1944-03-23

Mr. W. H. MOORE (Ontario) moved:: That the first report of the standing committee on banking and commerce presented to the house on Tuesday, March 21, he concurred in.


[Stage Direction]
Motion agreed to.
That the second report of the standing committee on banking and commerce presented to the house on Tuesday, March 21, be concurred in.
Motion agreed to.

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

Mr. KNOWLES:: 1.	In what provinces are liens filed against the property of old age and blind pensioners?
'\Ir. Howe.]
2.	Is the filing of such liens the subject of any arrangement or agreement between the provinces and federal government?


Mr. ABBOTT:: 1.	The provinces of Prince Edward Island, Quebec, Ontario, Manitoba and Saskatchewan have the power to control property owned by old age pensioners and blind pensioners under the authority of provincial legislation. At the time of the last dominion examination of the provincial pension accounts, these provinces appeared to be following the general practice of filing liens or registration notices as authorized by their legislation.
2.	There is no agreement and no regulation regarding the filing of such liens, other than the general agreement of each pension authority to administer pensions in accordance with the act and the regulations. Subsection 3 of section 9 of the Old Age Pensions Act provides as follows:
A pension authority shall be entitled to recover out of the estate of any deceased pensioner, as a debt due by the pensioner to such authority, the sum of the pension payments made to such pensioner from time to time, together with interest at the rate of five per cent per annum, compounded annually, but no claim shall be made by a pension authority for the recovery of such debt directly or indirectly out of any part of the pensioner's estate which passes by will or on an intestacy to any other pensioner or to any person who has, since the grant of such pension or for the last three years during which such pension has continued to be paid, regularly contributed to the support of the pensioner by the payment of money or otherwise to an extent which, having regard to the means of the person so having contributed, is considered by the pension authority to be reasonable.
There has been some legal doubt as to whether this clause was mandatory or permissive in its effect. For some time the dominion has followed the legal opinion that the section indicated an intention on the part of parliament that recoveries should be made and that as a matter of sound administration, it should be regarded as a statutory direction to the pension authorities to make recoveries in the ordinary course. More recently we have been advised that while the drafting may leave some legal doubt, nevertheless the subsection is, strictly speaking, permissive. The provincial pension authorities have, as indicated in the answer to question 1, followed different policies, some have refused to follow the administrative requirement of making claims against the estates of deceased pensioners, others have suggested that it might be desirable either to discontinue making claims in all cases or to limit claims to the larger estates. In view of this situation, the provincial pension authorities are being

Questions
advised that whether or not recovery should be made from estates where the net value does not exceed two thousand dollars will be left entirely to their discretion.


INTERNATIONAL EXCHANGE UNION
Mr. QUELCH:: 1.	What are the names of the Canadian officials who drafted the proposals for an international exchange union?
2.	What were the terms of reference under which these proposals were drafted?
3.	Have these proposals been endorsed by,
(a)	the Department of Finance; (b) the government of Canada; (c) any other body?


Mr. ABBOTT:: 1.	The following officials of the Department of Finance, Department of External Affairs, the Bank of Canada and foreign exchange control board took part in the drafting of the "Tentative draft proposals of Canadian experts for an international exchange union":
R.	B. Bryce, W. C. Clark, J. J. Deutsch.W.A. Mackintosh, L. Rasminsky, N. A. Robertson, G. F. Towers.
2 and 3. The proposals were drafted to serve as a basis for the comments and suggestions to be made in regard to the American and British currency proposals by the Canadian experts who were to attend the discussions on this subject in Washington. Several of these Canadian officials participated in these discussions as a result of an invitation which the Minister of Finance, as he explained to the house on July 12 last year, had received from the Secretary of the United States Treasury to send technical experts to Washington for an informal discussion of the proposals for an international stabilization fund prepared by officials in the United States treasury. Those who took part in the drafting of the "tentative draft proposals" did not receive any instructions or terms of reference, as it was definitely understood that the experts in discussing this question, were to do so solely on their own responsibility with a view to exploring the possibility of reaching agreements on proposals that could be recommended to governments in order to solve the problem of post-war monetary instability.


CANADIAN PACIFIC AIR LINES-AIR ROUTES INTO UNITED STATES
Mr. KNOWLES:: 1.	Has the government been advised of any applications made by Canadian Pacific Air Lines to the United States government or any department or branch thereof dated since January 1, 1943, for permission to operate civil air routes into the United States (including Alaska)?
2.	If so, when was the government so advised, and what routes have been named in such applications?


Mr. CHEVRIER:: 1.	Neither the Departmet of Transport nor the board of transport commissioners has received advice of any such applications.
2.	See answer to No. 1.


TORONTO-PORT . DALHOUSIE STEAMSHIP SERVICE
Mr. CHURCH:: 1.	Will the government railways operate a steamboat passenger service during the coming season of transportation between Toronto and Port Dalhousie? If so, with what steamers?
2.	Will an improved type of steamer be provided this year for passenger and freight, and an improved service be given?
3.	Will reduced fares be considered for holidays and weekends?


Mr. MICHAUD:: 1.	The Canadian National Railways proposes to operate its Toronto-Port Dalhousie freight and passenger service again this year during the period of navigation with the steamers Northumberland and Dalhousie City.
2.	The same steamers will be operated as last year, on approximately the same schedules.
3.	The same fares will be in effect for holidays and week-ends as effective last year.


INDIANS-TRUST FUNDS
Mr. MacINNIS:: 1.	What is the Indian population of Canada, in, (a) each province; (b) Northwest Territories; (c) the Yukon?
2.	What is the total amount of money held in trust for the benefit of Indians by the Department of Indian Affairs?
3.	Is the trust fund apportioned so much to each province?
4.	If so, what amount is allocated to each province?


Mr. CRERAR:: 1. Indian population, 1939:
(a)	Alberta	 12,163
British Columbia	 24,276
Manitoba	 14,561
New Brunswick	 1,922
Nova Scotia	 2,165
Ontario	 30,145
Prince Edward Island	 274
Quebec	 14,578
Saskatchewan	 13 020
(b)	Northwest Territories .... 3,724
(c)	Yukon	 1,550
2.	$15,692,988.06 (as at February 29, 1944).
3.	The Indian trust fund is made up of some 450 individual band accounts, savings of more than 2,000 individual Indians and other special accounts for the benefit of Indians and Indian administration. Bands of Indians are grouped by agencies a number of which overlap pro-
Questions

vincial lines. The fund is composite in character and there is no apportionment byprovinces.
4. Answered by No. 3.


PENSIONS FOR THE BLIND
Mr. KNOWLES:: 1.	How many persons in each of the provinces and in the Northwest Territories were receiving blind pensions as at December 31, 1943?
2.	What was the average monthly payment in each province at the above date?
3.	In which of the provinces does the monthly average indicated in the answer to question (2) include the increase provided by order in council P.C. 6367 dated August 10, 1943?
4.	In which of the provinces does the monthly average indicated in the -answer to question (2) include any supplementary amounts paid by the
province? .


Mr. ABBOTT:: 1. Alberta	 240
British Columbia	 326
Manitoba	 344
New Brunswick	 720
Nova Scotia	 639
Ontario	 1,481
Prince Edward Island ....	113
Quebec	 2,251
Saskatchewan	 321
Northwest Territories 

 -
2(,	Alberta	
$23	99British Columbia	
24	26Manitoba	
24	23New Brunswick	
22	98Nova Scotia	
20	75Ontario	
23	88Prince Edward Island ...	22	41Quebec	
24	35Saskatchewan	
24	45Northwest Territories ...	-3.	In all provinces.4.	In no province.
Note: The information in answers I and 2 has been furnished by the provinces in their statements for the quarter ended Dec. 31, 1943.


OLD AGE PENSIONS
Mr. KNOWLES:: 1.	How many persons in each of the provinces and in the Northwest Territories were receiving old age pensions as at December 31, 1943?
2.	What ivas the average monthly payment in each province at the above date?
3.	In which of the provinces does the monthly average indicated in the answer to question (2) include the increase provided by order in council P.C. 6367 dated August 10, 1943?
4.	In which of the provinces does the monthly average indicated in the answer to question (2) include any supplementary amounts, paid by the province?
[Mr. Crerar.l


Mr. ABBOTT:: 1.
Alberta	 11,073
British Columbia	 14,544
Manitoba	 12,294
New Brunswick	 11,876
Nova Scotia	 14,093
Ontario	 56,364
Prince Edward Island	 1,902
Quebec	 47,336
Saskatchewan	 12,863
Northwest Territories	 8
2.
Alberta	$ 22 66
British Columbia	
23	56Manitoba	
23	33New Brunswick	
17	03Nova Scotia	
17	63Ontario	
22	80Prince Edward Island	
18	51Quebec	
22	38Saskatchewan	
22	90Northwest Territories	
25	003.	In all provinces.4.	In no province.
Note.-The information in answers 1 and 2 has been furnished by the provinces in their statements for the quarter ended December 31, 1943.


AIR TRAINING PLAN-CLOSING OF FLYING SCHOOLS -CIVILIAN PERSONNEL
Mr. BREITHAUPT:: What is being done by the government to place civil personnel laid off on account of closing of flying schools of the Commonwealth Air Training Plan?


Mr. MARTIN:: Special services and attention will be given to the placement of all civilian personnel released on account of the closing of flying schools of the commonwealth air training plan. The established procedures in respect to lay-offs in war industries will be applied to these lay-offs.
Information is being obtained from the Department of National Defence indicating the schools that are to be closed down and the order ini which the lay-offs are to take place.
A report has now been received in reference to the lay-off at the R.C.A.F. training school No. 4, Quebec city. Thirty-two civilian personnel are involved as follows: 4 stationary

Questions
engineers; 2 carpenters; 1 painter; 19 general duty messmen,; 1 plumber; 4 cooks; 1 electrician.
The lay-off became effective March 22. Vacancies exist in the Quebec area for all being laid off except general duty messmen and stationary engineers. The Quebec regional office at Montreal will endeavour to find suitable employment for the latter.
There will be no other schools closed until the middle of May.


EXPORTS OP BEER AND SPIRITS
Mr. JOHNSTON (Bow River):: 1.	How many gallons of spirits have been sold outside of Canada, (a) to the United States;
(b)	to the United Kingdom; (c) to others, during each of the years 1939, 1940, 1941, 1942, 1943?
2.	How many gallons of beer have been sold outside of Canada, (a) to the United States; (b) to the United Kingdom; (c) to others, during each of the years 1939, 1940, 1941, 1942, 1943?


Mr. MacKINNON (Edmonton West):: 1 and 2.
Exports of beer and spirits from Canada during the calendar years 1939 to 1943
Item and country	1939
Ale, beer and porter-	Gallons
United Kingdom	 20
United States	 80,837
Other countries	 94,923
Totals	 175,780
Gin-
United Kingdom	
United States	 382
Other countries	 3,870
Totals	 4,252
Whisky-
United Kingdom	 40,390
United States	 1,376,586
Other countries	 56,636
Totals	 1,473,612
Potable spirits, other- United Kingdom ,
United States	 7
Other countries	 130
Totals	 137
1940 Gallons	1941 Gallons	1942 Gallons	1943 Gallons4,827 81,069 154,770	137,323 3,369,911	360,613 7,159,738	2,322,108* 3,029,045240,666	3,507,234	7,520,351	5,351,15324,225	499	3,356	7161,911	8,926	5,834	29,27315,767	83,833	221,067	54,70641,903	93,258	230,257	84,69544,952	14,933	8,155	3,8261,595,621	1,625,843	1,673,732	1,685,52446,885	233,501	484,626	383,8611,687,458	1,874,277	2,166,513	2,073,2111,917,868	5,037	....	....12,586	15	6	1,120432	5,872	2,547	1,0771,930,886	10,924	2,553	2,197
* Of the 2,322,108 gallons of beer exported to the United States in 1943 we are informed that at least two-thirds of this amount were re-exported from that country.
1746
Questions


MARKETING OP WESTERN GRAIN-PARITY PRICES
Mr. FAIR:: 1.	How many bushels of, (a) wheat; (b) oats;
(c)	barley; (d) rye; (e) flax, were marketed each year from 1930 to 1943 inclusive by farmers in the prairie provinces?
2.	What was the average price per bushel at the farm for each of the above grains each year from 1930 to 1943 inclusive?
3.	What is the net amount received by the farmers of the prairie provinces each year for each kind of grain from 1930 to 1943 inclusive?
4.	Using the period 1915 to 1919 as a base for arriving at parity prices at the farm, what amount should have been received by the farmers of the three prairie provinces for each kind of grain each year, 1930 to 1943 inclusive?


Mr. MacKINNON (Edmonton West):: 1.	Wheat	Oats	Barley	Rye	Flaxbu.	bu.	bu.	bu.	bu.1930 	24,979,271	19,466,578	8,0S2,564	4,412,3921931 	
251,842,837	39,601,548	13,596,239	3,752,751	2,233,7291932 	
344,636,535	34,509,217	13,825,088	2,594,451	1,732,1311933 	35,508,778	14,638,951	2,615,603	800,6441934 	38,319,655	18,855,656	1,433,837	421,6941935 	
234,511,432	31,943,821	13,389,067	2,116,853	932,9061936 	34,520,892	26,261,514	2,242,391	1,391,1921937 	
124,298,496	29,537,529	22,870,959	1,880,574	566,3471938 	28,762,837	24,036,360	2,499,865	753,7821939 	35,628,072	25,151,404	5,155,448	1,423,4791940 	
346.S68,842	34,222,852	19,446,727	4,144,866	2,235,3111941 	36,957,380	28.946,141	6,763,018	4,654,6631942*	59,989,977	46,754,834	4,680,484	11,252,7801943*	
236,140,985	133,060,506	92,632,387	7,554,566	14,539,7452.	Wheat	Oats	Barley	Rye	Flax1930 	
$0-558	$0-221	$0-195	SO-275	$1-0261931 	
0-365	0-156	0-19S	0 194	0-7491932 	0-145	0-201	0-200	0-5131933 	0-159	0-232	0-335	0-9371934 	
0-579	0-241	0-411	0-450	1-1931935 	
0-607	0-197	0-255	0-234	1-1411936 	
0-822	0-252	0-562	0-438	1-4041937 	0-378	0-492	0-771	1-4961938 	
0-621	0-224	0-282	0-255	1-1251939 	0-183	0-266	0-379	1-3911940 	
0-52612	0-222	0-280	0-346	1-0591941 	
0-521123	0-283 4	0-372 4	0-4014	1-24241942*	
0-6261	0-336 4	0-440 4	0-3974	1-94541943*	0-395 4 *	0[DOT]497 4 5	0-6664	2-135 43.	Wheat	Oats	Barley	Rye	Flax$000	$000	$000	$000	$0001930 	5,528	3.798	2,219	4,5251931 	
91,842	6,159	2,697	727	1,6721932 	
110,125	5,021	2,783	518	8881933 	5,634	3,403	875	7501934 	
138.220	9.249	7,748	645	5031935 	
142.443	6,308	3.409	495	1,0641936 	
140.651	8,704	14,759	982	1.9531937 	11,153	11,245	1,450	8471938 	
173,968	6,446	6,769	638	8481939 	
212,878 2	6,526	6,690	1,954	1,9801940 	
182.565 i 2	7,598	5,447	1,435	2.3681941 	
169,186 i 2 3	10,467 4	10,773 4	2,709 4	5.783 41942*	
138.0981	20.184 4	20.578 4	1,860 4	21,883 41943*	52,593 4 5	45,993 4 5	5,034 4	31,045 4
4. Not applicable.
* Preliminary.
1	Payments on participation certificates not included.
2	Prairie farm assistance payments not included.
3	Prairie farm income payments not included.
4	Wheat acreage reduction payments not included.
6 Advance equalization payments included, but final distribution from equalization funds not included. 

Questions


PERMITS FOR EXPORTS TO JAPAN
Mr. COLDWELL:: How many permits were issued by or on behalf of the government, for the export of each of the following articles to Japan, from September 1, 1939, and on what dates, and for what amounts: asbestos, including asbestos sand
and waste; bauxite, alumina and aluminum; cadmium; cobalt, in ore, refined, salts and stellite; copper, in ore, concentrates and refined; ferromanganese; ferrosilicon; lead, in ore, concentrates and refined; nickel, in ore, matte and refined; nickel oxide; zinc, in ore, concentrates and refined; scrap metals of all kinds?


James Angus MacKinnon: No. of			Weight	
Date	Permits	Commodity		Tons	Value
1939-					
September 	
2	Asbestos	fibre	213	$ 9,052October 	
34	ft	It	6,490	2,901,4873	tt	crude	28	19,390November 	
18	"	fibre	4,350i	346,9632	tt	crude	28*	19,950December 	
30	tt	fibre	2,889	216.2652	tt	crude	62	29,8001940-	January 	
17	tt	fibre	2,082*	110,4092	tt	crude	26i	15,400February 	
4	tt	fibre	405	19,664March 	
28	tt	tt	2,738	185,2509	tt	crude	124	65,370April 	
13	tt	fibre	1,532	87.149May 	
17	tt	tt	1,426	72,1482	u	crude	4	2,600June 	
11	tt	fibre	l,342i	93,2041	tt	crude	5*	2,337July 	
7	tt	it	33	19,84820	tt	fibre	2,191	168,142August 	
1	tt	crude	18	10,57517	tt	fibre	2,363	201,825September 	
27	tt	tt	3,539	320,606October 	
2	tt	ft	500	23.375November 	
13	tt	tt	2,379	110.081December 	
15	It	it	4,270	195,2611941-	January 	
9	it	tt	1,759	92,832February 	
15	ft	tt	2,016	108,415March 	
16	ft	tt	2,040	103,580April 	
13	tt	it	1,626	83,428May 	
21	it	if	2.379	121,365June 	
16	It	tt	2,118	84,827July 	
8	it	tt	1,613	74,759Exports 	Bauxite	Nil	NilExports 	Alumina	Nil	Nil1939-	October 	
5	Aluminum	1,116	1,028,696November 	
8	it	1,380	378,7001940-	January 	
9	tl	1,897	892,900February 	
1	it	45March 	
1	tt	23 lbs.	25Exports 	Cadmium	Nil	Nil
100-110J
Questions

	No. of			Weight	
Date	Permits	Commodity		Tons	Value
1939-					
October 	
2	Cobalt concentrates 66	$ 19.087November 	
4	it	ii	178	39,900December 	
4	ii	ii	187	39,8001940-	January 	
3	it	ii	122	25.600February 	
1	it '	(i	40	8,500March 	
1	ii	ii	40	8,800May 	
2	it	ii	100	23,400June 	
2	a	ii	105	22,700July 	
1	u	ii	55	13,000Exports 	Cobalt refined	Nil	Nil1939-	October 	
2	Cobalt salts	6	17,273November 	
1	it a	1	4,5001940-	February 	
3	n u	2	7,577March 	
2	a a	1,600 lbs.	3,180April 	
6	it u	3	10.992May 	
4	u it	4	14,483June 	
4	a u	2	8,685Exports 	Stellite	Nil	NilExports 	Copper in ore	Nil	Nil1939-	October 	
3	Copper concentrates 5,500	216,144November 	
5	ii	ii	6,300	412,500December 	
2	a	ii	3,500	231,0001940-	January 	
2	u	ii	3,000	200,000February 	
2 [DOT]	a	a	3,500	229,031March 	
2	a	a	4.100	271,886April 	
4	a	a	6,650	453,108Mav 	
5	u	a	8,025	524.832June 	
3	a	ti	3,860	254,740July 	
4	a	it	8.600	520,905August 	
2	a	a	3,540	210,276September 	
2	ii	a	3,050	232,483October 	
1	a	a	1,515	48,2801939-	October 	
5	Copper refined	2,153	569,495November	
6	ii ii	665	153,5021940-	February 	
3	ti ii	203	48,990Exports 	F erromanganese	Nil	NilExports 	Ferrosilicon	Nil	NilExports 	Lead in ore	Nil	NilExports 	Lead concentrates	Nil	Nil

Questions
Date
October . November December
1940- January .. February March .. April .... May ....
July ....
August .. September
Exports .... Exports ....
September October .. November
December
1940- January .
T^.Ynnrf o
Exports
Exports
November
January ..
December
No. of Permits	Commodity	Weight Tons	Value. 2	Lead refined	3,350	$ 326,769. 6	it	ti	8,315	749,512. 4	it	it	2,775	274,379. 3	(t	it	3,400	328,774. 3	ti	ii	2,333	225,434. 2	it	a	2,044	177,677. 1	a	tt	326	28,400. 1	a	a	450	35,100. 1	a	it	1,500	108,000. 1	a	ti	4,000	258,000. 3	ti	tt	5,062	337,040Nickel in ore	Nil	NilNickel Matte	Nil	Nil1	Nickel refined	962	743,0002	it	it	729	614.0002	1it	it	800	617,0001	if	it	400	308,8S01	tt it	435	335,907Nickel oxide	Nil	NilZinc in ore	Nil	NilZinc concentrates	Nil	Nil. 1	Zinc dross	50	3,000. 11	ii li	500	39,750. 1	Zinc refined	25	2,500October	
3November	
7December	
4January	
3June	
2Scrap metals all kinds 45	9,563" " " " 940	20,800" " " " 55	17,462" " " " 80	9,565" " " " 1,028	20,348
Questions


BOUCHARD, STE. THERESE, AND NOBEL DEFENCE INDUSTRIES PLANTS
Mr. BERTRAND (Terrebonne):: 1.	Is there an employee by the name of Hazelton in the Defence Industries plant at Bouchard, Ste. Therese?
2.	If so, how long has he been in the employ of the D.I.L. at Bouchard?
3.	What positions has he held since his arrival at Bouchard?
4.	What are his present occupation and salary?
5.	Before his arrival at the Defence Industries, what was his occupation, and what was his salary?
6.	Was he sent to the Nobel plant of Defence Industries for the purpose of selecting labour and, if so, at what dates?


Mr. CHEVRIER:: 1.	Yes.
2.	Since the plant was put in operation. Mr. Hazelton was transferred to the Bouchard plant from the engineering department of Defence Industries Limited, Montreal, on i full time basis October 1, 1941.
3.	As works engineer-from October 1, 1941, to April 13, 1942; As production superintendent-from April 13, 1942, to present.
4.	(a) Production superintendent; (b) $500 per month.
5.	(a) Engineer, Department of Justice, Engineering Division, Penitentiaries Branch, Winnipeg, Manitoba, (b) Salary-no information.
6.	No.


Mr. BERTRAND (Terrebonne):: 1.	Did the Defence Industries Limited, at Bouchard, Ste. Therese, delegate any officials to its Nobel plant for the purpose of recruiting labour?
2.	If so, what are the names of the persons so delegated?


Mr. CHEVRIER:: 1.	No labour was recruited from the Nobel plant but certain staff transfers were made from the Nobel to the Bouchard plant as the result of a survey made at Nobel by W. S. Miller, works manager of the Bouchard plant. The transfer involved the following staff:
(a)	Six experienced graduate engineers to fill positions in the newly formed technical department, the formation of which had been planned several months, ago but had been delayed due to lack of staff.
(b)	Two experienced graduate engineers to fill existing vacancies caused, in one case, by resignation of the incumbent to rejoin his previous employer and in the other case, by plant expansion.
(c)	Twelve clerical employees, experienced in Defence Industries Limited systems and the nature of whose duties at Nobel fitted them for immediate service at Bouchard.
2.	Answered by No. 1.


WHEAT DELIVERY PERMIT BOOKS
Mr. FAIR:: How many wheat delivery permit books were taken out at, (a) wheat pool elevators; (b) line company elevators, in each of the prairie provinces in 1942 and 1943?


James Angus MacKinnon: (a) Pool elevators: 1942-43, 81,895; 1943-44 to date, 82,724.	(b) Line company elevators:
1942-43, 124,232; 1943-44 to date, 121,888. N.B. "Line company elevators" include certain small companies. The United Grain Growers Company, Limited, is not included in the above.


LABOUR CONDITIONS-EQUAL WAGES TO MEN AND WOMEN
Mrs. NIELSEN:: In the data collected by the national war labour board on wage rates, at various times and in various ways-1. How many industrial establishments in Canada employing more than one hundred workers each have been shown to be paying equal wages to men and women on similar jobs?
2.	How many women, in total, are employed in these establishments paying equal wages to men and women for equal work?


Paul Joseph James Martin: Mr. Speaker, I have spoken to the hon. member about this question and I think she is disposed to have it dropped for rewording.
Question dropped.


AIRCRAFT REPAIR LIMITED, EDMONTON
Mr. QUELCH:: 1.	What is the total amount of capital assistance granted by the federal government to Aircraft Repair Limited, Edmonton, Alberta?
2.	What is the total amount of war contracts let out to this firm by the Department of Munitions and Supply?


Mr. CHEVRIER:: 1.	No capital assistance has been granted by the federal government to Aircraft Repair Limited, of Edmonton, Alberta. The government built and equipped a plant for overhaul and repair at Edmonton, at a cost of $1,970,787.64. This plant and equipment is wholly owned by the Canadian government. Aircraft Repair Limited have been given a contract for the repair and overhaul bf aircraft, and the facilities of this plant have been made available to them to carry out the work.
2.	The amount that has been paid to date to Aircraft Repair Limited fox work done under the overhaul and repair contract is $10,149,788.01.
The amount of war contracts let to this firm is indeterminable because the amount is not known until the work is completed.

Questions as Orders jor Returns


AIR TRAINING PLAN-LIVING-OUT ALLOWANCES
Mr. HANSELL:: 1.	Is there a blanket rate of living-out allowances granted each rank in all the air training schools under the Commonwealth air training plan in Canada?
2.	If so, what are the rates granted each rank, and when were the present rates established?
3.	If not, what are the rates granted each rank in each air training school in Canada, and when were these rates established?


Mr. MACMILLAN:: 1.	Yes.
2.	Officers, $1.70 a day effective 1 September, 1939; other ranks-$1.25 a day effective 1 October, 1942.
3.	Not applicable.


JAPANESE NATIONALS IN BRITISH COLUMBIA
Mr. ESLING:: Will the Japanese settled by the British Columbia security commission in West Kootenay localities be removed at the conclusion of the war?


Paul Joseph James Martin: Mr. Speaker, the content
of this question involves a matter of future policy in relation to persons of the Japanese race in Canada, on which the government is not in a position to make a declaration at this time.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. BENCE:: 1.	What are the names of the nine permanent force officers of the Royal Canadian Air Force who have been either retired or whose retirements have been authorized since September 10, 1939?
2.	What were the, (a) temporary; (b) acting; (c) substantive ranks of the said officers on September 10, 1939?
3.	What were the, (a) temporary; (b) acting; (c) substantive ranks of the said officers on the date on which their retirements became or will become effective?
4.	On what rank, (a) temporary; (b) acting, or (c) substantive, is the amount of the pension of each officer determined?
5.	Were the pension regulations with respect to such retirements complied with as far as granting pension with relation to rank is concerned?
6.	What would have been the retirement pension of each officer if he had been retired on September 10, 1939?
7.	What is the actual retirement pension of each officer?
8.	What is the age of each such officer?
9.	How many officers now with the R.C.A.F. of the rank of air commodore and over have attained the age of 50 years?
10.	How many of such officers are, (a) of the permanent force; (b) of the auxiliary force; (c) of the special reserve?


LABOUR CONDITIONS-TEXTILE WAGE RATES
Mr. ROSE:: 1.	Has the national war labour board obtained from selected industrial establishments schedules of wage rates for different occupations in their establishments?
2.	From how many primary cotton textile manufacturing establishments were the schedules of wage rates obtained in, (a) Quebec; (b) Ontario?
3.	What periods do these textile schedules cover?
4.	For each of these establishments, what are the hourly or weekly wage rates, straight time and overtime, reported for each occupation listed in the schedules?


ST. LAWRENCE NORTH SHORE MAIL SERVICE
Mr. DORION:: 1.	What is the name of the company carrying mail, by airplane, on. the north shore of the St. Lawrence river?
2.	What places are directly served by such company?
3.	What amount is received from the Post Office Department by that company for such service?
4.	Has the company the right to carry passengers while carrying mail?
5.	What is the schedule of such service?
6.	What post offices are being served by dropping mail from the air?
7.	(a) What are the landing places of the plane carrying mail; (b) what post offices are served directly from these places? .


Mr. MULOCK:: Return tabled.


CANADIAN SYNTHETIC RUBBER LIMITED
Mr. DOUGLAS (Weyburn):: 1.	Who are the directors of Canadian Synthetic Rubber Limited, and what remuneration do they receive?
2.	In the case of each of those named in answer to question (1), with what other firms or corporations are they now employed, and of w'hat other firms or corporations are they directors or officers?
3.	Who are the owners of Canadian Synthetic Rubber Limited?


LAKF.HEAD TERMINAL ELEVATORS
Mr. ROSS (St. Paul's):: 1.	How' many grain elevators have been constructed, or additions made to existing elevators in Fort William and Port Arthur area since the outbreak of w-ar, (a) by the government; (b) by private interests?
2.	What is the capacity of each new construction?
3.	What was the cost in each case?
Car Ferry Service

4.	Under whose control or administration does each additional elevator come?
5.	Has the government, or the board of grain commissioners leased any government-owned elevators at Fort William or Port Arthur to private interests since July 31, 1939? If so, on what terms?
6.	What conditions, if any, have been made permitting a private owner to write off as depreciation during war period the cost of extensions to existing plant, or cost of a new plant, and what are the names of persons or companies receiving such privileges?


CANADIAN FORCES-CANNED FISH
Mr. DOUGLAS (Queens):: 1.	How many cases of canned fish were supplied to the Canadian armed forces in the year 1943?
2.	How many cases of each variety,' and at what price per case?
3.	What was the total cost of same?


WAR EXCHANGE TAX
Mr. TUCKER:: 1.	How much income has been received from the war exchange tax in each year since it was imposed?
2.	What imports, if any, are exempt from said tax?
3.	Is a licence or permission necessary to mport goods into Canada or to pay for same?
4.	Is the war exchange tax still necessary to conserve our foreign exchange position?
5.	Will consideration be given to the removal of this tax?



PRINCE EDWARD ISLAND


[Stage Direction]
On the orders of the day:
Mr. GORDON GRAYDON (Leader of the Opposition):: Mr. Speaker, I want to call
attention to a major emergency with respect to the tie-up in water transportation between Prince Edward Island and the mainland, and to seek information from the Minister of Transport in connection therewith. I have already given the minister a copy of the question to enable him to answer me to-day if possible.
I am informed that hundreds of cars of freight, mainly farm products, are awaiting transfer out of Prince Edward Island, and that a great many cars are awaiting transfer into Prince Edward Island. Some of the cars awaiting transfer out of the island are said to be loaded with a special early variety of seed potatoes, and if they are not moved it will mean a loss of approximately $500 per car. Added to this I am told that the seed is needed very 
badly at once in other parts of Canada. During this season the Prince Edward Island ferry service has suffered serious and continuous interruptions of service, to the point that at least one prominent public man in the province has declared that hundreds of thousands, perhaps millions of dollars, were due that province by reason of transportation tie-ups.


Some hon. MEMBERS:: Order.


Mr. GRANT:: Go ahead.


Mr. HANSON (York-Sunbury):: The leader of the opposition is allowed a little leeway.


Gordon Graydon: I may say, Mr. Speaker, that I debated with myself whether I should bring this up on a motion to adjourn the house. The situation is very serious, and I see there is some support from the other side. I am just coming to my question. What steps is the government taking to meeit this emergency?


Hon. J. E. MICHAUD (Minister of Transport) :: Mr. Speaker, the hon. leader of the opposition was kind enough to send me advance notice of the question. It is true that on account of severe weather and ice conditions it has been difficult to maintain regular ferry communications across the strait of Northumberland with the only combined ice breaker and car ferry that we have at our disposal. During the latter part of January and for the better part of February it has been very difficult to maintain regular operation of the service. On some days it has taken between twelve and fourteen hours to make a single crossing of nine miles. However, lately conditions have changed for the better, and I am informed that yesterday there were twelve crossings between Cape Tormen-tine and the island and eleven crossings the day before. To relieve the situation with respect to the potatoes it has been decided to transfer merchandise from box cars to refrigerator cars at Cape Tormentine, thus adding to the supply of cars available for the winter shipment of potatoes. Until ice conditions are improved it is impossible to remedy the situation because there is only one combined ice breaker and car ferry in the whole service. When there is a change in the weather and ice conditions we will transfer one other car ferry from another section of the maritimes to help relieve the situation between Cape Tormentine and Prince Edward Island.


Gordon Graydon: Is it not true that last fall representations were made to the government by officials in the island asking that a ferry or ice breaker be transferred from some other

Parliamentary Restaurant
part of Canada to operate in the Prince Edward Island service to avoid the very situation which has developed?


Joseph Enoil Michaud: In the whole service there is only one combined ice breaker and car ferry. The possibility of using ice breakers to help open the channel for the Prince Edward Island ferry has been suggested, but the engineers have reported that it would be useless, because the Prince Edward Island is just as good as any other ice breaker that could be used in that locality.


Mr. LECLERC:: How many cars can that ferry take on each trip?


Joseph Enoil Michaud: The ferry would take twelve cars, I think.


Gordon Graydon: Last week 500 cars were supposed to have been tied up.


Richard Burpee Hanson: I
desire to direct a question to the Minister of Transport of which I have given him notice. A press report from Halifax, under date of March 20, indicates that the inquiry into the loss of the car ferry Charlottetown off Nova Scotia in 1941 is to be reopened. Is the report correct, and if so, what is the reason for this action? Has any new evidence been made available?


Joseph Enoil Michaud: A rehearing of the inquiry is to take place on petition of the captain of the former Charlottetown, as authorized under section 569 of the Canada Shipping Act. In the petition it is stated that new and important evidence which it had been impossible to disclose at the first inquiry has been discovered, and that the captain felt that on that account a miscarriage of justice had taken place with respect to himself.


Richard Burpee Hanson: Is the captain not asking for an increase in his pension? Is that not the main objective?


Joseph Enoil Michaud: I do not know what is the objective. I can only judge by what is stated in the petition.



BOMBING OF ROME


[Stage Direction]
On the orders of the day:
Mr. FREDERIC DORION (Charlevoix-Saguenay):: Considering the decision taken
by our enemies to declare Rome an open city as reported to-day in a Canadian Press dispatch, does the government intend to give 100-111
instructions to our forces in Italy to spare Rome from any attack on land or from the air?


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, my hon.
friend gave me notice of his question. As it is one which refers to a matter that is being commented on in the press, perhaps I might be permitted to answer it.


Some hon. MEMBERS:: Oh, oh.


William Lyon Mackenzie King: What I am saying is that my hon. friend was kind enough to give me notice of the question, and1 inasmuch as the subject may become one of discussion it might be treated as a question which should be answered at the moment.
I would direct the hon. member's attention to the fact that his question is based on what he states is a decision of our enemies.
I do not know what credence can be attached to an announcement of any decision, by our enemies. I doubt the wisdom of making any statement based on such an announcement. I have no information whatever other than what has appeared in the press as to the alleged intention of the Germans to remove their military forces and installations from Rome. Whether that statement has been put out as an advertisement for our enemies or an evidence of their kindness of heart and deep religious feeling, I cannot say. I would say however, that I do not think it is advisable at this time to make any statement whatever in reference to what they are alleged to have said.



PARLIAMENTARY RESTAURANT


[Stage Direction]
On the orders of the day:
Mr. R. W. MAYHEW (Victoria, B.C.):: Mr. Speaker, I desire to make a statement on behalf of the joint committee on the parliamentary restaurant with respect to certain assertions made in local newspapers of recent date. The public must not be led to believe that the whole staff is kept on and paid when the house is not in session and the restaurant is closed. There are in that place employees doing a kind of work which requires experience and special qualifications. A competent manager and chef cannot be found and are not efficient unless they are given continuous employment. They will not accept positions for five months of the year.

Labour Shortage in Sanatoria

There is something to do in the restaurant after the session, such as inventories, repairs and the settlement of accounts, et cetera, which necessitates the employment of a couple of clerks. The manager has kept two and sometimes three persons for that purpose. It is a small proportion when we consider that there is a staff of fifty employees for the service of the kitchen, main diningroom and cafeteria.
The joint committee on the restaurant held meetings on March 4, 8 and 21 and is exercising close supervision on the management. A subcommittee has been appointed to inquire into conditions and report as soon as possible. The committee realizes that the restaurant is a necessity in our parliamentary life and must be managed economically. A serious effort is being made to reduce the expenses wdthout impairing the service.
A strong protest ought to be raised against insinuations that there is something wrong with bookkeeping in the restaurant, that members are not paying their bills regularly. The last report, received this week, shows that the outstanding accounts receivable amounted to only $7.40.
The allegation that the restaurant operates with a profit of 811,000 during the session, wasted by paying salaries during recess, is inaccurate, because it is based on a partial financial statement covering only a part of the year and does not show the actual receipts and expenses for the year 1943-44 which will only be completed at the end of this month.



TUBERCULOSIS


Hon. HUMPHREY MITCHELL (Minister of Labour):: Mr. Speaker, I would like, with your permission to answer questions of the hon. member for Parkdale (Mr. Bruce) with reference to staff help for sanatoria, as reported in Hansard on March 16, at page 1514:
The hon. member merely mentioned two sanatoria. I later learned he was referring to the sanatoria at Weston and Gravenhurst.
Some weeks ago, national selective service was notified that an expansion in services was to take place at both Weston and Gravenhurst and that an additional number of nurses and sub-staff would be needed. Our officers called at these sanatoria and secured detailed information concerning the number needed in the professional and non-professional classifications for the immediate and longer range staff requirements.
Later, a meeting was held and attended by representatives of the registered nurses' asso-
Mr. Mayhew.]
ciation, provincial department of health, the management of the sanatoria and selective service to plan for the special efforts which would be required to meet the need. The nurses' association was to assist in securing nurses; the sanatoria were to make certain adjustments in conditions of employment in order to make the employment more acceptable; selective service was to secure sub-staff and to canvass the registration of nurses on file in the local office; special publicity was to be undertaken.
I have received the following report on the Weston and Gravenhurst sanatoria, for the period January 15 to March 18:
Weston
Orders placed for men	 20
Referrals to work	 16
Orders placed for women	 39
Referrals to work	 26
Orders placed for nurses	 30
Referrals to work	 16
Additional nurses were secured from the nurses' registry. Remaining requirements to allow for full expansion are for 30 nurses and 12 men and 32 women for substaff.
Gravenhurst
Orders placed for men	 12
Placements in work	 li
Orders placed for women	 21
Placements in work	 16
Remaining requirements to allow for full expansion are for 18 nurses, ten of whom might be practical nurses, and 24 men and women for substaff.
I should like to take this opportunity to express my appreciation of the willingness of these institutions to make use of voluntary and employed nurses and substaff on a parttime basis. Unfortunately the sanatoria cannot, for reasons beyond their control, accept many part-time workers.
One of the most important and most difficult tasks of national selective service has been to meet the staff requirements of hospitals and institutions of a like character. This situation is not peculiar to Canada. It is also one of the most severe problems in Great Britain and the United States. At the present moment, notwithstanding the calls for the army, the navy and the air force, more help is engaged in the care of the sick in institutions-hospitals, sanatoria and the like -than ever before in the history of this country. That, I think, is an indication of the interest taken by the government in supplying this very necessary help. I should like to quote these figures for the record:

Cancer Research
Student Nurses Enrolled in Hospitals
1939	 8,500
1944	 11,300
Graduate Nurses Employed in General Hospitals
1939	 10,837
1944	 14,100..
This number of graduate nurses does not include supervisory nursing personnel.


Gordon Graydon: Has the minister also the figures as to the number of patients at the same periods?


Humphrey Mitchell: I can get them for my hon. friend if he requires them. But I do not bother about the patients; I bother about the help.


Gordon Graydon: After all, the help has to bother about the patients.


Humphrey Mitchell: My hon. friend will understand that my chief job is to find the help. No doubt the Minister of Pensions and National Health could give my hon. friend the number of patients.


Gordon Graydon: I think the minister missed my point. My inquiry was whether the number of patients had risen or not; because the rise in the number of employees could not be regarded in the same light if the number of patients has risen correspondingly.


Humphrey Mitchell: Speaking offhand and from my own experience as governor of a hospital in Hamilton for a good many years, I would say there has been a considerable increase in the number of patients being treated.


Gordon Graydon: The minister will get the figures?


Humphrey Mitchell: I will try to get the figures.
Hospitals have been given highest labour priority rating and instructions sent to local selective service and employment offices to give immediate consideration to all orders from these institutions and to appoint one or more members of the staff to deal with hospital requirements. Hospitals also have the right to advertise for help and to interview applicants directly.
In several centres special recruiting campaigns have been conducted in order to secure full and part-time workers at times when shortages became acute.
It will be recognized that certain conditions of employment regarding hours, salaries and the type of work, make it difficult for selective service to recruit workers for hospitals at a
too-1114
time when other lines of employment offer much greater inducement. We have appreciated the efforts many hospitals have made to improve conditions of employment and thus assist in the recruitment of employees.
It has been pointed out to me that it is more difficult to secure help for tubercular sanatoria than for general hospitals. The situation in Toronto bears out this statement. The general hospitals in that area are quite well supplied with staff. Statements from Mr. A. J. Swanson, president, Toronto hospital council, and Mr. R. W. Longmore, assistant superintendent, Toronto general hospital, as published in the Toronto press on March 16 corroborate these reports from selective service officers.



CANCER RESEARCH


[Stage Direction]
On the orders of the day:
Mr. HARRY LEADER (Portage la Prairie):: Before the orders of the day are proceeded with I should like to direct a question to the Minister of Pensions and National Health. I hold in my hand a telegram, signed by Doctor J. R. Davidson of Winnipeg, which conveys the information that his application for financial aid to further his efforts in cancer research has been refused. Does the government concur in the decision rendered by the associate committee on medical research? If not, will the government sponsor a more comprehensive investigation?
Hon. IAN A. MACKENZIE (Minister of Pensions and National Health): I have been unofficially informed that the report of the associate committee on medical research of the national research council did make an unfavourable report in regard to the case mentioned by my hon. friend. The committee does not submit its report to me, inasmuch as it is a committee of the national research council, and therefore I have not seen the report. Until I have seen it I am not in a position to answer the second part of the question.



CANADIAN ARMY


[Stage Direction]
On the orders of the day:
Mr. H. C. GREEN (Vancouver South):: I wish to direct a question to the Minister of National Defence. In Pacific coast papers reaching here yesterday there are dispatches
Army-Reversion oj Officers

to the effect that five hundred officers of the Canadian, active army within the Pacific command are being reverted in small groups to reserve force status, which means thait they are being discharged from the active army. The dispatches state that these officers are receiving letters informing them of recommendations for their reversion, and they are asked to furnish a statement within fourteen days setting forth reasons why they should not be so reverted. Further, it is stated, if the officer does not wish to submit reasons why he should not be reverted he is asked to sign the following statement:
I do not wish to make any statement against the recommendation that I cease to be on active service (returned to reserve force status).
Will the minister tell us whether or not these dispatches are correct and, if so, what provision is being made for giving these officers rehabilitation grants and any1 other allowances that would be given if they were discharged in the ordinary way.


Hon. J. L. RALSTON (Minister of National Defence):: I do not think that on the orders
of the day it is proper to submit a question which deals with the whole matter of procedure with regard to the reversion of officers to reserve status. If the hon. gentleman asks me how many officers are being reverted,- I will endeavour to get that information. I make these observations now because, I submit, this question is quite out of order. What I should have to do would be to put on the record the full procedure with regard to the return of officers to reserve status. This newspaper report deals with some features of it, and I do not think my hon. friend has any objection to them-


Howard Charles Green: Mr. Speaker-


James Layton Ralston: Just a moment, please. I do not know why he is including them in his question.


Howard Charles Green: The reason why I am asking the question on the orders of the day is that these men have only fourteen days within which to answer the letter. I do not know whether the report is correct and I would ask the minister to tell us the facts. If he cannot do so to-day, to-morrow will be satisfactory.


James Layton Ralston: That is my point. I find that what my hon. friend wants \o know is whether that length of time is the time given under the regulations. He will find in Hansard, at pages 437 and 566, a full statement with regard to 'the matter; but in view of the fact that he has seen fit to put on the record a dispatch appearing in the papers purporting to state the detailed procedure which is not complete, I prefer to answer the question to-morrow.



MAPLE PRODUCTS


[Stage Direction]
On the orders of the day:
Hon. II. A. BRUCE (Parkdale): May I direct a question to the Acting Minister of Finance, of which I have given him notice? Will the minister consider the immediate removal of the restrictions on the purchase of maple syrup and maple sugar so that the ration coupons will not be necessary, since they will be urgently needed later on for preserving purposes, the limitation of which would seriously interfere with an essential food product?
James Layton Ralston: I will treat the question as a notice.



PENSIONS


[Stage Direction]
On the orders of the day:
Mr. S. H. KNOWLES (Winnipeg North Centre):: In view of the representations made last week to the Minister of Pensions and National Health by the national executive of the association of non-pensioned widows of veterans of the last war, may I ask the minister if consideration is being given to a further revision of the regulations under which, in certain cases, allowances are paid to these widows? If so, may we expect an announcement soon?


Mr. SPEAKER:: The question will be taken as notice.



RIGHT OF PRIVATE MEMBERS TO APPEAR BEFORE WAR EXPENDITURES COMMITTEE

[Stage Direction]
On the orders of the day:
Mr. T. L. CHURCH (Broadview):: I wish to call the attention of the house to the rights of a private member before a select committee. Some years ago, when the committee on railways and shipping was set up, it was deeided by the rules of the house and as a matter of principle that a private member, not a member of the committee, could appear before the committee and ask questions with reference to any matter in which he was interested. On that principle I would like to ask either you, sir,-I have not given you notice of the question and I would ask your pardon for the omission-or the chairman of the war expenditures committee, this question: Will the principle I have enunciated regarding the select committee mentioned apply to the war expenditures committee? After all, the

War Appropriation-Supplies
house as a whole is responsible for these war expenditures. We are being held responsible, and as private members we should have the right therefore to appear before the committee and ask questions. May I ask further when any of the reports of the committee will be presented-this is the thirty-sixth day now-so that it can be discussed. I would ask the chairman of the war expenditures committee that question, or I would ask any member of the government, or have this taken as notice of a question.


Thomas Vien: I do not know whether the hon. member is asking me a question with regard to procedure. If so, I am not in a position to advise him at the moment. When his question appears in Hansard I shall read it and if it is proper for me to do so I shall answer it.


Thomas Langton Church: Might I point out, sir,
with great respect that you are the custodian of the rights and privileges of members. I would like to have some reply therefore, either to-morrow or the next day.


Thomas Vien: If I understand the hon. member correctly, he is asking me to reply to a question with regard to the proceedings of a committee. I know of no method by which that can be done, and I cannot advise him from the Chair unless the matter with which he is dealing comes before me in proper form.


Thomas Langton Church: The committee should be abolished.



WAR APPROPRIATION BILL


[Stage Direction]
The house resumed from Tuesday, March 21, 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. Ilsley-Mr. Bradette in the chair.

Mr. LIONEL CHEVRIER (Parliamentary Assistant to the Minister of Munitions and Supply):: I should like this afternoon, with the permission of the committee, to deal with two subject matters which have to do with the war appropriation bill, which we are discussing at the moment. The first relates to the purchasing policy of the Department of Munitions and Supply, and the second to the renegotiation of contracts.
Before I go on to these I may be permitted, Mr. Chairman, to express to the hon. member for Greenwood (Mr. Massey) the pleasure of the committee in his return to our midst. He has just come back from important duties overseas, and I know I express the feelings of the committee when I say that we are all delighted to find him in such excellent health.
(Translation): Mr. Chairman, I am happy to welcome back the hon. member for Richelieu-Vercheres (Mr. Cardin) whom I see occupying his seat. Some time ago, the house expressed sympathy in the deep loss which he experienced; to-day, we are happy to see him in good health and so well recovered.
(Text) Last year when I was reporting on the purchasing policy of the Department, of Munitions and Supply I referred to the manner in which contracts were awarded in the department, the methods adopted to reduce costs and control profits, the controls exercised over munitions contracts generally, and the reduction in prices consequent upon these controls. At that time I emphasized the fact that the department sought always to obtain fixed prices. The department was interested in asking, for tenders in order that competitive bidding might be set up, and by that method contracts obtained of a fixed price type. The department then felt, and still feels, that the cheapest method of obtaining production, from the standpoint both of costs and of profits, is through negotiation of short term contracts on a fixed price basis. I gave the reasons for that at the time: First, because many of those contracts were for equipment never made before in this country. Obviously in such cases it was impossible to obtain fixed, prices until production was well under way. Second, because of the frequent changes in the design of equipment while it was in production; and third, because the department is not always able to obtain full, accurate and up-to-date knowledge of the contractor's costs. For these and other reasons it is not always possible to obtain fixed prices; hence we have to get variations and modifications, such as the ceiling price, the contract price, the cost plus percentage, and the unit fee arrangement. I said that these were temporary devices only which were being used pending the day when it would be found possible to negotiate fixed price contracts. I explained how, because of the checks and-controls exercised on costs, it was possible to make substantial reduction in prices. I am happy to report to-day that in the department wo have made much progress towards fixed price contracts, and away from variations and modifications of them.
War Appropriation-Supplies

In the Department of Munitions and Supply there are five large purchasing branches. These, of course, are not all-inclusive; but in these five branches the vast majority of war equipment is purchased through the channels of Munitions and Supply. These five branches are: (1) the general purchasing branch; (2) the defence projects construction branch; (3) the munitions contracts branch; (4) the aircraft division, and (5) the shipbuilding division.
The general purchasing branch has to do with general purchases, such as the purchases of personal equipment, medical stores, food supplies, miscellaneous goods of that type. With but very few exceptions all the purchases in that branch are on the fixed price basis. I believe I am safe in saying that over ninety-nine per cent of the purchases made in the general purchasing branch are for fixed prices.
The same thing can be said of all contracts awarded in recent months by the defence projects construction branch. I hold in my hand a report from that branch which shows the comparison of cost plus contracts to total contracts awarded there and their value, from the first quarter of 1940 to the last quarter of 1943. During the four quarters of 1942 the percentage of cost plus contracts to the total was thirty-two per cent, and during the four quarters of 1943 the percentage of cost plus contracts to the total was 9-75 per cent, a substantial reduction.
The automotive contracts have now been converted entirely to fixed prices. The committee will remember that last year when I reported I stated that most of these contracts were on the ceiling price basis. To-day I am able to report that practically all contracts with the automotive companies are on the fixed price basis. The same conversion to fixed prices obtains in the munitions contracts branch where our knowledge of costs and manufacturing technique has enabled us to change over in great part.
A report covering this branch, which I have before me and which is as at January 31, 1944, shows that of a total of 15,267 contracts granted in this branch only 8-94 per cent were on a cost plus contracts basis. During the year 1943 of a total amount of contracts of $1,200,000,000, the estimated value of cost plus contracts was $379,825,806. The same position does not obtain in the aircraft division. It is not possible to put aircraft contracts on the fixed price basis, because of the constant and everlasting change in design. There is no known way of determining the efficiency of aircraft except by use in combat;
[Mr. Chevrier.l
hence we must ask our manufacturers to make frequent changes in design of equipment. For these reasons aircraft contracts must be on the cost plus basis, and they will in all probability remain that way.
Changes with reference to ship contracts have also had to be made. Originally, as the committee knows-[DOT]


Mr. DIEFENBAKER:: Would the hon.
member permit a question?


Lionel Chevrier: Yes.


John George Diefenbaker: What is the basis of the cost plus in the production of aircraft? What is the percentage of profit allowed to the operating companies?


Lionel Chevrier: I must say I have not the facts before me. I have not a report of that branch as I have of the other branches, but I shall be glad to get my hon. friend an answer.
I was saying that originally all ship contracts were let at fixed prices with allowances for wage and freight differentials all across the country. It was found, however, that there were wide differences in the efficiencies of the yards for a variety of reasons. Accordingly a price on which one yard might make a slight profit or another might sustain a loss might yield an undue profit to a third yard.
Apart from this, our engineers were faced with a constant stream of extras and modifications to original designs, and the problems of adjusting prices to cover these changes became involved and difficult. Accordingly, it was decided late in 1942 to readjust all contracts from a certain date either to cost plus a fixed fee or to a basis of cost plus a fixed fee per ship, plus a bonus for reduction of cost below a target. The fixed-fee plan no doubt penalized the two or three yards of highest efficiency, but the view was taken that looking at their operations as a whole, their efficiency had been given due but not excessive recognition. The committee will realize that placing ships on the basis of cost plus a fixed fee, plus a bonus for reducing costs below a target, is the next best thing to a fixed price contract, in that it preserves an incentive to cost reduction even if in a modified form.
The checks and controls which we have exercised over contracts have a marked effect on prices. I am able to report that on a number of articles prices have been reduced substantially. Here are a few examples taken at random:

War Appropriation-Supplies
1.	3-7-inch A.A. gun barrels-forging...
2.	3-7-ineh A.A. gun barrels-machining
3.	Bren machine gun	
4.	Bren magazine 100 rounds	
5.	No. 4 rifle	
0.	25-pdr. gun and carriage	
7.	40-mm. H.E. shell (empty round)

8.	75-mm. H.E. shell (empty round)....
9.	3-7-inch A.A. shell (empty round)...
10.	5-5-inch how. shell (empty round)..
Price reduced
From		To	
$ 1,650	00	$ 850	001,733	00	290	00230	00	160	0038	58	13	3862	30	32	0021,288	31	9,075	114	12	2	105	69	4	6715	08	9	6622	45	11	78
Item 3.-Bren machine gun. Figures shown were taken as at December, 1941, and December, 1943. Cost at December, 1942, was $195.
Item 6.

25-pdr. gun. Figures shown are production costs and were taken as at January, 1942, and September, 1943. Figure as at September, 1942, was $14,398.78.
On the whole, the purchasing policy of the department has been carried out along sound businesslike lines. It has led to substantial reductions in the prices of war materiel.
Let me for a moment turn to another angle of this policy. We have heard a lot about the Labour government in Australia. We have been told frequently in this house and outside that the policies of the party led by the hon. member for Rosetown-Biggar are similar to those governing the commonwealth of Australia.


Mr. MacNICOL:: But that is not a fact.


Lionel Chevrier: I think the hon. member for Rosetown-Biggar says it is a fact. I do not believe I am misquoting him when I say that. In any event I should like to examine for a moment the purchasing methods adopted in the commonwealth in order to see how they deal with contractors and manufacturers.
Some months ago, I believe it was in June, 1943, the government of Australia set up a contracts advisory panel. It was created to investigate the cost plus profit system of the commonwealth contracts. The report has recently been published and its recommendations have been adopted by the government, as announced in a statement by Prime Minister Curtin in November of 1943. An examination of this report will show that the purchasing methods of the commonwealth are similar to ours and, in fact, in many instances, they are much more generous to the manufacturer than we in Canada are.
The report contains three outstanding features: the cost plus profit contract, the target price contract, and the fixed price contract.
It recommends that the cost plus system whilst essential during the initial period of great urgency and cost uncertainty, should be abandoned in favour of fixed price contracts
for all items for which an opportunity has been given of establishing costs. Let us examine these three features:
1.	On a cost plus profit contract:
The Australians have decided the profit should be 24 per cent on materials plus 7i per cent on labour and overhead. This averages about 5-6 per cent in ordinary run of war materiel.
In Canada, our view is that on ordinary cost plus contracts the profit should be 5 per cent, with something better in exceptional cases where unusual skill or services are provided, and somewhat less where production is of a very routine character.
This relates only to the manufacture of items in which materials employed are purchased. It does not apply in the case of, say, a mining company which produces everything from the underground operation through the extraction, refining and working up into a highly finished production.
In the management of government-owned plants such as, for instance, Defence Industries Limited, Canadian Car Munitions, the fee is very much less.
2.	Target price:
Our usual basis on a target price contract is cost plus a 5 per cent fixed fee plus 25 per cent of the saving below the target- although we have some in which a lesser percentage is allowed and a very few in which a graded profit sharing allowance in excess of 25 per cent is provided. In Australia, they use a 4 per cent fixed fee, plus a graded scale as follows:	[DOT]
Extent of saving on	Common-	
target cost	Contractor	wealth
	Per cent	Per cent
First 10% below target...	. 20	80Next 5% below target....	[DOT] 33J	66|Balance	. 50	50Australians give their	contractors	a lower
fee, but a larger participation than we ordinarily grant.
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3.	Fixed prices:
On fixed prices, the Australians come to the same conclusion as we do, and they strongly recommend that these be used wherever possible.
The Prime Minister of Australia in November of 1943 had this to say on the subject:
The war cabinet to-day considered the first report submitted by the contracts advisory panel in respect of the cost-plus profit and other methods of contracting. All departments engaged in the purchase of government supplies, or undertaking government works, will be instructed to move away from the cost-plus system of contracting in as many cases as possible.
It was impossible to avoid the adoption of cost-plus contracting in the early stages of the war, because a great proportion of the supplies, particularly of munitions, were entirely new to Australian manufacturers, and it would have been unreasonable to expect contractors to give firm prices. If that had been done, the contractors would quite justifiably have allowed for unknown contingencies, and to the extent to which these failed to occur unduly high profits would have resulted. Now, however, both the buying departments and the suppliers have the experience necessary to determine fair and reasonable prices, and when these have been fixed they will not be disturbed.
I consider that the time has come when the government should secure fixed prices whenever it can, and that the suspicion inherent in all cost-plus profit contracts, that the more a job costs, the more the contractor makes should be removed.
The government realizes, moreover, that even now some classes of work, such as the overhaul of aircraft and the repair of ships, will need to be done on the basis of actual cost, plus some form of remuneration. The remuneration will be based on a percentage of cost only where no better method of determining the profit margin can be fixed.
From this it will be seen that the methods adopted in Australia are very similar to our own, in fact, the Australians are far more generous to the contractor than we in Canada are.
I need hardly add that the Australian purchasing policy is predicated on the assumption that the munitions programme should be carried out by private industry, and that private industry is entitled to a fair and reasonable profit for its effort.
I would suggest to the leader of the C.C.F. party that the similarity between the policies of his party and those of the government of Australia are not as apparent as he would lead us to believe.
I should like to deal for a moment with the subject of renegotiation, but before doing so I should like to table, with the permission of the committee, a manual on termination of contracts. We in the Department of Munitions and Supply have had our attention
[Mr. Chevrier.l
directed chiefly toward the war programme, but we have realized that there will be a post-war period and with that in mind we have reviewed the termination clauses of our contracts and have set up a procedure in the department which has to do with the claims of contractors and subcontractors. I am sure that this document will be of interest to the members of the committee.
The important thing in the fixed price type of contract is that there should be a sound basis for arriving at a fixed price. A prematurely fixed price based on inadequate data, is just as much a danger to be avoided as a cost plus percentage type.
It sometimes happens that with the best of information as to the costs, the best of intentions and the keenest negotiations, a fixed price ends up by yielding an undue profit to the manufacturer.
Such a profit may be due to the discovery by the manufacturer of some new type of material, or the development of other economies not previously visualized. It may also be due to the subsequent addition of new business from various sources leading to the spreading of the fixed overhead of the business over a much larger volume of output. Whenever this occurs, the department takes the view that the contractor in wartime should be content to give to the taxpayer the greater part of the benefit of the improved techniques, rather than retain them for himself. While the department appreciates the principle of the sanctity of contracts entered into between itself and its contractors, still it realizes that in wartime, there is a responsibility placed upon the minister to protect the taxpayer's money. For this reason, where it is shown that profits are unreasonable, the department renegotiates contracts.
Renegotiation is a retroactive price reduction after the contracts have been let and the goods purchased. This practice may be voluntary or compulsory. Its object is twofold: To lower the costs of war goods, and to prevent unreasonable profits on them.
Where the department becomes aware of an undue profit, and its officers are instructed to be constantly on the watch for such profits, it is the practice of the negotiating officers to seek price adjustments in order to bring the profit down to a fair and reasonable figure. In this regard, however, the view is held that some reasonable share of the products of the efficiency of the contractor should be left with him. In other words, on a renegotiation, whether entirely voluntary or taken on the initiative of the department, it is the practice to allow a reasonably larger profit margin than would be the case on a straight

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rost-p'us-percentage contract. It is obvious that if this is not done, we would be taking away all incentive to cost reduction and all incentive to the assumption of manufacturing risks. In this connection, the report of the panel which investigated the contract policy of the Commonwealth of Australia has this to say:
Where the contract is substantial, the order placed should be for a quantity or for a period which will permit a review of the price after reasonable experience; or, alternatively, the order should be for the full quantity required with a condition that the price will be reviewed after the production of a stipulated quantity. The review of the price, however, should not be retrospective. When made, the revised price should not be so reduced as to deprive a contractor of the fruits of his efficiency or of the incentive to further reduce costs.
Two things should be noted here. The first is that renegotiation in Australia is never retroactive; that is to say, it never starts from the original date of the contract but rather from the date of the renegotiation. In Canada it is always retroactive. When we in Canada renegotiatiate a contract, the renegotiation price dates back to the original contract. Hence, on renegotiation also, the Australians are more generous with their contractors than we are. The next point to note is that renegotiation should always take care not to deprive the contractor of the incentive to further reduce costs.
This informal method of renegotiation has proved entirely effective and in no case has it been necessary for us to exercise the powers given by this house in section 13 of the Department of Munitions and Supply Act, to compel a contractor to return profits deemed to be unreasonable. The fact that these powers exists has been an influence in reaching a settlement in some cases, and we anticipate that in some instances we shall have to resort to them. I believe the committee will agree, however, that we should be as careful and as sparing in employing extraordinary measures as we possibly can. In the main we have met with excellent cooperation from the manufacturing community who fully realize the anti-social aspects of excessive profits on war contracts.
It is difficult to draw an exact line between various types of renegotiation. Circumstances vary in the individual instances and in many cases, an over-all readjustment in relation to a company's annual war business is made, even though the contracts for the year may include some cost-plus, some ceiling price, some target price, and some fixed-price contracts. We have made an attempt, however, to estimate the savings arising out of renegotiation of various types and are able to
point to a total of 8119,107,000, of which $66,691,000 covers instances of direct renegotiation and $52,416,000 arises chiefly out of price adjustments on ceiling price contracts.
These figures are undoubtedly conservative and do not take into account cases in which downward adjustments of prices have been made during the course of a contract, due to tne efforts of our negotiating offices or to the voluntary action of the manufacturer concerned.
These figures are not to be compared with the American figures for renegotiating which have been recorded as exceeding the five billion dollar mark. Our whole method of purchasing is different from that of the United States. In that country' a great volume of contracts in excess of 8100,000 are subject to being renegotiated, but, so far as we can ascertain, very much less attention is paid to the problems of setting the original price than we are accustomed to pay. The United States system appears to rely principally upon the powers of recapture of excessive profits, while in Canada, Australia, and the United Kingdom the attempt is made to arrive at fair prices in the first place and to use the right of lecapture very sparingly, as above indicated. It is believed that this is the preferable method because no incentive exists for a manufacturer to cut costs and avoid wastages of materials and labour, if, under renegotiation powers, there will be left with him only the same amount of profit as would be the case were he to adopt a more easygoing attitude as regards cost reduction and cost control.
The problems of purchasing are not simple. They involve the exercise of a great deal of care and discriminating judgment.
One of the main jobs of the Department of Munitions and Supply is to get the maximum possible value for the taxpayer's dollar which involves not only seeing that profits are fair and reasonable, but that costs are driven down in every way possible.
The best proof of the wisdom of our policy is that to-day there exists a group of war contractors who are definitely cost conscious. Their interest in reducing costs is second only to their interest in production.
Since the outset of the war, there are three things which we have sought to do:
1.	To secure the maximum of output in the minimum of time.
2.	To secure all benefits of modern production and cost reduction technique.
3.	To keep profits under strict control.
I do not pretend that we have attained 100 per cent efficiency in all these, but all in all,
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we are doing a good job in spending the taxpayer's money. We have tried to negotiate our contracts on a proper business-like basis. We maintain a close check on costs and profits through the audit system. We seek to improve manufacturing technique by daily contact between our production officers and our contractors, and we renegotiate our contracts when there is evidence of undue profit.
Our negotiating officers cannot always be right, but I can assure the house, from my personal knowledge, that there is in the department a group of able and hard-working men attempting honestly and without fear or favor, to administer their responsibilities in a way which should merit the favor of this house.
These men have succeeded in elaborating a purchasing policy that compares favorably with that of any of the united nations. These men are determined to stop war profiteering.
The minister in reporting to the house on Tuesday stated that from the inception, contracts awarded in the department amounted to 89,450,000,000.
With such an unprecedented outlay of public funds, after four and a half years of war, we in Canada have every reason to be proud of the fact that there have been few charges of graft and almost no charges of war profiteering. In the few cases where waste and dishonesty have been discovered, the department has moved quickly and effectively.
The department has one thing in view and that is to maintain a reputation for efficiency and honesty. I submit, sir, that it has established that reputation, and if it has succeeded in doing so, it is due not only to the purchasing methods to which I have referred a moment ago but also to the high and excellent calibre of the men in the department who administer these policies.


Mr. COLD WELL:: Mr. Chapman. I think we can all congratulate the hon. member who has just taken his seat upon the clarity with which he has expressed the point of view of the department.
I have not taken very much part in the debates on the war appropriation because the work has been apportioned among the various members of our group and it did not fall to my lot to engage in the discussions earlier.
I wish, however, to take this opportunity of saying that I am fully in accord with all the praise which has been given to the men in the armed forces, in the navy, the army, and the air force, and to the men and women who have contributed so largely and generously to Canada's industrial war effort.

The hon. member for Stormont (Mr. Chevrier) spoke a few moments ago of Australia, and pointed out that from time to time we have had occasion to refer to Australia, New Zealand and the Labour party of Great Britain. He tried to draw some inferences from that regarding support for government policies. But I wish to point out that the government of Australia, under Mr. John Curtin, took office in November or late October, 1941, when the pattern of the war effort and of war contracts was already laid, and therefore that pattern had very largely to be followed no matter what the philosophic point of view of the members of that government happened to be. Besides, Australia had relatively little established industry when this war began compared with the very highly developed industry we had in Canada. Since then Australia, like ourselves, has established many new government owned and operated industries. Indeed, one of them was largely established before the war, the aeroplane industry, which also included, I believe, the manufacture of some aeroplane engines, but I am not sure of that. I do know that some new industries were established by the government as public enterprises, and I have read from time to time that the Australian government is carefully guarding the properties of the Australian people and is determined that when the war ends they shall be used for the production of civilian goods. In that respect the point of view of the Australian government, no matter what it may be as to the immediate question of making contracts, is radically different from the .point of view that has. been expressed in this house on behalf of the government.
As to generosity in the making of contracts, let me say this. They have a lower management fee and a greater participation, if costs are reduced, in the amount of the surplus attained, and it seems to me that is an incentive which under private business practice any government might well consider. I agree with the hon. member for Stormont that individuals engaged in a public service, whether in the employ of the government or as contractors making an essential commodity for war purposes, whether in public or in private enterprise, are entitled to fair remuneration for the services so rendered, whether in war or peace. I do not dispute that. But I do point out that from time to time concessions are made great industries and corporations which certainly go for beyond that point.
I agree with those who have said that as long as this war lasts we cannot emphasize the production of civilian goods, that we must continue to manufacture to the full extent of

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our capacity, war material for the armed forces, and that production of civilian goods may be considered only when, all our obligations to the armed services have been met.
When I heard the Minister of Munitions and Supply the other day outlining the work of his department I was struck by the references to the enormous undertakings that Canada has engaged upon since the war began.. When we compare what we have done in these four and one-half years of war with the condition of this country in the ten years prior to the war, under both a Conservative government and a Liberal government, we are appalled to think that the country was allowed to drift into the condition in which we knew it economically during the ten dreadful years before the war broke out.
To the end of 1943, for example, we have spent on various phases of the war effort the enormous sum of $10,824 millions, or, as I may refer to it a little later, nearly 811,000 millions. This includes-and I am going to speak in round numbers-$4,000 millions for munitions, $2,750 millions for strategic materials and foodstuffs, $2,250 millions in production of material and equipment for Canada's armed forces at home and abroad, $1,500 millions in Canada for capital assistance to industry and defence construction. I take these figures as at December, 1943, from the government publication entitled "Canada at War." Almost $11,000 millions have been expended in war material, war industries, and other facilities and equipment of all kinds in connection with our war effort. Much of this has been destroyed or worn out, but many assets remain and will remain when the war ends.
As I say, although our concentration must be upon- the conduct of -the war; yet the pattern of the post-war world will be decided by what we do now. This afternoon I am going to ask what we are doing now and what is to be done when the war is over with the tremendous assets which we have built up in this country? To a very large extent, as we heard from the minister and from the hon. member for Lake Centre (Mr. Diefenbaker) yesterday, this will be decided by the new War Assets Corporation under order in council P.C. 9108. There is also a crown assets allocation committee consisting of interdepartmental officials and a representative of labour and of agriculture. But I understand it to be a purely advisory committee. The real power of disposal will be in the hands of this new corporation. To quote from the order in council, the actual business of the War Assets Corporation will be as follows: It is empowered to hold, manage, operate, dispose of or deal in and with any surplus crown assets consigned or transferred
to it. It will also, according to the order in council, withhold- from Canadian or world markets, for such time as 'it may decide, all or any portion of any surplus crown assets consigned or transferred to it. Further, it is empowered- to effect sales of surplus crown assets consigned or transferred to it, in such manner and upon such terms as the company may determine. When we look at the statements which have already been made by some of the persons connected with this new crown assets corporation, we realize that parliament must closely supervise its operation.
The personnel of the War Assets Corporation includes, of course, as president, Mr. J. B. Carswell, a well-known steel manufacturer of this country. As Saturday Night well said in its issue of January 29:
The business community must be gratified that Mr. Howe (Minister of Munitions and Supply) has placed the disposal o-f surplus war assets in the hands of business men and set them up in trade, not in political and official Ottawa, but in metropolitan Montreal.
In a speech before the Canadian Construction Association the president of the corporation, Mr. Carswell, made some interesting remarks which were quoted in the Financial Post of January 29 of this year. This is what he said:
Since the key job of the corporation is to protect the going economy against impingement of war surpluses, it stands to reason the corporation should never get into competition with industry-which is another [DOT]-_ of saying it should not sell direct to the consumer but rather to those whose legitimate business it is to deal with the article concerned and on a basis that, within the corporation's powers, will ensure reasonable profit to dealer and reasonable price to consumer.
Three years ago a prominent business man told a committee of this house that in his opinion at that time there should be set up a committee of business men whose duty it would be to consider ways and means of disposing of crown property and of material in such a manner as not to interfere in any way with established industry. If that policy is carried out we shall find that the War Assets Corporation, instead of being of assistance to the people of Canada, will further strengthen some of the vested industrial and financial interests in this country. I say to the minister and to the hon. member for Stormont that, because of the manner in which the government established some parts of Canada's industrial war effort, we as a nation have increased the power of some of our most powerful monopolies and cartels. I shall refer to one of them this afternoon. I shall refer to Canadian Industries Limited, the great chemical concern which is the Canadian part of the international cartel of which two of the most
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powerful chemical organizations in the world, du Pont De Nemours Company and Imperial Chemical Industries Limited are the owners or the major interests.
Throughout the war the members of this group have drawn to the attention of the house and of the country the alarming growth in power of some of these powerful industrial and financial corporations, I may say quite frankly that for some months we have been making a study of Canadian Industries Limited; and while this afternoon, because of the limitations of the time at my disposal, I shall refer but briefly to the corporation, one of my colleagues, the member for York South (Mr. Noseworthy), will supplement what I have to say.
When the war broke out, Canadian Industries Limited, an organization which at that time had assets of some $75,000,000, established a wholly owned subsidiary company known as Defence Industries Limited, in order of course to separate entirely their war business from their civilian and ordinary commercial enterprises. Since 1939 Defence Industries Limited has directed and operated, on a management-fee basis, government-owned plant and other facilities costing some $260,000,000, so far as I can gather, judging from reports issued in this house from time to time, this capital of $260,000,000 was advanced partly on Canadian, account and partly on British account; and last year, as we know, an agreement was entered into between Great Britain and Canada, whereby this country took over the British obligations and properties.
This sum of $260,000,000 represents approximately thirty per cent of all Canadian government assistance to private industry. The total expenditure incurred to this company through the Department. of Munitions and Supply in the undertaking of Defence Industries Limited since the war, for construction, equipment and operation, has amounted, so far as I can gather, to some $600,000,000. I have said from time to time in this house that the policy of the government-and if other governments adopt the same policy, of those governments too-has strenghtened monopolistic industry and the cartels of which they form a part and will make it infinitely more difficult when this war ends to emancipate our people and the people of the world generally from the control of these great national and international organizations.


Mr. HOWE:: May I interrupt my hon. friend? I am sure he would wish to make it clear at this time that all the expenditure he mentions, in capital, is still the property of the crown. The assets created are the property of the crown, and the company has acted only in the capacity of manager in every case.


Thomas Miller Bell: I was going to deal with that in a few minutes. I had a return brought down last May, which contains some interesting clauses, and I had intended to deal with that point. First of all, the concentration of war business in this company has certainly been enormous, and I may say that if similar businesses of that type had wished to enter into the supply of these materials they would have found it at least very difficult to do so. Thirty per cent of all our capital assistance has gone to this corporation, and the expenses incurred by Defence Industries Limited for all war purposes I believe amounted to $611,525,000.
When the minister interrupted me a minute ago I was about to refer to a sessional paper, No. 360, tabled in this house on May 28 of last year. This return indicated the manner in which the capital facilities paid for by the government may in part at least pass to the ownership in some cases, or in other cases to the control, of this corporation. In my opinion the optional purchasing clauses in some of these agreements have the effect of depriving the government in advance of all bargaining power, and in some instances appear to commit the government to a policy by which Canadian Industries Limited may acquire, without adequate and proper remuneration, properties paid for by the people. I say, some of the clauses in the contracts make that possible. Moreover, the contracts may have the effect-and this I regard as one of the gravest features of the whole situation- of perpetuating a monopoly which the operator of Defence Industries Limited, Canadian Industries Limited, has already acquired.
If we look at return No. 360, to which I have already referred, the contracts with Defence Industries Limited-some of them, that is, not all-are shown to contain the following clause in respect to plants engaged in the manufacturing of certain explosives and munitions of war. I quote:
The government shall give Defence Industries Limited a sixty-day option to purchase the plant or any part thereof, at a price it is willing to accept from any other party. If the offer is not accepted, the government is free to sell the same to any other party at a price not less than that offered to Defence Industries Limited.
At first glance this may appear to be fairly reasonable, but in some of these contracts there are restrictions on the use of properties, and these restrictions are of such a nature that only Defence Industries Limited would be interested in the purchase of the plant. Let me quote one of the restrictive clauses:
The plant is not to be used for production of product or other explosives, or any constituent elements thereof, for other than military purposes.

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The plant is not to be used for the manufacture of the present product or of any constituent thereof except for military purposes. In other words, when the war is over the plant obviously would either be operated by Canadian Industries Limited or would have to be closed down. It should be noted that this condition is imposed on all purchasers and the restriction does not apply- I say this because I think it has some bearing in the opposite direction-to the machinery and equipment if the plant is demolished or dismantled. Other plants are bound by the same restrictive clauses. What are the effects of those clauses which have quite evidently been inserted at the request of the company? They clearly envisage the possibility of the plants as at present constituted producing commodities other than those they are now producing, perhaps civilian requirements, after the war, and they completely prevent that possibility from arising. The effect, of course, is to perpetuate the monopoly enjoyed by Canadian Industries Limited in regard to certain products.
In view of this, Mr. Chairman, I urge that parliament should take some note of the restrictive practices of the monopoly and the cartel of which Canadian Industries Limited is a part. We feel there is a grave risk that while we win the war on the battlefronts of the world we shall actually lose it to the great cartels which now embody the nazi idea and hold themselves above parliaments and governments.
Canadian Industries Limited is not a Canadian enterprise. It is jointly owned and controlled by the du Pont De Nemours company of the' United States and Imperial Chemical Industries Limited of the United Kingdom.


Clarence Decatur Howe: And others.
Mr. COLDW'ELL: Who between them hold, I understand, between eighty-five and ninety-five per cent of its share capital. The others have a very small interest in the corporation. These two companies are part of a world-wide international cartel which has divided and still divides the world into markets and concludes exclusive licensing and patent agreements. They also divide the territories of the world amongst themselves. Canada is exploited by this cartel through the jointly owned Canadian Industries Limited, just as South America is exploited by other companies which are similarly owned by the corporations I have named. It is true that politically Canada is a sovereign nation, but economically this international cartel treats her as a colonial area or a colonial possession.
The foreign capital, so far as I have been able to discover, invested in Canadian Industries Limited throughout its existence has amounted to not more than $7,000,000. An analysis of its profits and their disposition show that since 1910 dividends on capital have amounted to $75,000,000. In addition all assets in Canada exclusive of Defence Industries Limited amount to another $75,000,000. and the original foreign capital invested in the company in Canada seems to have amounted to less than $7,000,000.
Through Canadian Industries Limited this international cartel has exercised monopoly control of many vital products. They include, of course, types of ammunition, explosives, ammonia, chlorine, hydrochloric acid, sodium sulphate, carbon disulphide, caustic soda, many kinds of dyestuffs, specialized paints, lacquers and varnishes. It holds the patent for cellophane, and is, I believe,

I am not positive of this-in exclusive control of nylon production in this country. Furthermore there is a widespread belief that agreements existed with other firms that eliminated competition in certain important fertilizers before the war.
I say the monopoly has made enormous profits. To illustrate-


Mr. TRIPP:: Did the hon. member suggest that this company holds a monopoly of the sodium sulphate industry in Canada?


Major James William Coldwell: No, I did not suggest quite that.


Jesse Pickard Tripp: I think he did.


Major James William Coldwell: I said it holds the monopoly on many of those vital products, and among them I named sodium sulphate. Is that what the hon. member said?


Jesse Pickard Tripp: Yes.


Major James William Coldwell: Yes, sodium sulphate.


Jesse Pickard Tripp: We have millions of tons of it in Saskatchewan undeveloped.


Major James William Coldwell: We have millions of tons of the raw material undeveloped, but I am going to show these people have developed and controlled the market for it.


Jesse Pickard Tripp: They could not get a monopoly on an article of that kind.


Major James William Coldwell: They have a monopoly on the manufacturing and refining of it. You can have all kinds of raw materials in the ground. We have large amounts of raw material, but where you have one group in control of the machinery, and particularly of the market, there you have the control of the product.

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I said that this monopoly had made enormous profits. I could not illustrate it better than in this way. The holder of a $100 par value common share in 1910 now holds eighteen common shares of no par value which sell on to-day's markets for over $150 each. In addition, the holder will have received dividends in those years totalling $2,322 in respect of an investment of $100.
Recently the Department of Justice of the United States charged du Pont De Nemours Co. and Imperial Chemical Industries Limited with constituting a cartel in restraint of trade, and Canadian Industries Limited was named as a co-conspirator. This cartel, by the way, included agreements with I. G. Farbenindustrie, the German nazi-controlled chemical trust, and the Mitsui interests in Japan. However, I shall confine my remarks to the effect of this cartel on Canadian living standards.
The agreements between du Pont, Imperial Chemical Industries Limited and the jointly owned subsidiary, Canadian Industries Limt-ited, by ingenious methods eliminated competition in countless products in Canada. They provided for the exchange of patents, and for exclusive licensing arrangements; they provided that no one cartel partner should export into territory assigned to another partner; they provided for the sale of all du Pont and Imperial Chemical Industries products in Canada through Canadian Industries Limited only. No other company could handle their products. In particular Imperial Chemical Industries and du Pont have eliminated competition in strategic materials in Canada by entering into agreements with potential competitors. For example, in 1928 du Pont and Imperial Chemical Industries caused Canadian Industries Limited to enter into contracts with the Atlas Powder Company of Delaware, U.S.A., whereby Atlas was prevented from exporting explosives to Canada, or participating in the explosive business in Canada. That is one example. Another example is that in 1936 du Pont and Imperial Chemical Industries Limited caused Canadian Industries Limited to enter into an agreement with the National Lead Company of the United States in order to eliminate competition in titanium pigments in Canada. This agreement provided for the setting up of a new company, Canadian Titanium Pigments Limited.


Mr. EDWARDS:: Will the hon. member permit a question?


Major James William Coldwell: I would prefer to make my speech; then the hon. member could ask questions.


Manley Justin Edwards: What is his authority for that statement?


Major James William Coldwell: I am quoting directly from a report tabled, in this particular instance, in Washington, by the committee which inquired into the chemical industry. Du Pont de Nemours Co. and Imperial Chemicals Limited are part of the cartel of which Canadian Industries Limited is a part and a subsidiary.


Manley Justin Edwards: The hon. member is saying so, but I am asking for his authority.


Major James William Coldwell: If my hon. friend will read these reports for himself, he will get the information I am now giving. They are available in the library.
This agreement provides for the setting up of a new company, Canadian Titanium Pigments Limited, in which Canadian Industries Limited holds fifty-one per cent of the share capital, and the National Lead Company forty-nine per cent. Now, the new company has exclusive control in Titanium Pigments in Canada, but must not export from Canada. That is the agreement, and it is accessible to anyone who cares to read it. The hon. member for York South will probably place on record the clauses from the agreement., since the agreement has been questioned. I have merely cited two examples of this kind of practice; others can be developed.
But far more dangerous to the welfare of the Canadian people are the agreements preventing Canadian Industries Limited from exporting from Canada. We talk about restrictions on imports. These people have restricted exports from Canada, and thus cut down the amount of employment for Canadian citizens. These restrictions are not new, but have existed in various forms since the formation of Canadian Industries Limited in 1910. They are an affront to the Canadian people, and a flagrant instance of private interests placing themselves above the authority of parliament. As I have said before, it is not too much to say that Canada has been treated by these interests as a mere colony.
Here is an example. In 192S Canadian Industries Limited attempted to export to the United States a new waterproof finish they had developed, but du Pont prevented this, and later took the patents of this Canadian developed process for itself.
In 1933 du Pont and Imperial Chemicals Limited prevented Canadian Industries Limited from exporting pyralin toilet articles, manufactured in Canada, to Australia. These things are on record. Where, on rare occasions, Canadian Industries Limited was

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allowed to export-and this is interesting-the profit on the sale went to du Pont or Imperial Chemical Industries, depending on the territory concerned, or the territory to which the product was exported.
I gave two examples only of direct restraint of Canadian export trade, but my colleague will develop others. The understanding among these firms, that there should be no exports from Canada, was clearly expressed in a letter which Lamont du Pont, chairman of du Pont De Nemours Company, addressed to Lord McGown, chairman of Imperial Chemical Industries, on December 11, 1933:
If the above is correct, it seems to us to follow directly and as a matter of course that Canadian Industries Limited shall stay in Canada, and not spread out into other countries, either by laying down plants-
And note this:
-exporting their products, or licensing under their processes, unless both Imperial Chemical Industries and du Pont believe it is advantageous to so spread out and then only to the extent and for the time and under the conditions that Imperial Chemical Industries and du Pont agree upon.
Note that it is not to the extent to which Canada may agree it is advantageous to this country, but to the extent to which du Pont and Imperial Chemical Industries agree it is advantageous, not to this country but to themselves.
Following these instructions Canadian Industries Limited has not, in point of fact, exported from Canada, with the rare exceptions I have noted. In 1939, however, du Pont, as a special concession to Canadian Industries Limited, allowed-and note that word "allowed"-Canadian	Industries Limited to
export some products for a temporary period in view of the war emergency. A resolution of the du Pont executive committee, of October, a month after war broke out, 1939, sets this forth:
Resolved further, that the foreign relations department be advised it is the feeling of the executive committee

That is, of du Pont-
-that Canadian Industries Limited has no right to export any products embodying shareholders' inventions, except that during the present emergency Canadian Industries Limited may be permitted to supply Imperial Chemical Industries such goods for sale in the British Empire at prices returning a satisfactory profit to Canadian Industries Limited.
Thus -we have an United States board of directors deciding that a vital Canadian industry, in wartime, with assets of $75,000,000, shall not be allowed to export after the war- because the permission extends only during
the war crisis. Note the words used, that Canadian Industries Limited "has no right" to export. These words are an unpardonable affront to the Canadian people. In my opinion the time has arrived when we should consider this whole question of cartels and monopolies.
Let me add this, in case someone should question what a cartel is. Some people seem to imagine that agreements between governments in connection with raw materials and food supplies are in the nature of cartels. A few days ago I looked up a number of definitions, and I could find nothing to substantiate that point of view. I did. however, copy from the Encyclopaedia of Social Sciences, a standard work not only in North America but in the English-speaking world, these definitions:
The term cartel designates an association based upon a contractual agreement between enterprises in the same field of business which, while retaining their legal independence, associate themselves with a view to exerting a monopolistic influence upon the market. . . .
Cartels may be divided into three basic types, according to methods by which they exert their influence upon the market. There are cartels whose direct object is price-fixing, cartels which aim at limitation of production or supply, cartels which operate through division of territory. . . .
In general, only associations oif the larger, independent enterprises are designated as cartels.
To-day the world is faced with a revival of some of these great international cartels. They are not dead; they are only sleeping. This organization had the very closest contacts with the German chemical industry. Indeed, if one went into the whole cartel set-up-and I have not the time this afternoon to do it-of its history, he would find that before and during the last war, while apparently it slept, and in the days of peace, I believe right up to the present time, the cartel's assets were carried by these organizations as assets on the right side of the ledger. They will be ready to act when the war ends because of their control of patents and other assets.
My time is up, but I should like to add just a word. We in this house ought to take action regarding the problem of patents. Through the control of patents some of these great international cartels have built up monopolies and have thwarted the progress of industry and the safety of our people. The time is long past when we should have tackled this problem, and the last thing parliament should have done is what I believe it has done, namely, strengthened the power of monopolies and cartels in the midst of the present war emergency.
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Clarence Decatur Howe: Mr. Chairman, I think I should make a few remarks at this time about the statement of my hon. friend. He has discussed the activities of Canadian Industries Limited and has tried to associate them with the Department of Munitions and Supply and Canada's war effort. He made the statement that we dealt not only with Canadian Industries Limited but with Defence Industries Limited, and I should like to make clear just why that was done.
The firms which make a business of producing explosives and certain chemicals allied with the manufacture of explosives have been through a war. They were bitterly attacked after the last war as being war profiteers. I did not want war profiteers in this country and I may say in all fairness that Canadian Industries Limited did not want to be classified as war profiteers. Therefore we had a discussion before any contracts were entered into with Canadian Industries Limited, and by mutual agreement it was decided that the government would have the benefit of the engineers and other personnel of Canadian Industries Limited, of the many patents and industrial processes owned by the company and of the knowledge accumulated by the company over the years, without involving the affairs of the department in any way with the peace-time business of the company.
Therefore a corporation was formed called Defence Industries Limited. This corporation was given, by Canadian Industries Limited, a capital of 81,000,000 which was thought to be sufficient to pay its running expenses. It was agreed that any business undertaken by my department would be with Defence Industries Limited, and that the profits of contracts with Munitions and Supply would be segregated and thus be subject to taxation, examination and investigation. I intend to deal with the remarks of my hon. friend about the cartel to which he referred, but I wish to make it clear first that this department has had no business with any cartel. It has dealt purely with Defence Industries Limited, which is a management company. I saw a statement in the newspapers a few weeks ago giving the profits and balance sheet of Defence Industries Limited. When I thought of the vast volume of business handled for the department by that management company, I was amazed at the modesty of the profits shown. I shall produce the statement in the committee and be glad to discuss this later on. I may say that I did not expect this discussion and therefore have not the proper data in hand to carry it through.
My hon. friend spoke of handling expenditures of $500,000,000. I am not sure that he saw the document which was tabled recently
TMr. Coldwell.]
in the house, namely the report on the expansion of industrial capacity in Canada. This shows that Defence Industries Limited has handled the engineering, supervised the construction and is directing the operation of plants to the equivalent of approximately
8100,000,000. The engineering skill required to build these plants was not available elsewhere. Not to have used the skill of this company would have prevented the production of explosives in this country. There was just no other skill to turn to for that experience.
All the patents of the company were turned in at cost. The only concession was that where special skills were used and where plants were built in expansion of this industry, which in peace time is rather small, the patents and the plants would be used only for the production of military explosives. My department was not interested in anything else, and we saw no objection to including a provision-I think it is in one or two contracts-to the effect that the plant would be used only for the production of military explosives. This does not prevent units of equipment from being used for any other purpose, when removed from the plant, and it does not interfere in any way with ownership by the government of the plant and its equipment.
So much for explosives. I judge from the expressions of horror used by my hon. friend in connection with Canadian Industries Limited and its affiliates that if he had been in my place he would not have done as I did. I think he is agreeing with that now. There was no option, and I think the procedure adopted was perfectly legitimate and proper.
There were certain chemicals needed in connection with which Canadian Industries Limited controlled the existing patents. Therefore again we called on Defence Industries Limited to furnish the engineering, supervise the construction and act as operators for the government. The only concession for the use of the patents was that, if and when the government wishes to sell the plant, it would be offered to Canadian Industries Limited, at a price at which the government was willing to sell, for a period of sixty days. That concession does not interfere in any way with the government getting full value for the plant, or a value which it believes is reasonable. The offer is made to Canadian Industries Limited, and is kept open for sixty days. If Canadian Industries Limited do not wish to purchase at the price asked, the government is then free to sell to anyone else at the same or a higher price. I might

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point out that the government is not under any obligation to sell the plant to any one. That is the only compensation given to Canadian Industries Limited for the free use of all the patents of that company applying to that particular industry. I do not think any undertaking will be found in those contracts which will not commend itself to hon. members of this house at this time.
Our chemical programme was very important. We did not turn to Canadian Industries Limited where other sources of information were available. It will be noted on page 3 that we dealt with other chemical firms in manner similar to that with which we dealt with Dominion Industries Limited. There was McDonald chemicals, Miner Rubber Company, Naugatuck Chemicals Limited, Nichols Chemical Company, Limited, St. Maurice Chemicals Company, Limited, Shaw-inigan Chemicals, Limited, Shell Oil Company of Canada, Stormont Chemicals, Limited, and the AVelland Chemical Works Limited. The combined dealings with other chemical companies were probably more extensive than our dealings in the chemical field with Defence Industries Limited. We got help where we could. We in no way favoured Defence Industries Limited because we wished to contribute in any way to the concentration of industries, or to the promotion of cartels. The urgency was great. We went to the firms best able to do a job for the department, in putting up a plant to produce a product needed for the war and to do it as efficiently as possible. If any money of the department has been well spent, I think the money spent in chemicals and explosives has been well spent. I think the price of our product, and its quality, and the surety with which it was brought into production, have not been equalled in any other country of the world. We have a grand story to tell of our output of chemicals and explosives to meet urgent war needs.
I might point out that Canadian Industries Limited is a Canadian corporation subject to Canadian laws. Its balance sheets are published for all to read. It has many Canadian shareholders. The prices of all its securities are quoted on Canadian markets every day. My hon. friend says that from eighty-five to ninety per cent of the company is owned by two firms. I think he is mistaken there. I think his proportion is much too high. I am not sure about that, because I have never interested myself in that phase of the company for, as I say, we have had practically no direct dealings with C.I.L. in the course of the war.
I do not favour cartels. I believe that the cartel is a relic of the past that is rapidly disappearing. I wholly agree with its disappearance. I believe that the disappearance of the cartel will be a benefit to industry as a whole. Canada has been singularly free from cartels. But let me say this. My hon. friend has attacked in this house two companies by name, one the Aluminum Company of Canada, and the other Defence Industries-


Major James William Coldwell: Canadian Industries
Limited.


Clarence Decatur Howe: I am speaking more particularly of its subsidiary which has worked for 'the department. I wish to say this, that without those two firms in this country Canada's war effort would have been a very pale and insignificant thing. I suggest to my hon. friend that there is a time and place for all things. I have no objection to his attacks on cartels, but it seems to me that the time for those attacks should be a time when the defence of the country and perhaps the future of Canada and of its people are not so greatly dependent upon their skills. I read with amazement that, in the United States, in the middle of the war, time has been taken out to undertake a prosecution of firms there which, are playing such a tremendous part in the wTar and the crippling of which would have such a tremendously damaging effect on the war effort.


Mr. DOUGLAS (Weyfourn):: Perhaps they
are fighting for democracy over there.


Clarence Decatur Howe: Perhaps they are. But one
battle at a time. My hon, friends fight every battle in this house except the battle that Canada is fighting on the fronts abroad.


Mr. DOUGLAS (Weyburn):: Nobody knows better than the minister that that is not true.


Clarence Decatur Howe: Perhaps that was an overstatement. Nevertheless I am fighting only one battle at a time, and everything I do is directed toward one objective, namely, to obtain the munitions of war that are required in this struggle and to obtain them as efficiently and in as good quantity as Canada is capable of providing them.


Major James William Coldwell: We believe that.


Clarence Decatur Howe: I am sure you do. I have
used the instruments at hand and I think our choice of instruments on the whole has been very satisfactory. We have had very few disappointments in our munitions programme. We had these 'two instruments at hand, and whatever their history has been in the past, Canada has been very fortunate in having at her disposal the wealth of information, and the wealth of skills, of these two instruments in a time of great peril.
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Dorise Winifred Nielsen: Mr. Chairman, the report which was made by the minister covered so many things-the aircraft programme, communications, oil, rubber, explosives and many other matters-that I realize his report had to be a lengthy one. But even so he did not cover in great detail the various items which he mentioned. It was not possible for him to do so; it would have taken perhaps days if he had. But as it is a year now since we had a discussion in this house on the production of synthetic rubber, perhaps it would be permissible to ask the minister to give us a little more information on this subject than he did in his report.
I am one of those who realize the tremendous urgency and the dire necessity which faced the minister at the beginning of this war when suddenly our supplies of raw rubber were cut off and it became necessary for him at any cost to produce this essential part of our war equipment. I understand perfectly well, in the conflict of ideas which were presented to the minister, the difficulty he must have had in making up his mind at that time as to which might be the better source from which to obtain rubber. But it is some time since we had a discussion on this question, and I believe the minister is now in a position to tell us a little more about this whole matter.
Synthetic rubber and the making of synthetic rubber are of importance to us as a country. I speak as a western member interested in the making of synthetic rubber from grain alcohol, but I do not consider that I am speaking for any sectional interest because it would be to the benefit of the nation at large if we were able to keep up with the rest of the world in the production of cheap rubber for all the various uses to which it will be put after the war is over.
The minister said the other day that we had won the race so far as the production of rubber is concerned. That is a fine statement and I am glad to know that that is true, but I believe that the minister could tell us more about the possibility of rubber production in the future. Western people, the farming people of the prairies, have had enough information given to them so far to make them feel that there are vast possibilities in the production of alcohol from grain to be used for the production of synthetic rubber. There is also the possibility that in certain areas of Canada we could produce a type of dandelion similar to the Russian type for the production of latex, from which we would obtain real rubber to be used in conjunction with synthetic rubber in making tires and other rubber articles of a very fine type.

I was sent recently a copy of a report from the Saskatchewan industrial development board, containing a speech by Doctor Paul Kolaehov, technical counsellor of Joseph E. Seagram and Sons, Inc., at the fourth midAmerican chemurgic conference at Cincinnati, Ohio, on September 29,	1943. Doctor
Kolaehov is recognized as one of the most renowned experts in this particular field of scientific research, and what he says is listened to with great attention. Here is a short paragraph from his speech:
The fermentation industry shows unusual possibilities, mainly for two reasons. First, as we have already mentioned, many different compounds can be produced; alcohol, ethyl and butyl, 2.3 butylene glycol, acids, non-nitrogenous organic compounds; second, by utilizing farm products it draws its raw materials from an inexhaustible source. This second advantage has great significance for those of us who are interested in bettering the position of the farmer by utilizing his raw materials m industry. Industries based on the fermentation pre-cess have unlimited possibilities of growth; to further this growth will bring prosperity to the farmer such as he has never seen before, for he will be cooperating with the factory in furnishing essential raw materials. With industry playing such a large part in the activities of every leading nation the farmer's position has descended to that of an unrewarded house servant of the people, one who fills the icebox and the cupboard with the food staples. Unless he begins to take his place in the industrial life of these nations, his position will lessen in importance in the ratio to which industry's position increases in importance.
When Doctor Kolaehov was lecturing in this country early this year he predicted that one of the products which would be obtained from the distillation of wheat alcohol was motor fuel, and that quite soon in the United States they would be using one hundred per cent wheat alcohol as motor fuel.
These things are of intense interest to our western people. Opinions expressed by authorities in the United States and in this country indicate that' the minister has to-day further information which he is capable of giving us and that it is quite possible he may have to revise the opinion which he expressed last year during the discussion of this same subject. At that time he said that it would not be feasible to use grain unless the grain could be had at a price of around twenty-five cents a bushel, which all western members will readily agree is far too low to be considered by our farmers. Some hon. members may remember that in the debate last year I quoted from one Canadian scientist who had written for popular consumption a pamphlet in which he stated quite a little of interest to western grain producers. It was entitled "That Man May Prosper," by Mr. Dyson Carter, M.Sc., A.C.I.C., F.CA.S.-to give him his full title. Recently

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Mr. Carter has been speaking again in western Canada. I have here an address delivered by him to the annual convention of the Consumers' Cooperative Refineries Limited, on January 12, 1944. He urges in the speech which he delivered before that cooperative society that we do more to investigate the possibilities of the chennirgic industry, and he places as one of the first considerations the production of alcohol from grain. Toward the end of this speech he says:
Let me point out that if we mix farm alcohol-
That is alcohol produced from grain.

with our gasoline, to an extent of only 15 per cent of the total fuel, this would create an industrial market for 75,000,000 bushels of industrial wheat per year! And at the same time, using the new processes, it would give up a large quantity of the highest quality protein, as a by-product for stock or human feeding.
The minister did indicate, when he made his report, that the rubber which was being produced in the plant at Sarnia had not yet produced a tire which was completely satisfactory. I quote from the report of his speech in Hansard, page 1705:	,
A word about the quality of these tires. It is not possible yet to say that a synthetic tire matches the quality of a raw rubber tire. This department is conducting very extensive tesis of synthetic tires, in conjunction with the United States army. The data obtained from these tests will, we hope, help to improve the. quality of synthetic tires. So far as we can now estimate, the synthetic tire is about 80 per cent as efficient as a raw rubber tire. It is still necessary to use a certain proportion of natural rubber in the fabrication of tires for heavy duty and high speed operation.
This would indicate that there is still need of a great deal of research in this particular matter and that the minister himself is far from satisfied with the type of rubber which is being produced by the plant at Sarnia.
It does seem that, since the war has been going on for such a while, we should by this time have taken advantage of any and all information we could get from our allies who have been able to produce sufficient good rubber for their use and who have to all intents and purposes, so far as we can see, made very good use of it. As is already known, the Soviet Union is producing rubber to fill all its needs and is not dependent upon supplies of raw rubber from any source other than its own production, that is from grain and the Russian dandelion. We have often in the past spoken of our "good neighbour to the south". To-day we are in a position also to speak about " our good neighbour to the north," who has been ready and willing to give us such assistance as we need in learning the technique of producing for ourselves good rubber from both the dandelion plant and our grains. There are some people who seem to have circulated the idea that the Soviet Union is not willing to give away her secrets. That, I believe, is incorrect. As soon as the United States of America wished to have some seed of the Russian dandelion for experimental purposes, the Soviet Union flew the seed to the United States immediately in one of its biggest bomber planes. That does not indicate an anxiety to hide secrets of rubber production. I am inclined to think we have not taken full advantage of the assistance the Soviet Union is able to give us on this question. The minister will be in a position tP explain more about this, but the fact remains that in the Soviet Union they have been so satisfied with the result of experiments with the production of real rubber from the latex which is derived from the roots of the dandelion that they have at present over two and one-half million acres devoted to the growing of this root. From that, together with synthetic rubber, they have produced enough rubber tires for the tanks and guns which are rolling the Red army on to victory.
I remember that last year, when the minister was speaking about the production of rubber from the latex of the dandelion root, he remarked that he would hesitate to say how many hundreds of square miles would be needed to produce a ton of rubber. I am a little surprised at a statement like that;
I was at the time; and I think the minister should tell us why he suggested that hundreds of square miles of land would be needed to produce a ton of rubber, even under Canadian conditions. It seems to me that, to say the' least, he rather overstated the position. It is not necessary to devote hundreds of square miles to the production of a ton of rubber if we engage, as we can do, in the production of the Russian dandelion.
According to the statement of Mr. Carter, in the Soviet Union roughly 8,000 pounds of roots are obtained from one acre of land, and the rubber content of these roots is roughly about twelve per cent, while some of it goes as high as twenty per cent. This is not my argument; it is Mr. Carter's. He says that, if we were to take full advantage of all the information which the Soviet Union could give us. he believes it would be possible for us, with thorough cultivation, to get at least an average of about 6,000 lbs. of roots from one acre of good Canadian soil, and that it might be possible for us, by careful cultivation and a full understanding of what is needed for the growing of the plant, to produce a root which would have at least ten per cent of rubber content. He then explains that 600 pounds of
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rubber to one acre would be produced, and even if we gave the farmers as low as ten cents a pound it would give them roughly 160 an. acre, which is equal to thirty bushels of wheat at $2 a bushel, something which they have not had for a long time.
Now that we are to have an industrial bank which will lend money to enterprises, cooperative enterprises, it would appear that such an enterprise as this would be like a blood transfusion to western Canada.
I would quote again from Mr. Dyson Carter's address. Continuing on the question with reference to the price that might be obtained, he says:
Now synthetic rubber being produced to-day from petroleum costs about 30 cents per pound to manufacture. Therefore the factories which brought the rubber dandelion root and extracted the rubber latex from it (one factory or several which would be built up in the west) would get the equivalent of $180 per acre for the rubber crop. (30 cent9 a pound for 600 pounds is $180.) This is a very large "spread" between the price of 10 cents paid to the fanner and 30 cents paid to the manufacturer. It means $60 an acre to the farmer, $180 to the manufacturer.
That surely should be a good enough profit for any cooperative or even small private industry in which to invest its money.
But we might as well be realistic. What farmer would complain about getting $60 an acre for any crop? And remember, if we could raise this crop as farmers do, we would g,it over 8,000 pounds per acre of 12 per cent rubber, or about 1,000 pounds of rubber per acre. At 10 cents a pound that would amount to $100 an acre. With the manufacturer getting $300 per acre for the finished rubber.
I hope that when the minister answers me, as I trust he will, he will criticize any statement made by Mr. Carter if it is not correct, because I am not in a position to know.
These figures may be a little more of guesswork than perhaps the minister would care to indulge in, but if he is not satisfied with them, I should like him to give us something more realistic, because I know our western people are following this question. They want to know and they have a right to know. It seems that there are unlimited possibilities with natural rubber so produced in this country to be used together with synthetic rubber, which would make a tire far more satisfactory than the type now produced.
I understand that some of the interests in the country already in control of rubber supplies might be a little alarmed at this new production, but we cannot sacrifice the interests of the nation at large to any sectional interest. The claims of those who control the rubber industry must be subordinated to the claims of the nation if it is possible for us to produce rubber in these other ways. I believe
[Mrs. Nielsen. 1
that some startling new methods are now known as a result of research in producing alcohol from wheat, and the statement made by the minister last year, in which he said that a price of twenty-five cents a bushel was all that could be paid for wheat to be used in the process, might be revised. To-day, owing to the new technique in producing alcohol from grain, which has shortened the process and made it quite different from what it was a year ago, when we had the minister's last report, he might consider raising the price for grain to be paid to the farmer for industrial processes such as this.
Let me quote once more from Mr. Carter's speech delivered on January 4.
Still something more is to be said in regard to alcohol from wheat. Every farmer knows that there are two principal constituents in wheat, the starch and the protein. In the old alcohol processes, only the starch was used to make alcohol. The protein passed through the process, coming out in the end as waste product known as "distiller's slops". This material caused foaming in the stills, the tanks, and other equipment. It led to waste and to increased cost of production. But now chemists of the United States department of agriculture have developed a new process to take .care of the wheat protein. This process extracts the protein from the mash before it is converted into alcohol. The process is extremely cheap. I he protein is extracted in a very pure form, which is of highest nutritional value even for human beings. Experts say that it can be sold .at prices from 10 to 30 cents a pound. It has become of considerable importance in the feeding problem after the war, and will be of greater importance after the war. because here we have a source of very concentrated protein food.
I wish the minister would tell us whether in the experiments carried out in this country in the growing of dandelion root and in the direction of obtaining alcohol from grain we have solicited all the help which the Soviet Union is willing to give us in this direction, or whether we have merely gone on our own and allowed our own researjh departments to go over the same ground which had been travelled several years previously by the experts of the Soviet Union, when we might have had the benefit of their researches to help us to speed up the process in Canada. Will the minister tell us whether the new discoveries with regard to the hastening and cheapening of the process in obtaining alcohol from wheat do not now make it a feasible way of obtaining alcohol, and therefore is it not feasible for us in western Canada to start industries to obtain industrial alcohol?
Third, will the minister tell us how the rubber made in the Sarnia plant compares with the rubber which is made in the United States from grain alcohol? I should also like to know if it is the government's intention

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to set up any plant in our wheat growing areas as a government project, or whether the government would prefer to leave this project to some of the western cooperatives.
1 have no quarrel with what the minister has done in trying to supply the nation with rubber. Indeed, I can only compliment him upon the way in which he has tried to tackle a problem which at the beginning of the war seemed a colossus, something terrific which we had to face when we were left practically without supplies of this valuable commodity. I do feel that, to-day, in view of the fact that new discoveries have been made, we should not, merely because we have a plant ip. Sarnia which is making synthetic rubber, refuse to investigate the full possibilities of these other new wa37s of producing rubber. After all, our job in the future is to produce rubber as cheaply as possible. Not only that, but if we can produce it from the grains we have, the possibility from the various by-products, which in turn would enrich the soil and give our farmers a chance to produce in western Canada an industry which would be of value to the whole nation and also enrich the land, would place agriculture in all its other phases in a far better position to carry on in the future. It would give new life to western industry. It would open up a new era, and the hopes of our western farmers would-begin to soar as thev saw the possibilities opening up before them when industrial raw materials as well as food could be the product of our western farms.
I have brought this matter to the attention of the committee because I feel sincerely and honestly about it. As I stated at the beginning, it is not a sectional interest of the western people, although it does affect us considerably. As a nation we cannot afford to fall behind other nations. Both the Soviet Union and the United States, our neighbours to the south and to the north, are far ahead of us in the production of rubber; and I should like the minister to give the committee a more detailed report of what is being done and what he hopes to do in this field.


Clarence Decatur Howe: I wish to compliment my hon. friend upon the very fair way in which she has placed before the committee the questions that people are asking with respect to the production of rubber from grains, as compared with its production from a petroleum base. I have considerably more experience now than when I spoke last time with reference to producing alcohol from grain. From the commencement of the manufacture of artificial rubber I think fifty per cent of all the alcohol produced at our distilleries has
been exported to the United States for the manufacture of butadiene. For a time we were making our rubber from butadiene manufactured from alcohol, for the reason that it took much longer to bring in the plants based on petroleum than the plants based on alcohol. To-day we are making rubber from our own butadiene made from petroleum. The situation is very much the same as I stated when I spoke last in this committee. It costs about three and one-third times more to make butadiene from wheat than from petroleum. To-day alcohol made from wheat costs about ninety cents a gallon. Alcohol made from petroleum costs about twenty cents a gallon. These are approximate figures.


Thomas Clement (Tommy) Douglas: They are
based on what grade of wheat?


Clarence Decatur Howe: It is wheat that is bought
to-day by the distillers for the purpose of making industrial alcohol for conversion into rubber. I am not sure what grade of wheat they use, but I am certain that they are trying to make it as cheaply as they can. However, that is the situation.
My hon.. friend has referred to improvements in the process of distilling alcohol from grain; but I think we must revert to the fundamental fact, namely, that no one has discovered a way of getting more than, two gallons of alcohol from, one bushel of wheat. That is the basic difficulty. On, top of that, of course, is the conversion cost. While the conversion cost may be cut, I would point out that if wheat at the distillery costs $1.40 a bushel, we have a basic cost of seventy cents for a gallon of alcohol. That is fixed and unchangeable, as far as I can find out, and on top of that, of course, is the cost of conversion. I said that if wheat cost $1.40 a bushel at the distillery, that in itself would mean seventy cents a gallon for the alcohol. It actually costs ninety cents; therefore there is a conversion charge of around twenty cents a gallon involved. Perhaps by better methods that could be cut tc ten cents a gallon, but my hon. friend will appreciate that even then the cost of alcohol from wheat is vastly greater than the cost of alcohol from petroleum products. Now, what about the quality of the product?


Thomas Clement (Tommy) Douglas: Before the
minister leaves that point may I ask him a question? As I understood the minister, he gave a figure for making alcohol from wheat and from petroleum products. Would he have the figures as to what the final rubber costs are from wheat and from petroleum products?
War Appropriation-Supplies


Clarence Decatur Howe: I shall trace that through if my hon. friend wishes. I cannot give him the costs of butadiene because I have not them at my finger-tips. The costs of butadiene, which is one of the two basic products of rubber is about one-third of the cost of butadiene made from wheat alcohol. I may say that wheat is not used in the United States. Com is the base there, if it is available. It makes a cheaper alcohol. Ordinarily a still cheaper alcohol can be made from molasses. Alcohol is alcohol and butadiene is butadiene. It does not make any difference what you make butadiene from. Butadiene is a chemical, and when it has the same degree of purity it is exactly the same regardless of the source of the manufacture.


Thomas Clement (Tommy) Douglas: I understand
that at. Sarnia they made synthetic rubber from wheat in the early stages. I wondered if the minister had the figures with him.


Clarence Decatur Howe: Yes, they made it from
alcohol, but in starting up a plant it is very difficult to get costs that mean very much. Rubber made at Sarnia to-day is slightly below the cost of the imported rubber. The import price of rubber is about forty-one cents a pound. According to the last report I received, our costs are running around forty cents a pound to-day; but they are dropping very rapidly and we expect within a matter of weeks to get down to a cost of approximately twenty cents a pound. We hope ultimately to arrive at a cost of around sixteen to seventeen cents a pound.


Thomas Clement (Tommy) Douglas: That is less
than the price of raw rubber before the war?


Clarence Decatur Howe: Yes, and much less than raw rubber to-day. The average price of raw rubber .before the war was roughly fifteen cents a pound. Frequently it went as high as twenty-five cents a pound. Of course, that is rubber at the seaboard. We expect our rubber to compete freely with natural rubber and perhaps have a price advantage, if we can read the cost of rubber from the past as the cost of rubber in the future.
As I say, one ingredient of rubber is butadiene. The other is styrene. We make both products on the same property. We make butadiene at our Sarnia plant; on the same property we make our styrene, and on the same property we combine the two together into rubber through a process known as polymerization. In that we used a certain amount of dandelion. As my hon. friend may know, through the Department of Agriculture we encouraged the planting of dandelions for

that purpose at about the time that we started the synthetic rubber plant, and we are using dandelions in our process to-day. Unfortunately we have not enough to be much of a factor, but the use of dandelions is helpful in the polymerization process. It is said to help the process of converting the basic materials into the finished rubber. However, I do not think anyone has made rubber wholly from dandelions commercially. I asked our experts what the costs would be and they estimated about $10 a pound. They admitted it could be done, but they said that the cost of making rubber from dandelions alone would amount to about $10 a pound in the finished product, which, of course, puts it out of the way as a commercially feasible process.


Mr. FRASER (Peterborough West):: What about milkweed?


Clarence Decatur Howe: From the point of view of use in making rubber the two products are very much the same. I may say that we are having some difficulty in getting our farmers to cultivate milkweed. We paid them for their crop and I think they found it was not a very attractive element in farming. Perhaps the Minister of Agriculture can give more data on that than I can from the point of view of milkweed and dandelions as a crop.
As to the quality of the rubber, I think our rubber is as good as any made on this continent, and perhaps as good as any made anywhere. It is recognized everywhere as a first-class grade of synthetic rubber. The difficulty we are having in manufacturing tires is that of processing the rubber that we have. I suppose it took ten or twelve years for the industry to make, from natural rubber, the tires that were being sold just before the war. As many of us will remember, the tires we used to buy ten years ago were guaranteed for perhaps only 1,000 or 2,000 miles, but just before the war we expected a tire to last for 20,000 or 25,000 miles.
We have been going through that process with tires made from synthetic rubber. Great strides have been made. I said in my report that to-day tires could be guaranteed as eighty per cent as good, as respects wearing qualities, as tires made from crude rubber. That is a marked advance in only a matter of months. Perhaps I was a little conservative in my statement as it would apply to the type of tires used on ordinary passenger cars. Many of our tests show that the same mileage can be obtained from that type of tire, using synthetic rubber, as can be obtained from the same tire built of natural rubber.

War Appropriation-Supplies
The difficulty is in connection with the heavy-duty tire the big truck tire and particularly those very large tires used in connection with mobile artillery.


Mr. STIRLING:: How do costs compare?


Clarence Decatur Howe: I shall talk about quality first. The difficulty is that for the early tires built, it was found that in driving at high speed and with heavy loads, the tires heated, and deteriorated through the action of the heat on the rubber. Even to-day, we are using about twenty per cent natural rubber in the biggest artillery tires, and only eighty per cent synthetic rubber.


Mr. ADAMSON:: That is, virgin rubber.


Clarence Decatur Howe: Twenty per cent natural rubber, and eighty per cent synthetic.


Agar Rodney Adamson: Not reclaimed rubber?


Clarence Decatur Howe: No; reclaimed is not used in tires at all. Tires, however, have been greatly improved. The natural rubber tire used cotton fabric, but to-day in the heavy-duty synthetic tire we are using a celanese fabric which is stronger than cotton, and permits us to carry the same loads with thinner tires. This has the effect of reducing heating.
So that I believe it can be said that we are well on the road to having a satisfactory solution of our rubber problem. I have never undertaken a war project which has caused me as much worry and concern as did that of synthetic rubber. At the time we undertook the project, no synthetic rubber had been made on this continent, outside of laboratories. We were very much in the dark as to costs, and we were not at all sure that sufficient engineering data was available to allow us to work out the process. I went to rtiy colleagues and asked for an appropriation of $45,000,000 to undertake this project. I had to point out that our stock-pile of crude rubber at that time could last for only a matter of months, that the chances of getting more were not good, and that the world stock-pile of rubber would run out in a matter of months. I put it to them as a race against time, with the possibility of disaster if the project did not turn out well.
The plant is now completed, and getting close to full operation. We have had no serious disappointments in connection with it. Even though it was rushed through in winter months, the cost was within ten per cent of the estimate I placed before my colleagues. It was brought in pretty much at the estimated time, and the product is first class. It happens that ours is the only wholly integrated rubber plant built on this
continent, where all the products are made, and the rubber completed, on the same lot. That has had the effect of cutting down our costs and, from a comparison of data supplied by officers in charge of operations in the United States, I find that our costs are favourable. I believe we have a splendid industry and, for the chemists, a tremendously interesting one. At some stage in the process, simply by turning a petcock one can draw off almost every element of petroleum. The various elements of petroleum are the basic substances from which a great variety of products is made. I believe that not only will this plant continue in the future to make rubber, but it will be the centre of a great industry and1 the source of the production of a great variety of other products.
I believe it has been perhaps the most interesting project of the war, and one which will make a contribution to Canada's future industrial progress as great as that of any we have undertaken. I would hope that any hon. member who finds himself in the vicinity of Sarnia would take the opportunity ol visiting the plant. I am sure he would find it an interesting and inspiring experience.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


John George Diefenbaker: Mr. Chairman, there are certain matters about which I should like some information and which were referred to this afternoon by the parliamentary assistant to the minister. The first is in connection with the renegotiation of contracts and I wish to know the number of contracts that have been renegotiated and the amount of the savings thereby affected. There is a further matter in connection with the cancellation of war contracts. The minister dealt with this matter and he is reported on page 1692 of Hansaid as follows:
In many cases, when orders have been cancelled we have been able to convert the manufacturing capacity to other uses. But there will always be certain capacity which is single purpose, and is not suitable for other types of manufacture. Reductions or cancellations of programme in such single-purpose plants mean reductions in personnel.
What factories have been closed down as result of the cancellation of agreements, and what has been done with the employees of those factories?
I come now to the general position in regard to controls and controllers. The minister dealt
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with the production of instruments and communication equipment, and, as reported on page 1693 of Hansard, he said:
The production of instruments and communication equipment in dollar cost was 180 million in 1913, as compared with 84 million dollars in 1942.
And again:
This continues to be an expanding programme.
Last Saturday I had an opportunity of visiting certain aircraft and instrument factories in Toronto, and I was able to see the development that has taken pace during the past year. I wish to refer particularly to the Sutton-Horsley Company Limited, in connection with which a controller was appointed on March 12, 1943. The preamble of P.C. 1980 with reference to this company states:
The Sutton-Horsley Company Limited, which operates a plant in the city of Toronto, is engaged in the manufacture of special types of aircraft parts and accessories required for use in the production of aircraft for His Majesty.
It states that a preliminary investigation of this plant was made when it was ascertained that the production of aircraft parts and accessories was being seriously handicapped and that such production might be seriously interrupted or entirely stopped unless financial and managerial assistance was given to the company. The order in council goes on to point out that a controller is being appointed to look after the business in the interests of increasing the production of that firm and that Robert James Pinchin of Midland, Ontario, was being appointed as controller. Apparently the production of this factory is needed or the minister would not have stated that the production of instruments and the like is an expanding programme.
If my information is correct the conditions at this plant have not been any too good since the controller was appointed. I understand that the number of employees has decreased from 1,200 to less than 400 and that lay-offs are continuing from day to day. A rumour is being circulated that the place is to be closed down within a period of time. What is the situation with regard to the Sutton-Horsley Company? I should also like to know how much money was advanced by the government by way of capital assistance or otherwise in order to encourage the production of aircraft accessories which were regarded as being so necessary in March last that a change was brought about in the set-up of the company. Why has there been this reduction in the number of employees? Has the production of this plant increased or decreased since March, 1943? What course does the government in-

tend to take in order to ensure production of these articles which are so necessary in connection with our aircraft production?
I pass now to another matter dealt with by the minister, the production of wood fuel, and I intend to submit an example of what I consider gross inefficiency on the part of those in charge. The minister dealt with this matter on page 1702 of Hansard, when he said:
Wood fuel control was established to stimulate production, and to supervise the distribution of wood, in order that there might be no hardship during the present winter.
And again:
In addition to the production subsidy, transportation subsidies have also been paid, in order to facilitate the movement of wood to probable distressed areas. The wood fuel controller^ also initiated a number of special cutting projects, as a means of building up government-owned banks of wood fuel, which could be held in reserve and shipped to any areas where distress was imminent.
I ask the minister to explain this set-up. I know the circumstances under which wood fuel control was established. I am going to give one example and then I shall ask the minister to explain the whole position, giving the number of camps established, the results that flowed therefrom and the cost of producing the wood fuel in each area.
I deal now with the situation particularly at the head of the lakes. There, after the appointment of a controller, plans were proceeded with for taking out 75,000 cords of fuel wood. Directives were given to those who were to take out this wood, and ceiling prices were established. There was a ceiling price- at the lakes, a different ceiling price at Winnipeg, and further west still another ceiling price. The government, through the controller, directed these firms at the head of the lakes to get out fuel wood, the prices paid to the -operators being as follows: for poplar, $7.50; pine, $8.25; tamarack and birch, $10.50. Strangely enough, the Manitoba ceiling price for the same wood, including the one dollar subsidy, was $5.50 for poplar, $6.25 for pine and $7.25 for tamarack.
The freight rate on this wood to the city of Winnipeg was from sixteen to twenty-one cents per 100 pounds. This wood could not be used until it was reasonably dry. A cord of green poplar weighs 5,400 pounds and, when dry, about 2,500 pounds. A cord of birch weighs 5,000 to 6,000 pounds when green, and about half that when it is dried out.
Winnipeg had sufficient fuel. In the province of Manitoba fuel was available at a shipping rate of 4j to 7 cents per 100 pounds. But what happened a few weeks ago? An order came from the controller that wood

War Appropriation-Supplies
shall be taken from the head of the lakes production. So what did they do? They shipped the wood to Winnipeg. I have given the initial price of the wood. Take poplar, for hfttance. 'They did not wait to ship it until it was dry in order to save freight rates. The wood was not needed in Winnipeg and it could have been kept in a stock-pile at the head of the lakes until it could be used. The fuel dealers of Winnipeg informed the controller that there was no market there for the wood. But that did not matter. The wood had to be sold in Winnipeg. Poplar cost S7.50 a cord to produce, and they shipped it to Winnipeg and paid an $8 freight rate. It cost $15.50 a cord to produce and deliver in Winnipeg. That does not take into account administrative costs, and then the government sold it in Winnipeg at $5.15 a cord.


Clarence Decatur Howe: Does my hon. friend recall the day when a motion was made to adjourn the house to discuss a matter of great public emergency, when we were told that the people of the country would freeze for lack of fuel? May I tell him that this last winter no one in Canada went cold for lack of fuel. Does he think that just the usual means were required to overcome this great national emergency which was painted by his party, or is his party in the habit of moving to adjourn the house in a great national emergency when there is no emergency at all?


John George Diefenbaker: I do not criticize the minister for getting the wood out.


Clarence Decatur Howe: Thank God for that.


John George Diefenbaker: But I do not thank the Deity that this wood was shipped to Winnipeg, paying an SS freight rate, when it could have been stored at the head of the lakes until needed. That is why I criticize the government. If they had left the wood at the head of the lakes, all that it would have cost would have been $7.50 stored, until it was needed and was dry. Instead of so much moisture being hauled to Winnipeg, the wood could have been left at the head of the lakes until it was needed.


Clarence Decatur Howe: It seemed important to my hon. friend, when lie moved to adjourn the house, that there be enough wood to keep the people from freezing. A lot of the wood was left at the head of the lakes, but we shipped a fair amount to Winnipeg in case the weather turned cold. We are not judges of the weather; we cannot tell what the weather will be next month. Let him remember that, and let him tell me how much surplus fuel there is in Winnipeg to-day. He is the greatest second guesser in the house.


John George Diefenbaker: After all, when the minister speaks I listen to him, and he can answer me afterwards, as I do him. Just because the minister realizes that $800,000 or thereabouts was thrown away, naturally he becomes annoyed. He was warned about this, and his controller was warned that the wood was not needed in Winnipeg, that wood could have been obtained in Manitoba at a freight rate at 4| to 7 cents. But the order of the controller to the people of Winnipeg was: You have to take 12,500 cords from the head of the lakes, regardless of your wishes or your needs. I do not criticize the government or the minister for any efforts that were made to get out the wood. But the department had it stored at the head of the lakes, and it was not needed in Winnipeg at that time. The freight rate to Winnipeg would have been just exactly one-half if the wood had been left until dry in the stock-pile at the head of the lakes to meet emergencies. But for some reason best known to the controller, and acting against the advice of those he consulted with, against the advice he received from those with whom he came in contact in the trade, he went ahead as controllers sometimes do, regardless of the treasury of Canada, and in that one small item the people of Canada have lost a matter of from $600,000 to $900,000.


Clarence Decatur Howe: All right; that is a charge we will investigate and see whether $600,000 to $900,000 was lost in the Winnipeg situation. All the wood involved was not worth that much. My hon. friend is making a definite charge.


John George Diefenbaker: I am speaking of the controller.


Clarence Decatur Howe: The hon. member is just
speaking. He does not want to be taken seriously. I suggest a royal commission or a committee to inquire whether $600,000 to $900,000 was lost.


John George Diefenbaker: The minister, as
ever, when faced with facts seeks refuge in truculence.


Clarence Decatur Howe: When serious allegations are made, I ask that they be investigated. My hon. friend has made his statement and I expect him to go before a committee and prove it.


John George Diefenbaker: I am asking for
information, and I am asking as to the wood situation elsewhere in Canada, for I know that if the minister will give information with regard to the cost of getting out the wood in Saskatchewan it will reveal that the

War Appropriation-Supplies

cost was very high. I do not criticize that. But I do criticize this, that instead of the wood being left in a stock-pile, it was shipped into Winnipeg at a freight rate of $8-12,500 cords-wood that cost $7.50 to produce and an $8 freight rate-and the government sells it in Winnipeg at $5.15 a cord.


Mr. ROWE:: Less than the cost of production.


John George Diefenbaker: And I do not take into consideration the original cost. All this is because the controller decided not to take the advice of those "who told him of the conditions that existed.
Mr. HOW'E:	The controller himself was
a Winnipeg man incidentally, and knew the Winnipeg situation as well as anyone.


John George Diefenbaker: Yes, controllers
always know more than anyone else. He knew more than the entire trade, and that is what this parliament should object to.
I will deal with another matter, which possibly the minister will also explain, in connection with the production of timber. I am just running over these matters because at the moment I am asking for information. He deals with it and, as reported in Hansard, at page 1703, he sets out the circumstances connected with the requirements of Great Britain and elsewhere for timber.
Last October notice came to a forestry corps unit overseas that it was to go back to Canada. These men enlisted for overseas service or service anywhere, and they were ordered to come back to Canada to produce timber. I quote from a return, sessional paper 171A, brought down in answer to a question of the hon. member for Peterborough West. Here are the questions:
1.	Was the Canadian forestry corps dispatched for service in Great Britain? If so, for how long did it remain overseas?
The answer is "yes", and there is some further information.
2.	How many officers and how many men received orders during September and October, 1943, to return to Canada?
The answer was:
Forty-seven officers and 1,906 other ranks. . . .
Another question:
4. Were these men of the Canadian forestry corps interviewed at Debert by selective service officials? If so, to what purpose?


Clarence Decatur Howe: Mr. Chairman, I suggest that this has nothing to do with the estimates before us and nothing to do with my department.


Gordon Graydon: Is the minister going to rise continually on some point? It is not a point of order, as far as I can see.


Clarence Decatur Howe: I rise to a point of ordqj.


Gordon Graydon: The minister has risen and made a speech every two or three minutes while the hon. member for Lake Centre has been making his speech.


Clarence Decatur Howe: He is not making a speech; he is asking a question.


Gordon Graydon: He is making a speech, and he is making the kind of speech that the minister finds it necessary to interrupt.


The CHAIRMAN:: The minister has raised the point that the remarks made by the hon. member for Lake Centre have nothing to do with his department. I hope the committee will realize that it is impossible for the minister to answer such a question at the present time.


Gordon Graydon: The minister has not raised any point of order at all.


Clarence Decatur Howe: Yes.


Gordon Graydon: Well, he did not make any reference to a point of order. He rose out of the blue and made some statement about the hon. member for Lake Centre. If the subject has nothing to do with his estimate he has a perfect right to raise a point of order, but he cannot rise in his place every other moment and interrupt the hon. member while he is making a statement.


Clarence Decatur Howe: I believe any hon. member, according to the rules, has the right to make a point of order.


Gordon Graydon: But the minister did not do so.


Clarence Decatur Howe: The point I make is that I have nothing to do with the forestry corps, and nothing to do with selective service. This incident of the forestry corps has nothing to do with the Department of Munitions and Supply.


John George Diefenbaker: On the point of order, Mr. Chairman, the minister set out at page 1703 of Hansard the circumstances connected with timber and his encouragement of the production of timber in Canada. I am proceeding to show that a certain number of forestry men, some 2,000, were brought back from England-


Some hon. MEMBERS:: Order.


John George Diefenbaker: -in order to assist in timber production, and the cost of their passage was paid. Fifteen per cent found their

TFor Appropriation-Supplies
way into forestry; the rest either -went overseas or to some other units, or were not utilized by selective service. I am pointing that out as a wasteful example in connection with the encouragement of timber production in this country. To support my argument I have to refer to the best information I can get, which is a return that was brought down to this house.


Mr. GOLDING:: What department?


John George Diefenbaker: It says this:
9. How many of the Canadian forestry corps-


Lionel Chevrier: Mr. Chairman, on a point of order, the hon. gentleman is referring to the activities of the forestry corps. The minister has risen and said that he is not concerned with that branch nor has he had anything to do with it. My submission to you is that that part of the hon. gentleman's speech is out of order. I ask you to rule accordingly.


Joseph-Arthur Bradette: On the point of order, I state again that we must realize that we have before the committee a certain proposed resolution providing for a sum of money not exceeding $3,650 millions. The hon. member for Lake Centre is making some argument dealing with the production of lumber, which I believe can be discussed at the present time because it has been mentioned by the minister, and timber production comes under the present resolution.


Clarence Decatur Howe: Let me say this, that no forestry corps-*


Gordon Graydon: The Chairman has given his ruling.


William Earl Rowe: The point of order is decided. The minister is out of order.


Clarence Decatur Howe: Certainly not.


Joseph-Arthur Bradette: The minister has the floor and I wish to hear him.-


Clarence Decatur Howe: I say that no forestry corps was ever involved in any operation of the Department of Munitions and Supply.


Mr. ROSS (Souris):: Whom is the timber controller under?


Richard Burpee Hanson: The Chairman has ruled. On the resolution the hon. member can talk about anything.


Joseph-Arthur Bradette: The minister had the right to rise and explain, as he has done.


Richard Burpee Hanson: Not after the ruling.


Gordon Graydon: He can explain himself, of course; but this is after the Chairman has ruled.


Lionel Chevrier: The Chairman is on his feet; the hon. gentleman should sit down.


Joseph-Arthur Bradette: Of course we must realize that I am in the hands of the committee, but we are bound by the rules of discussion of the committee of the house. I was taken to task a day or two ago because I allowed the hon. member for Davenport to deal with the subject of tar sands, because the committee realized that it was absolutely out of order. I think the hon. member for Lake Centre should be allowed to proceed, keeping within the limits of the discussion at the present time.


An hon. MEMBER:: Anything on the
resolution.


Lionel Chevrier: Anything on anything.


John George Diefenbaker: Thank you, Mr. Chairman.
This just illustrates the lack of cooperation between the departments, because in the orders which were given to these men to come back to Canada it is stated:
You have returned to Canada to assist in increasing production and export to the United Kingdom of vitally needed timber.
And timber control is under the Department of Munitions and Supply. For that reason I am dealing with this matter. The minister dealt with it, and spoke in such glowing terms of the success of the production of timber that I am referring to an incident which occurred in the last three or four months and which does not do credit to the degree of cooperation that one expects between government departments. I pointed out that nearly 2,000 officers and men were brought back from overseas. Of these men there were, in category "A" 37 officers and 1,206 other ranks. These men arrived in this country in November for the purpose of increasing our timber supply, and this is how the authorities went about it. The men were interviewed by Colonel Ferguson and a representative of the timber control board, which is under the control of the minister, as well as a representative of the Department of Labour. They were advised that they were to be put to work on forestry duty. They stayed where they were for several days. Then some of them were moved out to the far west, and in the final event only fifteen per cent or thereabouts of the 2,000 men brought back to Canada found their way into forestry and the production of timber.


Clarence Decatur Howe: Where did the rest of them go?
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John George Diefenbaker: Some of them went back overseas because they did not want to be back in this country under the orders of the Department of Labour, or the timber controller either. It is a very serious matter that in time of war 2,000 men, approximately 1,300 of whom are categoiy "A," should be brought back to assist in timber production and not be so employed. Some of the officers were placed on the reserve of officers and some of the men went overseas in other units.
These are matters as to which I want an explanation from the minister.


Clarence Decatur Howe: Will my hon. friend explain to me what this has to do with the production of lumber in Canada?


Richard Burpee Hanson: Everything to do with it.


John George Diefenbaker: That is what we are trying to find out, why the department should have these men brought back and their services not utilized when it was so necessary to secure an increase in forestry production in this country. Therefore, on three matters, regarding the three controllers under the minister's department-


Lionel Chevrier: May I ask what the hon. gentleman was reading from a moment ago?


John George Diefenbaker: I was reading from my notes.


Mr. MACKENZIE (Vancouver Centre):: Pretty extensive, aren't they?	.


John George Diefenbaker: Here are three controllers under the minister. First, the controller-


Lionel Chevrier: On a point of order, the hon. gentleman, in making the statement which he did a while ago, was referring to a idefoftte which took place in this house during fthis session.


Richard Burpee Hanson: What
debate?


Lionel Chevrier: A debate on the estimates of the Minister of National Defence.


Richard Burpee Hanson: It is the same debate we are on now.


Lionel Chevrier: I refer you, Mr. Chairman, to page 95 of Beauchesne's Parliamentary Rules and Forms, citation 293, from which it appears that it is not permitted to refer to any debate of the same session on any question not then under discussion.
Mr/ HANSON (York-Sunbury): It is the same debate now.
I - (Mr, Diefenbaker.]


Lionel Chevrier: Will the hon, member
allow me to complete my statement? My submission to you, Mr. Chairman, is that the statement and the discussion so far are out of order.


Gordon Graydon: On the point of order,
the parliamentary assistant, of . course, has risen perhaps a little too hastily, because had he thought twice he would realize that the debate to which he refers is the same debate we are on now, namely, the war appropriation resolution debate. It is unfortunate that he rose at this time because I am afraid he himself is out of order in rising on a point of order.


William Earl Rowe: He just stuck his chin out a little.


Ian Alistair Mackenzie: Not much cooperation from over there.


Richard Burpee Hanson: What are
you talking about cooperation for?


John George Diefenbaker: On the point of
order, this is the same debate, the consideration of the war appropriation; and while we agreed, in the interests of convenience, as the hon. member for Weyburn (Mr. Douglas), said the other evening, to a division of the subject matter, nevertheless it is the same debate.


Ian Alistair Mackenzie: An agreement whidh is not being observed.


Richard Burpee Hanson: What are
you talking about?


Joseph-Arthur Bradette: The committee must
realize that we are dealing with matters pertaining to the war and war expenditures which parliament did not have to face prior to the war. At the present time we are dealing with the war appropriation bill under which these items come.


Gordon Graydon: We are not dealing with the bill, if I may say so.


Some hon. MEMBERS:: Sit down.


Joseph-Arthur Bradette: It is a part of the bill; it comes under the war appropriation resolution. It is the resolution preceding the bill.


Gordon Graydon: It is the resolution but
not the bill.


Joseph-Arthur Bradette: The discussion must of necessity be generalized in a way, although it was understood-I am in the hands of the committee and have no power to dictate to it __that members of the committee, in their discussion, would keep very closely to the items and department before the chair. So far this dine of conduct or understanding has been

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pretty well followed, and it should be fairly easy for the members of the committee to follow this precedent so as to keep within the limits of the item as much as possible. I must also make this statement. You must realize how hard it is for the chair not to rule in favour of the minister-


Some hon. MEMBERS:: Oh, oh.


Joseph-Arthur Bradette: Let me finish my statement, please. I hope the hon. member for York-Sunbury (Mr. Hanson) will listen to me. My situation is difficult to the extent that when the minister sa3rs it is not possible to answer certain questions that have to be answered by another minister I must rule those discussions or questions are out of order under such conditions, and the answers can be given, when the proper items or department come before the committee.


John George Diefenbaker: Is it in order to go on, Mr. Chairman? It is rather difficult to know just where I was. I was dealing with the controls, and I was asking the minister-


Clarence Decatur Howe: You were telling the minister.


John George Diefenbaker: -about the success of the controller appointed to improve conditions at Sutton-Horsley Company Limited at Leaside; second, about the success attained by the controller in charge of firewood; and third, the controller in charge of lumber production. I would point out in connection with the latter that in the instructions given to these men after they came back from overseas, brought back for the purpose of assisting in improving timber production, paragraph 6 reads:
In the event that you do not apply for forestry leave you will remain in a military camp or depot until detailed for duty in the woods on army pay and allowances or until you are otherwise disposed of. It is not possible at the present time to give you much information as to employment on duty in woods operations as details of this have not yet been worked out fully with other government departments concerned. It may be noted that it is very unlikely that it will be possible to employ you with units of the Canadian forestry corps. It is more likely that you will be sent as one of a group to an existing civilian operation.
Bringing these men back from overseas and not knowing what to do with them when brought back for the purposes of timber production is a very serious matter and deserves to be explained by the minister and the other departments concerned.	i


Mr. NOSEWORTHY:: The minister's statement, in which he reviewed his department, and his reply to the member for Rosetown-Biggar (Mr. Coldwell) earlier in the day, indicate, I think, certain things:	First of all, the
extent to which we were industrially unpre-pared'for this war, as we were unprepared in the military sense; second, the extent to which the minister, as he claimed, was forced to take the enterprises that were at hand, the organizations that were at hand, in order to get the job done. It appears quite evident that he was pretty much at the mercy of enterprise as it was organized in the country. I think his speech also indicates the extent to which private industry in this country had failed to meet the demands of war and how necessary it became for the government to come to the assistance of private industry in that endeavour.
We learn that the government had to come to the assistance of enterprise to the extent now of somewhere about 8900,000,000 of capital investment; that the planning of production that was needed had to be done by the government, and that priorities and controls were established by the government and crown companies were set up. Numerous private enterprises which had failed to deliver the goods were of necessity placed under government ownership in order to do the greatest production job that this country has ever undertaken. I wish to say at this point that those hon. gentlemen in this chamber who place their faith so unequivocally in private enterprise, who still believe that private enterprise is responsible for the production of war essentials and who want to depend so exclusively on private enterprise for our post-war reconstruction, would do well to consider the part that the government has been called upon to play in our war effort .
There are those in this committee who have been quite loud in their protestations about our lack of military preparedness when the war began, and who have been loud in adopting the attitude of "I told you so," and accusing others of being responsible for that lack of preparation. These same hon. gentlemen have been silent regarding the industrial handicaps that we suffered and slow to observe that many of those handicaps were deliberately imposed upon the country by privately owned monopolies and cartels. Only now are we beginning to learn the extent to which Germany had succeeded in the pre-war days in her twofold policy of arming herself and disarming the democracies. Germany's war preparation was just as effective in the field of science and industry as it was in the field of military preparation. Through her international cartels and agreements, her monopoly and restrictions on the use of patents, she was able to restrict the production of many essentials of the democracies to a point that required many years to overtake. Only by
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an examination of our situation and its causes at the outbreak of the war, the hamstringing of our war effort, can we plan for our future security or learn how to avoid world war number three.
Almost every shortage that has impeded our war effort can be attributed to a cartel. When men died of malaria in Bataan it was for lack of quinine made unavailable because of the cartel which administered the affairs of the producers of that product.
AVhen we tried to expand our factories and needed tools we were hamstrung by agreements which had been made between Carboloy Incorporated and Krupps. When we needed cobalt for its hardening qualities of steel in order to make our machine tools we found the Canadian field comparatively undeveloped because of international agreements and cartels. When scientific instruments were scarce and optical instruments were not to be found, and civilians were asked to volunteer their binoculars and high-powered cameras, it was because of agreements signed in 1921 for a term of twenty-one years between Bausch and Lomb of the United States and the Zeiss interests of Germany. When we were desperately in need of tin we found a shortage on account of similar tactics by the British-controlled cartel, the international tin committee. Just how far these huge corporations, enjoying the protection and freedom of our institutions and the legal protection which they enjoy under our patent laws, will be permitted to continue to exercise treaty-making powers in our essential commodities and strategic materials without supervision by the government and responsibility to governmental authority, will be one of the principal questions that we shall have to decide in all our post-war planning.
This afternoon the minister denied any association of his department with Canadian Industries Limited, a member, as the leader of this group has already shown, of an international cartel. I think in making his statement the minister must have had in mind his department's dealing with the matter of explosives; for I cannot think that this company which operates fifteen important divisions and on its own account supplies essential material for forty-five distinct war uses, has had no dealings with the government. I cannot think that company has had no dealings with the government through the minister's department.
I wish to deal with the question of the plant at Nobel, but before doing so I should like to give a brief resume of some of the activities of the parent company of Defence Industries Limited. Canadian Industries Limited, the

company that is the sole owner of Defence Industries Limited. Canadian Industries Limited, as was pointed out this afternoon, is in its turn almost completely owned by du Pont and Imperial Chemical Industries, the first of the United States, and the second of Great Britain. This company was organized first in 1910 as Canadian Explosives Limited. It was organized by du Pont and Imperial Chemical Industries for the purpose of buying controlling interests in five or six small Canadian companies in which they were interested, five or six companies at that time engaged in the production of explosives. The company flourished during the first great war. The minister went to great pains to show that no great profits were made or that no one has yet shown that great profits, or profiteering, as he called it, has been shown by those engaged in the explosives industry during this war. I think we can say for his benefit that so far there has been no evidence of any profiteering on the same scale as that which took place during the last great war. This particular company, Canadian Industries Limited, flourished during the last war. In 1917 it paid on its invested capital dividends of 256 per cent. In 1918 its stockholders received a dividend of 56 per cent, plus 100 per cent stock dividend. In 1920 another 50 per cent stock dividend was paid to its shareholders. Probably not until somebody is capable of bringing to the light of day the hidden costs and the real profits that will be made in this war shall we know really to what extent profiteering has been going on.
In 1927 this company changed its name to Canadian Industries Limited. Shareholders were given six shares in the new company for each one in the old. So that when we estimate the profits which this company has made in this war, these profits must be multiplied by eighteen, if you are to relate those profits to the original capital investment; because the holders of the original stocks now hold eighteen shares for every one of their original holdings. Since the beginning of this war the net profits per share on the common stock of this company have ranged from S7.50 in 1919 down to $5.25 a share in 1943. This is quite a different picture from that of 1917, 1918 and 1919.
Already the statement' has been made that this particular company, like other cartels, is above the regulations and laws of the country in which it operates, and that this particular company, through its agreement with du Pont and its other parent company, has restricted again and again both imports into and exports out of this country.
I have quite a few examples, and shall mention again one or two already mentioned. In

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1928 Canadian Industries Limited attempted to export a new waterproof finish for shot shells to the United States. Du Pont, one of the parent companies, prevented this, and later took the patents of the new process for itself. In 1929 Imperial Chemicals and du Pont prohibited Canadian Industries Limited from exporting to the West Indies. At that time the Canadian government was subsidizing the steamship companies for transportation to the West Indies, and was anxious to increase our export.
There is a letter in existence from an officer of Canadian Industries Limited, written in 1939, in which he said he felt that the position of Canadian Industries Limited with its government would be strengthened if his company were free to quote on certain products in the West Indies, while at the same time protecting Imperial Chemical's prices, since the refusal to quote had led to complaints to	the
government.
Again in 1930 du Pont prevented this Canadian, or so-called Canadian Company, from selling finishes of the duco type for shipment to South America. In 1932 and 1934 du Pont prevented this Canadian company from exporting a product known as pontan, a coated textile product, because it would conflict with the parent company's product in Great Britain.
The story regarding imports is similar. In 1928 du Pont and Imperial Chemicals caused Canadian Industries Limited to enter into a contract with the Atlas Powder Company, and this is one of the reasons why, when war came, the explosives industry in this country was a monopoly in the hands of Canadian Industries Limited. Another United States company which had sought to export its products to this country was prevented from doing so by a contract under which it agreed not to export explosives to Canada, or to participate in any such business in Canada, leaving Canadian Industries Limited a clear field.
Prior to 1936 du Pont, Imperial Chemical Industries and Canadian Industries Limited, in order to eliminate competition between themselves and the Shawinigan Chemical Company entered into a contract with the Shawinigan company which provided that Shawinigan would restrict its activities in the chemical field to products made from acetylene, and that Canadian Industries Limited would refrain from manufacturing such products. Then, in 1936 a similar arrangement was made with the International Paper Company, which prevented the latter from entering the manufacturing of chemical products, and prevented Canadian Industries Limited from entering pulp and paper production.
In 1936 a similar arrangement was made with Courtaulds Limited whereby Canadian Industries Limited agreed to refrain from manufacturing rayons and Courtaulds from manufacturing chemical products in Canada. Similarly in 1939 Canadian Industries Limited and the Sauffer Chemical Company of California organized the Cornwall Chemical Company, to be the sole manufacturer of carbon disulphide in Canada, so that all competition in this commodity in Canada could be eliminated. I quote these as examples of monopoly and cartel control, in restricting both import and export trades into and out of this country respectively.


Mr. FULFORD:: On a point of order, is there not a rule in committee stating that hon. members are not allowed to read their
speeches?


Joseph William Noseworthy: I am referring to my notes, as numerous others have done.
The hon. member for Rosetown-Biggar this afternoon called attention to an instance where a board of directors of a United States company by resolution prevented Canadian Industries Limited, a major Canadian company, from engaging in export trade. That agreement actually prevented Canadian Industries Limited or any of its subsidiaries from exporting explosives to Great Britain or to any country in which the British Imperial Chemicals operated. It was only by special arrangement, and by the special permission of these parent companies, that Canadian Industries Limited was able or permitted to set up its subsidiary companies, and to export the product of its factories to Great Britain and to the other allied nations during the war.
I wish to read from a letter written by the president of the British company to the president of the United States du Pont company dated May 29, 1933, which indicates the extent to which these international monopolies interfere with the policies of government. This letter states:
With a large organization such as we have I find it a good thing to issue warnings from time to time-one went out at the time of the Ottawa conference-so that everything possible is done to ensure that no prospective political or legislative action on the part of governments is permitted to influence relations between du Pont and I.C.I.
Du Pont replied June 17, 1933, as follows:
If any legislation or any international agreements are brought about which affect these I.C.I. du Pont relations, I am sure we will be able to adjust ourselves so as to get the continued benefit of our agreements.
The hon. member for Rosetown-Biggar referred to the terms of a contract entered into in 1936, and I should also like to refer to
17S4
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certain of tho-se terms. First, the contract provided for the exploitation in Canada and Newfoundland of the products of Imperial Chemical Industries and du Pont through Canadian Industries Limited. That is, they eliminated any possible competition between the two parent companies. AH the products of those companies not manufactured by Canadian Industries Limited were to be sold to them' at prices fixed by the United States and British companies.
Second, du Pont and Imperial Chemical Industries agreed to grant C.I.L. exclusive licences under respective patents, inventions and processes which they owned or might acquire for the territories of Canada and Newfoundland. Canada agreed to grant du Pont and I.C.L. similar licences for use in the rest of the world outside Canada and Newfoundland.
Canadian Industries Limited was not to export from Canada and Newfoundland and du Pont and I.C.L. were not to export to Canada or Newfoundland any product manufactured by C.I.L. This is important because according to the agreements and the correspondence it is quite evident that the parent companies of Canadian Industries Limited never intended that Canadian Industries Limited or any of its subsidiaries should export from Canada any product made by either du Pont or Imperial Chemical Industries, and that only in the emergency of war. or in the event of an emergency arising which the British and United States companies were not able to meet, would they agree to permit the Canadian company to enter that field.
I have a question to raise, but I do not intend to do so in the way of criticism. I have visited a great number of factories and talked with a great many managers and workers; I have heard a great deal of criticism about production-I do not think any department spending such sums of public money as the minister's can expect to escape criticism and scrutiny-but I have not yet heard anyone criticize the minister on the ground that he had not done his job. I wish to say for his benefit that he took the conditions that prevailed, whether they were monopolistic, cartels or what they were, and he delivered the goods.
However, that should not blind us to the extent that we do not feel free to criticize the details of that administration. I want to admit publicly that I have no criticism of the extent to which the minister maintained production in this country during the dark days of the war, but I do think many of these monopolies were able to extract from the minister and his department agreements and

conditions which he could not help granting because of the position which these concerns held in this country.
I wish to refer for a moment to the C.I.L. plant at Nobel. The minister told us a few days ago that this plant had been closed down for the time being because the bombed out plants in Great Britain were again in production. To what extent did that pre-war agreement between the parent companies of C.I.L. affect the closing of the plant at Nobel? To what extent was it true that just as soon as' the English and the United States parent companies were able to meet the emergency, the agreement preventing C.I.L. from exporting came into effect? The minister probably knows the position better than I do.


Clarence Decatur Howe: No agreement had anything to do with the situation at Nobel. The Nobel plant belongs to the Dominion of Canada, and the production was used to meet the requirements of the Dominion of Canada. The plant operated at full capacity as long as Canadian requirements called for that production. The falling off of requirements here, in the United States, and in England has caused the closing down of plants in all three countries.


Joseph William Noseworthy: I thank the minister for his assurance. Does the minister know whether plants of a size comparable with that of the one at Nobel and belonging to the du Pont interests have been closed in the United States?


Clarence Decatur Howe: I do not think the du Ponts own any large explosive plants there, but I can assure my hon. friend that at least two of the largest explosive plants in the United States have been closed for the same reasons that closed this one, namely overproduction.


Joseph William Noseworthy: 
Clarence Decatur Howe: That would not interfere with a plant making plastics. The clause is restrictive as to making explosives, but as I said in making my statement, the plant can be used for other purposes than making explosives.


Joseph William Noseworthy: 
Clarence Decatur Howe: Oh, no, there are dozens of firms making plastics using a great number of raw products. My guess would be that C.I.L. is one firm that does not make plastics, although I may be wrong.


Mr. NOSE WORTHY:: Plastics is listed in the company's own literature as one of the products of its factories. Here is another clause in the agreement:
Defence Industries Limited is to make an offer if it desires to purchase the plant or any part thereof. If an agreement is not reached in sixty days, the government shall have a reasonable period to dispose of the plant to any other party on condition that it must be removed within ninety days from sale. If it is not sold to other party, the government shall remove the plant and level the site, or surrender ownership to the company without payment. The land is to be resold to the company for $1.
I find that restrictive clause in some of the contracts or agreements with Defence Industries Limited. It looks very much to me as though this company, because of its strategic position in this particular field, was able to extract from the government terms and conditions in the agreement which in effect will leave the government very little choice, when the war ends, except to demolish or remove those plants. That, of course, is a convenient arrangement for C.I.L. It leaves them entirely free to expand their peace-time production, and they have expanded enormously during the war. They can scrap the D.I.L. plants; their peace-time plants remain intact. They have no commitments; they have no plant; they have no expansions such as have been made for war purposes to worry about when the war is over, and of course they have no funded debt.
As I stated earlier, one of the great problems of any government that seeks to achieve maximum production when the war is over, or to use the productive enterprises of this country, will be the existence of these monopoly enterprises in this country, many of them with international interlocking directorates and cartel arrangements; and these monopolies will be emerging from this war-* let us make no mistake about it-much more strongly entrenched than they were at the beginning of the war. The ineffectiveness of legislation or legislative c>
ntrol has been demonstrated, I think, in the United States. We find that notwithstanding our Combines Investigation Act, notwithstanding the glaring revelations before our price spreads committee some years ago, notwithstanding certain prosecutions which have taken place under the Combines Investigation Act, no effective control has yet been applied to these concerns. Hon. gentlemen may disagree with our plans or our policies for dealing with these concerns; but let me say that the future of any political body in this house-any political party, whether it be Liberal, Conservative, Cooperative Commonwealth Federation, or anything else- is not of paramount concern to this country. The future of Canada is the thing that is of paramount concern to this country, and whatever party seeks to govern this country when the war is over must face this question of Cartels and cartel agreements, and must find some way of making these enterprises serve the interests of the common people.


Richard Burpee Hanson: Mr. Chairman, I have taken very little time- of the committee since the army estimates were before us. I listened with the greatest care to the minister's statement of two days ago, and since then have had an opportunity of

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reading some of the documents which were then tabled and have now been circulated in pamphlet form among the membership of the house. Among these pamphlets is the printed report of the minister on "Government-Financed Expansion of Industrial Capacity in Canada as at December 31, 1943". It is based on and forms part of the minister's statement to the house on the 21st of this month and is intended for the consideration of this committee.
I was intrigued in looking over this booklet. I was astounded to observe that of a grand total of 8714,000,000 invested by this department in fixed assets relating to war production facilities, general munitions, aircraft, shipping and other investments and fixed assets, less than a fraction of one per cent has been made in communities outside the central provinces. That is the position to which I desire hon. gentlemen to give their attention for a few minutes to-night. We have, according to the summary on page 2 of this pamphlet, a statement that for general munitions the commitment was $626,000,000-I am leaving out the odd thousands-and that the expenditure as of December 31, 1943, was $535 millions; that on aircraft production, including manufacture, overhaul and repair, and miscellaneous, the total commitment was $88 millions and the expenditures $70 millions; on shipping, total commitments of $40,500,000 and expenditures of $32,950,000; or a total for war production facilities of $639 millions of the taxpayers' money spent, as against a commitment of $755 millions which was permissible to the department.
If hon. members will follow along at the foot of page 2 of this pamphlet they will observe that the, total of "other investments", under the expenditures heading is $75 millions, with commitments of $101 millions.
I ask hon. gentlemen to turn now to page 3 of this pamphlet, headed "Investment in war production facilities: chemicals, explosives and pyrotechnics", and observe that there is not a dollar of expenditure or of commitment for a single plant in the maritime provinces or the western provinces, so far as I have been able to observe.


Clarence Decatur Howe: Oh, yes.


Richard Burpee Hanson: All right, now; just point out where they are.


Clarence Decatur Howe: Alberta, Manitoba, British Columbia.


Richard Burpee Hanson: Well, I have gone over these, and I cannot recognize them by name as to geography, but I suggest to the minister that the great bulk of them are in central Canada and in the prov-

ince of Ontario. Here you have part A, crown plants, government operated, Department of National Defence, $1,764,000 expended, and of course we do not know where that expenditure has taken place. I suppose it must be in some of the government arsenals, and certainly none of these is located outside the province of Quebec or the province of Ontario; at least none was in peace time. Under "crown companies, government operated", we have "nil". Then, "crown plants, operated by private corporation", which show a total expenditure net of $141 millions, and not a cent expended in the maritime provinces.


Clarence Decatur Howe: Oh, what are you talking about?


Richard Burpee Hanson: Well, all right. Does the minister deny that not a cent has been expended there? I am not going over the list seriatim. I said that not one cent has been expended in the maritime provinces in the category headed "C. crown plants, operated by private corporations." You have Alberta Nitrogen Products Limited; that was a plant erected in the province of Alberta. Then, Canada Cement Company, Canada Car Munitions Limited, again Canada Car Munitions Limited, Consolidated Mining and Smelting Company Limited, and then a long list of allocations to Defence Industries Limited. I could go right down the line and state with truthfulness that there is not one company on page 3 which operates in the maritime provinces. I challenge the minister to name them. If he will look at the page he will 1 agree with me.


Clarence Decatur Howe: Yes, that is right.


Richard Burpee Hanson: I do not want to overstate the position.


Clarence Decatur Howe: We tried to induce Fraser, of which my hon. friend is a director, to build, but they would not do so.


Richard Burpee Hanson: No, and I will tell the minister why they would not do so; I will be perfectly honest about it. The directors of that company were exceedingly anxious to build that plant; and a company of which we have heard a good deal to-night came along and made such an attractive offer to Fraser's that it would have been foolish to have built the plant.


Clarence Decatur Howe: In other words. Fraser's
wante.d to help the war, but they thought it would be cheaper not to.


Richard Burpee Hanson: Fraser's
have helped with the war. Believe me, they have helped. Their bits and pieces' record is the best of any plant in Canada-the Restigouche company.

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Clarence Decatur Howe: But my hon. friend is talking about chemical plants in the maritime provinces.


Richard Burpee Hanson: I do not want my friend to throw any mud at the Fraser company.


Clarence Decatur Howe: I am not throwing mud at the company; far from it.


Richard Burpee Hanson: They have done a magnificent job, within their capacity.


Clarence Decatur Howe: I know it.


Richard Burpee Hanson: And I
will tell you this: they have Contributed millions in taxation to this war effort. .


Clarence Decatur Howe: But I am explaining why
there was not a chemical plant in the maritime provinces.


Richard Burpee Hanson: Well, it was a chlorine plant which would have cost a few thousand dollars and given very little employment. Much as I desired to have that plant built, mine was only one voice on a board of ten directors. So that the minister cannot get very much comfort out of that.
Mr. HOW'E: I was hoping to comfort my hon. friend.


Richard Burpee Hanson: But the
main part of my charge against the location of these war plants is-and I do not think the minister will dispute it-that there has not been a fair geographical division in their location. I am going through this pamphlet, not seriatim-I promise the committee that- but page by page, and I will try to analyse it.
Page 4 covers crown plants, raw materials and other basic. With the exception of what may have been allocated under "D. privately owned and operated plants", Dominion Steel and Coal Corporation, amounting to a little over two and one-half million dollars, on that page there is not a single cent for any plant in the maritime provinces.


Clarence Decatur Howe: What about Dosco? That is quite a sum.


Richard Burpee Hanson: I said, two and one-half million dollars. I gave the minister credit for that.


Clarence Decatur Howe: It is much more than that.


Richard Burpee Hanson: That is
under this one item, "raw materials and other basic"; it is divided up under the headings of materials and plants and that sort of thing. I am taking the table as I find it.


Clarence Decatur Howe: Yes, but there is a sum of $2,980,000 plus $95,000.
100-113*


Richard Burpee Hanson: The minister can explain that when he comes to it. I cannot see the item he is talking about.


Clarence Decatur Howe: That is under "D".


Richard Burpee Hanson: Dominion Steel and Coal Corporation; I said that.


Clarence Decatur Howe: You said, two and one-half million dollars.


Richard Burpee Hanson: I said
$2,527,000, and I suppose that was expended on the plate mill at Sydney which they put into condition in order to forward the government's shipbuilding programme-and very properly; I am not criticizing the expenditure. What I am trying to point out is that so little was done there compared with other parts of Canada. That is what our people are talking about and thinking about, and that is what they will be voting about some day.


Clarence Decatur Howe: Well, let us go on through.


Richard Burpee Hanson: All right, I will. But the minister might allow me to proceed; one at a time is enough. If you turn to page 5, table 1A-3, army and navy guns. The first one is "crown companies, government operated-National Railways Munitions Limited," $5,000,000 odd; none of that in the maritime provinces; "C. crown plants, operated by private corporations"; the only one I see there out of a total of $61 millions actually expended is the sum of $636,685 for Trenton Steel Works Limited, which is a subsidiary of Dominion Iron and Steel.
Then if you will turn to "D. privately owned and operated plants", the Eastern Car Company Limited got $2,022,000 out of a grand net- total of $83,462,000, or about three per cent of the total under this heading.


Clarence Decatur Howe: Oh, well now-


Richard Burpee Hanson: Perhaps
my mathematics is a little out. It may be four per cent.


Clarence Decatur Howe: The total of D is $16,000,000.


Richard Burpee Hanson: Yes, but
it is the whole table I am talking about. For the whole table that I am referring to, which covers a net expenditure of $83,462,508, the actual total expenditure in the maritimes was $2,022,671. That is the only one in the whole page. Coming then to machine guns and small arms-


Clarence Decatur Howe: None.


Richard Burpee Hanson: None, not a dollar. While we are on that page I am going to ask the minister to be good enough to explain the position of the investment in, the
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Ottawa Car and Aircraft Company Limited. Once upon a time I undertook to investigate something in connection with that expenditure because my attention was called to it in the luditor general's report. I think that if the whole story were told it would be rather a sad one, not that people did not mean well. I am not attributing any particular fault to anybody except that perhaps the company was too ambitious. But the company could not perform, and I want to say this. It is my understanding that the department did everything it could within its power to help the company -to perform. What the net result has been I do not know, but I understood that the requisition was withdrawn, and I suppose somebody is going to take a heavy loss there. I am not suggesting to the committee or to the minister that there was any fault or negligence on the part of the department. I wish to make that quite clear. And I am not making charges against anybody; but the operation, I am sure, fell down. Somebody took a substantial loss.


Clarence Decatur Howe: I might explain that it was
a complicated naval job-


Richard Burpee Hanson: I know it was.


Clarence Decatur Howe: -and there was great difficulty in getting into production. Shortly after it was in production we were notified that the gun was now regarded as obsolete and no longer required. I know it looks bad.


Richard Burpee Hanson: I accept
the minister's statement 100 per cent, but there was a loss.
That brings me to the consideration of another matter. The minister made a great statement the other day with regard to production of which this country ought to be proud. I am going to say that, and I have no doubt that Canada has done a good job in production. But the minister never told us about the failures that his department met with, and he must have had a good many headaches.


Clarence Decatur Howe: Very few.


Richard Burpee Hanson: I beg your pardon.


Clarence Decatur Howe: I said, very few failures. I
think the opposition touched on them all.


Richard Burpee Hanson: I would
just like to remark, in reply to that, that I do not believe the opposition has scratched the surface of the failures and extravagances. We have not scratched the surface of the failures and extravagances because we cannot get the information. It is denied to us on the ground that it is not in the public interest.
(Mr. R. B. Hanson.]


An hon. MEMBER:: You scratched enough for all you found.


Richard Burpee Hanson: I have not scratched much, my hon. friend, and if you will just keep quiet I will proceed with my remarks.


Ian Alistair Mackenzie: Go on scratching.


Richard Burpee Hanson: I am
speaking for the part of the country I come from, and if the hon. gentleman comes to the maritime provinces he will find out what the people are thinking and saying there. If the minister comes down he will find out, too, about the allocation of these plants. I say that, with respect to the table to which I have so far referred, there is not one-tenth of one per cent of industry allocated to the maritime provinces.
I come now to table 1A-5 on page 7. The net total expenditure in that table is $75,-
854,000,	and there has not been a dollar spent in the maritime provinces. Why could not some of these plants have been built in those provinces, so close to the seaboard, where the products could have been shipped overseas, and from which most of it was shipped overseas. Where was the Minister of Finance (Mr. Ilsley)? Where was the Minister of National Defence (Mr. Ralston) ? Where was the Minister for Naval Services (Mr. Macdonald)? Where was the Minister of Transport (Mr. Michaud)? Are there any others of them from the maritime provinces? Why were they not doing something to allocate some of these plants to the maritime provinces? They were asleep at the switch; that is the reason why we did not get anything- and the people have memories. Make no mistake about that. The first head that shows itself in the maritime provinces is going to be shot off.


Ian Alistair Mackenzie: The first Tory head.


Richard Burpee Hanson: No; it will be a Liberal head in New Brunswick, m June. Just watch us go, and watch them go too.
Coming back to these plants, may I say that there was no reason in the world why we could not have made small arms ammunition in the maritime provinces just as well as it is made in central Canada, just as well as in the privately owned and operated plants that got so much capital assistance. I come now to table 1A-6, heavy ammunition. There is not a dollar there.


Clarence Decatur Howe: What about T. S. Simms and Company?

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Richard Burpee Hanson: I am coming to that. I have it all marked here. I am glad the minister refers to that, because in the net total expenditure under this table, heavy ammunition, amounting to 836,881,700, T. S. Simms and Company got 896,972.


Clarence Decatur Howe: What about Trenton Steel?


Richard Burpee Hanson: I am coming to that, because there was a little there. There is a little plant in my own community, making certain kinds of practice shells, which got 850,001.


An hon. MEMBER:: Made a good job of it?


Richard Burpee Hanson: I think they did. I know we had hard enough work to get the plant started. It took us six months to beg the department to give us a little work. I went with the owners myself; I will say this, that they have kept that plant going pretty well, and we are grateful for what they did. It is a small plant making practice shells and things like that.


Clarence Decatur Howe: There are engineering works.


Richard Burpee Hanson: Wait a minute. The minister should not anticipate me because I am going to give him plenty before I am through. On page 8 will be found two plants in New Brunswick making shells. Creighton and Smith Motors Limited got $50,001, and the McLennan Foundry and Machine Works at Campbelltown got $203,694. May I tell the minister that the proprietors of the McLennan Foundry and Machine Works made thousands upon thousands of shells in the last war, and the Smith Foundry Company, predecessors of Smith Motors, also made thousands upon thousands of shells at that time and had an extremely fine record, and were only too anxious to go into the business again. There are two in New Brunswick.


Joseph William Noseworthy: They must have been Conservatives.


Richard Burpee Hanson: It does not matter what they were. It is the country I am thinking about. The hon. member for York South closed his speech a little while ago on a very high and mighty plane. He was going to talk about Canada. The fate of political parties did not mean anything.
Then I come to page 9, Robb Engineering Works Limited of Amherst. They did pretty well. They have had an enviable record in days gone by. It is one of those plants that was bought up by the big corporations in central Canada and closed down. That is how we have suffered in the maritimes there in days
gone by. Then there was Simms. I have already referred to them. Mr. Simms got the magnificent sum of 896,972 out of a total of $36,881,700. Let us go on. I turn to page 10, table 1A-7.


Clarence Decatur Howe: On page 9 you will find the Trenton Steel Works. They are down there, too.


Mr. HANSON (York-Sunbuiy):: Yes. I stand corrected. I am obliged to the minister for the correction. They received $746,000. The whole thing is nothing but chicken feed; when you add it all together it hardly makes chicken feed.


Ian Alistair Mackenzie: That was carefully marked,


Richard Burpee Hanson: I did it
rather hurriedly, I will say that. But, as a matter of fact, what I am contending is true, that we have not had anything in relation to our strategic position as part of this dominion qua the other side, where all the stuff had to be shipped and where large savings in transportation facilities could have been made. Chicken feed is right.
Then, let us go to the table on mechanical transport. Well, we did not have any factories equipped for mechanical transport, and we could hardly expect to get any of the $10,000, 000 that were expended under that table. I am not making any particular complaint about that. Then I come along to the table on tanks and armoured vehicles. This was all new work and I assume that it required big plants and a lot of expense, but we did not get any of that. No crown plants were built. No crown companies were operated. No crown plants were operated by the government, but there were crown plants operated by private enterprise and I suggest that we might have got a share of that. Then there were privately owned and operated plants. The total expenditure under that heading was $9,444,000, but nothing was spent in the maritime provinces.
I come now to signals, communications and instruments on page 12, table 1A-9. Total expenditure under that heading was $12,569,900 and not a cent spent in the maritimes. The bulk of that, of course, was Research Enterprises Limited, and, that had to be located near Ottawa somewhere. It would be unthinkable to put that down in the province of New Brunswick. That sort of thing just is not done.
Then we come to machine tools and gauges. A large number of more or less small companies participated in the government largess. The total expenditure was $5,050,427, and not a cent went to the maritimes. I do not understand why that work could not have been
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done down there. It is said that the people down there did not have initiative. The people down there never had a chance to show initiative. They never were encouraged to show initiative.


Mr. KINLEY:: The national policy.


Richard Burpee Hanson: That is the policy. I am glad the hon. member for Lunenburg agrees with me that it is true, because he operates a machine shop himself. That ought to hold him for a while.
Then there is table 1A-11, general purchasing and miscellaneous, purchases of merchandise. Crown plants government operated, nil; crown companies government operated, nil; crown plants operated by private corporations, $5,000; privately owned and operated plants, general merchandising; Trenton Steel Works is the only one and it received $23,268 out of a total of $530,972,648.
Then I come to section B, aircraft manufacturing. I have failed to find anything that is specifically allocated to the maritime provinces except it may be the Canadian Car and Foundry Company Limited at Amherst, and I am not at all sure that any part of this sum was spent in the maritimes, although I am willing to assume that some portion, perhaps a substantial portion of the $4,144,000, was spent there, but outside of that there is no evidence of any part of the total of $53,000,000 odd spent in the maritime provinces.
Then there is aircraft overhaul and repair. There is a total of $13,82S,833, and again I fail to find the names of any maritime province concerns except possibly it may be Canadian Car and Foundry which, I believe, operates a plant or does some repair work at its Amherst plant.
Then we have Clark-Ruse. I want to call attention to this about Clark-Ruse. They operate a plant over in Dartmouth. I was there the other day and I want the country to listen to this. They have seven or eight hundred employees.


Ian Alistair Mackenzie: Poor old country!


Richard Burpee Hanson: They have seven or eight hundred employees, and at five o'clock one evening a notice was posted on the board that the services of five hundred of these men would no longer be required. That is the notice they got.


Clarence Decatur Howe: From when? These men are still working there. A notice was put up that after a certain date-


Richard Burpee Hanson: Does the minister know that himself?


Clarence Decatur Howe: Absolutely; I saw the notice.


Richard Burpee Hanson: I will take the minister's word.


Clarence Decatur Howe: Why make the statement?


Richard Burpee Hanson: Where are they to be placed?


Clarence Decatur Howe: Two thousand men are required in the same city for a similar class of work in the shipyard there.


Richard Burpee Hanson: For aircraft repairs?


Clarence Decatur Howe: No. We repair aircraft when they are damaged, and when they are not damaged we have no repairs.


Richard Burpee Hanson: I am not questioning the fact.


Clarence Decatur Howe: Then why are you-


Richard Burpee Hanson: I wonder what the minister is going to do with them. I suppose he will fall back-


Clarence Decatur Howe: Does the hon. gentleman suggest that this helps the employees in their-


Richard Burpee Hanson: No; I
imagine that is probabty true. Five hundred men are going to lose their jobs and I ask the minister what is to become of them. I suppose he will fall back on the usual stereotyped answer that national selective service will look after them. I wish to tell him something about national selective service as told to me by an employer of labour going down on the train the other night. The government knows; I do not know whether it is the minister's department.


Clarence Decatur Howe: It is a smoking-car story, I take it?


Richard Burpee Hanson: No; it is right from the horse's mouth. The minister can take it from me, it is Simon-pure, and right out of the horse's mouth.


Clarence Decatur Howe: It took place on the train; I presumed it was a smoking-car story.


Richard Burpee Hanson: And that is a respectable place to talk about things; at least I hope so. This is about the Pennfield airport. We have heard something aboqt the Pennfield airport; the hon. member for Charlotte knows something about it. The Pennfield airport was condemned by the Department of Transport. I was glad to see it built. I thought it was a proper place to have an airport. However its fortunes have been varied. Schools have been moved in and schools have been moved out. And we had it among the list of twenty-eight schools that were being closed down the other day,

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the operational school at Pennfield airport.
I do not know what they are going to do with the airport, but I will tell you what the government is doing. They have doubled the capacities of the runways, at a cost of $500,000, and the work is still going on. I should like the minister to explain what use they intend to make out of that airport when they have spent this additional amount of money in doubling the surface of the airport.
But that is not the point I wish to make. The contractor wanted a hundred men. He applied to national selective service in Saint John. He got fifteen men in two months- and only six of them stayed.


Mr. FACTOR:: You are not blaming the Minister of Munitions and Supply for that?


Richard Burpee Hanson: No; I am just passing out a bouquet to national selective service. They got fifteen men in two months, and six of them stuck. When the contractor complained they said they could not get them. Then they said to the contractor, "Can you?" "Yes", he said, "I can get them." And he got them. They said, "Go ahead and get them and report the names to us, and we will put them through as if we had got them." That is the wonderful performance of national selective service. They confessed their inability to get them, but the private enterprise got them.


Samuel Factor: Let us get back to the maritimes.


Ian Alistair Mackenzie: Maritime rights!


Richard Burpee Hanson: You bet. Then, Clark-Ruse has had an advance of about two and a half million dollars. I should like to ask the minister is that is recoverable, nr if it is a dead loss. I would ask if that plant is closed down because of lack of work, and what is to become of it.


Clarence Decatur Howe: My hon. friend has been complaining about no plants built in the maritimes. Now he has a very decent industry that has done a fine job and he asks if the money is recoverable.


Richard Burpee Hanson: I have asked if that money is recoverable.


Clarence Decatur Howe: Those buildings are owned by the crown.


Richard Burpee Hanson: What are they going to be used for, if the work is to be closed down?


Clarence Decatur Howe: If the maritimes keep yapping about them-


Richard Burpee Hanson: "Yapping"?-I resent that.


Clarence Decatur Howe: Yes, yapping; that is all.


Richard Burpee Hanson: I never yap at anything. The minister is doing all the yapping now. And I say, too, that that is a very rude statement and he ought to take it back. If he is a gentleman he will take it back-and I know he is a gentleman, and I know he will take it back.
I now come to table IB-3, at page 17, and turn to the heading "Aircraft miscellaneous", and notice that there has been some contribution by maritime provinces in shipbuilding. I turn particularly to part I, section C, table 1C-1, which refers specifically to naval shipbuilding, and shows an expenditure of $1,186,918 in connection with crown plants, government-operated. In the list there is the Princess Louise berth, wherever that is. Then under the heading "crown companies, government operated", we find Quebec Shipyards Limited and Toronto Shipbuilding Company Limited. Someone else can deal with the Toronto Shipbuilding Company. I understand the minister is not too proud of it.


Clarence Decatur Howe: Part of that is in the province of New Brunswick.


Richard Burpee Hanson: I would not think so. They had a little assembling plant at Indian Town. They brought them down, put them together and shipped them overseas, when they might have done a lot of things there.
I come now to privately owned and operated plants, and- I find the Halifax Shipyards Limited got $579,160. Then there is another item for J. D. Irving Company Limited which, I suppose, was in connection with the landing barge programme, and they did not take up any amount. Of the $9,731,888 in connection with this table for naval shipbuilding, the maritime provinces got only a little over half a million.
We come now to cargo shipbuilding, and I call the minister's attention to table 1C-2 at page 19. Under this heading I find the Pictou berth, with a commitment of $388,300, and an expenditure of $301,054. I understand that that was for the building of a wharf at Pictou harbour. Was it done by the Fundy Construction company. I Wonder if that has a familiar ring to the ears of any hon. members from the province of Nova Scotia. They will tell us who the Fundy Construction company is. They were paid a little over 8140,000 for the work they did on that wharf, and then the wharf slid into the harbour.


Ian Alistair Mackenzie: Is the harbour all right?
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Richard Burpee Hanson: You cannot laugh this off in that way. It may have been on account of faulty engineering, I do not know. But I suggest to the minister that some explanation is due the committee in connection with that expenditure. I am just trying to point out one or two of the headaches the minister must have had. I am not holding him responsible for this loss.


Joseph-Arthur Bradette: The hon. member has taken forty minutes.


Richard Burpee Hanson: That is very good; I have done pretty well.


Mr. BENCE:: Mr. Chairman, I believe the hon. member who has just taken his seat has considerable justification for the remarks he has made in connection with the allocating of war industries. But I do not think he has as much cause for complaint as those of us who come from Saskatchewan, because we have received absolutely nothing.


Ian Alistair Mackenzie: He said that when he started.


Alfred Henry Bence: I started complaining over three years ago about that, and-


Clarence Decatur Howe: Would my hon. friend let me make a comment?


Alfred Henry Bence: Yes.


Clarence Decatur Howe: The greatest proportional increase in industrial activity in the Dominion of Canada during war time has taken place in Saskatchewan. Let him think that over.


Richard Burpee Hanson: If there was nothing before, and you spend a dollar, what is the percentage of that?


Alfred Henry Bence: The minister knows that as far as our province is concerned it is still practically nil. However, I made my complaints and offered suggestions a number of years ago in connection with this matter, and I realize that we are now at a stage of the war where there is no particular use in dwelling upon things unless you think there is a possibility you may be able to get somewhere. I believe any hon. member from Saskatchewan, no matter from what party he might come, would be willing to put forth an effort if he thought he could obtain results.
The matter I should like to raise is in connection with synthetic rubber. Last year I spoke at some length in connection with this matter and made special reference to the production of rubber from surplus agricultural products. At that time the minister informed us that after due consideration it had been determined that the best process to produce rubber was by the use of petroleum. He

stated that they had embarked on the programme and were going to see it through. At the same time he held out some hope that possibly in the future, if circumstances warranted, investigations might be continued into the production of alcohol from agricultural products. Last year the minister stated that the process they were using to produce synthetic rubber from petroleum had been obtained from the United States. He is reported at page 3700 of Hansard of June 16, 1943, as follows:
Extensive development work in the processes involved in the production of butadiene from a petroleum base had been made in the United States, and Canada was offered the use of all information obtained on the same basis as similar projects in the United States.
And on page 3701:
The problems of developing organizations to produce synthetic rubber in satisfactory amounts and qualities and of procuring or training the necessary operating personnel for the various plants in the Canadian project could, for obvious reasons, best be met and solved by following the main lines of the United States programme.
He went on to state that even though they had embarked on that programme it did not necessarily preclude the use of industrial alcohol made from agricultural products. If, as the minister stated the other day, this programme is a complete success, if it is the most economical means of producing synthetic rubber, then. I and those of us who come from western Canada will have to be content for the time being. There are one or two points, however, I should like to draw to the attention of the administration before I ask one or two questions in connection with the operations of the plant at Sarnia.
As far as the use of surplus agricultural products are concerned, it is not so much a question of the cost per bushel of the wheat or the cost per unit of the agricultural product involved; it is more that we on the prairies felt that, because our agricultural production was so great that at times we produced more than could be used in Canada for food purposes or exported for the same purposes, therefore some of this production should be used in the manufacture of synthetic rubber. Last year the minister stated that the plant at Sarnia would be in full porduction by November. He stated also that they would be making in this plant 37,000 tons of buna-S rubber and 8,000 tons of butyl rubber when they were in full production. The plant was to be in full production by November of last year, but the other day the minister stated, as reported on page 1705 of Hansard, that it would not be in full production until May of

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this year, as far as the buna-S plant was concerned, and until July, as far as the butyl plant was concerned.
I think the committee is entitled to an explanation for that delay. It is true it is only a matter of months, but there must have been some bottle-necks or mistakes encountered by those in charge of production, and possibly these might be worth following up in order that similar mistakes might be corrected in the future.- The minister stated last year that the production of butyl rubber, which I understand is used for inner tubes, was to be 9,000 tons, but he now states that they are obtaining only 150 tons per month, or 1,800 tons a year. In other words, in order to meet that figure the increase in production between now and next July will have to be over fourfold.
My attention has been directed to certain newspaper and' magazine reports in the United States to the effect that the synthetic rubber programme on this continent has not been quite as successful as those who devised the plants thought it would be. If the plant in this country is such a success and they .are going on without much difficulty, perhaps the minister will explain why the United States, with whom we are collaborating, have not taken advantage of the wisdom which was apparently used by the Canadian authorities to obtain such a success in their programme? I was interested in reading in Time of February 14 of this year an article on rubber, where it is stated that they are using more alcohol to produce synthetic rubber than they anticipated using, whereas the petroleum end of it was bogging down. I should like to quote from page 33 of this magazine as follows:
When "Bull Bill" Jeffers bowed out of Washington as rubber czar last September, he flatly announced: "The big job is done." In the long months that followed, optimism flowed from the rubber director's office; full-page, breast-beating advertisements of many an oil company happily assured the United States that the battle of rubber had been won. But last week, a sheaf of ominous straws fluttered out of Washington:
The allotment of synthetic rubber previously scheduled for civilian tires in the next five months has been halved.
OP A drastically screwed dowm tire rationing, shifted the rationing basis from mileage to essential occupations.
Rubber boss Bradley Dewey slapped a ban on the use of synthetic rubber in many a civilian item, even nipped plans for girdle manufacture.
And further on:
Out of alcohol. The famed Baruch rubber report handed oilmen the big job of butadiene production for buna-S (75 per cent butadiene plus 25 per cent styrene equals buna-S). Oilmen were to turn out 65 per cent of all United
States butadiene production. The remainder was to come from the alcohol process, which was loudly damned as a farm-bloc plot to use up surplus grain.
But by last week the alcohol process was the brightest spot in the picture. Paced by Carbide and Carbon's plants at Institute, West Virginia, and Louiseville, Kentucky, butadiene from alcohol is now actually furnishing 75 per cent of all butadiene. Built last year to produce only 220,000 tons, the plants have been geared up to 150 per cent of capacity, and can turn out an unbelievable 330,000 tons a year. Thus, the alcohol process has shouldered in to take over the big job. Even by the end of the year, when all petroleum butadiene plants will presumably be in production, alcohol will still furnish half the butadiene.
The article goes on to refer to the difficulty of obtaining enough grain to produce the alcohol, and I understand from what I have seen in the press that they are importing grain from this country for the purpose and also importing industrial alcohol. The article goes on to say:
But Rubber Boss Dewey calmly points to the glowing alcohol-production record to prove that the programme was right, the oilmen wrong. The hard fact is that the much simpler alcohol process ran into fewer production kinks than those which knotted up petroleum butadiene production, split as it is among 13 companies, tinkering with five different processes. What worked like a dream in the laboratory is turning out to have some nightmarish bursts in big-scale production.
There is another statement in the article which interested me because we are producing butyl in the plant at Sarnia. It says:
But the biggest "if" of all in the rubber programme is butyl, the synthetic from which inner tubes were to come. Ex-Trust-Buster Thurman Arnold once hailed butyl as the king of all rubber synthetics, and roundly denounced Standard Oil (N.J.) for not putting it on the market. Standard's prompt protests that butyl was not perfected -went unheard. But butyl, which was once programmed to supply 75,000 tons a year, proved Standard right, Arnold wrong. It is strangled in the intricacies of manufacture.
It seems to me that these are very interesting points. The article, of course, may not be accurate; I do not know about that; but it seems to be well posted, and so far as I know its accuracy has not been challenged, or, if it has, this has not been brought to my attention. I should like to know from the minister whether or not the plant at Sarnia has been proven to be a complete success, and that while in the United States they are having difficulty with synthetic rubber production, nevertheless in this country we are completely successful. I should also like to know that in connection with butyl rubber, which is the only kind that can be used for inner tubes, we have nothing to worry about. I sincerely hope
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that the belief of the minister that the difficulties have been completely overcome will be justified1 by the facts, because this is a most important matter for the Canadian people and for Canadian economy, and it seems to me from the reports we get from the United States that there-is sufficient doubt about the process to warrant the administration continuing actively to canvass the question of a more intensive production of industrial alcohol from agricultural products to supplement, if necessary, the present programme, and at the same time give the agricultural areas of the west a use for their surplus products which cannot find their way into foodstuffs.


Agar Rodney Adamson: I should like to ask the minister a question which was raised this afternoon but to which I do not think an answer was given. I refer to the Sutton-Horsley plant, where the minister put in a controller by the name of Pinchin. The International Association of Machinists has complained that this controller has cut the number of workers from 1,200 to 400, and the rumour is that the entire plant is going to close down. I understand that they are making gauges for aircraft and for other purposes. Naturally a considerable amount of concern is felt by the workers in that plant.
The minister has not said anything about the effectiveness or otherwise of the utilization of machine shops, particularly in the mines, in making war material. There was quite a programme at one time to have the machine shops of the various mining companies making certain types of equipment as subcontractors for war industry. Has this programme been carried out; if so, to what extent, and has it been successful?
The parliamentary assistant to the mniister spoke this afternoon of the audit of fixed price contracts and said that when it was found upon investigation of a fixed price contract that a large or unnecessary profit was being made, after an audit of the company's operations a new price was agreed upon and made retroactive. I think the committee would like to have a little more detail of the methods of that process. Let us say that a base price of 100 units is fixed, and that at the end of the first three months operations the company produces material for eighty units of cost, making a profit of twenty units. Assuming that we consider that five per cent is a sufficient profit; there is a fifteen per cent excess profit, shall we say, over the fixed price. What is the machinery set up? Does the government go into that factory and say:	We want the fifteen
units of profit that you have made over the last three months? Or does it say: You can keep that excess profit and we will now allow

you eighty-five units of cost? I think the committee would be interested to have that information with regard to the revampnig of the fixed price contracts.
I believe the committee would also be interested in having information with regard to the cost of production of aircraft. We know it is impossible in the early stages to give any idea of the cost of production of aircraft. It is very difficult even to set a target price for aircraft when you are starting on the manufacture of a complicated air frame such as the Lancaster or the Mosquito. What I should like to know, however, and what I think the committee would like to know, is what is done as to a reduction in price for the manufacture of the Lancaster and the Mosquito as the programme has proceeded. I think the minister said that forty-nine Lancasters have been built-


Clarence Decatur Howe: I said thirty-nine.


Agar Rodney Adamson: Probably the base cost can now be obtained and some estimate of future cost arrived at. I think that is information which it is legitimate for the committee and the country to have.
With regard to the re-negotiation of cost-plus contracts. The cost-plus contract is, I suppose, a necessary evil in war time. It must happen when you are dealing with new operation, new factories on which no base rate can possibly be known. But when a base rate is known in the operation and a reasonable estimate can be made of the cost of the operation, even one as complicated as the building of aircraft or' the operation at Research Enterprise Limited, what is the machinery here again for re-negotiation of these cost-plus contracts?
I have one suggestion to make to the minister. During the war we have developed a number of strategic minerals. I shall not go through the list; they are well known to the committee. Ore bodies were- delimited and discovered, and actual production took place in many instances. We now find that because of the easing of the supply, or because of the bringing in of supplies from elsewhere, these operations are no longer economically feasible for the country to carry out. I speak in particular of the Emerald mine, the tungsten deposit in British Columbia. Apparently the mine is now closed down. We have developed an operation -which, because tungsten can be produced cheaper, in greater volume, or for other reasons in the United States, is now closed down. With all metals, their use depends upon the amount of research that goes into the work on them. It is well known that after the last war the International Nickel company found itself with a terrific production of nickel and no market. They

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went and carried out by themselves one of the most intensive research programmes ever known on this continent. In consequence, not only did the demand for nickel come back to where it was in the last war, but it tremendously increased. I believe there were developed something like 250 separate alloys containing nickel, and to-day there is hardly an industry, hardly a machine, which does not contain this vitally important metal. Now, it seems to me that we, having developed these strategic metals, unless we can provide through research a use and a market for them, shall find ourselves with a development which is closed down and in which our investment as a country is lost. I suggest to the minister that one of the first priorities is to see to it that adequate research is carried out now so that new uses for these strategic minerals and metals can be found. That is an essential and important move at this stage of the war.
There has been a considerable discussion this afternoon on cartels. I was interested to note that the leader of the Cooperative Commonwealth Federation mentioned Canadian Industries-the I. G. Farbenindustrie-Imperial Chemical and du Pont. I brought this matter up in the house early in February. I think that, when we are dealing with something as abstract as cartels something which can be so misrepresented, and as to which so much misinformation can be injected, some statement might be forthcoming in this chamber concerning international cartels. I wish to quote two paragraphs from a paper delivered at the annual meeting of the Canadian Institute of Mining and Metallurgy this month by Professor George B. Langford, professor of mining geology, University of Toronto. Dealing with cartels in the mineral industry, he has this to say:
Cartels and monopolies have existed, and now exist, in the mineral industries. Some have been outstandingly successful and others equally unsuccessful. When the time comes to put into effect the mineral industry policy advanced here, the history of the international metal cartels will be a useful guide in working out details, rnd also in pointing out pitfalls to be avoided. For the purpose of this discussion, only the oriefest mention will be made of some of the features of such organizations that are of interest in formulating a post-war mineral control policy.
Outstanding is the International Nickel Company of Canada, a virtual monopoly controlling SO to 9Q per cent of the world's supply of the' metal. Since 1926. this company has found it advantageous to maintain a fixed price for the metal, irrespective of violent fluctuations in general economic conditions. It has also adjusted its production to meet market demands and thus has prevented over-production.
The tin cartel, an association of individual companies brought together by international agreements, was sponsored by the governments
of the several producing nations. It has been referred to as the most successful metal cartel. It was formed in 1933 as the only logical cure for a badly disorganized and over-produced industry. Previous to its formation there had been several other curative methods tried without success. The object of the tin cartel was stated in the first clause of the agreement for the international tin control scheme:	"The
scheme is intended to secure a fair and reasonable relation between production and consumption with a view to prevent rapid and severe oscillations of prices and to ensure the absorption of surplus stock."
The operations of this cartel proved the feasibility of international political- control in mineral industries.
The aluminum industry in North America has operated as a monopoly because of cartel agreements with European producers. This monopoly has not always operated in the best interests of the consumers, and demonstrates the inadvisability of leaving the operations of such organizations without suitable controls.
Professor Langford goes on to mention copper cartels and other cartels which have failed. I merely mention this to show that cartels, as a method of regulating mineral production and as a method of preventing violent swings of price and instability of employment, and for other reasons, are not always a bad and vicious thing, and I mention here the tin cartel as an example.
1 had not intended to speak at such length, but in view of what has been said this afternoon I brought this up.


Mr. BURTON:: It is not my intention to make a speech, but I would ask the minister a question or two. First, I should like to ask him whether any cooperative organizations, especially Cooperative Implements Limited, made any representations or request to his department or to the government with a view to obtaining from the government those surpluses he referred to the other day when he was speaking, or possibly even the disposing of those surpluses after the close of hostilities. If they have made representations, I would ask him whether his department or the government are prepared to give any consideration to these requests at the present time.
Many of us farmers feel keenly about this, because for quite a number of years now we have found ourselves severely handicapped in eariying on our farming operations, first through inability to purchase the new machinery we required owing to the prices we were receiving for our products; and later on, now that we do have a little money to buy the necessary machines, we find ourselves unable to get them because the machines are not there or there are not enough to go around. To make matters worse, after we had become quite adapted to the repairing of our machines out of our scrap-heaps, along came an order
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from one of the boards under the minister compelling us to dispose of our scrap metal which we had on our farms, leaving us only a very limited amount of scrap with which to continue repairing our machines.
Some of us felt rather hot under the collar when we were forced to deliver our scrap for $7 a ton, much of which we had to pay S700 a ton for when we bought it.


Clarence Decatur Howe: Who used the force that made the hon. gentleman deliver the scrap?


Joseph William Burton: There were different advertisements in the newspapers, in my part of the country at any rate, that gave us up to a certain time to have that scrap delivered at certain places, failing which there would be penalties if we were found with more scrap than a certain number of pounds on our farms. I am sorry I have not the advertisements here, but I am sure the minister must know something about it.


Mr. WARD:: Did you deliver the scrap iron?


Joseph William Burton: I certainly did. It cost me more in time gathering the stuff and hauling it than I got out of it on top of all the other misery, and then we had not what we needed to keep on repairing our machinery. Incidentally, some of these scrap heaps were lying around the railway sidings for quite a time. But I am not arguing about that. I realize that, under the circumstances, the boards may have justification in calling in that scrap, and in spite of the fact that we delivered scrap for $7 a ton, which cost in some instances $700 a ton when we bought the implements, nevertheless we were prepared to do that. We consider, however, that some of this surplus equipment, it may be in the line of trucks, or jeeps or other equipment; it may be even in some of the plants in which the government is interested, might be made available to the farmers so that they might get the necessary material at reasonable cost.
If the minister would rather discuss this question when he is before the house with the bill to which he referred the other day, dealing with the Assets Disposal Corporation, I am prepared to let the matter stand until then. In the meantime, I would impress upon him that the farmers in the west expect that as soon as possible their cooperative organizations shall be given an opportunity to take part in handling some of that equipment, at least so far as it is adaptable to agricultural purposes.


Gordon Knapman Fraser: I am suspicious of people who say they are not going to make a speech, like the hon. gentleman, who made a good job of it. In regard

to scrap metal on the farms, I know that in our section of the country there were notices in the newspapers, but our farmers never figured on anything for the scrap. They gave it to the Red Cross Society.
In the minister's speech it appears that of small craft, 3,600 were delivered out of a total of 4,300 orders placed, and the rate of deliveries in 1944 will be about the same as 1943. I should like to know from the minister where those small craft were delivered. In one newspaper item the statement is made "Landing craft a big item now in shipbuilding". I asked the Minister of National Defence for Naval Services (Mr. Macdonald) on March 17 a question in regard to small craft. I said:
What about landing craft and seeps?
The minister replied:
No, not for our navy.
Where did those go to? Did Canada get any of those delivered, or were they all for the United States and Great Britain?


Clarence Decatur Howe: Is the hon. member speaking of landing craft?


Gordon Knapman Fraser: Landing craft, jeeps, seeps, ducks and other small boats of that kind.


Clarence Decatur Howe: Quite a number were delivered to the Canadian navy. All landing craft were delivered in the United Kingdom, but I believe all our small boats programme was divided between the Canadian navy and the British navy.


Gordon Knapman Fraser: Why would the Minister for Naval Services make that statement? I asked, "What about landing craft and seeps?" and he distinctly said, "No, not for our navy".


Clarence Decatur Howe: Did the hon. member mean the assault craft?


Gordon Knapman Fraser: The seeps are the ones that can go on land and water.


Clarence Decatur Howe: We are not building any. Perhaps my hon. friend is referring to the landing craft.


Gordon Knapman Fraser: The ones with open bow?


Clarence Decatur Howe: L.S.T. type.


Gordon Knapman Fraser: A large type or a small type?


Clarence Decatur Howe: We are building the large type at the moment. We are building the type called the L.S.T., which is a very large type.


Gordon Knapman Fraser: What tonnage would that be?

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Clarence Decatur Howe: Quite large, perhaps eight or ten thousand tons.


Alfred Henry Bence: Could I obtain under this item answers to my questions in connection with synthetic rubber plants?


Clarence Decatur Howe: I think I made a statement this afternoon that covered the entire field of the questions asked by my hon. friend.


Alfred Henry Bence: No. I should like to ask the minister the reason why last year he stated he anticipated that the plant would come into full production by November, and now he says it will not come into full production until July after the butyl production is brought up a considerable amount. Was there any particular reason why there was that delay?


Clarence Decatur Howe: The plant was in production last November.


Alfred Henry Bence: Yes, I know.


Clarence Decatur Howe: In production before that. Full production means, of course, every unit operating at capacity, and it is not up to that now. As Time magazine stated-and it was quite correct with regard to one feature- butyl production turned out to be a very difficult process. As I stated this afternoon, we planned these plants before buna-S or butyl rubber had ever been produced on this continent outside of a laboratory. It was believed in the early stages that it would be easier to make butyl than buna-S. It turned out in practice that there were difficulties in large scale operation in connection with butyl, but those have been overcome and butyl production is stepping up very satisfactorily.


Alfred Henry Bence: Last year the minister stated that he anticipated the production of butyl would be eight thousand tons. The other day he said four thousand tons. Is that because of the difficulty that we have run into in connection with the production?


Clarence Decatur Howe: No, I do not think so. I am not sure whether the figure is four thousand or eight thousand. Perhaps the eight thousand figure was wrong. Whatever we planned originally will be produced.


Alfred Henry Bence: According to the minister's statement of last year eight thousand tons were planned originally. I was wondering why four thousand tons were mentioned in the statement the other day.


Clarence Decatur Howe: I do not think the unit was dropped. It may have been dropped, but I do not think so. I shall get the answer and give it to my hon. friend. I think I was correct in the first statement that we shall
eventually have eight thousand tons of butyl, but sometimes changes are made. I do not recall a change in that particular capacity. Sometimes we slip from one product to another while we are building the plant, but I shall look into the facts of the matter as to butyl.	*


Agar Rodney Adamson: Has the minister any information about the plant at Sutton-Horsley?


Clarence Decatur Howe: Yes, Sutton-Horsley was a small operation stepped up into a very large operation. We had a need for a large number of instruments for trainer aircraft and a contract was given to Sutton-Horsley. Considerable advances of working capital were made and it was found that the finances of the company were being badly handled. The inventory on hand did not represent the advances made. We therefore put in a controller in the person of Mr. Pinchin to straighten out the operation, and particularly the finances of the company. He succeeded in doing that. All the operating capital put in by the government was recovered and the receivership was ended. The fact that the work has dropped off recently is on account of the falling off in the production of trainer planes. They have dropped sharply as a result of the curtailment of the air training programme, and the future of the existing contracts depends entirely on the future production of trainer aircraft in this country.


Joseph William Burton: Would the minister care to discuss the question to which I referred?


Clarence Decatur Howe: Yes. We had representations from this cooperative. The representations were turned over to the crown assets allocation committee. The difficulty at the moment is that no department of government has declared agricultural implements or anything resembling them a surplus; therefore we have nothing to send to the cooperative at the moment. Their request is on file, and as soon as we have the type of implement in which they are interested we shall be glad to have their help and the help of other cooperatives in distributing the production in the area in which they operate.


Mr. NICHOLSON:: On page 5 of the report made available to members to-day appears an item for Frost and Wood of $281,146. I understand that this company at Smiths Falls has recently received an order for a thousand reapers and some work has been done on retooling. I wonder if an order of that kind would come through Munitions and Supply and, if so, what country at this stage of the world's history is going back to the reaper? Are we to make it possible for tight materials
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to be made available for the making of reapers? Has the minister any information about that?


Clarence Decatur Howe: I may say that Frost and Wood had a contract through my department for making gun carriages, I think it was. I believe that contract has been completed. I am sure that if they have a contract for reapers it is a contract they received through the ordinary channels of trade. My department does not buy reapers.


Alexander Malcolm Nicholson: Is there not a department concerned about the releasing of tight materials for the manufacture of an article like the reaper? Surely it should be a matter of government concern as to whether or not Canadian workmen and Canadian materials are to be used for the manufacture of reapers?


Clarence Decatur Howe: There is no tight material situation associated with that type of production.


Alexander Malcolm Nicholson: Farmers across the
country are being told that there is a serious shortage of all the materials used in the manufacture of farm implements. If we can release materials for the manufacture of reapers I should imagine that those materials should be made available for other much more necessary instruments of production. I have not seen a reaper in operation during my lifetime. It seems a pity that workmen and materials should be used, if my information is right, in the manufacture of reapers.


Clarence Decatur Howe: I really cannot say. That contract was not placed by the Department of Munitions and Supply. I do not know the story.


Agar Rodney Adamson: Has the minister any information about the cost of aircraft?


Robert Fair: Are we to understand that there is no longer a shortage of material used in farm implements?


Clarence Decatur Howe: That is correct.


Robert Fair: Are we to have all the instruments we need?


Clarence Decatur Howe: I did not say that. If you cannot get them it is not a matter of materials being in short supply.


Robert Fair: I notice farm implements are rationed and we have quite a few complaints coming in of people not being able to buy the implements. If the materials are there, it would be a good idea to put the workmen to work.


Clarence Decatur Howe: If my hon. friend can find any spare manufacturing capacity I am sure we

shall be glad to use it for that purpose. The industry is working at full capacity at the moment.
The price of aeroplanes is not a subject to discuss in five minutes. If my hon. friend is interested in the price of aircraft I shall take fifteen minutes to-morrow and give a lecture on the subject.


Agar Rodney Adamson: I think it would be interesting in view of the policy the minister has brought down in regard to post-war civil aviation. It might be a complementary subject which would be of interest to the hon. members.


Clarence Decatur Howe: I shall be very glad to do that, but it is not a subject on which you can say, what does this plane cost? To take a figure and compare it with the cost of another plane somewhere else, and then to decide that one plant is doing much better than another. I will show how the manufacturing costs of aeroplanes vary with the size of the contract and the range of the run, the number of units produced. After that I shall be glad to discuss costs, but I think it is important to have a background.


Agar Rodney Adamson: That is what I hoped the minister would do, and in the same way I should like to get some information from the parliamentary assistant with reference to the methods of reallocating contracts.


Lionel Chevrier: I think I can give my hon. friend that now. He spoke first of all of the cost-plus contract, which he said was a necessary evil. That is true; but it is a fact also that we have tried in the department to get away from cost-plus percentage contracts, and we have done very well over a period of time. I went on to discuss this afternoon the main purchasing branches of the department, and I think I showed how, in each of those, the percentage had gone down tremendously. Last year I was able to say that four-sevenths, in point of number, of contracts granted in the department were on a fixed price basis. This year there are substantially more than that. I do not know what they are, in point of numbers, but there are certainly five-sevenths, if not six-sevenths.
Then, with reference to re-negotiation, renegotiation is brought about by our cost accountants, who are stationed in plants and who, when they have evidence of undue profits, re-negotiate immediately. The re-negotiation in the department is a retroactive re-negotiation. That is, it is one which dates back to the original date of the contract. In other words, if a re-negotiation begins now-to-day-and we find there is undue profit, the price will

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revert to the date of the original contract. This afternoon I compared our system with that in Australia, where re-negotiation is not retrospective, and dates from the time of renegotiation. I believe those are the two questions which were asked.


Agar Rodney Adamson: That is the question in which I am interested. If, because of increased efficiency in a plant, the manufacturing cost comes down, and undue profit is being made, it might be that undue profit was not being made at the beginning of the contract because the operation was not handled as efficiently as it was six months later. Then the department re-negotiates at the beginning of the contract, and reduces the price of the article from that time. It seems to me that the department is going to cause considerable loss, if it does that, because the first period of production might have been nearer the fixed price allotted by the department. Only after six months, or a period of time has elapsed, and because of increased efficiency is an undue profit being made. It seems to me that if they are made retroactive, the department will be paying less than the article actually cost during the first period of the contract. It appears to me that there is that danger.


Lionel Chevrier: That is exactly what we have done, that is, we re-negotiate them as of the date of the original contract.
While I am on my feet perhaps I can answer before 'eleven o'clock some of the questions asked this afternoon and this evening. The hon. member for Lake Centre asked for some particulars with respect to re-negotiation. He wanted to know the numbers. There are eighty-three re-negotiations which have taken place. The value of those re-negotiations amounts to $119,107,000. Then, with reference to the number of cancellations of contracts, m3' hon. friend will appreciate that cancellations have to do not only with prime contractors but also with subcontractors, and therefore it is impossible to obtain the information. I cannot give him the number of those.
While I was speaking he asked me to give the percentage of profit allowed to aircraft operating companies. In the department we aim at five per cent. Sometimes it is under that, and sometimes over. But the profit is in the order of five per cent, with something better in certain cases where unusual skill has been shown, and something less in other cases. There are also some occasions where the fee is fixed. For instance, there is the cost plus a fixed fee.


John George Diefenbaker: How much does
"something more" amount to?


Lionel Chevrier: It depends upon the
circumstances, and I am not in a position to give any further details. As I said before, the target is five per cent. We aim at cost plus five per cent. There are cases where it is under that amount, and other cases where it is over.
The hon. member for York-Sunbury asked some questions yesterday with respect to the subsidy on wood fuel. * The total production subsidy is $757,664.15. This represents a payment. of one dollar a cord on all commercial wood fuel cut on or before March 1, 1944, and delivered to a dealer or held to his account after March 5, 1943. In addition to the production subsidy, transportation subsidies amounting to $257,639.71 have been paid. These pa>unents cover such portion of the transportation costs incurred by wood-fuel dealers in the transportation of wood fuel. Both of these subsidies are paid by the Commodity Prices Stabilization Corporation on receipt of a certification by the wood-fuel controller.
The hon. member for- York-Sunbury also asked what quota of heavy-duty trucks are being imported into Canada.


Mr. TUSTIN:: How is the subsidy on transportation arrived at?


Clarence Decatur Howe: If wood is required in an area, and must be brought in from outside the normal sources, the transportation bonus is paid, representing the difference between the normal cost of transportation and the actual cost paid from the greater distance. We had a situation that represented, among other things, a very bad distribution of wood. The normal sources could not be developed sufficiently to produce the required supplies and, as I say, we went outside the area. For instance, at the head of the lakes we cut 75,000 cords of wood as a reserve supply for points both east and west of the head of the lakes. That is not a normal operation; it was an emergency. And moving wood from that emergency store, either to Winnipeg or to the east, involved an abnormal cost that was covered by the transportation bonus.


Lionel Chevrier: Perhaps I might continue. I had referred to the question by the hon. member for York-Sunbury as to the quota of heavy-duty trucks being imported into Canada. The answer is that heavy-duty trucks of 16,000 pounds or over, gross vehicle weight rating, are not produced in Canada. The quota of imports from the United States is fixed by the motor vehicles controller in consultation with the director of the automotive division of the war production board in the United States. The quota in 1943 was seventy-four; the quota in 1944 is 207.
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Then the hon. member for Peterborough West asked a question with respect to glycerine. The answer is that glycerine is now on the free list, by virtue of order CC-2-B-3 of December 31, 1943. At that time all restrictions on glycerine were lifted.


Grote Stirling: The minister will remember that he undertook to bring down a statement with regard to the processing of coal at the mine. Will he be good enough to make a statement to-morrow?


Clarence Decatur Howe: My hon. friend spoke about processing coal at the mine head. We are doing no processing of that type in Canada at this time. But the Department of Mines and Resources are continuing studies on the hydrogenation of coal at this time. In fact a special laboratory has been built for that purpose. The subject matter will be considered very carefully. It is appreciated that it would be a favourable way to deal with some of the western mines, particularly if it turns out to be an economical process. We are hoping that some progress may be made.


Grote Stirling: It has not got beyond the experimental stage?


Clarence Decatur Howe: No.
Item stands.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Friday, March 24, 1944