to the levels our knowledge now makes possible.
_ Mr. Chairman, was there, at that time, a single hon. member who did not realize that the increased military estimates were being voted not only to ensure the defence of Canada but also with a view to participating in foreign wars I repeated that statement time and again, at that period. The right hon. Prime Minister added:
There is no great margin of realizable wealth for this purpose; we must, to a greater or less extent, choose between keeping our own house in order and trying to save Europe and Asia.
How can one reconcile such a solemn statement uttered by the Prime Minister with the actions by which he followed it a few weeks later? For my part, I have kept faith with the word I had pledged. I have long since withdrawn from that atmosphere strewn with falsehood.
Let him who laughs interrupt me and ask me a single question on the position I have taken. Does the hon. member for Sherbrooke (Mr. Gingues) wish to do so? Let him go ahead!


Mr. GINGUES (Translation):: All in good time.


Liguori Lacombe: Do those who, on September 9, 1939, did not lift a finger in support of my amendment against participation in war, feel satisfied now with their doings?

At this stage of my remarks I must recognize the Canadian spirit, the loyalty and the honesty of the hon. member for Quebec-Montmorency (Mr. LaCroix), who alone supported me. Is any satisfaction felt by our colleagues who voted for the mobilization act on June 19, 1940, overwhelming my amendment by a vote of 202 against 2? On that occasion the hon. member for Quebec-Mont-morency was again alone in supporting me. Do our colleagues derive any satisfaction from what they have done? '
I am blaming neither the government supporters in this house nor the opposition, but I do blame the hypocritical members who denied us their support and who divided us on that question. I have more compliments to offer to the government supporters than to the opposition. I remind those members that they protected, in their own way, our young men and our farmers, by mobilizing and conscripting them. They are now protesting against a dreadful situation which they have themselves brought about, of their own free will and wittingly. The time will soon come, Mr. Chairman, when we shall let the people know about the devious and knavish stand of the false prophets of the day. The people do not know them yet. We will put them in the limelight. My first duty is to denounce the would-be patriots who have left nothing undone in order to foment disunion among true Canadians, especially in the province of Quebec-as was pointed out by the right hon. the prime minister - not only some time ago but during the last few sessions. Divide and govern, such was their only goal. They care not a whit about disinterestedness, and sincerity is .with them a lacking virtue. Their patriotism is limited to fine speeches broadcast over the air lanes. Open at random the debates of the house and you will be amazed at the unmatched hypocrisy of these elected representatives who are responsible for the distressing situation which prevails in agriculture and all over civilian industry in Canada. To all these sham patriots, I prefer a man sincere, honest and true who faces his opponent squarely and strives against policies he cannot countenance.


Douglas Gooderham Ross: As I said last year, tlie housing situation in Toronto is still bad. If any more people come to the city we shall have to have war-time housing. Toronto has never had any war-time housing. The only thing we have had is some money to convert a few apartments. I am glad to

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hear that the government are going to bring in some measures so that houses can be erected after the war. The situation in some parts of Toronto is far worse than the minister realizes. In certain slum districts we have families of five or six living in one room. The by-laws of the city cannot be enforced, because, if they were, there is no place to which these people could go. I do not know what is going to happen. I imagine, as time goes on, there will be relief to a certain extent. Certainly the situation that exists to-day should not be allowed to continue. When I brought the conditions to the minister's attention last year he said he did not understand why he should have to do anything about housing in the city of Toronto. On the other hand, he has done something about housing in other cities.


Gordon Knapman Fraser: Last year Wartime Housing gave prizes for beautification of homes and victory gardens. I hope the minister will see to it that prizes are given again this year for similar work, because it certainly improved the houses. I know it helped a great deal in the districts around Peterborough. Instead of the homes being allowed to remain in a plain condition, they were really beautiful. Some of the people worked very hard on their homes. The prizes that were given were worth while and the people who received them certainly earned them. They were wonderful prizes and the homes were very much improved. I hope the minister will look after this during the present year.


[Stage Direction]
Item agreed to.
7. Departmental administration, $9,000,000.
Howard Charles Green: On March 2, an answer was brought down to a question asked by the hon. member for New Westminster. It will be found at page 1080 of Hansard. It shows the number of gasoline ration cards issued in the different provinces. In British Columbia the ratio of AA, A and B is ten, two and one respectively. There is no other province in which the percentage of AA licences is anything as high. In fact, in two provinces, Alberta and Prince Edward Island, there are more A ration cards than AA. The percentage in British Columbia seems to be entirely out of line. I presume the reason for that is that we have a very tough deputy oil controller in that province. That may or may not be the explanation. Can the minister tell us whether there is any other reason why there should be such a very large percentage of AA ration cards in British Columbia.


Clarence Decatur Howe: I think the percentage of farmers in the province would have some bearing on the situation. The categories of farmers are more generous, because the farmers use their automobiles for business purposes to . a greater extent than do ordinary city dwellers. That may be the explanation. I know it is the intention of the oil controller to administer the regulations equitably as between all parts of Canada. .


Howard Charles Green: Would the minister mind checking that up?


Clarence Decatur Howe: Yes; I shall be glad to look into it.


Gordon Knapman Fraser: What is meant by "revolving funds"?


Clarence Decatur Howe: Those are funds made available to the department to enable it to carry on the day to day operations; to provide funds for payrolls and manufacturing expenses until these can be billed out to the buyers. Revolving funds are the equivalent of the working capital of a private business, covering all the operations of the department.


[Stage Direction]
Item agreed to.
DEPARTMENT OF TRANSPORT Air services branch-
3. Civil aviation: operation and maintenance of municipal (terminal) airports, $398,260.
Clarence Decatur Howe: I think we had passed the first sub-item of item 3 and were on the second sub-item, dealing with the operation and maintenance of municipal airports.


John George Diefenbaker: This evening I
intend to refer to the address of the minister on March 17 in connection with the subject of post-war aviation. The minister's speech unfolded a pattern and formula for international control, coupled with a draft international convention, timely because the questions raised are in a state of flux at this time and also because nations all over the world are formulating conventions and making plans for the post-war solution of this great problem.
In its domestic as in its international aspects the enunciation of policy was made by the minister without benefit of discussion in parliament. I make that statement without any wish to enter into a political discussion, for I believe that a debate on this important matter should be free of any partisan considerations, and that discussion should be constructively designed to advance the cause of post-war aviation. The minister properly referred to the history of civil aviation and sketched something of the progress of the past few years in connection with the development of

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airways, for without a knowledge of the past and of the incidents that have occurred since the last war this subject becomes even more difficult of comprehension.
As I see it, the problem divides itself into three classes or aspects, namely the international and, within the international, our relationship to the United States of America; second, the interempire or commonwealth relationship, and, finally, the domestic relationship. To-day we find ourselves, as does the world, on the threshold of a great evolutionary change in world commerce. A third dimension has been established in world travel; hours, not miles, are now the measure of distance. The result is that isolationism and the sense of security that was based on oceanic barriers are to-day as dead as belief in the invulnerability of the Chinese wall. This is a tremendous problem. As far as I am concerned I have not had the advantage of the help of technicians in carrying on research, but I found the discussion by the minister most interesting and most complete, and I must pay my compliments to those who assisted him in the preparation of the draft convention. Air transport has no antiquity; only the future can tell the degree and extent of its impact upon civilization. To base a policy now on prophecy is out of the question. We must face the problems as we see them to-day, as they are now; and in evolving a policy provision must be made for changes and developments as they may become necessary.
One general criticism I offer as to the policy announced by the minister is that it is too inflexible, rigid and uncompromising to meet the needs of a problem as comprehensive and changing as the air problem. There are some matters upon which there is general agreement as, for instance, Canada's strategic position in the routing of international traffic west to the orient, east to the continent of Europe and north to Europe and Asia. While this factor may be too greatly emphasized, on the other hand I take it that hon. members on all sides of this house are now in agreement that Canada must not allow herself to become in the modern world what Asia Minor was in past ages, an area to be crossed over by other nations or, in the present era, an area to be flown over. I believe we all agree that an international set-up controlling aviation is indicated as the only solution of this problem in its broad aspects. Every country has its own particular problems. Every country has its political, military and economic interests in air transport, for 'all recognize to-day that while planes carry passengers they also carry bombs. After the last war, in spite of the many conferences that took place, nations

refused to accept the principles of freedom of transit and international control, with the result that air development was obstructed internationally. Competition in Europe was between France, the Netherlands and Germany; in the east it was between Britain, France and the Netherlands, while in South America Germany achieved a wide measure of control. Prior to this war the attitude of most nations was that air lines were arteries of national policy and empire, and all nations, in their own Interests and in the interests of their defence, claimed ownership of the air above their territories. Commercial planes of all nations were denied the right to pass over or land in foreign countries, even for rest, refuge or refueling, except by agreement. The right to take on or discharge passengers or traffic was a matter of national policy. The attitude of the nations in this way was that national exclusion rather than international cooperation prevailed, and that deterred development of the airways between 1919 and 1939. All plane companies in Europe were controlled by the state, directly or indirectly, and air transport was a phase of national development. In the United States private ownership was encouraged to develop airways, and at the outbreak of the war no country in the world had a civil system of air transport in excess of that developed in the United States.
I am not going into details of the various routes which were established by nations in Europe and beyond. Suffice it to say this, that restrictions were universal, because nations feared the destructiveness of air power rather than the benefits to mankind in its extension. For example, the United States refused rights to foreign airways to fly over Hawaii. In a route of one thousand miles from Lisbon to Warsaw, there were four changes of planes. United States planes had to discharge their passengers in Ireland en joute to Britain, and take other planes to complete their journey to their destination. The fear of bombs, the distrust between nations, and nationalistic policies designed to deny international control, built up an international philosophy of non-cooperation and restriction. ,
Possible disagreements between nations and the necessity for air transport being made available everywhere in the world make international control desirable and necessary; for history teaches that if aviation is to be nationally controlled on a narrow basis, the seeds of a future war to secure freedom of transit or freedom of the air will have been planted.

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Aviation, properly controlled, can be made mankind's handmaiden for peace; uncontrolled, it will remain a potential destroyer of mankind.
I think no better summary of the matter can be found than in a recent book, "The Air Future", in which the author, Burnet Hershey, said this:
The important thing to remember about aviation is its universal character. It can be destructively annihilating or almost superhumanly beneficent; but it can never be subjected to localized restriction. To aviation political boundaries are obsolete absurdities. Above the clouds the earth itself is out of sight, and at 400 miles an hour the crossing of an imaginary line drawn arbitrarily across an invisible planet far beneath, is of less consequence to pilot and passenger than the blowing of the wind and the direction of the wind.
The difference between freedom of the air and freedom of transit is that between licence and liberty. The war's outcome is even now being determined by the superiority of air power, and I believe that air transport after the war may well determine the future of mankind. I agree with the minister's viewpoint that international freedom, rather than selfish national aspirations, must be the foundation stone upon which a new world order will be built. In enunciating an international air policy at this time Canada has assured the world that, as far as she is concerned, located on the airways of the world, occupying a position unequalled in those airways, she intends not to allow herself to become a national instrument for international rivalry, but means to devote herself to the principles of peace, through international action. To this end there will have to be international recognition by all nations, and there is the inescapable fact that the experience in the twentieth century is that no nation can live unto itself alone while desirous of trading by air with other nations.
That brings me to a principle which is rather difficult to understand, namely the doctrine of freedom of transit or freedom of innooent passage, sometimes mistakenly called freedom of the air. Britain calls it the open sky, as distinguished from the sovereignty of air policy, the closed sky policy. Freedom of the air denies international control, when freedom of the air is used in its wider sense. It means that the atmosphere is open to the planes of all nations without control. What that would mean is again set out in the same book to which I referred a moment ago, in these words:
In essence freedom of the air means exactly the same thing as freedom of the road, the free right of the driver of any motor vehicle to use any road anywhere on earth without buying
any licence, taking any operator's examination, or otherwise submitting to any regulation in the interest of public safety. Such a state of anarchy applied to surface transportation is ' obviously absurd. It is even more ridiculous when carried to the skies.
Much discussion has taken place on this principle, and it seems now generally agreed that freedom of the right of transit should be recognized by all nations, great and small, but that the right of foreign nations to take on cargoes and passengers must remain a matter of agreement between nations affected. Those who desire freedom of the air at once must remember that it took more than 350 years to establish the somewhat correlative doctrine of freedom of the seas. The adoption of freedom of the air to-day, in its widest sense, would in my opinion destroy Canada's chance of participation on a world basis, in international airways. Canada would be put in competition with subsidized airways of countries operating national routes. I should like to ask the minister what provision is made in the convention, and what his ideas are in connection with the matter of preventing or at least controlling subsidization by nations of the air routes which are set up. Freedom of the air is impossible, if national safety is to be considered. On the other hand, the closed sky policy is not open to Canada to adopt, because of the danger to international peace that such a policy would result in. The intermediate principle of freedom of transit would appear to be the solution.
The minister, in speaking the other day,
used these words at page 1579 of Hansard:
Each nation should at least possess the right to carry passengers and cargo from its own territory to other countries, and to bring back from those other countries passengers and cargo which are intended for its own territory.
With that view I disagree for, in my opinion, it is altogether too wide in its scope. The adoption of this principle would destroy the possibility of the Canadian air industry drawing a fair share of cross-frontier traffic. Take our position during the past few years, when we have had an equality with the United States of America on trans-frontier routes. Yet to-day we operate but one route, compared with eight operated by the United States of America into Canada. Experience in the operation of the airways during recent years between these two countries denies the application of the principle enunciated by the minister respecting our relations with the United States of America.
I believe that the principle of an international air transport authority rather than an international air transport system represents the viewpoint of the people of this nation, as
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of other nations. But I see objection in supersovereignty being set up under powers contained in the draft convention. I refer to article 7 section 1, wherein the authority of the super-body to control activities within the nations making up the international set-up is provided for. Is' there to be internationalism or trusteeship in connection with our strategic bases? Does the government favour supersovereignty of a united nations' government such as is advocated by Governor Stassen to administer the international airports and airways of the world?
When the hon. member for Winnipeg North Centre (Mr. Knowles) was dealing with this question the other day, apparently he did not take the same view as do the labour party groups in Great Britain where their policy is that they will support an internationally owned and operated air transport company for the whole world or, if that is not possible, for Europe. The principles enunciated by the labour party in Great Britain apparently are not being accepted by my hon. friends in so far as this country is concerned.
In connection with international control I ask the minister: Have all the major nations within the United nations agreed to participate in an international set-up? If not, which ones have been consulted and have any refused? Who are the eight nations referred to in the convention? What is the attitude of the U.S.S.R.? Have they been consulted and have they subscribed to the principles? It must be remembered that the U.S.S.R. do not require freedom of transit in order to fly directly from their own country to adjoining countries such as China, Japan, Iran, Turkey, Roumania, Poland, the Scandinavian countries, the United States and Canada. Before any international organization on air can be brought into being, there must be cooperation on the part of the U.S.S.R. in order to ensure its success. If there is to be set up a world system of aviation with international control, and if we are to ensure that the sacrifices of this generation shall not be repeated in another generation, that international control must have within its confines the U.S.S.R. After the last war Russia did not participate in the international convention in 1919 in connection with aviation. China was denied the opportunity to become a party.
If international agreements are to be effective, they must be secured now. Otherwise there will be terrible competition after the war. To-day some sixteen United States companies are seeking international transoceanic licences. Recognizing the seriousness of the situation potentially, a joint committee of the Association of British Chambers of Commerce,

the Federation of British Industries and the London Chamber of Commerce have asked, in order to prevent unbridled competition which will sow the seeds of future war, that a unified air policy should be effected with each country having a fair allotment of planes.
As I read the minister's speech; as I looked over the convention, one thing that stood out more saliently than any other was the fact that no reference has been made to the British empire or the British commonwealth of nations within the international set-up. I do not know whether article X, providing as it does for pooling, is intended to cover possible agreements between various parts of the British empire. The minister was a representative at the Beaverbrook conference in October, 1943, and yet to this date Canada has had no report as to the decisions arrived at or the principles adopted.
Does the contention, which is to be found in Hansard of March 17, represent the consensus of agreement of the nations of this empire? If it does, it is not so indicated by a reading of the press of the United Kingdom. I ask the minister to explain whether the government, in adopting the policy that she has, in placing this convention before the country, is taking a position in keeping with or adverse to that taken at the conference by other parts of this empire? What about international transoceanic routes? Nowhere is there any reference by the minister to the means whereby Canada intends to operate a national transoceanic system of airways.
Is she going to do it by herself? Is she going to do it in cooperation with other nations? Is she going to embrace the world? Is she going to do it within the empire? All we know is that the chosen instrument is the TCA. Other than that we have no information as to the plans of the government in that connection. General Critchley, president of the British Overseas Airways Corporation, stated recently that as far as his corporation is concerned, it no longer wants to be the chosen instrument. I think this committee and this country have a right to know why Canada is going to adopt the chosen instrument policy internationally when Great Britain and the United States are apparently not accepting that principle.
If the chosen instrument of international transoceanic routes is followed by Canada, it will mean that Canadian companies desirous of operating internationally will have to join with British steamship companies under British registry, will have to go to the United States and incorporate there and act under the national control of that country, or go to other countries such as Luxembourg, Panama

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or Mexico in order to have an opportunity to operate Canadian aircraft in all parts of the world. I do not think Canada as a nation wants to see Canadians except as Canadians in the international field. I believe we have the right to demand that, as Canadians, having regard to the status that our nation enjoys. Under the scheme as it is now planned internationally, we should see to it that Canadians can fly Canadian machines without the necessity of operating under the auspices of other countries, and thus be able to take their place in the post-war air transport world.
I ask the minister to give us the picture of what he anticipates Canada's contribution will be to the international field when the war is over. Doctor George Weir recently said that twenty-five thousand airmen would be employed in civil aviation after the war. How that can be brought about, I do not know. To-day, even with the increased traffic of war time, TCA and Canadian Pacific Air Lines together in the domestic field do not employ more than 3,000 men.


Clarence Decatur Howe: Oh, oh.


John George Diefenbaker: Those are the figures given the other day. What numbers do the government experts believe will be employed in the international field during the first few years? These figures must be in the possession of the government and should be made available. I unhesitatingly accept the principle of an international set-up, but I suggest that further discussion should take place in order that matters like super-sovereignty and the like may be resolved, so that they will meet with the approval of our people and of other nationals composing the international set-up.
What is the alternative? If the great nations do not enter this scheme, aye, if they do not accept this convention, what is the alternative? Unless the UH.S.R. accepts it,
' I ask, what is the alternative? We are informed that for a period of from four to five or ten years after the war there will be no peace conference. What will the international set-up be at that time? Is there to be uncontrolled competition in the airways of the world during that period? During that period international transport will be developed, and unless Canada and the British commonwealth have their share of the business then a setback will be suffered from which there will be small hope of recovery. I ask the minister this:	Has consideration
been given to the setting up of an empire organization to operate during the period prior to the peace conference, and after the peace conference as supplementary to and within the aegis of and under the control
of an international world organization? Has consideration been given to an empire and commonwealth scheme? Is there any reason why an empire scheme should not be constituted to operate within the framework of and without prejudice to the acceptance of the principle of an international authority and international control? I may be told that sixteen international set-ups under the draft convention will come into effect immediately the war ends. Not according to my reading of the convention, for article IX, section 1, shows clearly that the convention is entirely dependent and is predicated upon the setting up of a world security plan under which it would operate. What, I ask, is to be done in connection with world and empire airways during the cooling off period before the setting up of the international security organization?
As to the empire and the commonwealth I ask this: Are not our relationships bound up in our decision in this regard? I ask again, why is there no reference to the British commonwealth or empire? I believe this, that the empire must be kept strongly united not only in its own interests but in the interests of world peace, and that can be effected now only through the instrumentality of air transport.
In May, 1937, the imperial conference of that year recommended earth-embracing air services within the empire. I believe that the strength and the predominance for good of the empire in the after-the-war period will be in direct proportion to the vitality, vigour and imagination that is displayed in civil aviation. All of us believe in closer communications. The British commonwealth, in the interests of survival, must have parity with the other great nations. She cannot have that parity unless the dominions and all parts of the empire work together. Has any arrangement been made for the post-war pooling of transports with the United States, which produces the greatest majority of the transports being produced? There is no threat against any nation in empire air cooperation, least of all against the United States, with which we must live in the closest cooperation. Our hopes and our ideals demand it. The people of the United States admit with us that the future of world peace depends in large measure upon the cooperation of the English-speaking world.
Our air policy is inextricably bound up with our foreign policy. It depends upon our foreign policy. It depends also upon the degree of our desire for a closer relationship with other parts of the empire.
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This matter was discussed in the British house, and Captain Harold Balfour, joint under-secretary of state for air, used these words with regard to foreign policy which, I think, are applicable to-day. He said:
Our traditional foreign policy has been based on sea power, the possession of naval bases, and the protection of our sea commerce; now post-war minds will have to think in a new dimension. When directing our foreign policy we shall have to incorporate into it the knowledge that we must preserve civil air communications for the benefit of ourselves in particular and humanity in general.
On March 15, 1944, Sir Archibald Sinclair made this statement in the British House of Commons with reference to post-war air policy:
Britain and the dominions had reached a broad measure of agreement.
We have a right to know the measure of that agreement, circumscribed by only one consideration, the safety of the state. If there is an agreement, why should our representatives not speak at once and give us the agreement in so far as it can be revealed? I ask the minister, as Canada's representative at the Beaverbrook conference, to tell this country whether or not an empire air scheme was proposed at the conference and whether or not it was accepted or refused by Britain, New Zealand, Australia and South Africa? In my opinion the British commonwealth air training scheme, bringing together as it does in Canada representatives of all parts of this empire, fits exactly into the picture of an empire transport system, operating again, I repeat, within the control of an international body, and leaving to each of the component parts of the empire the right to determine its relationships with reference to neighbours whose territories are contiguous.
In the convention, reference was made to the fact that while this international body shall have wide and comprehensive powers, it shall not have the right to dictate as between contiguous pow'ers, mentioning specifically as an example the United States and Canada.
I think our post-war transport policy is important in that it cannot be dissociated from the trade policy of the various' self-governing dominions and other parts of this empire; it cannot be dissociated from an empire policy, and it cannot be dissociated from the question of empire defence.
How should we go about it? I suggest that consideration be given to the setting up of a commonwealth air board, having as members the United Kingdom, the self-governing dominions and the empire of India. There is no reason why in cooperation there should not be achieved a uniform air policy for the empire, or why the various parts of the

empire should have a divergent air policy. I again repeat that there are no insuperable difficulties in an empire policy being arrived at, reserving to each of its members the right to control its relationship with neighbouring countries.
We must realize to-day that air power will become more important as the years go by, that our survival will depend possibly again in the future upon air power, and that Canada cannot afford to take the attitude which she did prior to the present war, of refusing to consult with or to demand consultation with the other parts of the British empire. Canada cannot afford the luxury of isolationism after this war. We must never lose sight of the fact that history does not record that empires, any more than individuals, are given a third chance. I think we have an opportunity in the British commonwealth air scheme to build up an empire system of airways in no way hostile to those of any other part of the world. We have the personnel; we have the technical ability; we have the skill; we have the air factories; we have the trained men.
There are those who would say that the adoption of an empire scheme would imply domination by the empire. No such thing. What it would imply, Mr. Chairman, is negotiating on a larger basis with other nations. Think of the position of the commonwealth. It has within its territories many of the world's greatest bases. Canada ha? a strategic air position certainly unexcelled anywhere in the world. The British commonwealth scheme has a valuable trained personnel. Canada by herself could not hope to maintain routes on a world basis on a scale large enough to sustain a world scheme. That is shown by the fact that she has been unable to compete on equal terms with the United States, or at least has not done so on cross-frontier routes.
Empire trade must be encouraged to parts of the empire which are our greatest customers. We cannot afford to adopt an attitude of aloofness and allow our communications tp be broken down, and expect a continuation of that trade. I think all will admit that Canada, however important she is, cannot take a major part in world transport system, neither by themselves can other parts of the empire. An empire scheme built up around a world system can now be made to include Australia and New Zealand; for with the universal adoption of the principle of freedom in transit, Hawaii may become a port of call for the airways of the future, which she was not in the past.
Australia and New Zealand have declared for an international system or, in its absence, an empire system, no doubt realizing that there might exist some opposition to an

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empire scheme. Canada is the centre of the airways of the future. Should we not become the centre of an empire scheme comprising the whole world? That is the challenge I give to members of this house at this time, and again I say there is implied in that, no threat to any one, but rather unified collaboration in the interests of the control of aviation after the war, and in the interests of universal peace.
The establishment of the scheme would allow Canada to maintain Trans-Canada Air Lines. An empire corporation set up in this way could well adopt Canada as the headquarters for the system. It may be said that this is a new system. In general it was suggested, in part, on May 11, 1918, during the last war, but not followed, when the civil aerial transport committee met. In 1926, in a report to the imperial conference, the British Secretary of State for Air stated these matters as fundamentals in the building up of a great system of air transport, namely: The empire is in need of better communications, and if the communications are to be improved, a sustained and united effort will be required.
Now I come closer home and I refer to the
120,000	employees in the aircraft factories of the country to-day. We have in recent days asked the minister, what about the production, after the war, of aircraft? How many of the workmen will be employed? Promises of employment will not ensure the employment of the men.


The ACTING CHAIRMAN (Mr. McCann):: The hon. gentleman has exhausted his time.


Some hon. MEMBERS:: Let him finish.


John George Diefenbaker: I thank the committee. How many of these employees in the aircraft factories of Canada will be employed unless we set up such a scheme to ensure continuance of the plants in the production of commercial transports? I do not know whether our aeroplane factories can compete with factories in other parts of the world, though the minister said yesterday that the production curve indicated that we were doing a good job in that direction, but I believe that in a commonwealth scheme we shall assure employment for many thousands of these men who to-day are working in the aircraft factories of the country, and for many thousands of those who are overseas at the present time in the service of their country.
To adopt such a scheme would not clog the development among the various dominions, nor would it in any way create antagonisms; for regional considerations such as are advocated by the convention would still govern as between parts of the empire, and their contiguous national neighbors.
If we wait for five, six or seven years after the war is over before an international body is set up, then in my opinion there will have been such competition in the airways of the world that the control which is demanded today by the people of all the nations may in fact never be brought into effect.
There is one other matter I'should like to deal with, and possibly I shall have to discuss it at another time. However, I will just sketch it. I refer to the domestic situation. I accept as axiomatic the principle that Canada's interest as a nation is paramount to the interests of any private companies, and that we have to ensure that our men who return shall be guaranteed employment. I do not, however, lose sight of the fact that private airway companies have opened up Canada. I remember the companies in the northern part of Saskatchewan where I live that started after the last war and pioneered those trails into the north when no public enterprise would have been able to undertake the work. I believe that private companies deserve the right to continue on the feeder routes, controlled in order to prevent a monopoly privilege from being established in this country. In my opinion, the time has come for a revision of the Transport Act, chapter 53 of the statutes of 1938. This is an act under which a quasi-judicial body is set up, a transport board. It has the power to-day to grant a licence to anyone over routes that have once been established by the government, and the board may grant it regardless of government policy. It may grant licences against government policy; for the granting of the routes is made dependent upon public convenience and necessity. That act was passed by parliament, and parliament is the place where it should be changed. This act of parliament has been emasculated by an order in council, P.C. 2200, which was passed on March 18, 1943, while parliament was in session. What was done was concurred in by the Minister of Munitions and Supply. For public convenience letters patent may be granted to any company having as a principal object or purpose the operation of aircraft either in Canada or between Canada and other countries. I repeat, the act was an act of parliament. In doing what was done by the minister, or with his concurrence, there was revealed by him a contempt of this parliament in that, while parliament was in session and without regard to submission to the people's representatives, there was thereby destroyed an important provision in a statute passed by the people's representatives.


Clarence Decatur Howe: May I point out to my hon. friend that he did not read the whole effect of
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the order in council. It provides that a patent shall be issued only after a hearing by the railway committee of this house. That, I think, is hardly undemocratic.


John George Diefenbaker: I am speaking about the action of denuding an act of parliament of its provisions by the indirect method of order in council while parliament is sitting.


Clarence Decatur Howe: May I point out to my hon. friend that the incorporation of companies had nothing to do with the Board of Transport Commissioners Act. The transport commission has nothing whatever to do with the incorporating of companies.


John George Diefenbaker: The minister did by indirect means what he did not dare do by direct means. That is what I am objecting to.


Clarence Decatur Howe: Tommy-rot.


John George Diefenbaker: I am glad to have the concurrence of the minister in the point I am endeavouring to make. Let me go on to show the attitude of the minister in the new transport board that is to be set up. The minister has set himself up as believing that he is above parliament. Could one expect sound judgment to be exercised by the courts if they were to be subject to dictation by a minister or by the executive? Under the plan announced by the minister a new transport board will be set up. This new board is shorn of its vitality before its conception by reason of its dependence on the executive being specifically provided for. The minister sets forth the situation in these words which are found at page 1574 of Hansard of March 17, 1944:
It is proposed to establish a new board, to be called the air transport board, which will confine all its activities to air traffic, and which, in addition to performing the regularity duties now lodged with the board of transport commissioners, will be charged with the responsibility for advising the government on ways and means of bringing about a rapid and well-planned expansion of transport by air. The proposed board will examine the needs for new commercial services.
And so on.	[DOT]
It is felt that the creation of a board, to be concerned solely with transport by air will ensure prompt attention to all matters affecting air transport, that may call for consideration by the government, and be^ of great assistance to government, and to private enterprise, in the post-war period.
These are its powers. It "may make recommendations." "It may advise the government." "It may report on the need." "It may perform such other allied duties as may be determined." That board, if set up, would n.it be an independent board, but would be I Mr. Howe.]
a powerless tool in the hands of the executive. I protest against the principle of setting up boards with judicial functions, and at the same time denying them independence and power to carry out the recommendations that they make. As far as the general principle in Canada's domestic airways is concerned, the minister has adopted the principle that TCA shall have exclusive authority in so far as the Trans-Canada routes are concerned. The minister says that there is an opportunity to private enterprise in the feeder routes and accordingly the government recognizes the necessity of competition. Is the government going to subsidize these young men who come back from overseas? How are these young men to finance, themselves in the setting up of these air routes? What provision is to be made for inter-city traffic? Is that to be under the government? The other day I read an article which indicated that during the next few months it is expected that there will be established in the United States a helicopter set-up, and that there are over some thousand applications for routes on hand to date. Will there be such a development in Canada? If so, will it be under government control?
The minister stated at page 1574 of Hansard of March 17, 1944:
A vigorous aeroplane construction industry is an essential complement to Canada's post-war aviation plans.
Where will the demand be' for these planes? How many of the factories are to be maintained? How many of the men will be employed? The minister says that the railways companies must dissociate themselves from air expansion. He will be able to explain the reason for that, no doubt, for the explanation that he has given so far does not fit very well into the explanation that he gave in 1937 when he said that the airways should be under the railway corporations.
What is the attitude in Britain? They are changing their attitude. They are giving the railway companies an opportunity to expand air services within the country and even on to the continent. The United States has declared for private ownership as far as foreign airways are concerned, although it is believed that so far as transoceanic airways are concerned they will be pooled .as between the various companies. I ask this question: Where are the young men coming back from overseas to secure the opportunity that is promised them by the minister in the air development of the future unless there is continued in this country private enterprise alongside of state development? In my opinion, imagination, resourcefulness and initiative can come only

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through a degree of competition, wherein the best benefits are secured from both state and private enterprise. There are fields for both. There is need of both, but there should be rigid control to prevent abuse, to assure com* petition in the interests of efficiency and to control monopoly. The rights of companies to develop new routes with reasonable service and at reasonable prices should be encouraged; and assurance should be given that the companies that develop shall be subject not to penalization when they have success, but to a continuation in the work that they have undertaken so long as they furnish good, efficient service at reasonable rates.
There is a definite change in the attitude of the minister in regard to railways. In 1937, the minister announced his views as reported in Hansard at page 2216. At that time he set out the reasons why the railway companies should operate. Why has he changed his views? These are matters on which we should like to have information. What has happened that has resulted in the necessity for the divestment of railway companies of their airway interests? Without the minister's answer to that question we cannot discuss the matter at any great length. Suffice it to say that, as far as this party is concerned, we believe that Canada should maintain control over the further i developing of her vital position in national and international air transport. We believe that all internal air domestic aviation should remain under the board of transport commissioners or a board with similar powers, and not under the control of the executive. We believe that the existing TCA lines should be maintained and reasonably expanded; that privately owned commercial aviation should be allowed to expand and to open up new routes.
I again wish to thank the committee for having permitted me to speak beyond the forty-minute period. The science of aeronautics has developed in the laboratory of war. It becomes a matter of world importance that it shall be utilized and extended into the world of peace. Canada, with courage and skill and her strategic world position, has earned the opportunity to achieve a great destiny in postwar air development. But I warn this committee that we must be careful in the decision at which we arrive. Hon. members should discuss this problem freely and untrammelled, because we must make sure that Canada becomes more than a cross-roads, for Canada must be a factor in world and empire air development. What I have said is far from the final word that can be said on the subject, as I am sure the minister would admit that what he said was far from the final word.
It is too early yet for anyone to speak with finality on the course of the airways after the war; but frank, free and unprejudiced discussion now may well bring about the creation of a path that will lead Canada to the goal of world peace, empire cooperation and the assurance to the Canadian people of domestic happiness and prosperity.


Thomas Miller Bell: I am going to take a minute or two, since the hon. member for Lake Centre referred to the statements made in this house by my colleague the hon. member for Winnipeg North Centre (Mr. Knowles) and myself on March 20. The hon. gentleman pointed out, as is done so frequently in this chamber, that we have very niuch in common with the British labour party and the labour parties of the commonwealths of New Zealand and Australia; and he went on to say that the British labour party had taken the position that international ownership as well as international control of the main air routes of the world might be undertaken. Just to keep the record straight, I should like to quote what I said in the course of my remarks, at page 1656 of Hansard:
I think in the field of civil aviation we must have international understanding, international operation and international control. I should like to see the world go beyond where I think it can go to-day. I should like to see an international system owned internationally; but I realize that under present world conditions not only is that improbable but it is quite out of the question. Hence I believe we must have an intergovernmental regulatory body, one which will license and regulate and enter into arrangements with the nations, so that we may achieve the results we desire, namely efficient transportation, rapid transportation, comfortable transportation, safe transportation-and peace at the end of it all.
When that statement was made I was thinking that we do not know where Russia stands, as the hon. member for Lake Centre has said. We read of a considerable discussion of international airways in the United States of America, and it seems-unfortunately, I think -that the best we can hope for from the United States is international control, intergovernmental agreement. While I should like to see a wider scheme, we have to be realistic about the matter and get the best we can. I am glad the government has gone as far as it has in that respect; I wish that it might go farther. I realize there are others who wish to place the views of their particular parties or groups before this committee, so that while I should like to comment farther on what the hon. .member for Lake Centre has said, I do not believe that at this time I should take more of the time of the committee.
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Thomas Langton Church: Mr. Chairman, I have followed with the greatest interest the question of civil aviation ever since the last war, during which eighteen thousand cadets and mechanics of the Royal 'Air Force were trained in the city of Toronto. After the war many prominent people, including the late Colonel Barker, V.C., Air Marshal Bishop, Sir Frederick Handley Page, Air Marshal Collishaw and others came back to Toronto-and as mayor I discussed the matter with them for months-that Canada, which had done so splendidly in the last war, should continue with a programme of civil aviation during the time of peace. As an example, I refer to the progress that had been made three hundred years before on the high seas, when Britain, of her own volition, went out and created an oceanic empire through sea power, when she had only one rival, Portugal, and later on the Dutch. Britain gained command of the sea and built up her magnificent empire.
I am very much disappointed with the secret policy of the government in this connection. Why did Canada not seek first a conference with the other dominions in order to formulate an empire policy as a unit? What was the need for all this secrecy in regard to a public matter such as this, which is of the utmost importance to the future of the world and the future of our empire? Why were all these star chamber proposals made, when w'e had the minister and his staff in London at a time when there were also in that city representatives of nearly all the countries of the world trying to devise some definite plan for the progress of civil aviation and the progress of the world in general? One objection I have to this internationalization of bases is that Russia, our great ally, will have nothing to do with the idea, because they believe in collectivism. The United States will have nothing to do with internationalization; Washington almost shudders when one mentions it and international aviation. They are going to act separately in civil aviation. It is all very well to come here and appeal for this sort of thing, but after all we are only a nation of ten million people. Why should we go outside the empire and make international treaties with these world powers on one of the most important matters ever to come before the people of this country? It is dangerous to plan to share these bases with any other and give them sovereignty, while allowing user. I referred to this matter on July 15 of last year, when the estimates of the Minister of Trade and Commerce were under consideration. At page 4868 of Hansard I said:
If we had had an international policy which meant the giving up of empire ports like Gibraltar and Suez, the Cape, the far east and

the West Indies, where would we be to-day? The empire would have been destroyed, and that would have meant the fall of civilization.
Already we have given the United States bases for ninety-nine years, reaching from Newfoundland to British Guiana, and no doubt they will want to hold on to them. Let us see what that will mean to this country. The bases which it is proposed to share are the backbone of the British empire on the seven seas. Upon them the security of the British empire has depended for some two hundred years, as it will depend in the future. Just fancy what would have happened to the mother country in the present war without these bases! The commonwealths and colonies would be adrift; the empire would become a perfect absurdity on the map; it would be a body without arteries. Just imagine what would have happened in 1940 if we had been compelled to share Gibraltar, Malta, the Cape, Alexandria and these other bases around the seven seas with the United States and Russia, two neutral powers for two years, and all the other powers that were afraid to provoke Germany. Our position would have been impossible. We should have been under pressure to keep neutral. Internationalization presupposes a perfect world of the future. It is one of those dangerous principles. The policy of the government is one of the most dangerous for the mother country that we have had in the last two hundred years. We are prepared to let trusted allies use our bases, as I said on July 15 last-even in peace. But beyond that concession there are dangers. We have to get back and look at the basic principles behind this policy of internationalization. We have to stop and listen, and go back to the very concept of the British nation, united and strong, to defend itself as a unit, existing as an influence among the powers of the world, and ready to cooperate with others on a self-respecting and honourable basis.
Imperial defence should be strengthened. I spoke in the house on July 15 last, after April 2, when the Prime Minister announced the policy which, in my opinion, has prevented an empire conference since then on this important matter of civil aviation. Civil aviation is to be the transport of the future. The Prime Minister practically threw cold water on the whole thing through the following words, which have been quoted in the British House of Commons. He said on April 2:
The Canadian government strongly favours a policy of international collaboration and cooperation in air transport and is prepared to support in international negotiations whatever international air transport policy can be demonstrated as being best calculated to serve not

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only the immediate national interests of Canada but also our overriding interest in the establishment of an international order which will prevent the outbreak of another world war.
What was the result of that policy, which was quoted in England, in the British House of Commons? In my opinion, it was quoted by the acting leader of the government as one of the reasons why no empire conference on civil aviation should be called. True it is that some time in October, I believe it is the minister and some of his staff went over and had a conference over there. But there were no practical results from that conference. It was said then that under the statute of Westminster each of the dominions is responsible for its home defence, to three miles outside boundary lines. In addition to that, each dominion retains its status, autonomy and sovereignty, and has to look after its own domestic affairs. So much is that so that even in its air policy the domestic policy of Canada is that, following the statute of Westminster we are to set up a vast monopoly in this country, with hidden subsidies, something which will lead to untold error in connection with this work of civil aviation.
I referred to this speech of the Prime Minister when, speaking in the house on July 15 last, I said that the domestic policy of Canada in the air should be based on a well known policy in navigation laws and lease-lend, and that

We should be ready to cooperate with our allies and allow them to use these air bases, but we should not give away sovereignty over them. The empire has thrown back its enemies from without and in my opinion she will go on to destroy them. Now is the time that we should try to recapture the spirit of empire and our faith and pride in our dominions and in our trade and commerce. The empire is a living thing and should not be allowed to go by default or into liquidation.
That is what you are prepared to do now. You are prepared by this policy to allow this empire to go by default and into liquidation with a war on, instead of being a unit as an empire as to civil aviation. I said further on the same date:
The mother country and the dominions fought this battle alone for two years. Our soldiers carried on with those from India, New Zealand, South Africa, Australia and the empire training plan. We stood shoulder to shoulder in the snows of Labrador and Newfoundland and in the heat of India and the far east.
In the days before the war you could go into any large port and find fifteen or sixteen ships from different parts of the empire carrying on their trade.
I have seen that in Halifax, Victoria and Vancouver.
I believe that this same spirit of empire co-operation will continue in the years that are to come. Canada should be ready to go along
with the dominions and the empire. The time has come when the Minister of Trade and Commerce should tell this committee and the country what our relations are with the other sister dominions who fought along with us for two years to save civilization. One of our great allies stood aside for two years with Germany, but Russia has since made a glorious record. To-day she is practically fighting her battles alone except for some supplies and munitions that are being sent in.
I went on record to the effect that the policy should be to allow these bases to be used by all the world in the future. But sovereignty-no. They should be retained by the mother country and by the British empire. That is why I have objected to such secret policies in the house.
Had the same energy been put into civil aviation in the period between the two wars that has been put into it in the empire air plan since the war started, we never would have had a second war. I have followed this civil aviation question, right from the start of the last war, and I have been very much disappointed in what I have seen.
The minister of Munitions and Supply on the 17th if this month gave a fine history of civil aviation. He placed on record a splendid summary of the progress of civil aviation. He pointed out what had been done by private , enterprise and private initiative. Then he went on to refer to many other matters, pointing out that a reduction had been made in the estimates in 1935, and then went on to a reference to Trans-Canada Air Lines, and how Canadian Pacific Air Lines would not come in.
Did this international agreement he quoted ever come before the other dominions? I am referring to this international agreement given out secretly at Washington, over the heads of parliament, behind our back, when parliament was in iession, which decided on a domestic policy involving the greatest monopoly this country has ever seen, and for the payment of hidden subsidies to a corporation whose civilian heads had had very little training. There was one exception, because the head of Trans-Canada Air Lines, Philip Johnson, had come from the United States, and was an able business man who had had experience in aviation.
But Canada's policy of not calling an empire conference on civil aviation will have unfortunate results, because she has been advocating a policy of internationalization. No definition has been given with respect to what internationalization is, and no one understands what it is. The House of Commons has never seen this particular agreement, and I doubt if some of the dominions have ever
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read it. I doubt if the British parliament has ever seen it or discussed it, because they had a debate over there last June.
Some forip of internationalization is no doubt necessary. Some form of private enterprise, or a mixed form of private and public enterprise, might be considered. But I believe the whole policy of the government is entirely wrong and a leap in the dark, and it is one which will not commend itself to the wisdom of the country. After all is said and done, if that is the view of the government, then there is very little hope for civil aviation in Canada in the future of Canada or the empire. I never have been able to see how this secret conclusion was ever reached. Civil aviation should not be a political question, nor should it be the plaything of any political party. It should be considered on its merits. In the great future which lies before this country we must wrap ourselves up with the mother country and the dominions, as a unit, in a joint empire air scheme, as we did in war.
As far as domestic aviation goes it is wrong to create a monopoly in this and other countries. The government is just drawing red herrings across the track, with a war on, and creating unnecessary dog-fights between these two companies. All this is being done when the war is not yet won. We should get back to basic things, namely, what the British empire as a unit should do in connection with civil aviation with an all-empire plan.
Instead of sticking to the main policy and the main task that is before us, instead of considering what is best to be done, we start off by creating a dog-fight between the two transportation systems in this country which have been doing glorious work in this war.
I was interested in civil aviation many years ago in connection with the policy of the present government and the government before it. Little or nothing was done, before the two wars, about civil aviation; it was left to private enterprise. The means by which we were able to obtain a technical victory in the battle of Great Britain were made possible by the information obtained in the Schneider race in 1931. The British government were able to obtain information which laid the foundations for the winning of the battle of London in 1940. The low-wing monoplane was born in that race, and this was the ancestor of the Spitfire and the Hurricane. Many great inventions followed out of the information obtained from those races. But there has been a complete lack of policy on the part of this government and that of the mother country in connection with civil aviation.

I am dissatisfied with the policy of this government because it will not solve the problem. The two transportation companies are to be put'out of existence in the air and all surface road transport, and a new company is to be substituted. They do not say how Canadian Pacific Air Lines are to be liquidated, and they fail to recognize the findings of the council of British shipping. This is an important body which has done much to help to win the battle of the Atlantic and keep the empire trade routes open in war. Their experience dates back for 200 years in providing sea services, and they outline the part they feel they can play in civil aviation. The report of that body in 1944 reads:
Our problem in this matter is greater, hut our opportunities are also greater than those of any other great power. The shipping industry does not pretend to any specialized knowledge of aviation, but it possesses experience of travel.
What it does possess and what it offers as a practical contribution to this task is a wealth of experience derived from our generations of successful management of overseas services; an efficient organization already dealing with those classes of passengers and freights likely to be borne by air; and a network of branch offices and agencies all over the world.
That contribution, the result of vast experience, W'as at first gained in monopoly before other countries took to overseas ventures, and then in competition with shipping subsidized by foreign governments. Having watched the effects of subsidies and of monopoly, the shipping companies believe that they should not be established for the air. They also believe that "persistent subsidy would retard genuinely healthy progress." ...
The war itself is both a forcing house for the development of the aeroplane and an agent for the wholesale destruction of ships. What might therefore have been a gradual, will become an abrupt transition. British shipowners, when tackling the rehabilitation of their traditional services after the war, will be presented also with an unusual opportunity to convert them spontaneously from the old medium to the new, in whatever respects and in whatever proportions their respective characteristics and the requirements of each trade or group of trades may suggest.
But any such spontaneous conversion is faced immediately by two obstacles. First, there is the risk under present legislation that shipowners may find themselves in competition with their qwn government in the shape of British overseas airways corporation.
This corporation holds a legal monopoly of all British services which are subsidized from public funds. The council of British shipping hold that their experience is of great value to the future.
A far wider and more varied deployment of experience, resources and individual enterprise would appear to be required, and British shipowners, in technique and experience and in their long established position in international transport, should be able to make certainly not

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an executive but a substantial contribution to the sum total of British air commerce. Ships and aeroplanes are by no means mutually exclusive. On the contrary, experience has shown that they can, and ideally should, be operated in a sense complementary to each other.
The conduct of a regular air line and that of a regular se& line have wholly systematic characteristics. Each calls for long term policies; each requires an international outlook; in each rigid technical discipline is essential to public safety; each finally succeeds only by capturing and retaining the goodwill of the travelling public or the consignor of freight.
In this remarkable memorandum the council of British shipping have made a real contribution to our understanding of the subject of air and sea transport. They end with suggesting that there should be a national empire board and they say;
In its twenty-five years of existence the national maritime board, on all questions of seagoing conditions and pay, has not only acquired confidence and authority, but has developed within itself a happy combination of mutual respect, eommonsense and an absence of rhetoric.
New Zealand and Australia have attempted to do something in connection with air routes and civil aviation. Mr. Curtin and Mr. Fraser appealed to Canada, last January when they met, to hold a meeting in order to bring about a unified policy for the empire. When I spoke on this matter here two weeks ago I quoted the speeches of Mr. Curtin and Mr. Fraser of January last and also referred to what the war correspondent of the Sunday Times said in his dispatch dated January 16. I repeat:
It is not generally realized at home that America has a Pacific air route which is marvellously well organized. On the day after war ends the same pilots, planes, air crews, ground organization, wireless and meteorological services will be available to begin commercial air services between Canada, America, Australia and New Zealand.
The British empire will not be in this lucrative traffic because nowhere on the Pacific route during war is there one British plane, pilot, meteorological expert or radio operator. Unless Britain places air crews on this route in 1944 she will be left at the post as far as experience and good will of services go, if peace comes in 1G45.
The Prime Ministers of Australia and New Zealand made an appeal to Canada to send delegates to an empire conference, and urged that serious consideration be given to the question.
The United States have been progressive in civil aviation. Many of the prominent men in this industry gained their experience in the R.A.F. in Toronto during the last war. The Americans have a tremendous hold over the Pacific, and they did not get it by accident but by enterprise, at a time when Canada
was asleep. They have made great concessions to travellers. The United States air service over the Pacific is free, every military or civilian traveller having the benefit of that route at no cost to himself.
The Prime Ministers of Australia and New Zealand had a conference on the 17th of January at which they agreed on an airways plan and made an appeal for an empire air policy. Canada has ignored it all, and has done nothing about it. Now Canada announces an international air policy as though she were a first-class power. I can tell you this, that America will have nothing to do with internationalization, neither will Russia. Russia has an agreement with the mother country for after the war to which the dominions are not a party.
I am very much disappointed with the whole air policy of the government, and I do not believe it will ever be consummated. In Canada we should have a chair in civil aviation in every large university, especially after the glorious record that Canada has made in this war with the empire training plan, which cost the taxpayers of this country close to a billion dollars. But we shall get little value out of it all under the domestic and international policies of this government. How does it come about that this policy is announced over the head of parliament and that a secret international document like this was produced in Washington over our heads and put into the record? It was done over the head of this parliament while in session, and over the head of the mother country, over the head of Australia and New Zealand and the other dominions which have been fighting with Canada in this war. Imagine the future for our young aviators coming back from this war if we have no settled air policy! This policy has been got up by a minister of the crown over the head of parliament. How many members have read this secret international proposed agreement? I have read it three or four times and I as a simple Canadian citizen am shocked by it. It gees over the head of Britain, which stood alone in the battle of Britain. This policy is got out over the head of parliament while our young aviators are fighting overseas. I doubt if few members have read the policy. It is, in my opinion, a shock to the people of the empire, and I have made a study of civil aviation ever since the magnificent record Canada made in the air in the last war.
I have waited for over twenty years for this day, to see that civil aviation would at least get a break here and that we could have
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a discussion in this house of this matter. Hitherto we have had no chance to discuss the future of aviation and the place it will occupy in our life when our young men come back from the war. How many of them, when they return, will have one hundred dollars in their pockets to finance a feeder line? What is the use of talking about their coming home as o-wners to enter an air industry? They will have twenty-five dollars in their pocket to buy a suit of clothes, but not sixty dollars, and yet we have squandered millions on camps all over this country without suitable sewers or water in them. Is that what our pilots are fighting for? Is that what we are doing for them, instead of calling a conference with the other dominions with a view to action along the lines I have indicated?
We have a navigation policy under which any ship can enter our harbours and land its cargo. They cannot enter our coastwise trade on the Atlantic or Pacific, but they can land their goods at our ports. That policy has proven in navigation a success for two hundred years, and has made Great Britain the great ocean-going country she is. The same principle should be applied to civil aviation, which should be free the world over. I regret that, instead of sticking to the large issue, the government has brought in these irrelevant matters when the war is on, and at a time when the railways are doing magnificent work they are to be deprived of any share in civil aviation. At a time when railway facilities in this country are choked, the ministry says: Nobody shall engage in civil aviation except the government, and they shall have a monopoly of it. I am not a Canadian Pacific man or any other kind of man, but one of independent mind, but I do say that this policy is a mistake. The government has got out a political feport on civil aviation in the domestic and in the international field. Civil aviation should rank next ,to agriculture in providing work and employment for our young men when they return from this war after writing the most glorious page in the lpstory of the world. I still have ten to fifteen minutes, Mr. Chairman, and I will continue my remarks when this question comes before us again, since I see it is now eleven o'clock.
Item stands.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Wednesday, March 29, 1944