1944-05-26

[Stage Direction]
On the orders of the day:
Mr. J. H. BLACKMORE (Lethbridge):: Mr. Speaker, it is reported to me that over the,radio to-day it was anounced that President Roosevelt has called an international monetary conference for July 1, 1944. Will the Minister of Finance tell the house not later than Monday: first, whether or not Canada has been invited to this conference; second, whether or not, if invited, Canada has accepted the invitation; third, whether or not the Canadian delegates, if Canada should send such, will be told that they shall have no power to commit Canada to any international monetary agreement until after such agreement shall have been subjected to the maturest consideration by the parliament of Canada?


Hon. J. L. ILSLEY (Minister of Finance):: I will answer on Monday.



SELECTIVE SERVICE


[Stage Direction]
On the orders of the day:
Mr. THOMAS REID (New Westminster):: I desire to ask the Minister of Labour a question based on a press dispatch to the effect that national selective service is endeavouring to procure help from other provinces for work in industry on the Pacific coast, with the assurance given them of permanent employment following the end of the war. My question to the minister is: Are such steps being taken, and if so, is the same guarantee being given to all those who have left British Columbia?


Hon. HUMPHREY MITCHELL (Minister of Labour):: Mr. Speaker, I am not responsible for any statement in the press. There is of course a considerable movement up and down the country under the direction of national selective service; that is inevitable under war conditions and with the civilian labour situation as it is at the moment. I have no knowledge of any guarantee being given as indicated by the hon. member with respect to permanent employment when the war is over.



STATEMENT OF MR. MACNAMARA-MAN-POWER SHORTAGE

[Stage Direction]
On the orders of the day:
Mr. J. G. DIEFENBAKER (Lake Centre):: I wish to direct some questions to the Minister of Labour concerning the lengthy statement given yesterday, as reported in the Canadian press, by Mr. MacNamara, the director of national selective service. No doubt the interview or statement is known to the minister. In the statement it is said that having regard to Canada's position to-day the number in the armed forces or gainfully employed " is just about as high as we can expect to go." Then it goes on to state that certain things are to be done by the department shortly. The questions I would ask the minister are these: In view of the declaration of Mr. MacNamara, do the surveys of the department indicate that there is any hoarding of labour on a large scale? Mr. MacNamara says that measures are to be taken in order to comb out those who have been hoarding labour. What industries are to be affected by further compulsory orders about to be issued, as stated by Mr. MacNamara? Does the statement I quoted a moment ago indicate that it is the intention of the government-


Mr. SPEAKER:: Order. The hon. gentleman has laid the foundation for his questions, and I think he should now put them.


John George Diefenbaker: Does that statement indicate that Canada has come to a point about as high as we can expect to go in manpower and that there is to be no change in the matter of call-ups under the National Resources Mobilization Act?


Humphrey Mitchell: Answering the last question first, no change is contemplated at the moment in the call-ups under the National Resources Mobilization Act. As I indicated when my estimates were before the house, we have a staff who are continually combing the industrial and commercial structure of the country for additional recruits for the army, and we have in motion also a policy of direction, transferring men from less essential to more essential industries. That is going on continuously. It is a day to day administrative policy. As regards the question of additional compulsory transfers, that has not been finalized at the moment, and I do not think I can go further than that at present.


John George Diefenbaker: May I ask one
supplementary question? Was Mr. MacNa-

Fresh Fruit-British Columbia
mara stating what is a fact when he said that to-day Canada faces its most acute man-power shortage?


Humphrey Mitchell: I think that is generally understood. Most grown-up men know that.



FRESH FRUIT


[Stage Direction]
On the orders of the day:
Mr. G. A. CRUICKSHANK (Fraser Valley):: I desire to ask a question of the Minister of Finance on a matter which affects fruit growers not only in my riding but in the entire province of British Columbia. I directed a question to the minister some three weeks ago, and again on the 24th of this month, in connection with the picking and disposal of strawberries and raspberries-particularly, at that time, strawberries. Under the present price set-up as established by the board it is impossible for the berry growers to arrange for the picking and salvaging of the crop. I would ask the minister, in view of the seriousness of the situation, and the fact that, with a seasonal crop like this, an immediate or a very early decision is necessary, and the price set by the board makes it uneconomic to pick the crop: First, what provision is being made to have the crop picked and so avoid waste, and, second, will the government give immediate consideration to modifying the administrator's order No. A-1224? The matter is of urgent importance to us in British Columbia?


Mr. D. C. ABBOTT (Parliamentary Assistant to the Minister of Finance):: Perhaps I might answer that question. Ceiling prices for strawberries were fixed, as my hon. friend has indicated, by administrative order No. A-1224, which was published, I think, on Monday of this week. I understand from my hon. friend that in zone 3, which includes British Columbia, the price is alleged to be not sufficient to cover the cost of production. My hon. friend has asked what the government proposes to do about that: is that correct?


George Alexander Cruickshank: Correct.


Douglas Charles Abbott: I received notice of his question a few minutes before coming into the house. I got in touch with the administrator of fruits and was informed that last year, when no ceiling prevailed, the price was higher than the price which has been fixed this year. The price fixed this year is ninety per cent higher than the average for the
years 1938, 1939, 1940 and 1941, and it is felt that it is sufficient to provide an adequate return. That is the only answer I can give to my hon. friend's question, but I shall be glad to bring his further representations to the attention of those concerned.


George Alexander Cruickshank: I would point out that it is of vital importance that we should know when this decision will be given.


Douglas Charles Abbott: My information is that one of the leading grower organizations of British Columbia was written to to-day in reply to certain representations which had been made setting forth in substance what I have said here, that the ceiling price set is felt to be adequate, and there is no indication at the moment that the price will be changed.



EXCISE ACT


[Stage Direction]
On the orders of the day:
Hon. R. B. HANSON (York-Sunbury):: Mr. Speaker, yesterday, on a question of privilege,
I adverted to the fact that, with respect to questions 9, 10 and 11, which I had on the order paper on May 16, the Minister of National Revenue (Mr. Gibson), answered only four questions in a series of twelve, leaving eight unanswered, with the notation that it is not considered to be in the public interest to answer these questions at the present time for the reason that the case is still before the courts. That, by some stretch of the imagination, might be applicable to questions 8 and 9, but I do submit that I am entitled to answers to questions 5, 6, 7, 10, 11 and 12. I want to know what counsel fees have been paid to date in relation to these cases; what witness fees have been paid to date; what other costs have been paid. Then I do want to know whether the attorney general was requested to prosecute these cases and whether he acted, and has there been more than one trial of these cases and, if so, how many. Then finally and vitally, why were the proceedings taken by way of indictment instead of by summary conviction under the appropriate part of the criminal code. I am entitled to answers to these questions.


Hon. C. W. G. GIBSON (Minister of National Revenue):: When the hon. member was speaking on this matter yesterday I did not notice that he said:
I am entitled to have that information notwithstanding that the case may be under appeal.
I would point out that these cases are not under appeal. The cases came on for trial
Answers to Questions

before a jury some time ago; I understand that the jury disagreed, and the cases are conning on for trial again next month. It is considered not to be in the public interest that the answers asked for should be made public at this time just before a jury trial. While there is no objection to the hon. member himself having that information, I do not think it should be made public property at this time.


Richard Burpee Hanson: I respectfully dissent from the whole attitude of the minister. What possible- effect could the cost of these trials to the public have on an approaching jury trial?



ANSWERS TO QUESTIONS


[Stage Direction]
On the orders of the day:
Mr. G. K. FRASER (Peterborough West):: 1 should like to ask the Minister of Finance a, question based on a statement made by the Minister of National Revenue. On April 24, at page 2280 of Hansard I asked a question about subsidies. The Minister of Finance said that he did not think it was in the public interest to give the information and I then asked this question:
And after that, would there be any harm in showing me privately to whom these are paid?
The minister said:
I do not like the latter part of the suggestion.
I replied: Tt has been done before." The minister said:
,, ^ . r'oally dp not like it, because I do not tnink l't 'i'S iair to other hon. members.
To-day the Minister of National Revenue suggested to the hon. member for York-Sunbury (Mr. Hanson) that he would show him the information privately. What is the difference between the two questions? Why should one hon. member receive the information privately and not another?


James Lorimer Ilsley: Each minister administers his own department and must take the responsibility for the practices he favours and adopts; and it is possible that my colleague and I have different views as to what should be done in the same situation. It is possible also that these are different situations.


Richard Burpee Hanson: What are the rights of the members of parliament; that is what I should like to know?


Gordon Knapman Fraser: Then the Minister of Finance suggests what the Minister of National Revenue says is unfair.


LABOUR CONDITIONS
[Stage Direction]
On the orders of the day:
Air. S. H. KNOWLES (Winnipeg North Centre):: I should like to direct to the Minister of Munitions and Supply a question, notice of which I sent him earlier to-day. Has the minister received from the Winnipeg city council a copy of a resolution adopted at its meeting of last IMonday evening, expressing concern over the large-scale lay-offs that have taken place recently at the MacDonald Bi others Aircraft plant, and asking the min-istei to investigate the possibilities of allotting to this plant contracts for other types of planes to replace the previous order allotted to this firm ? If so, can the minister indicate what action may be expected in connection vith this request from the Winnipeg city council?


Hon. C. D. HOWE (Minister of Munitions and Supply):: 
Stanley Howard Knowles: I should like to say that I appreciate the statements the minister has made, which set aside any rumours regarding [DOT]the closing down of the plant-; but in connection with the rebuke he endeavoured to give me I should like to point out-
Some hon. MEMBERS. Order.


Stanley Howard Knowles: On a question of privilege, Mr. Speaker, I ask for the right to point
out that my question did not refer to any rumours as to the closing down of the plant-


Some hon. MEMBERS:: Order.


Stanley Howard Knowles: -I asked only about
lay-offs taking place.	*


Some hon. MEMBERS:: Order.


OTTAWA PAINT WORKS-CONDITIONS UNDER WHICH MEN ARE REPLACED BY BOYS
[Stage Direction]
On the orders of the day:
Mr. JEAN-FRANQOIS POULIOT (Temis-couata):	I should like to direct a question
to the Minister of Labour regarding sweat labour in Ottawa. I am informed that men at the Ottawa Paint Works who earn an average of fifty cents an hour were replaced by boys of about eighteen who were paid $15 a week; that their job is to load and unload barrels of white lead weighing three or four hundred pounds, and that those boys are frozen on the job. If that is the case, it is just sweat labour and I ask the minister to investigate it at once. Would the minister be kind enough to tell me if he will investigate the case?
Humphrey Mitchell: Yes.


PRIME MINISTER CHURCHILL
[Stage Direction]
On the orders of the day:
Mr. JEAN-FRANCOIS POULIOT (Temis-couata): Yesterday I asked -a question about the publication of Mr. Churchill's speech of the day before in Votes and Proceedings. Can the Minister of Mines and Resources give me any information in that regard?
Hon. T. A. CRERAR (Minister of Mines and Resources):: When my hon. friend brought this matter up yesterday I asked that it stand until to-day. I have been a bit remiss in my duty. I was engaged in the house yesterday and omitted to mention the matter to the Prime Minister. I do not think the matter has come to his attention. I think before the rather novel procedure as suggested by my hon. friend is adopted perhaps the Prime Minister should give some consideration to it. I promise to make a reply on Monday.


CIVIL AVIATION
[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: I should like to direct a question to the Minister of Munitions and Supply which differs from the question I asked a few moments ago. Has the minister received from

Ways and Means-Interim, Supply
the St. James-Winnipeg airport commission a further proposal for the enlarging of Stevenson field to meet both war-time and post-war needs? In view of the importance of this airport to the whole of Canada, will the minister indicate-


Some hon. MEMBERS:: Order.


Stanley Howard Knowles: -whether consideration is being given-


Some hon. MEMBERS:: Order.


Stanley Howard Knowles: -to the granting of approval to the commission's plans?


Thomas Vien: The hon. member must place that question on the order paper.

Hon. J. L. ILSLEY (Minister of Finance) moved that the house go into committee of supply.
Motion agreed to and the house went into committee of supply, Mr. Bradette in the chair.


James Lorimer Ilsley: Resolved, that a sum not exceeding $46,331,283.90, being one-sixth of the amount of each of the several items to be voted, as set forth in the estimates for the fiscal year ending 31st March, 1945, laid before the House of Commons at the present session of parliament, be granted to His Majesty, on account, for the fiscal year ending 31st March, 1945.
He said: AYith the consent of the leaders of the different groups we are to vote interim supply, one-sixth.


Mr. GORDON GRAYDON (Leader of the Opposition):: Before the resolution carries may I ask the minister for the customary undertaking which the minister and the government always give when interim supply is asked for and granted, namely, that it is given without prejudice to the rights of the hon. members of this house to discuss and deal with any item covered or partly covered by this vote, as the item comes up in the general estimates; in other words, that we shall be as free after this vote passes as we were prior to its passing to discuss the general estimates.


James Lorimer Ilsley: Yes, I give that undertaking.
Resolution reported, read the second time, and concurred in.



WAYS AND MEANS


[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved that the house go into committee of ways and means.

Motion agreed to and the house went into committee, Mr. Bradette in the chair.
James Lorimer Ilsley: Resolved, that towards making good the supply granted to His Majesty on account of certain expenses of the public service for the fiscal year ending March 31, 1945, the sum of $46,331,283.90 be granted out of the consolidated revenue fund of Canada.
Resolution reported, read the second time and concurred in. Mr. Ilsley thereupon moved for leave to introduce bill No. Ill, for granting to His Majesty certain sums of money for the public service of the financial year ending the 31st March, 1945.
Motion agreed to and bill read the first time.
Mr. ILSLEY moved the second reading of the bill.


Gordon Graydon: In view of the fact that copies of the bill have just been delivered to us, will the minister give an undertaking that the bill now in our hands is in the same form as the previous interim supply bill? I do not desire to hold up the bill, but for our protection I should like to have that undertaking.


James Lorimer Ilsley: Strangely enough I hesitate to give that undertaking without seeing what was done at the time it was passed, for I was away then. This cannot be in anything but the same form, as far as I can see. Certainly I believe it to be in the same form. It is very simple; I think I would be safe in giving that undertaking, but I should like to compare it with the other bill before doing so absolutely.
Mr.	COLDAVELL:	The amount is
$46,331,283.90?


James Lorimer Ilsley: Yes.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Bradette in the chair.
Bill reported.
Mr. ILSLEY moved the third reading of the bill.
Gordon Graydon: Once more I rise to the point 1 mentioned a moment ago; that is, in connection with the form of this bill. Has the minister the number of the previous bill, so that a comparison may be made before third reading is given? I would not care to consent to the third reading of this bill until we have had an opportunity of at least seeing that the form is in order.	[DOT]


James Lorimer Ilsley: The Clerk of the House informs me that it is in exactly the same

War Appropriations'
-Mines and Resources
form as the other bill. I have not compared it myself, but on his undertaking I will give the assurance that the form is the same. It cannot be anything else.


Gordon Graydon: I have not been able to find the other bill on my file; however, on the undertaking of the minister that this bill is in the same form as the previous bill I am prepared to agree to third reading. The responsibility now becomes his rather than mine, and that is exactly where I want the onus to rest.


Mr. CHURCH:: This is the sixty-sixth day of this session. Now parliament is being asked to grant more interim supply for two more months, which will bring us beyond the end of June. In other words half our annual expenditures will have been made, .and the detailed statement will not be presented to the house until the 15th day of next session. This is a most unusual procedure; half the annual expenditure will be made without this house having any control over one cent of it. The budget should have been brought down before bringing in a bill like this. We are just holding as a house a post-mortem on these expenditures after the money is passed.
Motion agreed to and bill read the third time.
Mr. ILSLEY moved that the bill be now passed and that the title be as upon the order paper.


Gordon Graydon: A copy of bill No. 65, purporting to be the bill passed by this house on March 30, 1944, has been put in my hands. I have one objection to make; the bill now before us has no schedule, while the other bill has. In my opinion a bill without a schedule is not a proper bill to bring into the house at this time. I think perhaps in giving his undertaking the minister did so sight unseen, and I should like to have these things regularized if possible. I do not want to be put in the position of quibbling about details of this kind, but we are letting this bill go through without debate in order to facilitate the business and I think we are at least entitled to have the bill in regular and proper form.


Stanley Howard Knowles: I think the bill to which the leader of the opposition is referring must be the bill dealing with the supplementary estimates for last year rather than the bill granting interim supply for two months of this year, which is what we are dealing with now.


Gordon Graydon: I think the hon. member is right, but this is the bill that was given to me, and it is not the same as the bill we are
now being asked to pass. Now I have been given a copy of bill No. 53, which appears to be the same, and I am quite satisfied.
Motion agreed to and bill passed.



WAR APPROPRIATION BILL


[Stage Direction]
The house resumed from Thursday, May 25, consideration in committee of a resolution to grant to His Majesty certain sums of money for the carrying out of measures consequent upon the existence of a state of war- Mr. Usley-Mr. Bradette in the chair.

[Stage Direction]
Mines and geology branch-Assistance to provincial governments in construction of transportation facilities into __ strategic mineral, including oil, properties, $75,000.
Mr. NEILL:: Mr. Chairman, I would like the minister to give us some information on this vote and tell us why it has been so greatly reduced. This is a very valuable form of assistance that can be given to mineral development. I recall that, in the district I represent, some years ago a prospector found ore in the Zeballos valley so rich he could make wages packing it out on his back over the mountains and along the beds of rivers. Then this government aided by the provincial government gave a considerable sum to make a road up that valley, which not only affected this man's holdings but meant that a' number of others were developed. Inside of a year or more four stamp mills were running in that district. The stamp mills crush the rock. The ore was very rich and the development was very successful. I remember that one mine was turning out $160,000 of gold a month, and as I say four stamp mills were running there in that small area-a situation that hardly could have been found in Canada before. The money that was granted by the dominion government, aided by the provincial government, helped that enormous development to take place. I would like to see that form of assistance continued, but I see that the vote is cut down from $200,000 last year to $75,000 this year. That will not go far in making roads through mountains. Mineral is almost always found in rock, not in a potato field, and rock is generally associated with mountains. To make a road with bridges through the mountains is very expensive. The sum of $75,000 would not make much more than eight or ten miles of mountain road.
3262	COMMONS
War Appropriation-Mines and Resources
That would be of very little assistance in promoting any substantial development. Would the minister say why this vote has been cut down so much?


Thomas Alexander Crerar: I think the point raised by the hon. member for Comox-Alberni is a pertinent one. The amount provided last year was $200,000, and the actual expenditure was $143,000 odd. This vote is to meet requests that may possibly come in from the metals controller for assistance in getting roads built into places where strategic minerals are found. It is not to assist in the ordinary mining development of the country at all. This is a war vote. It may be that this amount will not be required this year; on the other hand, over $75,000 may be required, in which event we would have to find ways and means of getting it somewhere out of the war appropriation. I wish to impress on the committee that while these are estimates they are really very little more than shrewd guesses as to what may be required.


Richard Burpee Hanson: They are something more than tokens, are they not? You are going to spend some money, are you not? And where?


Thomas Alexander Crerar: We may not spend any of the money. I explained to the committee yesterday on another vote that these items are included in the estimates to meet possible requests from the metals controller for assistance in developing certain strategic metal mines.


Alan Webster Neill: What is a strategic metal?


Thomas Alexander Crerar: They are the ones we discussed yesterday, such as tungsten, chromite, molybdenite, manganese if it were found, fluorspar, mercury, and others. It may be that in the course of this year some prospector who has staked a claim in one of the provinces or some company that has a claim staked may come to the metals controller and say, "We have a property that may be valuable in producing tungsten,"-or it may be some other metal required in the war effort-"but we need assistance. We think it is worthy of your examination." The metals^ controller makes an investigation, and if he thinks the property warrants further exploration; we have made provisions for that.


Alan Webster Neill: In that case gold would not be a strategic metal?


Thomas Alexander Crerar: No.


Alan Webster Neill: Will there be a similar vote
in the ordinary estimates?
[M. Neill. 1


Thomas Alexander Crerar: I think not this year.


Alan Webster Neill: Why not?


Thomas Alexander Crerar: I will come to that in a
moment. I was giving an illustration. Suppose the metals controller finds that the property is worth developing but that transportation facilities are required; the amount could be provided out of this vote.
Mr .HANSON (York-Sunbury): Have there been any requests for assistance this year under this vote?


Thomas Alexander Crerar: Not up to the present time.


Richard Burpee Hanson: Then of
course this is just an enabling vote which may or may not be used?


Thomas Alexander Crerar: Quite so.
Mr. HANSON (York-Sunbury)-:	Has the
government through its own motion or through the metals controller investigated the supplies of strategic metals? I have in mind tungsten. There is in the county which I have the honour to represent, to use the language the hon. member for Que-ens-Lunenburg used recently, a very large deposit of tungsten at Burnt Hill mountain. In the last war some development of that deposit took place; has it been called to -the attention of the authorities in this war, and if so have they done anything about it? I believe that the ore is of very high quality and there is an ample supply of it if it is capable -of reduction. As a matter of fact, the development is one that I think the country ought to undertake. I have always been surprised that the provincial government did not do something about it. I must confess that my knowledge of the property is most superficial, but I -am drawing the attention of the minister to the fact that there is a large deposit of tungsten in the parish of Stanley in the county of York which might be explored and, if it is of good quality, be made accessible-it is not at the moment. It might be an important contributing factor in the present war.


Thomas Alexander Crerar: The deposit to which my
hon. friend refers did come to the attention of the metals controller and was examined by him and by the officers of the mines branch of my department. It was one of a great many properties. The decision was not to go ahead with that particular one. I am not in a position at the moment to give the reasons why, but I presume other sources of supply were more readily accessible. The requirements for tungsten at the moment, according to the Department of Munitions and Supply, are not nearly so pressing as they were eighteen

War Appropriation-Mines and Resources
months or a year ago. In other words, quite substantial quantities of tungsten have been developed and secured.


Richard Burpee Hanson: In what part of the country?


Thomas Alexander Crerar: In various parts. As a matter of fact some of the gold mines, such as Hollinger, find tungsten in with their ores. I am unable to state the quantity, but I know that fairly large quantities come from, that source. Some comes from Nova Scotia and British Columbia.


Richard Burpee Hanson: Would the minister be good enough to have his officers send me what they have in the nature of a report on the Burnt Hill tungsten deposit?


Thomas Alexander Crerar: I shall have that sent to my hon. friend, if that will be satisfactory. The hon. member for Comox-Alberni raised the question of assisting in the development of gold producing properties. Commencing in 1936 and for several years thereafter a vote was provided in the estimates of the Department of Mines and Resources for assistance in developing transportation into mining areas. Substantial amounts were spent in conjunction with the provinces in carrying out that work. That vote was dropped at the commencement of the war or shortly after. There has not been the pressing need for gold in the last few years that there has been for many other metals, and so for the moment that has been put more or less aside.
My own opinion is that when the war is over and we come to times of peace the matter of the development of mineral areas, both in base and precious metals, should receive the serious consideration of whatever government is in power. During the depressed thirties there was no single industry that made such a contribution to maintaining the standard of economic wealth we had during those years as the mining industry. It was the one industry that expanded during those years and it continued to expand until the outbreak of war. In connection with base metals there has been a great expansion since the outbreak of war. When the time comes that the story may be told in full, the contribution made by *the metal mines of Canada to the winning of the war will be recognized as a fine contribution indeed. I would hope that in the policies that may be developed when this wretched war is over the type of assistance referred to by the hon. member for Comox-Alberni will be taken up again. There is no question of its economic value to the country.


Mr. SLAGHT:: I think the minister is right in reducing this item substantially, because,
as the committee will note, it is to provide transportation facilities for strategic metals development. Last year two large companies, Hollinger in Ontario and Bralorne in British Columbia, were the recipients of the one-third which the government provided in connection with this work and which made up the $142,000 spent at that time.
Apropos of the question asked by the hon. member for Comox-Alberni about gold, the minister hoped that when the war is over any government in power would take up the stimulating of activities in the production of gold. I want to submit to the committee and for the consideration of the minister that we should not wait until the war is over to encourage prospecting for gold and the development of gold mines. I think the hon. member for Comox-Alberni will probably be with me in that view.
In the first two years of the war under the then minister of finance, the present Minister of National Defence, the gold mining companies of Canada were asked to step up their production, to the highest possible degree. They put in new machinery and did everything to respond to that request. Additional production was needed because the Department of Finance was put to it to find1 gold in order to finance our war needs. Later on, under the liberal treatment that this country received from our neighbours to the south in assisting us in our great munitions production programme and furnishing us under a type of so-called lend-lease with the basic materials we were putting into the munitions we were sending to the mother country and other allies, the need for gold as a means of payment to Washington eased off very materially.
Drafts were made upon the men employed in the gold mines, and I think quite properly. An entirely different programme was adopted by the Department of Finance, and I think quite properly. They said, "We do not need gold with which to pay; we have better relations with our neighbours, and we are financing without the use of gold." It was said that the gold mining industry must bow to the manpower needs of base and strategic metals and other important war industries. Under that state of affairs one company with which I am acquainted has been operating with only twenty-seven per cent of their normal manpower.
Gold production in our country has fallen off, but to my mind that is not so alarming as the fact that the search for new gold mines and new base metals mines, the prospecting which is the very genesis of ultimate production, has also fallen off. That is to be expected, because the prospector is an adven-
3264	COMMONS
War Appropriation-Mines and Resources
turous and courageous man.. I spent ten years of my life among these men in northern Ontario. They have enlisted in overwhelming numbers and after the war they will be back. If the committee agree with me when I say that while we cannot predict the date, we know we shall not lose the war, then my humble submission to the minister is that we should not wait until peace is declared to encourage prospecting again.
Instead of a large item of $142,000 going mainly to two wealthy mining companies to assist in building roads into strategic metals properties I should like to see the minister stimulate the Minister of Finance when he brings down the budget and have provision made this year to provide for the bonusing and encouragement of prospecting. Everyone will tell you that there is a long period from the time a property is first discovered and staked until actual production occurs. Take the Hollinger mine, for instance, which has produced $150,000,000 of gold since it was first discovered. After the discovery of the Hollinger it took four years before a brick of gold was produced. That is the history of gold mining. Therefore we should be alert, in my judgment, because I am not so sure that when peace comes our neighbours to the south will be so ready to lencHease and send their material "on the cud"; they may resume quite properly, the position of saying, "For the coal, the gasoline, the cotton and other raw products which you need from us in your economy you have got to pay us with something", and gold will be a very sure economic assistance to this country in enabling us to pay for raw materials which we need after peace is declared.


Mr. MacNICOL:: Not if we have only a paper money and nothing behind it.


Arthur Graeme Slaght: I do not know what my hon. friend means by that. I hope he is not trying on this item to provoke me into an argument on economic principles. If he thinks we ought to go back to the gold standard, I suggest that he read history. My view is that never again should we return to the gold standard; it would cramp the development of the natural resources of this great country. Perhaps my hon. friend did not mean that. If he did, I should like personally to convert him, if he has a couple of hours or a couple of days to spare.


Mr. McCANN:: Or a couple of months.


Arthur Graeme Slaght: I should like to show him what is involved.


Mr. ROWE:: It will take until after the next election.


Arthur Graeme Slaght: There is nothing political in what.I am talking about, and I am sure my hon. friend did not mean to suggest that. The gold industry has been of great value to this country over the past thirty years. Look at the ramifications of the industry, the money which has been spent on wages, machinery, transport, everything which has gone into our economic life. The gold industry of Canada has had a magnificent stabilizing effect upon the economic life of this country. That being so, my only purpose is to urge the minister to say to his colleague or colleagues who bring down our budget: Do not overlook in this present session provisions which will encourage and stimulate the prospector, the man who must come first, before you build your transport or your roads, before you bring your hoists to raise the ore to the surface, before you construct your mills, and remember that four or five years must elapse between the discovery of a property and bringing it into production; so that you must make provision to encourage that branch of the industry.


William Earl Rowe: You are already two years late.


Arthur Graeme Slaght: There is some force in what my hon. friend says. I do not know whether he participated last year in the discussion ol this item for the encouragement of prospecting. To my mind the amount was too niggardly a provision, and this country can well afford to increase it. It does not represent very much in the sum total of $5J thousand millions which we spend 'n twelve months.
It has been indicated to me that Canada is not on lend-lease. That of course is true; and I may have created a wrong impression I did not mean to say that we were on lend-lease; I intended to say, on a basis of commercial trading with our neighbours to the south whereby they eased tremendously their demands in the earlier years of the war, before they were allies with us, in requiring us in the earlier years to pay either in kind or in gold. When they entered the war, as they did after Pearl Harbor, their whole economic attitude toward Canada altered very materially; in the past two years they have treated us with a great deal of consideration and a helpfulness which has reduced the need for gold. That is the reason for the change in the attitude of our administration towards gold mining. First it was, " Produce all you can," then, " Ease down and give your men to other industries." Let me therefore correct any suggestion I may have conveyed that we are on a lend-lease basis with the United States. We make a great contribution to them, let it not be forgotten, in nickel and other strategic minerals. Canada's place in the production of strategic metals and the

War Appropriation-Mines and Resources
stepping up of that production during these war years is a magnificent war effort of which we may well be proud. Any hon. members who desire to pursue that study will find in our booklet, " Canada at War," a chapter devoted to what we have done in the world picture in the producing of strategic metals.
I have spoken longer than I intended. I merely desire again to impress upon the minister that we should at this very session stimulate prospecting for and the early stages of the production not only of strategic minerals but of gold as well.


[Stage Direction]
Item agreed to.
Special exploration and development work in connection with the supply of strategic minerals, $60,000.
Thomas Alexander Crerar: Yesterday the hon. member for Lake Centre asked for some detailed information in regard to the expenditures under this vote. He desired a break-down of expenses under the strategic minerals vote fqr 1943. I find that they were as follows: Nova Scotia, $13,502; Quebec, $127-the expenditure in this province was small, but the year before it was much larger-Ontario, $45,630; Manitoba, $20,000; British Columbia, $10,564; Yukon Territory, $4,600. These amounts, with administration expenses of $23,363, give a total of $117,787.
The hon. member for Hastings-Peterborough asked some questions about the Miller deposit of fluorspar at Madoc. As we obtained the questions from Hansard they were these. First, how much did Mr. Miller spend to bring the mine into production? The answer is that Mr. Miller's expenditures prior to the mine being established in production are not known, but he must have had a considerable investment in connection with his acquiring of rights to mine fluorspar ore. The next question was: What part of the government's advances of $34,196 odd were used by Mr. Miller after the mine was brought into production? The answer is, none. Third, what profit did Mr. Miller make on fluorspar? The answer is, as indicated yesterday, that we have no information as to what Mr. Miller's profit was. Fourth, what were the expenses of supervision, including engineers, surveys, auditors and travelling? The supervision expenses for 1943-44 in connection with the Madoc fluorspar agreements amounted to slightly more than five thousand dollars, as a matter of fact $5,168.


John George Diefenbaker: One supplementary question: has the minister any information as to how much this property cost Mr. Miller?


Thomas Alexander Crerar: None. As I indicated to the committee yesterday, Mr. Miller had control
of a property which could produce fluorspar if it were worked. It was brought to the notice of the metals controller, it was examined, and the expenditure of some public money to get it into production was considered justified, so the arrangement was made. How much Mr. Miller paid for it, how long he owned it, or any other particulars of that kind we do not know; nor, to be quite frank, were we interested. All we were interested in was getting fluorspar, and getting it on terms which would reasonably protect the public interest; and I think these aims were accomplished in the way it was carried out.


[Stage Direction]
Item agreed to.
Bureau of Mines-Metallic minerals division 

Services to war departments, $330,000.
John Ritchie MacNicol: How much has been spent and how much is it proposed to spend on the new laboratory? Personally, I think this is one branch of the department that has been more or less starved for money to build adequate equipment. I would like to see in Ottawa a metals laboratory that would be a credit to the city and the country with all the necessary equipment to handle everything pertaining to minerals that come here. A month or two ago I received a bag of metal quartz or samples from a gentleman who is well known to the minister, Mr. W. J. Young of the Pas, Manitoba, who apparently is a mining man of note in that country. These samples are still in my room. He suggested that I send them to someone in Ottawa to have them tested, but I do not know where to send them. If there is a metals laboratory to which I can send them I shall be glad to send them there or I could send them to the minister, because the gentleman I referred to is in the minister's own riding. I support this vote because I think an adequate metallic laboratory is something that we have long lacked. I have been out to the small one in Ottawa, in the southwest corner of the city, near the city limits, but the buildings I saw did not strike me as anything that the government of Canada should have for laboratories of any kind. If there is now being erected a laboratory for the testing of minerals I hope it will be a real one. If so, it will be worthy of support.


Thomas Alexander Crerar: The point is, of course, an important one. Prior to the war we had considerable research facilities in the mines branch located on Booth street in Ottawa.


John Ritchie MacNicol: That is the street.


Thomas Alexander Crerar: Since the outbreak of the war that has been considerably extended. A new physical metallurgy building was put up
3266	COMMONS
War Appropriation-Mines and Resources
at a cost of $230,000 and laboratory equipment put in amounting to $100,000 or more, and that added substantially to the facilities which existed at the outbreak of the war. The work done under this vote is carried' on in the new laboratory building as well as in the old buildings, and I think I am safe in saying that by far the greater part of the work of the staff engaged there is devoted to war purposes. That consists of testing of various kinds. I do not wish to go into the matter in too much detail, because we have been asked by some of the allied governments with whom we are cooperating to give out as little information as possible as to the nature of the work that is being done. I can say, however, that it has practically all to do with war work and largely in the testing and improving of new devices. I am glad that my hon. friend has emphasized the importance of research work. There is no question whatever of its vast significance. We have under consideration now plans for a considerable extension of research work particularly in the utilization of coals and oils.


John Ritchie MacNicol: Hydrogenation.
Mr. CRERAR,:	Precisely. Experimental
work looking to the application of the hydrogenation process for getting more out of the oils that we have and possibly getting oil from coal. Hon. members know that methods had been developed in Germany before the war and since the outbreak of the war, and Germany has unquestionably secured a great deal of her fuel oil for motors and the like by synthetic processes from coal.


John Ritchie MacNicol: Three hundred million
barrels a year.


Thomas Alexander Crerar: Probably. We have vast
quantities of coal in Canada and I think an expenditure of the kind is highly justified. If the bitumen from the tar sands is ever to be successfully developed- this is my own idea; I may be wrong, and perhaps I am putting myself in the realm of prophecy where I should not be-if, I say, this bitumen from the sands is to be commercially exploited with success in the future it will probably be through the application of the hydrogenation process.


John Ritchie MacNicol: I suggested that two
years ago. Now, in reference to this small bag of stuff sent me from the Pas-


Thomas Alexander Crerar: I am sorry I overlooked
that. If Mr. Young will take it to the mines branch on Booth street and inquire personally for Mr. Timm, when we get him off . the grid here, we will give Mr. Young every possible facility. That work is being con-
stantly done by the mines branch in the testing ^ of ores and sampling them and giving advice on them.


Mr. GAUTHIER:: Will the minister answer the motion I put on the order paper on May 16 addressed to Minister of Munitions and Supply? I think he can answer it. I should like to have the correspondence with reference to the closing of the Montauban zinc and lead mines in the Portneuf county-the correspondence between the Wartime Metals Corporation, the Department of Munitions and Supply, and Siscoe Metal Limited. I believe that two or three hundred workers are being laid off. I should like to know if this is on account of the situation existing at the present time, which situation was explained by the Minister of Munitions and Supply last night when he suggested that the market for zinc was full and that high price contracts had been negotiated by, and cancelled with the Wartime Metals Corporation. I should like to get the facts about the situation with respect to zinc.


Thomas Alexander Crerar: I am advised that the mine to which my hon. friend has referred has been closed as a result of the Metals Reserve Corporation of the United States terminating its contract for concentrates from that mine. It is not a matter that comes within the control of this vote or, as a matter of fact, within the control of the Department of Mines and Resources. These contracts or arrangements with the Metals Control Reserve Corporation in the United States were negotiated by the Department of Munitions and Supply. The Minister of Munitions and Supply acted in reality as the agent of the Metals Reserve Corporation in making arrangements with the various mines. The Metals Reserve Corporation has terminated its agreement with several mines, and the one to which my hon. friend refers is one of those.


[Stage Direction]
Item agreed to.
Lands, parks and forests branch-
Bureau of Northwest Territories and Yukon affairs-Expenses of liaison officers in connection with the Alaska highway and Canol projects, $10,000.
Mr. CASTLEDEN:: I was dealing with this matter the other evening on another item, and the minister said that an opportunity would be given to discuss the allocation of oil and the Canol project generally under this item.
I referred the other evening to the order in council tabled in the house on May 5 last, and at that time I asked permission of the committee to have it printed in Hansard along with orders in council 742, 1138 and 2447, which

War Appropriation-
-Mines and Resources
had to do with the handing over of the oil resources of the Yukon territory and a large portion of the Northwest Territories. To save the committee the time of my reading them I would ask permission to have them printed in Hansard.


The CHAIRMAN:: It requires the unanimous consent of the committee.


Thomas Alexander Crerar: These orders in council have all been laid on the table. They are available to hon. members. What is the use of going to the expense of having them reprinted in Hansard?


George Hugh Castleden: Merely to save time.
I will read them if you wish. I believe the people of Canada ought to be thoroughly informed as to what has been done with the oil resources and the rights for exploring for and developing oil and selling it. Complete control is handed over under this order in council. If the minister prefers that I read them I am quite willing to do so.


Joseph-Arthur Bradette: They are already available for distribution to every hon. member of this House of Commons and the Senate. Why should the country be put to the expense of having them reprinted in Hansardt


John George Diefenbaker: What are the
numbers?


George Hugh Castleden: Numbers 2904, 742, 1138 and 2447.
The important one is 2904. The first part of this order in council reads as follows:
Whereas following the exchanges of notes between Canada and the United States in reference to extending the fuel supply for the United States army in Canada and Alaska, special regulations were established by order in council P.C. 742 of January 28, 1943, and P.C. 2447 of March 26, 1943, for the disposal under permit of petroleum and natural gas rights, the property of 'the crown, in the Northwest Territories anck Yukon Territory;
And whereas Imperial Oil Limited, who through a subsidiary held oil leases on certain lands in the vicinity of Fort Norman in the Northwest Territories acquired under the regulations established by P.C. 154 of the 19th January, 1914, and P.C. 331 of the 11th February, 1921, and had already found and was producing oil therefrom, was selected by the United States government to search for and develop the additional supply of oil;
And whereas in pursuance of an agreement between the United States government and Imperial Oil Limited, the company acquired under the regulations established by the said order in council P.C. 742 of January 28, 1943, permits comprising in all 139,176 acres, and carried out an exploratory and drilling programme thereon and, as a result, a proven field of oil has been delimited, comprising approximately 4,264 acres, estimated to contain from thirty to sixty million barrels of recoverable oil;
And -whereas approximately one-third of such field is included in the leases previously acquired by the company and the other two-thirds in the permits acquired under the regulations established by the said order in council P.C. 742 of January 28, 1943;
And whereas under the last-mentioned regulations, it was provided that at the termination of the war the company would have the right of taking up under leases when oil was discovered one-half of the area in each permit and that the other one-half would continue to vest in the crown;
And whereas the Minister of Mines and Resources reports that no oil has yet been found on any of the lands covered by the permits issued to the company except that found on those portions thereof within the proven field, although the company under its agreement with the United States government did carry out considerable exploratory work thereon;
That the United States government is desirous of renegotiating its contracts with the company and of withdrawing from participation in the exploratory and drilling programme; and in consideration of the expenditures it has made the United States government desires to acquire from the company an option to purchase for its own use and not for resale up to one-half of the oil (but not exceeding 30 million barrels) in the proven field and ten per cent of the oil in new fields that may be found, until a total of 60 million barrels had been obtained;
That before the company renegotiates the said contracts it is necessary for the Canadian government to decide upon;
(a)	The respective interests in the proven field and the manner in which the said field is to be developed;
(b)	The terms upon which the company can explore and develop the remainder of the area held under permit; and
(c)	The regulations to be established for the search for and development of oil in the rest of the Northwest Territories and Yukon territory;
That it is expedient to terminate as soon as possible the exploratory programme being carried out under the direction of the company for the United States government and to make available the whole of the Northwest Territories and Yukon territory for prospecting and development under new regulations that will facilitate, encourage and expedite the discovery and development of other large reserves of oil;
That it is to the general advantage of Canada that new sources of oil be discovered; that there are approximately 100,000,000 acres of lands in the Northwest Territories and Yukon territory warranting exploration for oil but owing to their remoteness and distance from markets large expenditures would be involved in exploring for and developing additional reserves sufficient to warrant the construction of a new pipeline; that it is estimated such expenditures would amount to $100,000,000, including the cost of the pipeline; and it is therefore necessary to establish regulations which will encourage exploration and development on a sound economic basis; and
That the war committee of the cabinet have studied the questions involved and are in general agreement with the recommendations hereinafter set forth;
Therefore, His Excellency the Governor General in Council, on the recommendation of

War Appropriation-Mines and Resources
the Minister of Mines and Resources, and under and by virtue of the War Measures Act, chapter 206, Revised Statutes of Canada, 1927, is pleased to authorize and doth hereby authorize the Minister of Mines and Resources to enter into an agreement with the Imperial Oil Limited to include, among other terms and conditions, the following:
1. In respect of the proven field

(a)	The area to be developed as a unit operation by the company, the oil produced therefrom to be disposed of by the company in the ordinary course of its business, the government's share therein to be sold at prices satisfactory to the government;
(b)	The government's share of the oil to be one-third and the company to be paid the actual direct costs of producing it, plus a fee of 10 per cent;-
I should like the committee to note the portion that Canada gets out of it, although there is nothing, as I said before, to show how the direct cost of producing is to be arrived at.
(c)	Subject to the prior and preferred supplying of all local requirements for crude petroleum and petroleum products, the company to have the right of giving an option to the United States government to purchase for its own use, ibut not for resale, an amount up to one-half of the oil recovered from the proven area, not exceeding thirty million barrels, the price therefor to be the cost of production, plus 20 cents per barrel. From its share the Canadian government will supply one-third. The United States government after May 1, 1954, shall take its oil currently as the field is produced,-
That is after 1954, so that you see this is not just a war-time contract; it has te do with the more or less permanent leasing of these properties and the oil rights and resources in that area.
-at the rate of at least 20 per cent of the *total amount currently produced from the proven area for export. If the United States government does not desire to take its share currently, then the company shall ibe entitled to sell it on its own account and the said government would be entitled to any difference between the cost of production plus 20 cents per barrel, and the average sale price received by the company for on sold by it during the period in question;
(d)	The company shall pay a fixed permanent royalty of 5 per cent on its two-thirds share of the oil produced and on that portion of the Canadian government's oil that may be included in the option to the United States;
(e)	Up to the time the agreement comes into effect the company may deliver to the United States government all oil produced, less that required for local needs, and no royalty shall be paid thereon;-
I do not think anyone would find] fault with that in war time.
(f)	No rentals or other fees other than royalty shall foe paid on that portion of the area in the proven field covered by permits issued under P.C. 742 but the company shall pay the rentals and fees payable under the leases it now holds;
[Mr. Castleden.l '
(g)	The agreement shall come into effect six months after the termination of hostilities or when the contract between the United States government and the company is terminated, whichever date is the sooner.
2. In respect to the balance of the permit area

(a)	Upon the completion of the renegotiation of its contracts with the United States government, the company shall have the right of surrendering the areas under permit not included in the proven field and of taking in the place thereof prospecting permits of the kind to he provided for in the new regulations and thereafter such areas shall ibe subject to the conditions, rights and privileges applying to such permits, provided however that instead of the rate of royalty to be provided for thereunder and in lieu of any interest that may have accrued to the crown by virtue of the regulations under which the said permits *were issued, the company will pay a royalty on all oil .produced from the said area of 71 per cent for the first five years after commercial exploitation has commenced,'


Thomas Alexander Crerar: Does my hon. friend propose to read the whole order in council?


George Hugh Castleden: Yes, and I am just at page 4 now.


Thomas Alexander Crerar: Then perhaps the committee will excuse me while I go out and have a smoke.


George Hugh Castleden: You have my permission. You would not give me permission to have the order in council tabled.


Joseph-Arthur Bradette: Order; it was not a question of permitting the hon. member to place the orders on, Hansard. The hon. gentleman must realize, as I stated previously, that these orders in council have been published and are ready for distribution to all hon. members of the House of Commons and Senate. That is why his request was refused. They are public documents.


George Hugh Castleden: As I said on Tuesday evening when I was stopped, I think the people of Canada have a right to know what is happening to their resources, as a result of orders in council like these passed under the War Measures Act. There was no bill brought before this house in connection'with handing over these resources; this is the only information we have, and I think the people of Canada are entitled to know exactly what are the regulations.


Joseph-Arthur Bradette: The hon. member
realizes that these are public documents which are available for distribution to all hon. members, and also available to the whole of Canada.


George Hugh Castleden: This is one method of giving them further circulation, so that the people of Canada may have an opportunity of

War Appropriation-Mines and Resources
learning just what is happening to their resources. The order in council continues:
-10 per cent for the second five years and 121 per cent thereafter, plus 10 per cent of the net profit derived by the company from such operations, to be computed as part of the royalty before income taxes;
(b)	That in respect of any oil found outside the proven field the company may grant an option to the United States government to purchase 10 per cent thereof until the balance required to make up the total of 60 million barrels is reached after including that obtained from the proven field, and in respect to such balance the said government will take the same at- the rate of 20 per cent of the total amount currently produced as in the case of the share coming from the proven field-.
His excellency in council is further pleased, hereby, to authorize the Minister of Mines and Resources to prepare and submit for approval new petroleum and natural gas regulations for the Northwest Territories and Yukon Territory to provide for, among other things, the following:
(a)	The granting of exploration permits for periods of three years renewable for a further period of three years;
(b)	No permit shall exceed 256,000 acres and not more than eight permits shall be held iby any one individual or company at one time. At the end of the first three year period anyone bolding more than 1,000,000 acres under permit shall reduce the said excess by 20 per cent during the fourth year, by 30 per cent during the fifth year, and by 50 per cent during the sixth year, so that the total area shall not exceed 1,000.000 acres, and thereafter any permittee may obtain additional permits as long as the area held under permit at no time exceeds that amount, exclusive of the amount that may have been taken up under leases;
(c)	During the first three years of the permit the holder shall expend in exploration works not less than the sum of 20 cents per acre, during the fourth year not less than 30 cents per acre, during the fifth year not less than 40 cents per acre and in the final year not less than 50 cents per acre;
(d)	At the end of the sixth year, unless such time is extended in the discretion of the governor in council, the holder of permits may acquire leases up to 35 per cent of the area held under a permit or group of permits, provided however that the total area held under leases iby any one person shall at no time exceed 350,000 acres;
(e)	The leases to be issued shall be for a term of 21 years, renewable for further periods of 21 years;
(f)	The rental shall be 50 cents an acre for the first year and thereafter $1 an acre. Credit for work done may be allowed against the rentals, due for the first two years of the lease and when commercial exploitation commences royalties then payable may ibe credited on all Tentals due over 50 cents an acre;
(g)	Royalty payable to be 7J per cent for the first five years after commercial exploitation has commenced, 10 per cent for the second five years and 121 per cent thereafter, subject to the provision that where it is satisfactorily proven that the cost of producing oil or natural gas from the area covered by any lease or group of leases, including the amount paid in royalties, is such that the commercial exploitation thereof does not permit a reasonable profit on the capital invested therein, the governor in council may reduce the rate of royalty and likewise may increase it again up to the original level w-hen the reasons for making the reduction no longer exist;-
That is a perfect guarantee of profit on the capital invested.
(h)	The governor in council may determine the allowable production of any well or wells or of any field and regulate the taking of petroleum or natural gas so as to prevent waste and to ensure conservation in accordance with the best practice;
(i)	The prices to be charged for petroleum products obtained from any lease, sold for use in the Northwest Territories and Yukon territory, shall ibe subject to the approval of .the governor in council;
(j)	Where no adequate existing facilities are available a lessee shall have the right to build and operate a pipeline to the nearest market and connecting feeder lines and for the purposes thereof shall be entitled' to free right of way over crown lands and the use of public roads. The pipeline shall be operated as a common carrier under such regulations as the governor in council may impose.
(k)	The government shall have the right of taking possession temporarily or permanently of all or any part of the areas held under permit or lease, together with all or *any part of the improvements, buildings and equipment thereon and pipelines and feeder lines that any permittee or lessee has constructed, in which event the permittee or lessee shall be compensated therefor. Failing an agreement as to amount of compensation, it shall be fixed by the exchequer court. Certified to be a true copy.


Clarence Decatur Howe: I hope the interjection by
my hon. friend will not be taken as part of the order in council. He said something about a perfect guarantee of profit.


George Hugh Castleden: I would not want that read as part of the order in council.
The question I should like to ask the minister is this. I do not think anyone in this house will question the part Canada should play or the contribution she should make to assist the war effort of the united nations. I do not think there will be any objection to Canada's resources' being made available in the general pooling under lend-lease for the prosecution of the war, that we may make our contribution along with that of other countries.
If you will look over the exchange of notes between Canada and the United States which led up to the order in council, you will see that the United States was asking, so far as the Yukon is concerned, just for that portion which lies north of the G6th parallel. But the order in council hands over to them the

3270	COMMONS
War Appropriation-Mines and Resources
rights of exploration and development in the whole Yukon territory and practically everything in the Northwest Territories west of a line parallel to the Mackenzie river and seventy-five miles east of it. What does the minister value these oil resources at? What are the Canadian people receiving out of these resources? The Canadian government can get one-third of the oil, for which it must pay exactly what it cost, plus a fee of 10 per cent. I maintain that the great natural resources of Canada are the birthright of the Canadian people, the birthright of the boys who are fighting on the war-fronts of the world to-day, and when they come back to Canada they expect to take part in the -development of the natural resources of this country in the interests of all the people. But Canada and the United States have entered into this agreement with Imperial Oil of Canada, which is controlled by Standard Oil of New Jersey, and all the development rights are being handed over to that company. Why does the Canadian government not enter into an agreement with that company to use these resources for herself? She could provide the United States with all the oil she requires for war purposes in that area.
I think the Canadian people are entitled to a statement from the minister as to the value of the resources handed over, the value of the resources remaining, and a statement as to why the resources were handed over. In my estimation this is stealing. I should like a statement from the minister as to Canada's contribution so far as the oil is concerned and what the Canadian people are to get out of it by handing over to that company one of our greatest birthrights.


Thomas Alexander Crerar: I have endeavoured to follow the remarks of my hon. friend since he concluded reading the order in council and I am somewhat at a loss to know just what he has in mind. He inquires what the Canadian people will get out of these transactions.
I think that is clearly set out in the order in council and in the regulations forecast in the order in council. How much the Canadian people may get out of it in the end, or how much anyone may get out of it in the end, depends upon factors of -which at the moment we know nothing. If no additional oil were discovered in the Mackenzie river country, I would say that no one is going to get anything out of the development.


George Hugh Castleden: Imperial Oil would not be drilling there and proving the field in that case. They have done some drilling and proving there.


Thomas Alexander Crerar: 
George Hugh Castleden: Does that include the
highway?


Thomas Alexander Crerar: No; that is just the Canol project alone. In laying a pipeline across rugged, mountainous country such as existed between Norman Wells and Whitehorse, transportation facilities had to be provided.


Gordon Graydon: How far is that?


John Ritchie MacNicol: Four hundred miles.


Thomas Alexander Crerar: It is more than that; it
is about six hundred miles from Norman Wells to Whitehorse, right over the ridge of mountains. The difficulties were almost insuperable. I ask the committee to bear in mind that this country is in the very far north and it is expensive to provide transportation facilities. All the equipment for drilling, all the pipe, all the supplies needed to maintain the people who were doing the work had to be transported to Waterways by rail. It was then put on boats and taken down the Athabaska river, across the western part of lake Athabaska and down the Slave river to Fitzgerald. At that point every pound of freight had to be taken over a portage of sixteen miles from Fitzgerald to Fort Smith. At Fort Smith the supplies were loaded on barges and boats and taken down to Slave lake and across that body of water, which is rather difficult to navigate under some conditions, to the Mackenzie river. The supplies continued down the Mackenzie to the point where they were taken off the boats to be moved inland over the muskeg to the place where the drilling was done.
I know something of these difficulties because I visited that part of the country in
100-206i
August, 1942, when the work was being carried on with the greatest possible speed. The difficulties to be overcome were tremendous. When they got the pipe and other supplies as far as Norman, which is 1.550 miles from Edmonton by rail and water and portage, they had to be transported out along the pipeline toward Whitehorse. That involved building the type of road that would provide the necessary transportation facilities. As I say, the United States authorities spent an immense amount of money which in the aggregate, as reported to the Truman committee in Washington, amounted to $134,000,000.
The pipeline was a four-inch line. This size was adopted because it was easier to transport than it would have been to transport ten or twelve-inch pipe. This pipe was more readily obtainable because it did not require so much iron and steel which were very pressing needs at that particular time not only in the United States but in Canada. The four-inch pipeline was designed to handle about 3,000 barrels a day.


George Hugh Castleden: In winter as well as
in summer time?


Thomas Alexander Crerar: Not so much in winter. I have not in mind at the moment what the winter capacity would be, but there is no doubt that the cold weather would interfere with the movement of oil and it would be substantially less. It was estimated that in the event of oil supplies to Alaska being shut off on the Pacific coast this pipeline would provide some of the necessary fuel for the defence of Alaska and northwestern Canada. Canada was vitally interested in seeing this work carried on because, if the Japanese had succeeded in overrunning Alaska and had got into northwestern Canada, we would have had a serious problem on our hands.
Consequently, when the United States made these proposals the Canadian government accepted them. This is all set out in the exchange of notes which were tabled in this house from time to time as soon as they could be. I want to impress upon the committee that this work was purely a defensive measure in our war effort. The picture has changed since. The Japanese are out of the Aleutian islands and the allied nations have increased their strength on the Pacific tremendously. The United States alone has naval forces in the Pacific which are more than a match for Japan. Consequently the danger of an interruption in gasoline supplies by the Aleutians and Alaska being overrun has pretty well disappeared.
The need which led to this project being undertaken no longer existed and it then be-
3272	COMMONS
War Appropriation-Mines and Resources
came a matter of making adjustments and getting a new arrangement with the United States. Once the defensive need had disappeared the United States were not anxious to continue exploring for oil up in our northwestern country. They desired to get out and I think the general Canadian point of view was that the United States interest in the development of these resources should be concluded. That is what was being done by the arrangements to which my hon. friend takes such serious exception.


Mr. GREEN:: Are they not still operating lhe pipeline?


Thomas Alexander Crerar: They will operate the pipeline as long as the war lasts?


Howard Charles Green: And the refinery?


Thomas Alexander Crerar: Quite. I am speaking of the exploration work and drilling for oil. With the drilling of some more wells in the proven field there is enough oil available to meet the requirements of the present pipeline. If hon. members are interested and will refer to the exchange of notes they will find there set out the basis for the final liquidation of the arrangement when the war is over.


George Hugh Castleden: I do not find any such thing. I do not know the terms for the liquidation of this after the war is over. I have here the notes for December 28 and those in February and March. They do not deal with the matter.


Thomas Alexander Crerar: If my hon. friend will refer to the notes which were tabled-I cannot give him the date but they are in the records of the house-he will find a provision set out for the termination of the arrangement once the war is over.	[DOT]


Howard Charles Green: In effect they give the Canadian government first option.


Thomas Alexander Crerar: Yes; the Canadian government is given first option on the-pipeline, as I recall. If they do not wish to buy it, then it can be put up to auction. I have here the United States note.


George Hugh Castleden: What is the date of that?


Thomas Alexander Crerar: June 27, 1942. In the exchange of notes I find this from the United States Secretary of State:
My government further proposes that the pipeline and the refinery shall remain its property, and shall be operated under contracts with it or by its agents or representatives during the war. It further proposes that at the termination of hostilities the -pipeline and refinery *'*'liall be valued by two valuers, of whom one shall be named by the United States and one

by Canada, with power, if they disagree, to appoint an umpire. The valuation shall be based upon the then commercial value of the pipeline and the refinery, and the Canadian government shall be given the first option to purchase at the amount of the valuation. If the option is not exercised within three months, they may be offered for sale by public tender, *with the amount of the valuation as the reserve priee. In the event that neither the Canadian government nor any private company desires to purchase the pipeline and refinery at the agreed price, the disposition of both facilities shall be referred to the permanent joint board on defence for consideration and recommendation.
Additionally, it is proposed that bo-th governments agree that they will not themselves order or allow the dismantling of either the pipeline or the refinery, nor will they allow any company which purchases them so to do, unless and until approval for dismantlement is recommended by the permanent joint -board on defence.
It is understood that if the pipeline and refinery are at any time used for commercial purposes they will be subject to such regulations and conditions as the Canadian government may consider it necessary to impose in order to safeguard the public interest.
That is the clause in the exchange of notes which provides for the final termination of the arrangement under which the United States authorities came in to secure these very necessary and pressing supplies of oil as regarded at that time.


George Hugh Castleden: That has to do only, I believe, with the disposal of the pipeline. It does not deal with the permit for the production and development of oil over that whole area. That is what I was talking about.


Thomas Alexander Crerar: I might read a portion of the note which has to do with the question just asked by my hon. friend:
My government,-
This is the United States minister, for his Secretary of Stat-e, speaking.

faced with -the necessity of obtaining an increased fuel supply without delay, desires to propose the -following project:
That it (a) make surveys and construct a pipeline either by United States army engineers or by contract, of a size sufficient to deliver three thousand barrels of oil daily from Norman Wells, Northwest Territories, Canada to Whitehorse, Yukon Territory, Canada; (b) sign a contract with a Canadian company to drill additional wells, upon its leases obtained under the petroleum and natural gas regulations applicable to dominion lands or upon permits obtained by it under -the oil and gas regulations .covering land in the vicinity of Norman Wells. Under this contract the United States War Department would -provide the necessary equipment and would purchase the total flow of -the additional wells during the war at an agreed price. The wells would remain part of the leasehold or permit property of the Canadian company and would ibe regarded as having been drilled under the provisions of the dominion regulations no-ted in this clause.

War Appropriation-Mines and Resources
In the next paragraph it speaks of the refinery. The Imperial Oil company, as was stated earlier, had already drilled wells in the district of Fort Norman-as a matter of- fact they are about forty miles down the river from Fort Norman-and had secured limited quantities of oil. The geologists thought more oil could be secured, and it was on the basis of that possibility that the United States entered into this arrangement. The result was that they provided the equipment-and, I understand, provided the company with the means of carrying on drilling operations. In view of this arrangement, special war-time regulations were issued covering it. If the United States government proposed to advance moneys to the Imperial Oil company, and wells were drilled and oil was found at practically no expense to the Imperial Oil company, the Canadian government-I made the recommendation to the government myself-thought the new regulations should apply. Consequently war-time regulations were promulgated, and under the war-time regulations the govern- . ment were entitled to share equally in whatever assets developed. The war-time regulations were published in the Canada Gazette,
I am told, in January, 1943; at any rate they were tabled.


Howard Charles Green: Is that P.C. 742?


Thomas Alexander Crerar: P.C. 742.
We come now to the stage where new arrangements have to be made. I can quite understand the position taken by my hon. friend, and I do not quarrel with him. In the speech he delivered he has not suggested what policy the government should have followed. He criticizes it for giving away vast resources, but I submit that his criticism is not tenable. We have not given the resources away. We have provided for the development of these oil resources on terms which we think are fair and equitable and which protect the public interest. I assume, and perhaps I am wrong, that my hon. friend's contention would be that the government should have gone into this development as a government enterprise. I should like him to say now whether or not that is his contention.


George Hugh Castleden: I am a believer in government enterprise in a thing of this kind. The oil as a natural resource belongs to the Canadian people; but since under the war set-up you have decided to go ahead with the development of it, seeing that Imperial Oil is already in the field, and since you are doing something that is essential for the prosecution of the war, we have no quarrel with that. But we do quarrel with the fact that under the order in council the permit to go on with
the development of these resources after the war is continued and the rights for the development, exploration and the taking of oil and selling it, are now in the hands of the Imperial Oil company, which is owned by the Standard Oil Company of New Jersey. What Canada gets out of these resources is too little for the resources that are being handed over. We can estimate Canada's share in the United States government's expenditure, and let Canada take her fair proportion. We have no quarrel with that. But under this arrangement, all the oil development rights, the permits, will continue with the Imperial Oil, and what Canada gets out of one of her great natural resources is not sufficient. I maintain that you have made a bad bargain.


Thomas Alexander Crerar: I want to continue the discussion along the line I was taking. I think I understand my hon. friend's position. There are two approaches to this question. He can say that we are not providing for sufficient royalties, or that we are not providing for sufficient revenue to the crown from the development of these resources; or he can take the other line and say that- w-e should not have had an arrangement at all with a private company. That, I gather, is the position he takes, that the government should have developed this as a government enterprise. That is quite in accord with the policy of the Cooperative Commonwealth Federation party. They have never disguised the fact, and I do not find fault with it. They have a perfect right to advocate that. But what I am trying to get at is what is really in issue here so far as my hon. friend is concerned. It is not the kind of arrangement that we made with the Imperial Oil company but the fact that we made any arrangement at all with them, and that the whole oil development that may ensue in the future in northwestern Canada should be a government-owned, controlled and operated development. I do not think I am presuming too much in saying that.


George Hugh Castleden: I did not say you should not have entered into an agreement with them. I say you made a bad bargain with them.


Thomas Alexander Crerar: Is my hon. friend going back on the socialist principles of the party which he adorns?


George Hugh Castleden: Not at all. As a war measure, you had the Imperial Oil in the field already there, developing, and probably under the circumstances you could not change overnight. But I am saying that once you have asked them to go into the exploring field- and the United States government is assisting them, and apparently it will not cost them
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very much-then Canada should pay her proportionate share of the cost, because the defence of Alaska is part of the defence of Canada, since we are under a lease-lend agreement in this matter. But after the war is over you have handed over the rights for developing that oil in the Yukon and in the oilbearing territories in the northwest.


Thomas Alexander Crerar: Handed them to whom?


George Hugh Castleden: Imperial Oil, under this
agreement.


Thomas Alexander Crerar: No.


George Hugh Castleden: The rights and the permit continue.


Thomas Alexander Crerar: My hon. friend should really study the orders in council, and the statements that have been tabled, a little more thoroughly We do not hand over to the Imperial Oil company all the areas to which my hon. friend refers.


George Hugh Castleden: For exploration.


Thomas Alexander Crerar: No, not for exploration.


George Hugh Castleden: Read the order in council.


Thomas Alexander Crerar: That is not contemplated at all. Nothing in the order in council that was tabled, nothing in the statement that I made to the house on May 5, can by any stretch of the imagination be construed into such a position. I suggest to my hon. friend that he should study this whole matter objectively and not approach it-am I unfair in saying so?-from a certain angle of prejudice. I want to come back to the other point. I do not know whether my hon. friend is finding fault at the moment with the agreement or the arrangement we have made with the Imperial Oil company.


George Hugh Castleden: Yes; that is right. I am.


Thomas Alexander Crerar: Then, so far as this oil development is concerned, my hon. friend is not at the moment advocating that the government should have gone into it as a government enterprise, putting in public money and developing it as a public undertaking.


George Hugh Castleden: It would be a splendid post-war project.


Thomas Alexander Crerar: My hon. friend is hedging a little bit on that.


George Hugh Castleden: No, I am not.


Stanley Howard Knowles: May I ask the minister whether any discussion was had with Wartime Oils Limited with reference to the matter?


Thomas Alexander Crerar: With whom?
TMr. Castlerlen.]


Stanley Howard Knowles: With W'artime Oils Limited, a crown company.


Thomas Alexander Crerar: The Minister of Munitions and Supply can give more information on that than I can, but Wartime Oils was a government company formed to do certain drilling, to provide the finances in order to drill for oil in certain areas, where oil was likely to be found. But that has nothing to do with the point we are discussing.


Stanley Howard Knowles: I am asking whether consideration was given to Wartime Oils going into the matter.


Thomas Alexander Crerar: Perhaps the hon. member for Winnipeg North Centre will enlighten the committee as to the kind of development the government should have undertaken. Does he object to our making an arrangement with the Imperial Oil company for development in that particular area? Does he criticize the government on the ground that it should have developed this resource as a public enterprise with government money? I ask my hon. friend frankly, does he take that position?


Stanley Howard Knowles: I do not mind answering the question straightforwardly. I feel that the proposal which the minister has suggested would have been the better one, but knowing that this government would not consider that, that the government preferred to deal with a private company, we are nevertheless exercising our right to criticize the deal made with that company.


Thomas Alexander Crerar: Quite right.


Stanley Howard Knowles: Knowing that the government will not go forward to the position that we would like them to take, it does not rule out of court our criticizing the agreement made.


Thomas Alexander Crerar: My hon. friend is quite right. I do not deny that for a moment. He is quite right in criticizing the government for making, from his point of view, an improvident arrangement so far as the public interest is concerned. That is his privilege.


Stanley Howard Knowles: You have put it in the correct language.


Thomas Alexander Crerar: Well, we can argue it out on that basis. But before I pass to that I must offer the reflection that my hon. friends of the C.C.F. are apparently moving from- the socialization of all public enterprises, because I saw not very long ago that the hon. member for Yorkton, if I remember correctly, was advocating that all the mines and timber industries in Canada should be nationalized, and that everything indeed in Canada excepting perhaps some small businesses and farm lands

War Appropriation-Mines and Resources
should be brought under some great master plan, organized and developed for the benefit of the Canadian people. I take it to-day that in so far as their criticism of the government's proposal in this respect is concerned they are not occupying that ground.


Stanley Howard Knowles: If the minister thinks he is forcing us into an awkward position let me assure him he is totally mistaken.


Gordon Knapman Fraser: The
hon. member is already in it.


Stanley Howard Knowles: We have every right to state what we believe to be our position. After we have done that, knowing there is not a great deal of chance of getting this government to take that position, we then try to get this government to do certain things which we feel are not inconsistent with the position of moving in the direction of proper protection of the public interest. That is the position we take with respect to this matter. We do not waste the time of the committee arguing the position that we feel should be taken in this matter, because we know the government would not pay very close attention to it, but we consider that we are justified in criticizing and that it is our duty to criticize the government at least on the basis of the government's own philosophy in these matters, and I believe that is what my colleague from Yorkton was doing.


Thomas Alexander Crerar: We shall now proceed to discuss the arrangement.


Gordon Knapman Fraser: Is
there not every chance in the world of the Imperial Oil company losing out on this project? There are many chances that Imperial Oil may lose out on this project.


Thomas Alexander Crerar: I would think there is a very considerable chance of their losing out.


Gordon Knapman Fraser: That is what I wanted the minister to say. Is it not also true that practically every workman of the Imperial Oil company owns stock of that company?


Thomas Alexander Crerar: I could not say that; I have no information on that point. If I may say so, I do not know that that is germane to the discussion we are having at the moment.
The statement that was read to the house on May 5 and the order in council which the hon. member for Yorkton placed upon Hansard really I do not wish to be critical, but I do not know why my hon. friend did that, because the order in council was tabled and has been available to every member of the committee-


George Hugh Castleden: But not to the Canadian people.


Thomas Alexander Crerar: Of course, if my friend wishes to send Hansard out to a number of his friends perhaps it is justified on that account. They can read the order in council; but what arrangement was made? First, take the province of Alberta. Alberta operates on oil royalties. Any oil development that I have known anywhere in the world-I will except Russia because at the moment I do not know just what the practice was there-was on the basis of royalties in some cases, plus a ground rental per acre of the areas covered by leases. That royalty in Alberta runs from five to fifteen per cent. The ground rental for the leases, once they are taken up is, I understand, fifty cents an acre and upwards. In the United States the average oil royalties are 12i per cent. Our information is that in south American countries the royalties are the same. In Alaska the United States fixed a royalty rate of 6i per cent on any oil to be found there. These are regulations that were promulgated some considerable time ago.
I mention that background simply to indicate to the committee that the practice generally in all oil-producing companies, not only in Canada, but in other countries, has been to get revenue from the development through the imposition of royalties and ground rentals. That is precisely the principle that we have applied in the Mackenzie river area.


Howard Charles Green: What about the special provision for reducing the royalty in the event of a company not making a profit?


Thomas Alexander Crerar: Oh, well, regulations will
provide that royalties may be reduced. After you impose a flat royalty of fifteen per cent and you come to a point in taking the oil from the well that it does not pay to take it out because of the excess of royalty, if you reduce the royalty, say to five per cent, you enable the well to have a longer life, and that, I am advised, is the advantage of a fluctuating rate of royalty. That can be determined by the authorities of whatever government is dealing with the matter, whether provincial or federal.
As regards the set-up in the Mackenzie river country I would ask the committee to keep in mind that it was all set out in the statements which were tabled in the order in council. There are two areas to which I wish to draw particular attention. One is described as the proven area. The proven area consists of approximately five thousand acres; but in that proven area is included the original
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wells of the Imperial Oil company drilled under licences which they secured over twenty years ago.


George Hugh Castleden: Estimated to contain
about sixty million barrels of oil.


Thomas Alexander Crerar: Not on the proven areas. Opinions of geologists differ. The geologists have some formula from the study of drilling cores-


George Hugh Castleden: I read that in the
order in council.


Thomas Alexander Crerar: It states from thirty to
sixty million barrels. Oil geologists differ in the estimate of the amount of oil in this proven area of five thousand acres. Part of the oil that will be produced comes from the original licences held by the Imperial Oil company. The remainder of it, which the geologists estimate roughly at two-thirds, will come from the remaining area which Imperial Oil secured under its arrangement with the United States or drilled under its arrangement with the United States.
Outside of this particular area Imperial Oil have taken up under permit under the wartime regulations the remainder of the 140,000 acres. Some drilling has been done on that, but so far no oil has been struck. We proposed that in so far as the proven area is concerned, where we know there is an estimate of from thirty to sixty million barrels, we shall retain one-third of the oil. That is provided in the arrangement.


George Hugh Castleden: It would be more correct to say that we reserve the right to purchase it at cost plus ten per cent.


Thomas Alexander Crerar: Yes; but how is that different from the statement I made?


George Hugh Castleden: I thought you said we retained one-third of the oil.


Thomas Alexander Crerar: Yes; one-third of it is ours to do with as we like.


George Hugh Castleden: If we pay for it.


Thomas Alexander Crerar: 'We pay the cost of producing it, plus the management fee of ten per cent, so that we have that. On the oil produced by Imperial Oil which it sells on its own account, it pays a royalty; and it also pays a royalty on the amount coming from the proven area which may go to the United States.


George Hugh Castleden: That is a royalty of five per cent?


Thomas Alexander Crerar: Yes.


George Hugh Castleden: Is that on the selling price?
fMr. Crerar.J


Thomas Alexander Crerar: The royalty is calculated on the value of the oil as it comes from the well.


George Hugh Castleden: That is, the company's cost price; what it costs the company?


Thomas Alexander Crerar: It is what it is worth when it comes from the well, not what it is worth if you transport it a thousand miles and sell it.


George Hugh Castleden: It is the selling price at the well.


Thomas Alexander Crerar: Probably that would be a correct description. Then, because the Imperial Oil company derived certain advantages under the arrangement it made with the United States, we provided for a scale of royalties which, once licences are secured, go up every five years. For the first five years I think it is 7\ per cent, for the second five years 10 per cent, and thereafter 12i per cent. In addition, once they secure their leases, ground rental on these, properties commences.
There is one other point with which I wish to . deal; that is, the extravagant statement by the hon. member for Yorkton that we were alienating all these resources to the Imperial Oil company. It is expressly stated in the order in council and in the regulations that there shall be a limit to the number and extent of the acreage that can be held by any one company.


George Hugh Castleden: Limited to a million acres.


Thomas Alexander Crerar: No; it is less than that. In the first place they get a permit to explore; that is the initial step, and that permit may cover two million acres. After a few years that is reduced, and finally it is brought down to the point where they have to say whether or not they are going to take out leases. Once they take out leases the maximum amount they can get is 360,000 acres. So that when my hon. friend states that we have given these vast areas to Imperial Oil, I must assume that he has not closely read-


George Hugh Castleden: Yes, I have read it all.


Thomas Alexander Crerar: -the proposals that we submitted. When the leases are taken out there is provision for ground rental. That is simply to encourage development.
Then I wish to go one step further and deal with another matter, namely, the arrangement which the government agreed could be made between Imperial Oil and the United States. There is a variation here from the original exchange of notes but, as I stated earlier in my remarks, the United States has spent about $134,000,000 on this project. As a result of that expenditure undoubtedly Canada has

War Appropriation-Mines and Resources
secured the development, possibly in a very large, commercial way, of the oil resources of that part of the country, should oil resources be discovered there. So that we provided that the United States should be compensated for the expenditure they have incurred, by saying that under certain conditions they may be entitled to obtain up to sixty million barrels of oil. That oil is for the use of the United States government, for army, navy or air force purposes; they cannot resell that oil, and it has to be taken currently, when production starts. Under the arrangement they have to pay Imperial Oil the cost of bringing the oil to the surface and I think a fee of 20 cents a barrel, which is roughly one-half cent a gallon. There is nothing mysterious about that. Does anyone here think the government should not have taken this step? -Will anyone in this committee claim that after the United States had gone in to develop these resources-true, for their own defence but for the defence of Canada as well-we should say, "No; now your expenditure must go for naught." No one would support that view for a moment. I say that this govermnent, and I think the Canadian people generally, want to maintain good relations with the United States. In our international dealings with that country we want to be fair and we want them to be fair, and within the last few years I think a great deal of progress has been made in that direction.
My hon. friend criticized our arrangement with Imperial Oil on the ground that it is too generous. Let us look at a few of the factors in this situation. Once more I would remind the committee that this oil development is 1,550 miles by rail and water from Edmonton, or almost 1,200 miles in an air line, and that the oil has to be transported from Norman Wells, not very far from the arctic circle, to a market where it can be consumed. What expense is involved in that? The present four-inch pipeline is not a commercial proposition at all. It is estimated that if sufficient quantities of oil were found, at least a ten-inch and probably a twelve-inch pipeline would have to be laid in order to make the proposition commercially practicable. Therefore, what must be done? First, there must be drilling to determine whether there is sufficient oil to warrant the building of a twelve-inch pipeline to seaboard, the cost of which is estimated at $80,000,000. It is further estimated that it will be necessary to discover reserves of 300,000,000 barrels of oil before it would be feasible to build a pipeline that large. So that we had these alternatives. Either the government could go in and risk that amount of money, taking a chance on
marketing the product afterwards, or we could make an arrangement with a private company along the lines indicated in the statement I read to the house, and in the order in council my hon. friend read this afternoon. I do not think there can be any serious criticism of the arrangement the government proposes to make. We want to get the oil resources developed. There has been a good deal of talk in recent months about the depletion of the oil resources of the world. To-day we draw eighty-five per cent of our oil requirements from the United States. What would the United States authorities think of us if Canada were to take the position that we are not going to do anything so far as developing oil is concerned but were going to depend upon the United States to supply us with oil.


George Hugh Castleden: We can supply our own needs if we develop the sands in that north country.


Thomas Alexander Crerar: The California fields are growing less. Ultimately this development may lead to the supplying of Alaska, British Columbia and the Pacific states with their requirements. We have also a better assurance with this development of securing the needs of eastern Canada for oil. My hon. friend asks; Why do you not take this oil down to the prairies?


George Hugh Castleden: I say that we have oil in Canada. Why not develop it?
Mr. CRERAR; Let my hon. friend reflect for a moment what would be involved in his proposal. There would be involved the building of a pipeline to Edmonton, a distance of at least 1,200 miles, and probably 1,400 miles by the route that would have to be followed.


George Hugh Castleden: You can take it out to the coast.
Mr. CRERAR; Certainly; that is what we propose to do under this arrangement. But Standard Oil controls it.


The ACTING CHAIRMAN (Mr. Golding):: I must ask the hon. member for Yorkton to address the Chair if he wishes to speak.


Thomas Alexander Crerar: There is just one other point I would mention. Under these proposals the regulations will apply generally. There are no reservations for Imperial Oil, other than the areas they now hold and referred to in the order in council. Any person who has the capital and wishes to go in there and take the risk can go in there and prospect and develop, but he cannot secure in excess of the amount that I mentioned a moment ago.

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Howard Charles Green: Can a pipeline be used by any other company?


Thomas Alexander Crerar: I was just going to mention that. We contemplate that when a pipeline is built either by Imperial Oil, or by any other company or association of companies, that pipeline must be a common carrier and its charges subject to public regulation.


Howard Charles Green: Does that apply to the present pipeline?


Thomas Alexander Crerar: No, because that is not a commercial proposition. It exists merely to get the oil through for military purposes. But a commercial pipeline must be a common carrier and be subject to control by public regulation.
There is one clause of the order in council which I should point out to the hon. member for Yorkton. He must surely have overlooked it. It is a clause that should bring cheers from our hon. friends in the C.C.F. It is the concluding clause of P.C. 2904, which reads:
The government shall have the right of taking possession temporarily or permanently of all or any part of the areas held under permit or lease, together with all or any part of the improvements, buildings and equipment thereon and pipelines and feeder lines that any permittee or lessee has constructed, in which event the permittee or lessee shall be compensated therefor. Failing an agreement as to amount of compensation it shall be fixed by the exchequer court.	.
It might happen down the vista of years that our C.C.F. friends might one day have the responsibility of office.


Gordon Graydon: Perish the thought.


Thomas Alexander Crerar: If ever they should have, this provision is in the regulations for them to take advantage of if they so desire. I apologize Mr. Chairman, for having taken up so much time, but it is a complicated matter.


Gordon Graydon: The minister is more
optimistic about the C.C.F chances than most people.


Mr. BLACK (Yukon):: It may interest
. the committee to know that on the first of this month I took part in the ceremony of the official opening of the oil refinery at Whitehorse to which the oil which has been discussed this afternoon is being piped for refining. I remember well when the discovery of oil in the vicinity of Fort Norman was made thirty years ago. At that time I happened to be Commissioner of the Yukon, and I know that gold miners from the Yukon valley made their way across the divide into the Mackenzie valley and staked out oil leases on that discovery. For the most part they snowshoed

out of the valley of the Yukon over the watershed and down into the Mackenzie, where they staked out their leases.
When I returned to Canada after the war and came here as a member of parliament, the holders of these oil rights, not having capital to develop them themselves and not being able to interest capital in their development, put it up to me to deal with the government of that day to extend the terms of their leases so that they could continue to hold them without having to do the development work and make the substantial expenditure called for by the terms of the leases. The government extended the time. But finally the time came when they would no longer allow that to go on. They were reasonable enough. It had to come to an end some time.
The Imperial Oil company, which had acquired some of the oil reserves, because of their isolation and distance from the market, had to cap the three wells they had, and the wells lay there dormant until mine, development began at Great Bear lake and at Yellowknife, and then a little oil was used.
Then came Pearl Harbor and the Americans had to have oil. They thought the Japanese might take possession of the coast of Alaska and the coast of British Columbia. Oil could not be got to Alaska by tankers because the submarines were attending to that. So that the United States came in, and they have spent $134,000,000 in exploring those oil resources for Canada. Fortunately the exigencies of war never made that oil necessary for war purposes. But the Americans put in a four-inch pipeline from Norman Wells to Whitehorse and extended it from Whitehorse to Fairbanks, and from Whitehorse to the coast, to Skagway, Alaska. As the minister said, that four-inch pipeline is too small for a commercial undertaking.
I only hope that the development of the wells at Norman will be sufficiently extensive to make it a successful commercial undertaking. I for one would not approve the Canadian government, going in there and spending anything like $134,000,000 in exploring that oil deposit as the United States have done. We had the experience not long ago of the government of British Columbia spending a huge amount of public money on drilling in the Peace River block. They lost it all; they have no oil. I do not think public money should be gambled in that way.
When I first read the agreement and heard the minister give his explanation of it a * month or so ago I felt that the terms granted to Imperial Oil were somewhat too generous. When you take into account the risks that

War Appropriation-Mines and Resources
that company has taken, similar to what the United States has taken, and the returns that are bound to accrue to Canada if the gamble is a success, then I think we should compliment the government on the agreement they made.


Mr. SISSONS:: Mr. Chairman, I should like to support the remarks of the hon. member for Yukon and express my appreciation of the excellent manner in which he delivered them. I wish also to dissent and join issue with the remarks of the hon. member for Yorkton. I do not think Imperial Oil has been given any undue advantage under this order in council. I am not particularly interested in theories or in the relative merits of public or private ownership, but I am interested in the results that are obtained. I want to see action in the north country; I want to see developments. I want to see this government give every encouragement to Imperial Oil and to any other oil company that wishes to go into that country. I want to see this government give every encouragement to every mining company, every prospector, every fisherman, every farmer and every other corporation or person who want to help to develop that Mackenzie river valley.
I am not worried about Imperial Oil making any undue profit or of retaining that profit after they have paid income tax. Any profit they may be able to make will be small compared with the benefits that will accrue to Canada as a whole from this development. There are not only oil resources to be developed; there are minerals in the Great Slave and Great Bear lakes areas; there is fishing; there is agriculture, and there are many other types of development that can be carried on. A balanced and orderly development of these resources will mean the production of new wealth and an increase in the national income of Canada.
There will be provided opportunities for thousands of Canadians, particularly for our returned men. These are the things in which I am interested. I want to see a real development in that north country. I particularly want to see that development because it will mean the development of the northern part of the constituency of Peace River. It means also that there will be created in the great north land a market for the produce of the Peace river country.
My hon. friends of the Cooperative Commonwealth Federation party are claiming that Imperial Oil is a monopoly. I do not like monopolies. I do not like private monopolies, nor do I like public monopolies. I know I would not like the kind of monopoly we would have if my hon. friends were in power.
100-207i
While I dislike monopolies, it is not an obsession with me. Monopolies seem to be an absolute obsession with my hon. friends, and yet at the same time they admire monopolies. They contend that monopolies make huge profits, but I cannot see that they do. I do not think monopolies are very efficient. Like most giants they grow slow and sluggish, whether they are private or public monopolies. I certainly do not fear monopolies because as long as we have a free parliament we can deal with them. But what we would not be able to deal with is the type of monopoly my hon. friends of the C.C.F. would create if they were in power.
Some weeks ago we dealt with what might be termed a monopoly in the form of Canadian Pacific Air Lines. We passed legislation which practically wiped that company out of existence and there was not one voice in this house raised in protest. We can deal with monopolies. I think there is some indication that monopolies are rather defenseless when they come up against public opinion.
My criticism is not that the department is doing too much for Imperial Oil; it is that the department is not doing enough for the development of the north country. The department is too much inclined to pay attention to such carping criticism as we have heard this afternoon from the hon. member for Yorkton. The greatest blow that the north country ever received in the past, the greatest handicap it had to overcome was such carping criticism. Probably it will be the greatest handicap the north country will have to face in the future.
Somebody has mentioned the possibility of a pipeline from Fort Norman to the south. In 1921 a private bill was submitted to the Alberta legislature to incorporate the Imperial Pipeline company. In 1920 Imperial Oil brought in a producing well at Fort Norman and they submitted this bill to permit the building of a pipeline south through Alberta. What happened? A tremendous filibuster was opened up and arguments much along the lines of those used by my hon. friends were advanced. It was said that Imperial Oil was a monopoly and the filibuster was kept up from some time in February until late in April. Not only that, but attacks against the bill were carried on throughout the province and in the press.


George Hugh Castleden: By whom?


John Howard Sissons: By people with exactly the same attitude of mind as my hon. friend, men who would rather adopt a policy of cutting off their noses to spite their faces than to see a development carried on by what they termed
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a monopoly. On the last day of the session the premier of Alberta read a telegram which he had received from Mr. Herbert Greenfield, president of the United Farmers of Alberta, protesting emphatically against the passing of the bill and demanding that it be withdrawn. The bill was withdrawn under this pressure and the house rose the next day.
A few weeks later the government went to the country and were defeated. A U.F.A. government came into power, headed by the same Herbert Greenfield. For a period of fourteen years, from 1921 to 1935, the U.F.A. government was in power in Alberta. Toward the end of its career that government was affiliated with the C.C.F. movement, and in 1935 went to the country calling itself a C.C.F. government. That was the opposition which was offered to the attempt to construct a pipeline from Fort Norman to the central part of Alberta.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


John Howard Sissons: Mr. Chairman, in my remarks before six o'clock I think I made it clear that I am not especially interested in any academic debate on the relative merits of public and private enterprise. I stated that I was very much interested in the development of all the great and varied resources of the north land, and would favour even more generous treatment, not only of the Imperial Oil company but of every corporation and every individual prepared to play a part in the development of any of those resources; and that I deplored'the reactionary ideas and the defeatist philosophy of the hon. member for Yorkton and his friends. I pointed out that the attitude of the hon. member and those who think like him is the greatest handicap that the north country has had and has to overcome, and I went on to show how a similar attitude had held up the development of the oil resources of that great land in times gone by. I pointed out that in 1921, when the bill to incorporate the Imperial Pipelines company was before the Alberta legislature as a private measure, it was defeated by a filibuster directed largely by men who thought as the hon. member for Yorkton thinks, and by pressure from outside the house of those who held similar ideas.
I wish to make only a very few further remarks regarding that debate in the Alberta legislature some twenty years ago. During the course of that debate the late Hon. J. R. Boyle

pointed out what the obstructionist tactics would result in, and Mr. Boyle wanted to know if the Imperial Oil company were to be told that they were free to spend vast sums of money in exploration work but that if oil was found they were not to pipe it out. That is exactly the attitude which was taken in Alberta; the Imperial Oil company were in effect called upon to spend their millions on exploration work, but if they did find oil they were not to be allowed to pipe it out. Probably a more significant statement was made during the course of that debate by Mr. R. B. Eaton, one of the members. Mr. Eaton stated that " the question of oil development should be carefully taken into account, because the oil resources of the north might easily be diverted to British Columbia if Alberta placed impossible barriers in the way of companies planning development." Back in 1921 Alberta did place impossible barriers in the way of a pipeline from the Fort Norman field to Alberta, and you see the results to-day. That oil is not being diverted, as Mr. Eaton thought it might be, to British Columbia, but it is being diverted to the Yukon, and to Skagway in the United States territory. That is a penalty the provincial government of Alberta paid for giving attention to the carping criticism of men who in Alberta at that time thought and uttered the thoughts which the hon. member for Yorkton has uttered this afternoon.
As mentioned, in 1921 the government then in office was defeated and a U.F.A. government came into power. That government was in power from 1921 to 1935, and during its whole term of office very little encouragement was given to the development of the north land, particularly that part of the north land which lies in the Peace River constituency north of the Peace river. The development of that area, particularly the fertile territory north of the river in the district of Fort Vermilion, was retarded, and retarded deliberately. I do not make that statement concerning the late U.F.A. government because it was a United Farmers of Alberta government or because its philosophy was largely that of my friends of the C.C.F. To a less degree the same thing must be said of the present Social Credit government of Alberta, and I would ask my hon. friends of the Social Credit party not to take offence, because I would say the same thing largely of the government I support. I do not believe that either the old U.F.A. government of Alberta, the present Social Credit government of Alberta, or any federal government of Canada has ever given the encouragement which should have been given to the development of that north land. I admit that the present government has done

War Appropriation-Mines and Resources
some things, but it has done far too little. It has been content more or less to make gestures. I am not unmindful that the Department of Mines and Resources has done a good work in regard to geological surveys. I am not unmindful that an important forward step was taken when the air fields in the Mackenzie river valley were taken over by the government. I am not unmindful of the good which will result from the civil aviation policy announced some weeks ago by this government respecting the opening up of that north land. I am not unmindful of the assistance which was given by the dominion and provincial governments toward the construction of the winter road from Grimshaw to the north in order to open up that territory. But I still say that no government, provincial or federal, has done more than a small part of what should have been done to open up that empire of the north.
I do not ask that governments should do a great deal, but I ask that they should do things which only governments can do, and these they have not done. If the hon. member for Winnipeg North Centre lived in the Peace river country he would not be so complimentary to public ownership, its performances and its possibilities. All governments have failed in their duty to encourage this development.


Mr. ROSS (St. Paul's):: The Canadian
Pacific Railway company has done a good job.
.Mr. SISSONS: The Canadian Pacific Railway company did no job toward the development of the north country, nor did the Canadian National Railways. I shall have something to say about that a little later.
I believe that a great part of the development of the north country in the future as in the past will be brought about by men and not by governments. Men with the blood of the pioneers have brought about the present development of the agricultural lands of the Fort Vermilion district, where there are now 3,000 settlers, still 250 miles beyond the railway. I am not unmindful of those mining pioneers who have pioneered in the lake Atha-baska, the Great Slave lake and the Great Bear lake districts. I am not unmindful of the pioneer work done by the Imperial Oil company. I am not unmindful of those young pioneering pilots who blazed air trails through all the north land. These are the men who have brought about our present development. It will be men of that type who will bring about the great development of that country in the future. But there are some things which governments and only governments can do, and
it is these things which I want the government to do. Years ago the Alberta government should have built a highway from Grimshaw up through that fertile Fort Vermilion country. That has not been done. Our own federal government should do certain things. They should give greater assistance to those who wish to play a part in the development of the north land, much greater assistance than they are giving to the Imperial Oil company. They should provide markets for the produce which that vast country can provide. Especially, they should provide railway transportation for that north country.
The hon. member for St. Paul's mentioned a moment ago the Canadian Pacific Railway company, but I wish to deal for a moment with the Canadian National Railways. That whole northland was the territory of the Canadian National Railways. The Canadian National had that territory for years and never developed it, and it allowed the Canadian Pacific to come in and take over, under lease, the Northern Alberta railway. The Canadian Pacific did nothing toward developing that territory. Later the Canadian Pacific Railway company and the Canadian National Railways jointly purchased the Northern Alberta railway and came to this parliament and had passed the Northern Alberta Railway Act which provided among other powers that a branch line should be constructed from Grimshaw to the northern boundary of the province. That is a line which would have opened up the Mackenzie river valley. That was in 1929 and not one foot of the line has been built since.
Now we find both the Canadian Pacific Railway company and the Canadian National Railways, joint owners of the road, coming forward with this proposition, that they should not be asked to build one mile of railway into any part of that north country until there has been developed sufficient traffic that it can pay a profit from the commencement. That is the attitude of the Canadian Pacific and the Canadian National. Now I am going to ask the government to do several things, but one thing in particular I do ask is that they go to the Canadian National Railways and the Canadian Pacific Railway company and put the situation up to them in this way: "Either you people do your duty and develop that north country, giving it the transportation which it was understood you would give it when this parliament passed the Northern Alberta Railway Act in 1929, or we shall ask parliament to repeal that act and hand the assets of the Northern Alberta railway over
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to someone who has a wider vision and who is prepared [DOT] to play the necessary part in the development of that north country."
All I ask is that this government and the provincial government have vision when it comes to the development of that north land, and particularly that this government pay no attention to such carping criticism as has been uttered this afternoon by the hon. member for Yorkton. Let the government pay no attention to such things but branch out on a programme of development for that whole north land which will repay itself many times over. Branch out on a programme of development which will produce new wealth, add to the national income of Canada and bring a greater measure of prosperity to Canadians in that area and in all parts of Canada.
That is what I ask. I also ask for even a larger measure of support than is contemplated in the vote. Let us help all those who would have a part in that northern development.


John Ritchie MacNicol: We have had two really interesting addresses to-day, one of them delivered by the hon. member for Peace River (Mr. Sissons). While most of what) he has said in the last half of his remarks has nothing whatever to do with the vote, I endorse every word he said about the north country and I agree with him in that regard. The other address was given by the hon. member for the Yukon (Mr. Black), and it was refreshing to hear first hand information from that hon. gentleman, who told the story of the commencement of this oil business. I wish someone had mentioned the beginner, the real pioneer, the man who more perhaps than any one else had to do with what is now called the Canol project or, as it should be rightly called, the oil development fifty miles down the Mackenzie river from Fort Norman. That gentleman is Colonel James K. Cornwall of Edmonton, one of the real pioneers of the great northwest, from whom I have personally learned great deal and with whom I have had much correspondence with reference to the north on the occasion of various preparations for trips to that country.
I believe it was about 1912, or in fact some years prior to the great war, and particularly when the Turner valley was being opened, that, according to information given me by Colonel Cornwall himself, he had a conversation with a promoter who spoke to him with reference to investing in Turner valley oil. He said, if I remember, to the promoter, "I am not going to invest any money in Turner valley oil because there is more oil in Mackenzie river area than anywhere else I have had to do with."
Apparently, following that, the prospectors to whom the hon. member for the Yukon referred were the first into that country; and as that hon. member said, they took up claims. These claims were later purchased by the Northwest company, a very fitting name, a subsidiary of Imperial Oil, which itself is a subsidiary of Standard Oil of New Jersey. In reference to the vote itself, I wish to support the minister in one stand he is taking, as referred to in the agreement, with which I presume he has had something to do if he is not largely responsible for it, namely, that the oil shall be developed if possible by private enterprise. I personally am wholly opposed to the government going into any business on that scale.
I agree with the department's proposal to assist in the development of the oil by financial assistance to private concerns. In that way we shall get a much better development; it will cost the country much less, and moreover there will be far more, returns if it is developed privately, with the support of the government. But if the government itself proposes to develop the oil we shall get the same exhibition that we have had in most businesses operated by governments. I am not blaming this government alone; that goes for any government. No government can operate business with anything like the same economy as a private firm can.
What does the agreement call for? All I want to be certain of is that Canadian interests are protected. I have read the agreement, and at the moment I do not see that I can suggest any improvement. Someone would have to show me where it could be improved from the point of view of the country. If the agreement recommended that the government itself should develop the oil resources up there I would be opposed to that; but the agreement does not say that. Furthermore, I like the attitude of the minister toward Imperial Oil. I cannot understand the attitude of people, who know little about business, who nevertheless denounce business. We hear it denounced here and it is easy for those who have not had experience in big business to engage in these denunciations. But big business has done a great deal for the whole country.
As regards Imperial Oil, what happened? They puehased the right from the Northwest company to the claims and then commenced to invest money there. They drilled or made attempts to drill many holes in that area to find oil, but they did not find it at every place they drilled. The Minister of Munitions and Supply probably knows more about

War Appropriation-Mines and Resources
this than anybody else, but I believe that at the outbreak of war there were three wells in existence, and they were not working at that time. They had been in operation during the time of the development of the radium mine on the east end of Great Bear lake and during the developments at Yellowknife and the other gold centres north and east of Yellowknife. There were seven mines in that area altogether, but that development was not sufficient to take up the oil that could be produced from the three wells, so that I believe they were shut down. If my memory serves me rightly they produced about 24,000 barrels of oil in the last year they operated.
Following the United States entering the war and the necessity of producing oil, which was *explained by the minister, and I do not intend to repeat it now, increased production took place at Fort Norman. An additional number of wells were drilled. I believe that before the war five were drilled that could produce oil .and since that time the number has increased to twenty-three. Some twenty-six wells have been drilled and I believe that the capacity of the twenty-three is about 8,500 barrels a day. That is a considerable surplus over the possible capacity of the pipeline which was built from Fort Norman to Yellowknife, a distance of some 620 miles. When the pipeline was first laid out it was not to be as long as that, but they found that they had to go down the river a piece, and the total length from Fort Norman to Yellowknife is 620 miles.


Thomas Alexander Crerar: If my hon. friend will permit me a moment, the present production of the existing wells at normal flow is about 3,900 barrels a day and not 8,000 barrels as my hon. friend says.


John Ritchie MacNicol: I said that the capacity was 8,500 barrels a day. I do not think I said that they were producing 8,500 barrels a day, but the information I have from the engineers is that the capacity is about that. I do not know whether that is right or not, but in any event the production of 3,900' barrels a day is more than the capacity of the pipeline, which is 3,000 barrels a day.
Personally I want to be assured that after the war, when this agreement has been carried into effect, those who have to do with taking over the equipment will be qualified to understand the length of life of pipe, if the pipe is steel, or iron. If the four-inch pipe is not an iron pipe the length of its life is limited, relatively speaking, to a brief space of years. It will rust and go out if it is steel pipe. If it is a wrought iron pipe, of course it will last much longer. Therefore, in taking over the plant after the war the great consideration with me as to what should be paid for it is,
what is the pipe made out of? This pipe crosses damp country; much of it was laid in muskeg; a lot of it was laid during the winter time on ice, which has since become covered with water. It was perhaps laid on props or supports of some kind, that is a consideration. Therefore the length of the life of the pipeline would be the determining factor with me if I had anything to do with passing comment on what should be paid for the plant after the war; but that will have to wait until then.
There is nothing more I wish to say in reference to this matter. There is nothing we can do about it. We should all be unanimous on the necessity of producing oil in the country, if it can be produced. I was talking to a man recently who told me that the distance from Norman to Aklavik would be some 500 to 600 miles. That would not be a long pipeline. This gentleman told me that after the war-and plans are being made for it now-it was intended to run a line of tankers through the Bering strait and around Alaska to Aklavik with the expectation that at that time the Norman wells will have developed to such an extent that it would be worth while running a pipeline of 500 or 600 miles from Norman wells, to tankers there. If that is what is going to happen then the oil could go down to Vancouver and be refined there, which would help to make the great city of Vancouver much larger than it is to-day.
Along with the hon. member for Peace River I see vast developments in that north country and the whole northwest country. At the moment I am thinking of going away to the far north again this coming summer with a view to seeing with my own eyes what can be done. I agree with what the minister and others have said, namely, that a large part of the future of this country depends on the opening up of the whole northwest country, the Northwest Territories and the northern half of the three prairie provinces, if we can awaken out of our lethargy. I am not blaming anyone for it. I like to keep these things out of the narrow' sphere of politics which has done more to retard progress in Canada than anything else. If w'e can get beyond that, up on the higher plane of patriotic development and fervour and all work together irrespective of party lines for the development of this country after the war there would not be any need for any unemployed men or women.	[DOT]
I hope that when the war is over and the possibilities of this territory are realized we shall do something. In that connection I think of Vilhjalmur Stefansson, who explored this northwest country and said that in his

War Appropriation-Mines and Resources
opinion there is more oil around Fort Norman than in any other flowing wells in Canada. If that is the case Canada should develop it, along with the Athabaska tar sands which I am not going to go back on. In my opinion they could be worked jointly, and Canada could be placed on a self-sustaining basis, so far as oil is concerned.
As the minister said to-day, and as I said last night, we import eighty-seven per cent of our oil requirements. Let us try to get out of that. Do not let us quibble over the advocacy of the hon. member for Yorkton. I think about as much of his plan as the hon. member for Peace River does.


George Hugh Castleden: Why not develop our own oil?


John Ritchie MacNicol: The difference between my hon. friend and myself is this: I have been a producer for many years. I have been in big business. I have operated big business and have had to do with giving employment to many thousands of people in the aggregate. I doubt if my hon. friend ever gave a job to a man in his life other than to cut the grass on his front lawn or such like.


George Hugh Castleden: The people of Canada felt the results of big business, too, from 1930 to 1939.


John Ritchie MacNicol: I get absolutely tired of listening to men who know little or nothing about production and less about giving employment. I like to talk to men who have done things, and I like to listen to them. I do not care to waste my time listening to men who have never done anything that I know of or ever read of or ever heard of toward production in this country. If we can get the real men of this country together, the men who know and the men who do things like the Minister of Munitions and Supply we shall be doing something. The minister is on the opposite side of the house, but I cannot get down on such a small plane as not to recognize a man's ability because he happens to be on the other side of the house. My hon. friend the Minister of Munitions and Supply can do a big job. I said last night in the minister's absence that if he had only been at Fort McMurray last year and the year before he would have produced oil. I have that much confidence in him. I do not want him to say I am wrong.
Let us get on a higher plane as we think of this great country, with more resources than any other nation in the world. We have more than ninety per cent of the world's asbestos in Quebec, more than ninety per cent of the world's nickel in Ontario, andmore than ninety per cent of the world's oil in Alberta and the
	_	; [JT[
northern country. If we do not awake from our sleep, Mr. Chairman, and recognize what God has given us to develop, some other country may come in and take it away from us. I say all power to anyone who can advance a plan to develop this country, for the good of the country and to create employment. In conclusion, I repeat that I hope the minister will stick to the private production of oil, not only in the northwest but at Fort McMurray, after the war.


George Hugh Castleden: I am not going to waste the time of the committee by replying to the barrage of words that were thrown at us this afternoon. If we look at the condition of want that has prevailed in this country for seventy-five years; if we remember that the only time we have enjoyed decent wages for labour and parity prices for farmers has been in time of war; if we recognize the record of the gentlemen who have been in power in this country since it has been a country, the wealthiest land in the world, with only eleven million people living in it, I think all that is sufficient answer to those who have been advocating the continuance of things as they were in the past. We have opened up western Canada and British Columbia; what has it meant to the welfare of the Canadian people? What did it mean in 1930 to 1939?


An hon. MEMBER:: Who opened it up? Not you.


George Hugh Castleden: Big business opened it up, and what did the workers get out of it?


Mr. MACKENZIE (Vancouver Centre):: The pioneers opened it.


George Hugh Castleden: And where are the pioneers to-day?


Thomas Reid: We have lived better than any other people in the world.


George Hugh Castleden: With a billion dollars spent on relief and forty per cent of our young men unable to earn a living.
' The CHAIRMAN: Order. We are discussing a special item in connection with the Canol project. I do not want to curtail discussion, but I do not believe hon. members will tolerate repetition ad nauseam, and I am going to try to confine the discussion from now on to the item under consideration.


George Hugh Castleden: I thank you very much, Mr. Chairman, and I shall abide by your ruling. Later on I hope you will see that I am given an opportunity to reply to those statements, if I may not do so now.


Gordon Knapman Fraser: That is the C.C.F. again.

War Appropriation-Mines and Resources


George Hugh Castleden: I suppose I am not allowed to reply to these interjections thrown at me. You maintain order on one side, but I am not allowed to reply.


Joseph-Arthur Bradette: I must appeal to the committee in reference to the statement made by the hon. member. I wish he would withdraw his remark. I try to be fair and I believe I have been fair to the hon. member for Yorkton and all other hon. members of the committee. I have always tried to be impartial, but I repeat that in the general discussion which took place this afternoon and the early part of this evening all parties expressed their viewpoints, and I am going to keep hon. members within the confines of the item now under consideration.


George Hugh Castleden: I am very sorry if I have cast any reflection upon the Chair, and I withdraw my remark. This afternoon the minister stated that the arrangements made under this agreement would not prevent any other company or companies from taking part in that development. I should like to draw his attention to one of the notes exchanged between the governments of Canada and the United States. This note is dated January 18, 1943, and was written by Mr. Keenleyside in reply to a note from the United States government dated December 28, 1942. The last paragraph reads:
It would facilitate the drafting of regulations if the United States authorities would indicate more definitely the particular districts, within the very large area described in your note No. 818, paragraph 2, which seem to be the most promising. These districts could then be reserved for exploration by nominees of the United States government.
Apparently there was a reservation for the government of the United States. The minister stated that no measures would be taken to prevent other companies from developing this region, but from this note it would appear otherwise.


Thomas Alexander Crerar: The effect of the two notes to which my hon. friend has referred is that at the request of the United States government a certain area was reserved for exploration. The right to go out and search for oil structures; the right to examine territory to see if there are favourable conditions for oil, would not confer any right upon them to exploit the property. That was not put under their control at all. The only thing the United States government were interested in was getting a sufficient supply of oil. They thought they might require up to 20,000 barrels a day. No private companies were going in at that time and searching for oil structures. My officers will correct me if I am wrong, but
the United States simply said, "Will you reserve a certain area, where we can send our geologists to see if we can find favourable structures," and that is all that was done. It did not give the United States government any right to preempt any territory, and that is where my hon. friend has misunderstood the meaning of the exchange of notes. No monopoly was conferred upon the United States government or anyone else under these regulations. I stated this afternoon that under the terms of the proposed regulations Imperial Oil may get the right to explore an area of perhaps 2,000,000 acres, but over a period of years that must be reduced to 350,000 acres.


George Hugh Castleden: I think it is 1,000.000 acres under the agreement.


Thomas Alexander Crerar: Yes, but eventually it
comes down to 350,000 acres. When oil may be found anywhere over 100,000,000 acres I do not think you are setting up a monopoly if you lay down regulations under which eventually a company, after it has examined a certain area, may operate in 350,000 acres; really my imagination is not quite keen enough to bring me to the conclusion that this is conferring a monopoly on the company. I am sure my hon. friend is quite sincere and in earnest in the criticism he is offering, but I suggest that he has not appreciated the full meaning of the regulations and the exchange of notes.


George Hugh Castleden: I do not think there
is any doubt about that.


Howard Charles Green: I should like the minister to explain two or three features in connection with this northern development. The first explanation is the general policy of the government with regard to the development of our north country. Last evening I mentioned the developments that have taken place in Siberia, and this evening the hon. member for Peace River stressed the need for great developments in northern Canada. I wish the minister would give us some idea of what the government have in mind as a general policy for developing northern Canada. I am convinced, as I think perhaps most hon. members are, that there are great prospects for development in that part of the country.
The other matter about which I should like a further explanation has to do with the ways in which another company or other companies or private individuals or syndicates will be able to go 4n and develop oil wells in this territory. The minister dealt with that in part, earlier in the debate. There seems to be no doubt that this Mackenzie river oil field is the finest in Canada. The Minister of
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Munitions and Supply said last year that it was a very fine field, and I have here the March 13 issue of the publication known as The Oil Weekly, published in Houston, Texas, in which there is a long article by Doctor *G. S. Hume, geologist for the oil controller for Canada. The article is headed: "Mac-kenize River Basin Best Opportunity for Oil in Canada." The minister will correct me if I am wrong, or if this statement is wrong. Doctor Hume, in his article, states this at page 26:
The Mackenzie river valley, comprising 150,000 .square miles and extending westward into the Wind river basin of the Yukon, the most promising oil territory in Canada, recently has been brought to the attention of the public by the Canol project, which includes the development of a field that was discovered more than twenty years ago by Imperial Oil company.
Then, further down on the same page we find this:
Doctor O. B. Hopkins of Imperial Oil has stated that a major oil field comparable with a major oil field in the United States has been found and that the area has been proven much larger and more productive than originally anticipated.
So that we apparently have something worth while-very much worth while-in this Mackenzie river oil field.
It just so happens that in the same magazine appears an editorial pointing out the great opportunities for United States oil interests to undertake development in Canada. It [DOT]says, after describing the possibilities in [DOT]Canada:
All these factors will result in relatively large representation dn this "foreign" development by smaller American oil companies, independent [DOT]operators, and geophysical, drilling, and other service companies.
I think we should be sure that these other [DOT]operators will have a reasonable chance to [DOT]succeed in the Mackenzie river field. Frankly, I am not convinced that that is the case at present, under the law as it now stands in Canada. I realize that the Canol project was undertaken as a war emergency measure. But the order in council of January 28, 1943, under which Canada gave approval to that [DOT]development, P.C. 742, contains this paragraph:
1. A permit for a location on lands lying within a radius of 50 miles from Discovery Well .of Northwest Company Limited-
Which, I understand, was a subsidiary of the Imperial Oil company.
-situated about 45 miles north of Fort Norman on the Mackenzie river, conveying the exclusive right to prospect and drill for, to produce and dispose of oil and gas thereon may be granted by the minister to any corporation or to any person eighteen years of age or over for the duration of the present war, provided however -that no person shall enter the area to which

these regulations apply for the purpose of prospecting for oil and staking a location without first obtaining from the minister a preliminary authority so to do.
I believe under that power the Imperial Oil company was given an exclusive right, not only to explore, and not only to prospect but also to drill for, produce and dispose of oil.
Then, later on, namely on March 26, 1943, order in council P.C. 2447 was passed. This order in council extended the territory from a territory within the radius of fifty miles of the old well, to include the whole of the Yukon territory and, the minister will correct me if I am wrong, also all of the district of Mackenzie west of a line drawn roughly seventy-five miles east of the Mackenzie river. I presume the Imperial Oil company got the same exclusive rights with regard to that territory, or as much of it as they wanted. Presumably no other company or individual was given any permit.
Then, this year order in council P.C. 2904 of April 27, 1944, which was read into Hansard this afternoon was passed. It certainly gives the Imperial Oil company every advantage. For example, as I read it, in any part of the field that has been proven; in other words, any part where producing wells have been bored, the Imperial Oil company again has exclusive rights. That is, it will have the whole of the proven field. I may be wrong in that, but the minister will correct me if I am.


Clarence Decatur Howe: Who proved it? Was it not the Imperial Oil company that proved the field?


Howard Charles Green: For example, section 1 (a) of this order in council states:
In respect of the proven field (a) the area to be developed as a unit operation by the company . . .
I take it that means that the Imperial Oil company have exclusive rights to the oil in the whole of the proven field. They also have rights to the balance of about 140,000 acres, over which they have permits. And they have the right to substitute for any part of that
140,000	acres a similar territory, or a like amount of ground in the other part of the whole area.


Thomas Alexander Crerar: That is not correct.


Howard Charles Green: I would ask the minister to correct me, because I am simply asking for information.


Thomas Alexander Crerar: Well, that is not correct.


Howard Charles Green: It looks to me as though any other company or any other operator is

War Appropriation-Mines and Resources
almost doomed to failure in that field, under present conditions, unless some way can be found of giving help to them. I would ask the minister to give us some further explanation respecting that feature of the development, because I do not think it is right to give the Imperial Oil company a monopoly in this Mackenzie river oil district. That may not be the situation, but certainly it is not right that they should have a monopoly. If we can develop that country as Russia has developed part of Siberia there may be 100,000 or 200,000 people there eventually. And it is far more likely to receive proper development if we do not permit any one company to have a monopoly in the area.
The third feature about which I should like to have an explanation is the government's policy with regard to the United States. Just a few weeks ago either the Prime Minister or the Minister of Munitions and Supply, I am not sure which, explained to the house that the government proposed to buy out certain .American interests in the north. That is, we were to repay the money that had been spent in developing air fields, and in buying land and erecting buildings. The Canadian government is buying the United States government *out in respect of those operations, so that such developments will be purely Canadian-owned.
As I understand it, that is not being done with either the Alaska highway or the Canol project. I would ask the minister to say just what the plan is with regard to the relation-.ship between Canada and the United States in respect of the Alaska highway and the *Canol project. He admitted 1o-day that the United States army is to operate the pipeline ifrom Norman to Whitehorse, and presumably is also to operate the refinery at Whitehorse, * and the pipeline from Skagway to Whitehorse. But we should know just what arrangements there are between the two governments in [DOT]respect of these two projects, and whether there are any other developments in northern Canada in which the United States has, or after the war will have a financial interest, once Canada has paid for the particular developments to which the Minister of Munitions and Supply referred.


Thomas Alexander Crerar: I shall reply first to my hon. friend's last question. The exchange of notes which have been tabled sets out the full basis of the arrangements made between the government regarding the development of the Canol project. Those were read into the record this afternoon and they show the means by which final disposition will be made.


Howard Charles Green: There was a change made in the government's policy regarding airports.


Thomas Alexander Crerar: If my hon. friend will please let me proceed, I am referring to the Canol project which is the item under discussion.


Joseph-Arthur Bradette: It is the only item
before the committee.


Howard Charles Green: The Alaska highway is also before the committee.


Joseph-Arthur Bradette: This is the item before the committee:
Expenses of liaison officers in connection with the Alaska highway and Canol projects.


Gordon Graydon: The hon. member for
Vancouver South is correct.


Thomas Alexander Crerar: May I be permitted to
continue? My understanding is that the United States authorities who constructed the pipeline and refinery at Whitehorse can either operate them directly or arrange to have them operated by agents. When the war is over, the basis of settlement, the liquidation of the matter if you like, will be as is clearly set out in the exchange of notes. The Canol project is not in the same category as the airfields. The hon. member for Vancouver South referred to a statement made some little time ago by the Minister of Munitions and Supply. It is true that so far as the airfields are concerned the Canadian government is paying the United States government for the work done, because it represents assets which will be of permanent value to Canada. I think that answers the first part of my hon. friend's question.


Howard Charles Green: What about the Alaska
highway?


Thomas Alexander Crerar: The exchange of notes provided for the Alaska highway. So far as I am aware there has never been any suggestion that Canada should pay the United States for the expenditures on the Alaska highway. There were certain extensions to airfields which were found necessary and for which we will repay them.
With regard to the second to the last point raised by my hon. friend, he seemed to fear that we were giving Imperial Oil some sort of monopoly in the Northwest Territories and he inquired whether companies would have the right to go in there.


Howard Charles Green: And individuals and syndicates.


Thomas Alexander Crerar: I made a statement on
government policy on May 5 when the order in council setting forth the arrangements and giving the details of the proposed regulations was tabled. I should like to quote from that statement as reported on page 2651 of Hansard, as follows:
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In respect to the new regulations to ibe established, the order in council sets out briefly some of the more important conditions that will be imposed. It is to the general advantage of Canada that an active programme of exploration and search for oil should be carried out in order that new sources may be found and developed. The regulations will make available to all companies and individuals the opportunity of exploring and developing these resources.
The policy of the government with respect to the matter is set out in those words. There is no attempt to restrict this to any one company. As I have pointed out once or twice already in the discussion, the regulations provide that while the company can retain a permit of one area up to 2,000,000 acres, it must within a period of years reduce that and settle upon what particular acreage it is going to take. The limit of the acreage that it can have when it reaches that point is 350,000 acres.


Douglas Gooderham Ross: What happens to the remainder?


Thomas Alexander Crerar: It is open to anyone else. My hon. friend can go in and explore it.


Douglas Gooderham Ross: Could I have all
;he rest?


Mr. STIRLING:: If you stake it.	[DOT]


Thomas Alexander Crerar: My hon. friend could go in; anyone else could go in. We were particularly careful in framing these regulations to provide against the very danger that the hon. member for Vancouver South has in mind. I have stated already that ultimately a pipeline must be built if the area, is to be commercially exploited, and that must be open to everyone upon terms approved by the government. I do not know how anything more could have been done to make certain that any company or individual that was interested should have an opportunity of going in and staking.
This is not a field of operations for an individual or company with small capital. You must transport your drilling equipment and supplies and everything else nearly 1,500 miles over very costly water and land transportation routes. You will have only three or four months in the summer for drilling operations and you must face heavy winter conditions. It is not a field for the small individual, such as Turner valley. This is not because of any limitation imposed by the government; it is because of limitations imposed by nature.


Howard Charles Green: Is it a fact that the proven field has been reserved for Imperial Oil?


Thomas Alexander Crerar: One-third or a little more of the proven field was covered by the old

leases which Imperial Oil obtained twenty years ago, the other two-thirds being secured under the war-time regulations. There is no doubt that the area is now under the control of Imperial Oil, but within a radius of fifty miles of Norman Wells there are over 5,000,000 acres.


Howard Charles Green: How much more does
Imperial Oil control?


Thomas Alexander Crerar: I am just coming to that. As I say, within a radius of fifty miles of the proven field there are over 5,000,000 acres, and of that Imperial Oil have a right to secure a permit covering 140,000 acres.


Howard Charles Green: In addition they could get permits for over another million acres?


Thomas Alexander Crerar: I suppose they could.
There is one other point I wish to mention. There is no doubt that at the moment Imperial Oil are in a position that may be regarded as advantageous compared with that of any other company coming in, but that is on account of the fact that they went in there twenty years ago and found oil. They were the people to whom the United States authorities went because they were on the spot and knew something about the country. It may be argued that they have a preferred position, but that preferred position may not be of any permanent value to them. I may add that other large oil companies are showing an interest in that country and, if they want to go in, they are free to go in. The same with my hon. friend; if he wants to get a company together he will have a chance to go in and see what he can do.


Howard Charles Green: May I ask one further question? Did the United States government provide the money for developing these wells?


Thomas Alexander Crerar: I am not fully informed of the financial arrangements between the United States authorities and Imperial Oil. My understanding is that the war department or some authority associated with the United States war effort financed Imperial Oil.


John Ritchie MacNicol: Did the United States government itself not drill the additional wells since Imperial Oil left off?


Thomas Alexander Crerar: Quite right. I was going to ask, would it be reasonable to say to Imperial Oil, "Are you prepared to go ahead and spend five or six or ten million dollars bringing in heavy drilling machinery and drilling wells to see if we can find some oil?"


Howard Charles Green: Is it fair to say then that the Imperial Oil company had three wells in this area when the emergency arose; that

War Appropriation-Mines and Resources
they were on the spot; that the United States government stepped in and financed them to drill other wells; that the Canadian government gave them these exclusive rights; and that they are now keeping all the rights as provided for in the new order in council? It is true that they had developed three or four wells up to the time the emergency arose, but apparently they did not finance the further developments.


Thomas Alexander Crerar: I have tried to explain that Imperial Oil had-roughly-2,900 acres under their original leases secured over twenty years ago. In the proven area there is an additional
3,000	acres, and in that area they have an estimated thirty to sixty million barrels of oil. Some of the holes were dry holes; most of them produced oil. In addition to that, because they wanted to be certain of their supply for the pipeline, they selected within a radius of fifty miles other areas upon which drilling operations were started but had not and have not yet reached a final conclusion, but probably will be carried on. As I said a moment ago, perhaps Imperial Oil had a preferred position because they were already established there. They had a small refinery from which they were producing gasoline for aeroplane services in the north country and diesel fuel oil for Bear lake.
It will take only a moment to deal with the first question asked by my hon. friend. I agree with him that increasing attention and importance .must be attached to the development of the north country, and the government and the Department of Mines and Resources have not been idle in that regard. This was the field work carried on in 1943. One party studied a proposed national park in the southwest Yukon and the recreational attractions along the Alaska highway. Two parties studied wild life along the Alaska highway.


Howard Charles Green: What sort of wild life was it they were examining?


Thomas Alexander Crerar: I think my hon. friend knows what is meant by the term. One party surveyed forest resources along the Alaska highway. Fourteen geological parties carried out surveys in northwestern Alberta between British Columbia and the Yukon. Seven topographical parties made surveys in northwestern Alberta. Four parties determined astronomical positions leading to the acquisition of the necessary data to establish proper base lines for mapping and surveying purposes. A party surveyed sites in northern British Columbia and the Yukon for water-power purposes. Two parties carried on hydrographic
surveys on the coast of British Columbia- very important work. In addition, the Department of Agriculture sent out a reconnaissance soil survey party along the Alaska highway, and one party in central British Columbia to make a soil survey along the Canadian National railway belt. For the current year we have made provision for almost forty parties in the territory about which I have been speaking. It is difficult to-day to get the personnel for these parties. We are endeavouring to gather all the information we can. A great deal has been obtained and it is available for further development work. I hope this will give my hon. friend the information he requires.


Howard Charles Green: Would it not be possible to send a party to Siberia to find out the developments which the Russians have made in their north country? They seem to have done wonderful things there. The Canadian government might get some very useful ideas.


Thomas Alexander Crerar: I think that would be very difficult during the war. We have, as my hon. friend knows, an ambassador in Moscow. All the data which has been gathered by the Russian government is available to our officers or can be secured for study. Later on, after the war is over, if it is thought desirable- and there may be a good deal to commend it-that we send a special mission to Russia to ascertain on the spot what the Russians are doing in the development of their north country, that could be done, but I do not think it would be wise to approach the Russian government with that proposal at the present moment.


Howard Charles Green: It might be worth trying.


Douglas Gooderham Ross: The minister has just told ws about the work of these survey parties. I have been wondering if they all went out under the vote of $10,000.


Thomas Alexander Crerar: No.


Douglas Gooderham Ross: We all remember that years ago some wells were drilled as a result of speculative activity, and others, perhaps more, to meet the needs as they arose in the north country, on behalf of the mining industry, and one thing and another. The main factor in recent development, as I see it, is the stress of war; that is, the United States needed oil for their ships on the west coast; something had to be done, and the problem of financing became in reality a United States job. I would ask the Minister of Munitions and Supply if that is not so, that the United States wanted a supply of oil for their ships on the west coast, in view
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of a possible Japanese invasion. I do not know what arrangement was made as between Canada and the United States to provide capital. But in connection with this project there is one important consideration which I wonder whether the government has in mind. Does it visualize Canada as a country of fifty million people instead of eleven and a half millions? These concessions given to Imperial Oil or any other company are being given not as concessions for to-day but as concessions for the future which at some time will become very valuable.
As far as the development of our natural resources in Canada is concerned, I am all in favour of having Canadians given an opportunity of developing them. I am not in favour of having to go outside Canada to get capital to any great extent to develop those resources. We have a great industrial organization in Canada, in the east, and we can take care of all supplies necessary to develop our own country. One of the difficulties in the twenties, so far as Canada is concerned, was that between 1920 and 1930 there were
120,000	Canadians leaving every year and going to the United States because we were not developing our own country. We let someone else do that for us. I am in favour of having this country developed by Canadians, by the boys who will be coming back from overseas. I would not give away the country to anyone else to carry out that development. The only question- in my mind, in connection with these concessions which are given at the present time, is this:	Are the government
keeping that point of view in the forefront? The hon. member for Peace River suggested that the Canadian Pacific Railway Company had done a good job for the development of the north country. So they have, by airways. I want to put that on the record.
Canada has proved herself as far as her productive capacity is concerned. I repeat, we have proved ourselves, and therefore I want to see our natural resources developed by Canadians with Canadian capital, with our own machinery, which we have in this country. The only thing that disturbs me when I hear about concessions being given to someone else is that we may not be looking forward to the future and keeping the concessions we have, in connection with the development of our natural resources, for the people of Canada.


Clarence Decatur Howe: We are getting a little afield from the actual project. Much has been said about concessions to Imperial Oil, but I would remind the committee that the discovery of oil in that area was made by that company.

They were not financed by anybody but went in as a Canadian corporation seeking oil in Canada.


Douglas Gooderham Ross: I was not criticizing that.


Clarence Decatur Howe: They discovered oil in the Norman area. It was developed to a moderate extent, and that development was limited entirely by markets in the territory. A smalt refinery was built; a few wells were drilled, and Imperial Oil since 1920 has been furnishing the requirements of that area for gasoline and oil products. When war broke out, entirely new problems arose. The sea route from Alaska was threatened by enemy action. A huge market for gasoline arose in the area owing to the development of the Northwest staging route. The United States army looked over possible sources of supply, and they were informed by Imperial Oil that the development was in existence in Fort Norman and that the probabilities were that the source of production could be enlarged. The United States government approached Canada and asked permission to carry on in that area certain development work as a war project. They chose as agent the Imperial Oil company. Why? Because that company knew the geology of the area and were operating in' that area. For the United States, the Imperial Oil company drilled several wells which proved up a certain area. The results were favourable and in the course of a year or two all oil had been proven of development that was likely to be required in the country. The Americans built a small refinery, or rather moved one from Texas and established it at Whitehorse to convert Fort Norman oil into the products required in that area. That is the extent of the development that is warranted by markets. Beyond that, another possibility exists, namely, that that development can be brought to a point where the oil can be transmitted by water where markets will be available sufficient to use the products of a larger field.
When you talk about concessions to Imperial Oil, what is the position of Imperial Oil today? They have a small proven field, between
30.000.	000 and 60,000,000 barrels of proven oil. In order to transport that to the coast an economical pipeline must be built costing $60,000,000, and to justify the pipeline, further oil must be found to bring the potential up to
. 300,000,000 barrels. Imperial Oil to-day have the right to go to that area and attempt to prove up additional oil to the total amount of
300.000.	000 barrels; then they have the privilege of finding $60,000,000 and to build a pipe-

War Appropriation-Mines and Resources
line; and after all that has been done they will market their first barrel of oil outside the immediate area.


Howard Charles Green: Is that over and above what the United States gets?


Clarence Decatur Howe: The United States of course found certain oil and they are entitled to that oil at cost.


Howard Charles Green: They get 60,000,000 barrels; they are entitled to 60,000,000 barrels.


Clarence Decatur Howe: If additional oil is found they have the right to 60,000,000 barrels at cost, plus twenty cents a barrel.


Howard Charles Green: Does that give them a total of
120.000.	000 barrels?


Clarence Decatur Howe: No. They have the right to-day to 30,000,000 barrels. If additional oil is found they are entitled to ten per cent of the proven field up to the total of another
30.000.	000 barrels.


John Ritchie MacNicol: To reimburse them for what they spent.


Clarence Decatur Howe: To reimburse them for their expenditure in drilling the wells.


John Ritchie MacNicol: Yes, and that is only fair.


Clarence Decatur Howe: The enviable position of Imperial Oil is this. They are located in the area. They have a certain field, but before it can be available and before they can get any substantial amount of money they must spend another $30,000,000 for development work and $60,000,000 for a pipeline before they will begin to get any return whatever from the field.


John Ritchie MacNicol: And they spent $10,000,000 in the beginning.


Clarence Decatur Howe: Yes. They spent $10,000,000 before the Americans came in. I wish the hon. member would not interrupt me. He has upset my train of thought. This development work will probably take from eight to ten years. I admire a private company that can take a gamble of that kind. I may say that all these wells have not been successful. A number of dry wells have been encountered, and there is nothing sure about the fact that that field will be large enough to warrant a pipeline to the coast. If it turns out not to be large enough to warrant a pipeline the expenditure that is made from now7 on will be lost for many years. It is a huge speculation. It is a speculation that large oil companies can take. I have never known one as large as this; nevertheless, I am proud of the fact that a Canadian company-Imperial Oil is a Canadian company-is strong enough to undertake a
development that requires such a tremendous risk of capital and so much courage to carry to completion.


Howard Charles Green: They are really a subsidiary of Standard Oil of New Jersey.


Clarence Decatur Howe: Assuming they are; nevertheless they are a Canadian company operating under Canadian laws with a substantial Canadian ownership. I hardly think that it has been the policy of this country through the years to discriminate against a Canadian company because some of its stock is owned in other countries. That is the position. I may say that every other company has the same right as the Imperial Oil company to go into that area and develop it. When the pipeline is built it will be a common carrier. If it is built by the Imperial Oil company, the smallest oil company that cares to go into that country and develop it will have the same right to use that pipeline and can use it at the same transport rate as the Imperial Oil company. The pipeline will be operated by a company whose rates will be regulated by the board of transport commissioners for Canada, and its use will be available to everyone operating through the area. The government sincerely hopes that other companies will go into that area and develop it. Every development will provide a portion of the 300,000,000 barrels required to justify the pipeline; and if other companies will provide a part in the proven oil resources it will mean that- much less for Imperial Oil to do, and that much shorter time before this area can be brought into production.
What is the Canadian interest in this development? Canada is a beggar for oil. We are knocking at every door on the American hemisphere to get petroleum to-day. In normal times we produce about seventeen per cent of the petroleum products that we consume. At the present time we produce considerably less than seventeen per cent of the petroleum that Canada is using. We formerly got our petroleum largely from United States sources, partly from the Caribbean area. We find that certain sources previously open to Canada are being depleted or overloaded to an extent that they are no longer available. We must go farther and farther afield. Formerly British Columbia was supplied entirely from California-*


Howard Charles Green: And Peru also.


Clarence Decatur Howe: To some extent, perhaps. To-day we are going almost entirely into South America for our supplies of petroleum for British Columbia. On the Atlantic coast we are going farther and farther south all the
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time to get crude petroleum and we are obtaining a lower grade of crude as the months go by.
If the world felt that Canada had large deposits of petroleum within its own boundaries which it was not attempting to develop I am sure that our reception would not be as cordial as it is to-day when we ask the United States and other countries to share their petroleum supplies. It is of great national importance that Canada should have an important source of petroleum within its own boundaries. The distribution of petroleum is limited by economic factors. The only possible way of getting petroleum out from the area in question is to the Pacific coast and then by tanker; but if we had a good supply there we could trade that oil for United States oil in position to serve eastern markets and would be in a vastly stronger position with respect to petroleum than we are to-day.
I ask hon. gentlemen in looking at this transaction not to look at the minute details. I believe that the minute details are perfectly in order. We are developing oil in the Northwest Territories just as we developed oil in every other part of Canada and just as every other country in the world has developed its oil. As a matter of fact, every province except one has given oil leases on practically the same terms as those have been given in the Northwest Territories. Although this deposit is in an area of extreme temperatures in which development work can be carried on only for a portion of the year, and in spite of the fact that there is this great transportation problem of moving the petroleum to the coast, the royalties charged and the terms of exploration are just as onerous as they are in other parts of Canada. Speaking personally, I can say that I fear the Department of Mines and Resources have driven too hard a bargain. My only fear in the transaction is not that the bargain is not hard enough, not that the government has not squeezed out the last share that can be squeezed out, but that the terms may be so onerous that the development may be stopped. I am indeed glad to note that the government of the day can, if that position proves to be the fact, relax the terms to a certain extent. I think that is a very fortunate saving clause in the contract. It may be that the development will go smoothly. Perhaps the schedule can be maintained, and the estimates in the hands of the oil companies completed. It may be that the company can carry out this development and pay the ground rentals and royalties called for in the lease; but to me the main thing is to get a major Canadian oil development which will make Canada independent in her oil position in the world.
[Mr Howe.]


Howard Charles Green: Is it not important to get
other operators in there?


Clarence Decatur Howe: Yes; we hope that other operators will come in. I may say they are in exactly the same position as Imperial Oil if they do come in.


Howard Charles Green: Hardly that.


Clarence Decatur Howe: It has been suggested that
Imperial Oil have a monopoly on a great part of the area. That is not true at all. All the property on which the Imperial Oil has rights is a small speck on the map of the Northwest Territories and a not much larger speck on the territory which has in a sense been proven to be oil-bearing from surface observation. There is ample property left. Perhaps the total claim of Imperial Oil is about two per cent of the acreage that is believed to be oilbearing. I may say that some of the acreage is nearer markets than the acreage Imperial Oil has at Fort Norman.
I hope that hon. members will take my viewpoint, that the main thing is to obtain oil from that territory and to develop that territory into a source of supply for Canada. That is the important thing, and the exact terms on which that oil is obtained, to my mind pale into insignificance in relation to the main problem.


Mr. GRAHAM:: What is the type of crude there?


Clarence Decatur Howe: It is a very good crude.


Mr. NICHOLSON:: It would appear to me that it should be government policy to plan for the production of the greatest quantity of oil with the least amount of labour in the post-war period. I think it is taken for granted that oil will be a very important commodity in the life of Canada; and since the government has spent very large sums of money in geological survey work and in developing the north country, I think plans should be made now for the government to go into this newest development in order that the Canadian people may obtain some return from these large expenditures. Last summer, while returning from the north country, I travelled for two days with some seventy Americans who had been employed on airport construction work in the far north. The lowest paid man in that party had received S450 a month, with board; carpenters were paid $500 a month and electricians $550 to $600. The government of this country is planning to take over these bases, as I understand it, paying all the cost of their construction; and many of these places will be of use in the development of the resources of the far north.

War Appropriation-Mines and Resources
Having in mind what has been done by the government in a critical period of war- I have in mind a visit I made this week to one of the prize babies of the Minister of Munitions and Supply at Sarnia-and remembering how the minister can boast of what has been done with public funds in connection with publicly owned corporations, I see no particular reason why the government could not take the risks involved in the drilling of wells, even if they should be dry wells. Imperial Oil or any other company must get from the Canadian people the funds they intend to use in this development. I believe that if we knew the very large amounts of money that bakers, tinsmiths and farmers in Ontario and Quebec have lost during the last twenty-five years in wildcat oil developments _ we would find that the experimental work has been very costly. Having made such very large expenditures in the past, however, I should think it would be government policy now to determine that the government should take the cream as well as the skim-milk. I believe it would be a great calamity if in the post-war period we should have half a dozen companies planning to build plants such as the one at Sarnia, when one plant of that size undoubtedly will be able to produce all the rubber we are likely to use, with something over for export. Similarly I believe the development of our oil resources should be carried on as part of a national policy to produce all the oil available in Canada to keep the wheels of industry turning and to export the surplus to other, less fortunate countries, if that is possible. I think at this stage the minister might make some statement indicating that the people of Canada will have a chance to recoup the large expenditures that have been made in the past in connection with the development of the northern country.


Gordon Graydon: I have said nothing in this debate so far, and I rise at this time only to say a word in support of some of those who have taken part in this discussion.
I think anyone who has studied the possibilities of that northern territory must range himself in support of a larger, more comprehensive scheme for its development. In the years to come I am sure this area of such potential wealth will come to be regarded as one of the most important parts of this country, and I wish to support much that has been said by those who preceded me, particularly the hon. member for Vancouver South, who suggested that we should take advantage of the expeirments and the experience of our neighbours across Bering strait,
the Union of Soviet Socialist Republics. In replying to the suggestion that we should take advantage of the valuable experience of Russia I thought the minister's answer was not perhaps as comprehensive as it might have been. I think we might very well take advantage of the experiences of other countries in developing areas whose climate and other characteristics are similar to those of the northwest part of our dominion. So that in these very few words I should like to identify myself with the suggestion that has been offered in that regard, and I hope the minister will accept in a kindly way the advice that has come from this side of the house during this debate, which I think has been constructive and to the benefit of the Canadian people. I should like to see the government adopt a forthright, vigorous and well considered policy for the development of the Northwest Territories, so that in the years to come this will become one of our richest and best developed districts.


Thomas Alexander Crerar: Some useful, constructive suggestions have been advanced during the course of the discussion. I believe my department is fully aware of the importance of taking advantage of everything that can be learned of what is being done in Russia. In my opinion the Department of Mines and Resources and indeed the dominion are very fortunate in having as deputy minister Doctor Camsell, whose knowledge of the whole north country is probably greater than that of any other Canadian. I would mention to the leader of the opposition that the Siberian or arctic region of Russia differs substantially from the arctic region of Canada. Our great northern area is largely found within what is knowm as the pre-Cambrian belt of rocks, which extends from Labrador, swinging around south of Hudson bay down as far as Port Arthur, and then in a northwesterly direction up to Great Bear lake, where the radium mines are, and on beyond the arctic. Therefore the development w7e may expect in a great part of our north country will be mineral development. I understand that conditions in Russia are somewhat different. Climatic conditions, I understand, are not quite as severe as they are in Canada, and they have timber and other resources.


Howard Charles Green: The article I read last evening said that their climate was worse than ours.


Thomas Alexander Crerar: I know, for instance, that navigation is open every summer from Archangel, in the northwestern corner of Russia, around through to Bering strait. In Canada that is not possible. Ships have made the journey from Hudson bay to Bering strait,
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but it has taken two years to do it. As a matter of fact a ship is on that journey now. Whether or not those conditions will improve, I do not know. Probably some improvements can be made. However, ice conditions appear to be worse in northern Canada than they are in Russia.
I can assure the leader of the opposition, however, that the department is fully alive to the importance of gathering all possible information. I remember reading within the last six or seven years a book entitled, " Forty Thousand Against the Arctic," describing northern developments in Russia. All the data which can be gathered is being gathered. I should like to express a measure of satisfaction that there is among the membership of the House of Commons a substantial growing interest in the possibilities of our north country.


Gordon Graydon: The minister should
mention the hon. member for Davenport, particularly.


Thomas Alexander Crerar: I have done so, several
times.


John Ritchie MacNicol: The hon. member for Vancouver South asked a question the answer to which I did not hear. I believe I can answer it. At page 1 of the report of the special committee at Washington investigating the national defence programme, I find something which I believe answers the hon. member's question. After stating that the programme in connection with Canol would cost $134;000,000, the report states:
The second part of the Canol .project will lost approximately $99,000,000. It includes prospecting for oil and developing new wells in the vicinity of Norman Wells in Canada at a cost of about $17,000,000.
So that I take it from that that the United States government has undertaken to pay the Imperial Oil company the cost of the drilling, namely $17,000,000.


Mr. NOSEWORTHY:: If I understand correctly, the Imperial Oil company have an option in respect of drilling on 2,000,000 acres. They have a number of years or a given period of time after which they must decide how many acres they want to lease. I did not get the length of time they were permitted to carry out their exploration work before they must name the number of acres they want to lease. Will the minister give us that information?


Thomas Alexander Crerar: They can get the eight permits of 256,000 acres each.


Joseph William Noseworthy: Two million acres.
fMr. Crerar.]


Thomas Alexander Crerar: That is for exploration and drilling. Within three years that must be reduced to 1,000,000 acres. And finally it gets down where they can select 350,000 acres.


Joseph William Noseworthy: I take it, that this
2,000,000 acres on which they may take an option includes the territory that has been proven, with the aid of the United States government finances, under our war programme.


Thomas Alexander Crerar: The 5,000 acres, which is what we have been describing as the proven field, is not included in that. They have outside of that, within, the radius of fifty miles,
140,000	acres. I understand that the 5,000 is included in the 140,000.


Joseph William Noseworthy: This 2,000,000 acres will unquestionably be the 2,000,000 that at this date offer the greatest promise for oil?


Thomas Alexander Crerar: No, not necessarily. It is true that oil has been found in this area; but fifty miles away there may be a better field than was found at Norman Wells. No one can say, until the geological structures are studied. That is nothing new; it has happened in every oil field in the world.


Joseph William Noseworthy: The minister did not make clear just how many years the company will have before it must decide finally how many acres it will lease. He has said that after threee years the 2,000,000 acres will be reduced to 1,000,000 acres. Then, after a given period, it will be reduced still further. What is the time limit before they must make their final decision?


Thomas Alexander Crerar: Within six years from the time the operation begins they must get down to 350,000 acres or less.


William Earl Rowe: They have been in there for more than twenty-five years.


Howard Charles Green: Have any recommendations been made in connection with development of northern Canada by the joint economic committees of the United States and Canada. On June 20,	1941, these committees were
appointed, and on January 25 of last year it was announced that they were going to undertake a study of the north Pacific area, including Alaska, the Yukon and northern British Columbia.
% On February 22 of last year the Prime Minister said:
The object is to study the possibilities for the economic development of the region for the benefit of the two countries and for the welfare of the inhabitants of the area.
At that time no recommendations had been received from the committee. Have any been received since that time?

War Appropriation-Mines and Resources


William Henry Golding: That has nothing to do with the item. We want to deal with the items as they are.


Howard Charles Green: With all due deference, Mr. Chairman, the item deals with the Alaska highway and the Canol project.


William Henry Golding: Yes.


Howard Charles Green: One goes through the Yukon and the other through northern British Columbia and the Yukon. Certainly they are economic developments. The committee to which I referred was a joint committee of the two nations appointed for the purpose of recommending what economic developments would be undertaken. Since that committee was appointed, both these projects have been undertaken. I have asked the minister whether or not there have been any recommendations with regard to the projects, and I submit I am in order.


Thomas Alexander Crerar: I can answer, briefly. This was a joint committee. I believe that in the initial stages it was expected a joint report would be prepared. I understand now that it is exchanging information, and that each section of the committee is going to report to its own government. As yet the Canadian section has not reported to the Canadian government.


Howard Charles Green: There has been no report from it at all?


Thomas Alexander Crerar: Not yet.


Howard Charles Green: Although it has been
appointed for more than three years.


Thomas Alexander Crerar: It is not three years, is it?


Howard Charles Green: June 20, 1941.


Thomas Alexander Crerar: WTell, no report has come in yet.


Mr. NOSE WORTHY:: I wish to join with those who have already spoken, to express the desire of this group to see this territory developed. I believe we have made it quite clear that our chief concern is to see that this rich area is developed. To-day it is practically the only area containing vast sources of natural wealth which has not been handed over, in one form or another, to large monopolistic interests. I am not going to continue this discussion any further. I should like to say something about the statement made by the hon. member for Davenport, but his riding adjoins my own and I have no doubt that we shall have ample opportunity to exchange views on this subject.
I wish to endorse what has been said by the leader of the opposition and the hon. member for Vancouver South regarding the
profit that may accrue to the Canadian people from what has been done in the northern areas of Russia. I was delighted to hear the minister say that his department has already given consideration to those developments and studies which have been carried on by our allies. I should like to ask him if from the study his department has made he has found that that country has given any corporation comparable with Imperial Oil the exclusive right to explore 2,000,000 acres of their oil fields?


Thomas Alexander Crerar: No. I confess that my studies have not proceeded to that point, but I would think it most unlikely that Russia had done so. Up to the present time Russia has carried on under a different political philosophy from that obtaining in Canada, one that is probably more in accord with the views of my hon. friend. I do not know upon what basis Russia has developed her north country.


[Stage Direction]
Item agreed to.
Dominion forest service-internment and prisoners of war operations, $52,800.
Howard Charles Green: Will the minister explain this item and tell us the approximate number of prisoners of war and internees being used in these forest operations, and the type of work they are doing? Will he tell us also whether any attempt is being made to segregate the nazis from the anti-nazis?


Thomas Alexander Crerar: I do not know that I am in position to give my hon. friend the number of prisoners of war working in any particular camp.


Howard Charles Green: I did not ask for those in any particular camp; I wanted the number at work.


Thomas Alexander Crerar: I think I can go as far as saying that last year there were 44,062 man-days. I cannot tell my hon. friend where that work was performed or the number of men who were working at any particular time.


Howard Charles Green: Has any attempt been made to segregate the nazis from the anti-nazis?


Thomas Alexander Crerar: That matter would be under the Department of National Defence; it would have nothing to do with this vote. These people are in the custody of the Department of National Defence, but the cost of supervision is covered by this vote. Trucks are required, and tools and other equipment to enable them to do the work, and that is all charged against this vote. The information in regard to the number should be secured from the Department of National Defence.
3296	COMMONS
War Appropriation-Mines and Resources


Joseph William Noseworthy: What is the nature of the operations?


Thomas Alexander Crerar: Some of them are cutting cordwocd; others are cutting pit props; others are cutting fence posts and some are doing other lumbering operations.


Joseph William Noseworthy: It is useful work?


Thomas Alexander Crerar: Useful and necessary work.


Mr. SHAW:: What is the government policy with respect to the sale of posts, pit props, mine ties and so forth? We have a peculiar situation here. The government is not paying wages comparable with those being paid by companies engaged in this work. Are you selling the product at a price comparable with that being charged by those regularly engaged in this type of work?


Thomas Alexander Crerar: The prices at which props or wood or anything else is sold are fixed by the timber controller or the fuel controller, as the case may be. I think that gives the information asked by my hon. friend.


Frederick Davis Shaw: Back in 1942 there developed an acute shortage of pit props, ties and so forth in the minefields of western Canada. I think that shortage was owing to the fact that the price which the producers were able to charge did not enable them to secure labour; in other words, they could not afford to pay the wages asked. At that time the government adopted the policy of paying a subsidy of $3.50 per thousand lineal feet and at the same time they put conscientious objectors and prisoners of war at work producing these commodities. Then in January, 1944, after more than a sufficient quantity of these products had been produced to meet the demand, without notice the subsidy was terminated. The producers of these products had responded to the request of the government and had produced thousands of lineal feet of mine ties and pit props, but before they could deliver them the government notified them on January 20 that the subsidy had been discontinued as of the previous day.


Thomas Alexander Crerar: I do not wish to interrupt my hon. friend, but I think he is talking about something that is not concerned with this vote. There are no subsidies paid under this vote. For one reason or another a number of people were interned, or a number of prisoners of war were available, and they were put to work cutting cordwood, pit props, lumber, fence posts and so on. The Department of Mines and Resources has control of the forest experimental plots or areas and supervises this work. The material produced is disposed under terms

set by either the timber controller or the fuel controller. No question of subsidy enters into the matter.


Frederick Davis Shaw: I quite recognize that fact.


Thomas Alexander Crerar: My hon. friend has certainly been good throughout the debate, but I doubt if he is in order in discussing this matter on this item.


Frederick Davis Shaw: Then I will put myself in
order by taking the minister's own words that these commodities are disposed of by the department over wLich he presides and I shall develop my argument on that basis. While I shall not say all I had intended to say, I object to the government utilizing prisoners of war or conscientious objectors to produce a commodity which I believe they have put on the market at a lower price than regular producers can afford to offer it at. I have no objection to these people being put to work; in fact I believe it should be done, but it is not right to compete with established businesses upon an unfair basis. Perhaps I may just mention that while it is true that the pit-prop producers, when the $3.50 subsidy was withdrawn, were allowed to raise their own price by $3.50, when they tried to deliver their materials to the mines they were told by the mine owners, "We do not want your product, because we can buy it from the government at a lower figure." That in itself justifies the criticism which came from the Alberta Mine Timbers Retail association. They protested most vigorously against the use of this type of labour to produce a commodity which, by reason of the circumstances under which it is produced, can be sold at a lower price than regular producers can afford to charge.
While I recognize that the wartime prices and trade board and the Commodity Prices Stabilization corporation are tied in with this, it is sometimes extremely difficult, especially with the set-up as it is to-day, always to be in order when one discusses it, because there are three organizations involved-the two I have mentioned, and a government department. I object to any policy whereby the government puts prisoners of war and conscientious objectors at work to produce a commodity and thus undersell persons who are regularly engaged in that type of work. The minister suggested that that was not being done. I hope not, but we have reason to believe that it is.


Humphrey Mitchell: Prisoners of war and
conscientious objectors come under the jurisdiction of the Department of Labour, and I

War Appropriation-Mines and Resources
wish my hon. friend clearly to understand that at no time have they been used in competition with what may be termed free labour in an effort to undersell ordinary producers. That is an elementary and fundamental principle. My hon. friend can make any case he likes, but I assure him that under no circumstances is the product of prisoners of war and conscientious objectors underselling the products of free labour.


William Earl Rowe: With reference to the employment of prisoners of war, what the Minister of Labour has said is quite true. The wages which are paid prisoners of war to-day by ' companies do not cheapen the production of what 'they create, and certainly in none of the companies by whom they are employed has civilian labour in any way been prejudiced. These people are used only where civilian labour is not sufficiently plentiful. I feel, however, that the scanty proportions of this vote reflect the government's policy toward forest services generally. The minister shakes his head, but we find that from year to year during the war the expenditure in his own department on this work has been less as the years go by. From 1939 to 1942 there has been a very substantial reduction.


William Henry Golding: I do not think that upon this item we should get into a general discussion in connection with forests.


William Earl Rowe: This subject pertains to forest services generally, and the amount to be voted under this item has to do only with forest -services. I submit that considerable latitude has been taken even by the minister himself; we have been in Russia and Japan and all over the Pacific. We also took in a lot of latitude in the items which preceded this.


William Henry Golding: I think too much latitude has been taken under all these items. This particular one states definitely, "Internment and prisoners of war operations"; it does not have to do with general policy in connection with forests.


William Earl Rowe: Very well, Mr. Chairman.


Thomas Alexander Crerar: I wish to make one or two remarks in reply to the hon. member who has just spoken. He is under a misapprehension or perhaps in some confusion. This vote is not intended for forest development work; it is to provide for the supervisory expense of looking after certain internees or prisoners of war.


William Earl Rowe: It is the first item under ""forest service".


Thomas Alexander Crerar: Quite true. As I have explained, that is what this vote is for, but my hon. friend is under a misapprehension if he measures by this vote what we are doing in forestry work. In our civil estimates, which in due course will be before the house, is an item of over $300,000 for forestry work. But this has nothing to do with that; it is merely a vote for which we are asking to supervise the work of internees and prisoners of war who happen to be employed at dominion forest experimental stations.


Joseph William Noseworthy: The vote last year under this item was $42,445. Will the minister tell us what the actual expenditures were, and also what income accrued to the department through the sale of what these men produced?


Thomas Alexander Crerar: I have already explained to the committee that the work of these internees and prisoners under supervision was directed to the production of cordwood, pit-props, a small amount of lumber, fence posts, and pulpwood.


Joseph William Noseworthy: Those were sold?


Thomas Alexander Crerar: I can give my hon. friend the figures. There were produced over 16,000 cords of wood, including 5,000 cords to heat the internment camps; 2,750,000 odd lineal feet of mine props; over 12,000 lineal feet of fence posts, including fence posts for the internment camp; over 1,100 cords of pulp-wood; and over 55,000 feet board measure of sawn logs. My hon. friend asked what the receipts were. I am sorry we have not that here, but the material was sold at prices fixed by the timber fuel controller.


[Stage Direction]
Item agreed to.
Forest products laboratories, $56,400.
William Earl Rowe: Will the minister explain this item?


Thomas Alexander Crerar: This is war work carried out by the laboratories. The purpose is to ascertain the best means of preservation and fire retardment treatment of wood for various purposes, serviceability of wooden aircraft under different climatic conditions, recovery of ethyl alcohol from wood waste for use in the manufacture of synthetic rubber, the use of paper plastics for aircraft and for other purposes, charcoal for producer gas and metallurgical pui poses, the moulding of aircraft parts to double curvature, the seasoning of lumber for special war purposes, and work of that kind. That is all directly related to the war.
3298	COMMONS
War Appropriation-Mines and Resources


Mr. PERLEY:: How many different laboratories are there?


Thomas Alexander Crerar: There is one in Montreal, one in Ottawa and one in Vancouver. That is the character of the work done, and the increase is due simply to the increasing demand made on laboratories by war services.


Howard Charles Green: Some time ago there was a discussion about the possibility of setting up a forest products institute in Vancouver in connection with the university of British Columbia. I understand that a tentative agreement was reached between the dominion government, the provincial government and the board of governors at the university and the timber industry at the coast. What progress has been made with that project?


Thomas Alexander Crerar: -Some discussions in that regard have gone on with the government of
British Columbia, with the university of British Columbia, and with the timber industry in that province, and I understand that substantial progress has been made. The likelihood is that before very long an agreement will be worked out.


Howard Charles Green: When will that project be undertaken? Is it a post-war project?


Thomas Alexander Crerar: It was agreed that it would be post-war, that it would be carried on after the war. It involves the erection of a building, and the provision of facilities and equipment necessary for the work. It would be difficult at the moment to get the labour and materials for the construction and equipment necessary.


Howard Charles Green: But it is the intention to go ahead with it?


Thomas Alexander Crerar: Yes. The agreement is
practically worked out and I have no doubt we shall cany it through. At least I hope so.


William Earl Rowe: Is the general laboratory work carried on for post-war as well as for war purposes?


Thomas Alexander Crerar: In Vancouver?


William Earl Rowe: No, in the estimates?


Thomas Alexander Crerar: Yes. It is directed mainly to war work now, but these are the functions carried on by the department in normal times. They have been carrying on research work and investigations but since the war most of the work has been directed to matters relating to the War.


William Earl Rowe: I wish to emphasize again the scanty attention that has been paid by the dominion department to the forest products

industry. When one considers what has been done during war years in Germany and in other European countries, one sees that our amounts as well as our efforts are infinitesimal in comparison with the enormous resources we have to deal with. I know the minister does not want me to hold up the estimates, but this afternoon we discussed possible treaties with Russia and the question of how we are going to fight Japan, and what we shall do in the post-war period. Many hon. members on the other side of the house have emphasized the importance of the gold mining industry to give employment in the post-war days, and we can all agree with that.


William Henry Golding: Which was all out of order.


William Earl Rowe: No. Mr. Chairman. I submit that the hon. member for Parry Sound was not out of order when he was dealing with gold mining under the minerals item. The minister himself now states that this is for post-war considerations as well. However, I realize that these are war appropriations and I will not hold them up long, though I submit again that this side of the house has not been doing all the holding up. Let me emphasize that our whole approach as a dominion parliament and as a dominion government to our post-war possibilities in the forest products industry, and to post-war employment that will be given by that industry, has been very much neglected. Indeed, it has been a miniature compared with the part that the forest products industry plays in the war and the part that it will play after the war. Just consider the different uses of the forest products of this country, from hospital waddings to the parcelling of goods for the boys overseas, buildings, wall board, as well as ammunition, and all sorts of paper requirements, the things that are used every day in the war. Consider the tremendous shortage that exists and the difficulty we are experiencing in maintaining the supply of pulps for explosives and waddings, pulps to make parcels, and so on. There is, I repeat, a vast shortage and this is a small vote for the laboratory work during war time. The time has come when as a dominion we must assume more of the responsibility for the promotion and encouragement of the second greatest industry in Canada, the one that offers the greatest possibilities in the post-war period, the industry that is second only to food production in the requirements of the war. The minister has mentioned $300,000 that may be brought down later. He says, I believe, that that is more than was spent in 1941 and 1942, when the expenditure was $60,000, less than in 1939. Well, $300,000 is

War Appropriation-Mines and Resources
not much for an industry that brings in, in revenue alone, almost SSO.OOO.OOO a year, an industry that pays out in wages $200,000,000, an industry that employs between 300,000 and 400,000, an industry that plays a more important part than any other except agriculture. It may be said that this comes under the provinces, in connection with civil and property rights. Well, one might just as well say the same about agriculture. We must realize that if we are to win the war and to win the peace that will follow we must have some practical and creative policies in our approach to a sound development of our great natural resources. Some would say, "Very well, we will handle all that through the state", but if we are to give employment to our people we must realize that we have a part in protecting, maintaining and preserving the great forest wealth of Canada that lies behind such employment.
I am not going to deal with many of the items on which the government might well spend money. The spruce bud-worm situation has been mentioned here. If the government were doing its duty toward our great natural resource it would have a larger vote directed toward the crucial years of the spruce bud-worm infestation, much larger than the amount mentioned here for all other laboratory purposes. I wish to mention only the general principle and the utter neglect which the government has shown toward this great industry not only in recent years but for many years. I am delighted to find that the leader of this party, Mr. John Bracken, who has studied the problems of this industry, as he has carefully studied the problems of other industries, made a speech not long ago in which he demonstrated his appreciation of the part our forest resources may play in post-war development. I urge the minister seriously not only to consider increasing this vote, but when he brings down his other estimates, not to talk about $300,000, but to assume the responsibility that he should towTard an industry that has been so long forgotten.
I realize that this item is not a large one. I am not criticizing it for its size; I am criticizing it because it is scanty and is an indication of the government's appreciation of the problem. In this dominion we have done practically nothing for the forest industry. The minister's department has spent more on the national parks of Canada alone than on the promotion of all the forest products of the country. When one stops to realize it, Mr. Chairman, one must think that if we have not awakened in peace times we should have awakened in war time, and for war purposes we should at least
be abreast of other nations who have been spending not in one year but for twenty years amounts that make us look like a backward nation. We are a nation that holds the key to the greatest forest resources development of any nation in the world. I urge the minister to reconsider, especially when he is bringing down his other estimates, increasing the vote in order to do the many things that are waiting to be done. I urge that he increase his other vote and give forestry its proper place in this country.
I may say here that after the next election- and it may not be long in coming; it is well indicated now-we shall have a keener appreciation of the forestry industry and we are likely to have a forestry department. In the meantime the minister who has had a long experience in the mines department, may at least take a leaf out of the constructive book of Mr. Bracken and show some progressive productivity.


Some hon. MEMBERS:: Where is he?


William Earl Rowe: He is out studying the problems that hon. members who have just made that remark do not understand, and I am glad that we see the results of some of that study in a clear comprehension of the problems that confront this country.


Thomas Alexander Crerar: The boundless optimism of my hon. friend as to what may happen in the next election certainly challenges one's admiration. He chides us for the smallness of this vote. He criticizes the government because of its parsimony in dealing with the problems of the forest wealth of this country, and he evinces a remarkably keen interest-


Ian Alistair Mackenzie: Newly discovered.


Thomas Alexander Crerar: -a newly discovered interest in pushing forward the value of our timber assets. I do not know how recent the conversion of my hon. friend to that point of view has been, but if he will take the trouble to go back eight years, to the time when his party was in power, and compare the amounts that the Conservative party, as it then was, appropriated for work of this kind with the amounts that have been appropriated and expended since this government came into power, even under the stress of war years, he will find, I think, some food for thought.


Ian Alistair Mackenzie: He knows that.


Thomas Alexander Crerar: In the observations that he has made-
.3C00	COMMONS
War Appropriation-Mines and Resources


William Earl Rowe: I said that.


Thomas Alexander Crerar: -the hon. gentleman is evidently putting a great deal of faith in Mr. Bracken, Well, I do not quarrel with that. I know Mr. Bracken.


Mr. SENN:: You should know him.


Thomas Alexander Crerar: I may say to my hon. friend that I supported Mr. Bracken in several provincial elections in Manitoba. I supported him when the Conservative party were calling him everything under the sun-and trying their best to destroy him.


Ian Alistair Mackenzie: They are now.


Thomas Alexander Crerar: If my hon. friend wants the proof let him look up the newspaper files of those days. I am glad he thinks Mr. Bracken is interested in a forest policy. I believe he is. Probably Mr. Bracken is a little more interested in a forest policy than he is in the official opposition in this house at the present time, if I may judge by everything I can learn about Mr. Bracken's work.


Ernest Edward Perley: What did the minister think of his present leader when he first came to .this house?


Thomas Alexander Crerar: Well, now-


William Earl Rowe: Look up the records on that.


Thomas Alexander Crerar: The hon. member for
Qu'Appelle does not need to barge into this discussion in this way because he was one of the gentlemen, if I mistake not, who came into Manitoba and campaigned against Mr. Bracken.


Ernest Edward Perley: I ask the minister to withdraw that. Never in the world did I make a speech in Manitoba against Mr. Bracken. I went into Manitoba and spoke against the minister's government but never against Mr. Bracken.


George Alexander Cruickshank: And they elected us.


Thomas Alexander Crerar: If my hon. friend did not, and I think my memory is right-perhaps my hon. friend is light, but there is no question that the hon. member for Qu'Appelle lent all the moral support he could to the Conservative party in Manitoba when it was seeking night and day every day in the week to destroy Mr. Bracken.


Ian Alistair Mackenzie: "Bracken must go" was the slogan.


Thomas Alexander Crerar: "Bracken must go" was the slogan, a man unfit to be premier of Manitoba. The hon. member for Winnipeg North Centre

could support my statements to that effect if he would care to do so. Therefore it is rather amusing; it is, indeed, decidedly interesting, to hear the hon. member for Dufferin rise in his place as he did to-night and in the best preachment style of which he is capable-and he is some performer in that direction-admonish this government and criticize it because it has failed to show proper regard to the development of the forest industry in this country.


William Earl Rowe: I said, "All governments in the country"; I did not confine it only to this government.


Thomas Alexander Crerar: My hon. friend did not say that.


William Earl Rowe: Yes, I did; I said "all governments".


Thomas Alexander Crerar: My hon. friend directed his shafts at this government.


William Earl Rowe: I said "all governments".


Thomas Alexander Crerar: If you go back to the days prior to the Conservative regime of 1930, that started in those unfortunate early years of 1930, what do you find the government of the day, the Liberal government, did? Look at the records and see what it was spending on work of this kind and contrast it with, I was almost going to say the parsimony of my hon. friend's party when it was in power from 1930 to 1935. Contrast that again with what has been done from 1935 up to the present time, even during the last five years of war. Why, my hon. friend has not a single peg on which to hang his hat.


William Earl Rowe: That is why we need a new interest now; we have a new day coming.


Thomas Alexander Crerar: The new interest that would be provided by my hon. friend would be a retrograde interest. I would be desperately afraid if the thing were entrusted to my hon. friend. However, this vote does not cover what the department is doing for the development of forest resources; it is merely for the supervision of the work of these prisoners of war in internment camps.


[Stage Direction]
Item agreed to.
Alternative service work camps, $127,000.
Ernest Edward Perley: Would the minister explain this and tell us where these camps are establ-lished?


Thomas Alexander Crerar: The alternative service camps are in three national parks; Banff, Kootenay and Riding Mountain, and in Kana-naskis forest station in Alberta and the Peta-wawa forest station in Ontario.

War Appropriation-Mines and Resources


Ernest Edward Perley: What is the nature of the work?


Thomas Alexander Crerar: It is the same as I explained under the previous vote; that is, pit props,
eordwood, pulpwood, fence posts and other products of that kind.


Ernest Edward Perley: You are keeping away from Saskatchewan on this vote?


Thomas Alexander Crerar: Yes. The only part of that province in which we could get this work done would be away up in the northern section.


Grote Stirling: Would the minister say how he finds the Doukhobors work in his camps?


Thomas Alexander Crerar: Fortunately or unfortunately, personally I think fortunately, we have no Doukhobors in any of these camps.


Grote Stirling: In none of the alternative service camps?


Thomas Alexander Crerar: No.


Alan Webster Neill: Where is the British Columbia camp?


Thomas Alexander Crerar: In Kootenay national park, which is between Banff and Golden.


[Stage Direction]
Item agreed to.
National parks bureau-
Alternative service work camps, $250,000.
Stanley Howard Knowles: Would the minister explain why this description appears in two separate items? First we have alternative service work camps, $127,000, and now alternative service work camps, $250,000. Is the work different? Why should there be two items dealing with this matter?


Thomas Alexander Crerar: One covers the work in the dominion experimental forest stations I mentioned a moment ago, Kananaskis in Alberta and Petawawa in Ontario. The other is for the work in the national parks, which I also mentioned; Kootenay, Banff and Riding Mountain. It is merely a distinction. Probably they could have been linked together, but putting it in this form gives more complete information.


Stanley Howard Knowles: Then the camps you mentioned cover both these items?


Thomas Alexander Crerar: Yes.


[Stage Direction]
Item agreed to.
Surveys and engineering branch-
Prince Rupert-Terrace^Cedarvale highway, $3,000,000.
Thomas Reid: Would the minister giye a break-down of this item? Would he also
explain why the federal government, after starting a highway which when completed was to extend from Vancouver to Prince Rupert, should leave a small portion of eighteen miles for the provincial government to complete? The people of British Columbia, and particularly those of the Prince Rupert district, are rather incensed at the federal government for leaving that small portion to be completed by the province. Would the minister explain this item and why that work is being left to the province?


Thomas Alexander Crerar: It will be necessary to deal very briefly with the genesis of this road. Ordinarily, as the hon. member for New Westminster knows, the dominion government does not go into a province and build a road. Years ago, under the government of the present Prime Minister, we did build what is known as the Big Bend highway in British Columbia. The road under discussion never would have been undertaken by the federal government if it had not been for the needs of war. The suggestion for the road came first, I believe, from the United States chiefs of staff; it was concurred in by the Canadian chiefs of staff, and was recommended by the permanent joint board on defence. Its origin is similar to that of the Alaska highway, the development of the Canol project which we were discussing this afternoon, and other matters. In considering the defence of North America the military authorities had to keep constantly in mind the possibility that coastal traffic would be interrupted. At a certain period of the war that was a danger. There was a road of sorts, capable of supporting truck traffic, from Vancouver to Hazelton, on the old Grand Trunk Pacific.


George Alexander Cruickshank: A road of sorts.


Thomas Alexander Crerar: Parts of it were all right; parts perhaps were not so good. At any rate it was a passable road. There was also a road of sorts from Hazelton toward Terrace, which under certain weather conditions was capable of being used by vehicles. Between Cedarvale and Prince Rupert, for a distance of ninety-seven miles, there was no road whatever. That country was a wilderness; the only outlet was the old Grand Trunk Pacific railway. It is not my place or my function to pass judgment upon the opinions held by military people, but certainly the chiefs of staff at Washington, supported by the chiefs of staff in Canada and the permanent joint defence board, recommended the construction of this road from Terrace to Prince Rupert in order to provide an alternative route in case

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War Appropriation-Mines and Resources
the railroad should be destroyed. This was predicated, perhaps, on a very long chance that coastal communications might be interrupted.


Howard Charles Green: The chance was not so long at one time.	'


Thomas Alexander Crerar: Perhaps not; I agree with the hon. member for Vancouver South that there was a definite possibility. That is why the road was undertaken. Nothing was known about the country, so that reconnaissance surveys had to be run. The work was entrusted to the Department of Mines and Resources, and under the surveys and engineering branch, in charge of Mr. Wardle, these surveys were made as speedily as possible. Undoubtedly greater difficulties intervened than had been expected. Surveys had to be made. There was a good deal of rock work, and much heavy timber to be moved. There was difficulty in getting labour and in getting materials. There were unfavourable climatic conditions, all of which increased the cost of the road, and delayed its construction very considerably beyond the period at which it was hoped it would be completed.
The fortunes of war have changed. If conditions at the beginning of 1942 had been as they are to-day, the probability is that the road would not have been recommended. It was built as insurance, and was thoroughly justified on that ground.


Thomas Reid: Why not complete it?


Thomas Alexander Crerar: I shall deal with that. The road was not constructed as an ordinary provincial road. The building of roads within provinces is the function and responsibility of the provinces.


George Alexander Cruickshank: Not all roads.


Thomas Alexander Crerar: Yes, all roads, with the exception of the transcontinental highway, where the federal government has assumed certain responsibilities. But this road was constructed for military purposes. That military need has disappeared.


Howard Charles Green: Not necessarily.


Thomas Alexander Crerar: Well, the military need, in the opinion of the chiefs of staff, has, I think pretty well disappeared.


Thomas Reid: Sometimes they have been wrong.


Thomas Alexander Crerar: The road, in addition to the original section from Terrace to Prince Rupert, has an additional mileage from Terrace to Kitwanga. That was also included in the construction. It is expected that the total cost will be between $10,000,000 and $11,000,000.
TMr. Crerar.]


Mr. HANSON (Skeena):: The minister has said that the chiefs of staff have decided that the completion of the road is not necessary.
I am of opinion, and I am sure that the chiefs of staff recommended that this road should be completed-


Thomas Alexander Crerar: Well, now-


Olof Hanson: -because it was necessary.


Thomas Alexander Crerar: The chiefs of staff recommended the road, in the first instance. Now they do not think conditions warrant the government extending the road. I think that is right.


Mr. SINCLAIR:: Finish, not extend.


Thomas Alexander Crerar: No; the demand is that the road should be built further by the federal government. The whole matter was carefully considered by the government. In this appropriation we have $3,000,000 to complete some sections of the road which were not completed, and for maintenance purposes during the year.
Now, what the province gets out of it is 110 miles of a good and completed road, with bridges.


George Alexander Cruickshank: What does the
dominion get out of it?


Thomas Alexander Crerar: The dominion gets-


George Alexander Cruickshank: Security.


Thomas Alexander Crerar: Well, yes, it gets security, which was indicated in the first instance. But I say now-


George Alexander Cruickshank: Is the war over?


Thomas Alexander Crerar: I say now to the committee that I do not think the road would have been undertaken, in the light of conditions as they exist to-day.


Thomas Reid: The same applies to the Alaska
highway.


Thomas Alexander Crerar: Of course.


Howard Charles Green: Will this vote finish the road?


Thomas Alexander Crerar: This vote will complete the road to Kitwanga, and there is in the vote the amount necessary to maintain it during this season. There is the possibility that in the spring some bridges or culverts may go out. The road is new; we have to gain by experience. But the vote was intended to cover the completion of the road from Kitwanga to Prince Rupert, and to maintain it this season.


Howard Charles Green: Apparently there are some sections which will not be finished. Which sections are they?

War Appropriation-Mines and Resources


Thomas Alexander Crerar: The extension between
Kitwanga and Hazelton.


Howard Charles Green: How far is that?


Thomas Alexander Crerar: About twenty-three miles, I am informed. It is not up to the standard of the road from Kitwanga to Prince Rupert. There was a road there. The provincial government had spent money on a road at that point. Under certain weather conditions it is passable, so I am informed.


Thomas Reid: And now they are left holding the bag.


Howard Charles Green: Surely that does'not make sense-for the government to take this attitude. Surely this plan does not make sense. I understand that the vote will complete the road, with the exception of a bit in the middle of it.


Thomas Alexander Crerar: No.


Howard Charles Green: Fourteen miles will not be completed?


Thomas Alexander Crerar: No, no.


Howard Charles Green: And several millions have been spent on it. Why not complete the road as quickly as possible? The minister has referred to supplies being moved to Prince Rupert. It was not only a question of supplies, and still is not. It is also a question of bringing troops up from reserve. While we are very glad that the menace is not nearly as great as it was before, yet Prince Rupert is the most exposed centre on Canada's Pacific coast, and nobody can tell what may yet happen. The Japanese fleet has not yet been destroyed.


Thomas Reid: And the road may be required at any time.


Howard Charles Green: And until the Japanese fleet is destroyed, we are not justified in taking chances. I would suggest that the minister ask for sufficient money to complete the road. It does seem foolish to leave a fourteen-mile gap which cannot be used in certain seasons of the year. Where on earth is the business sense in that?


Thomas Alexander Crerar: My hon. friend is under a misapprehension. The road from Kitwanga to Hazelton is a passable road even to-day.


Howard Charles Green: In certain seasons, the minister says.


Thomas Alexander Crerar: Probably if there were heavy rains, and muddy conditions, there might be some difficulty with traflic. But it is a passable road. It was not included in the first recommendation by the chiefs of staff.
100-208J
That covered only from Terrace to Prince Rupert. Later on, the additional stretches between Terrace, Cedarvale and Kitwanga were included. Now the demand is that another stretch from Kitwanga to Hazelton be included. Do that, and someone else comes along and says, "Well, there is another stretch of a hundred miles down this way, which is not in good shape, and which should be included." The government wishes to be perfectly fair in the matter, but we have not an inexhaustible supply of money, as hon. members know. The provision of money is for the Department of Finance.


Mr. KUHL:: I thought it was a question of men and material.


Thomas Alexander Crerar: The hon. member for New Westminster stated that British Columbia was left holding the bag.


Thomas Reid: I did, and I repeat it.


Thomas Alexander Crerar: Is British Columbia left holding the bag when we have spent $11,000,000 in building 112 miles of road, which is going to British Columbia, free?


George Alexander Cruickshank: If you do not finish
it, we are.


Thomas Alexander Crerar: I would be willing to be left holding the bag under those circumstances.


Howard Charles Green: With a gap in the middle?


Thomas Reid: You did not finish it.


Thomas Alexander Crerar: Yes, we did.


Thomas Reid: No, you did not.


George Alexander Cruickshank: You did not finish it.


Olof Hanson: Since this road is in my riding I think I can give the committee some information about it. From Vancouver, British Columbia, this road is approximately 1,200 miles. The provincial government have built the road from Vancouver to a point fifteen miles west of Hazelton, or a distance of about 900 miles. The federal government undertook to build the road to link up that road to Prince Rupert. According to the minister, the government has spent something like $11,000,000. There is fourteen miles of this road which is passable at certain times of the year, and I understand that it will take about $100,000 to link these sections up. If a business man or a corporation spent a thousand dollars on a project and then needed to spend only $10 to finish it, I think they would complete the job. The minister says that there is some responsibility on the provincial government,
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War Appropriation-Mines and Resources
but when the provincial government has built something like 900 miles and the federal government undertakes to build 200 miles, I do not think they should stop at mile 178. As I say, -this section of the road can be gone over with a model T Ford which has a sufficiently high clearance. If this road were linked up it would provide transportation from Prince Rupert to Vancouver. If it were necessary to evacuate troops from Prince Rupert they would not be able to take them over these fourteen miles of road except in a model T truck.


Gordon Graydon: It looks as though they are playing both ends against the middle.


George Alexander Cruickshank: There is not any middle.


Olof Hanson: They are playing the middle against both ends. Boards of trade and other interested bodies have appealed to the government to complete this road. I also know that the officers commanding have recommended that the gap be closed up. The provincial and dominion governments should get together and complete this gap. It is absolutely impossible to convince any layman that it should not be completed. I should like to ask the minister the total amount spent on the road up to the present time and what would be necessary to complete it to Kitwanga.


Thomas Alexander Crerar: The amount spent to
March 31, 1944, was $8,619,000 in round figures; of this vote $1,500,000 is to complete construction, which will make the total cost of construction roughly $10,119,000. The amount of road to be completed is not fourteen miles as the hon. member for Skeena states, but twenty-three miles.


Olof Hanson: Ten miles of the road from Hazelton is passable road.


Thomas Alexander Crerar: It would cost several hundred thousand dollars to complete the road. There are difficulties in connection with materials and labour.
Mr. O'NEILL: It must be almost a solid tunnel if it is going to cost that much.


Olof Hanson: The estimate of the provincial public works engineer is less than a hundred thousand dollars.


Thomas Alexander Crerar: That is simply to repair
the existing road. To build a road of the same standard would cost over half a million dollars.


Thomas Reid: I do not think the minister
gave the complete picture. The information we have is that when the United States mili-

tary men looked over the north country there was some kind of agreement arrived at whereby they would build the Alaska highway through Canada, which would become the property of the government of Canada, and Canada would build a road into Prince Rupert. As anyone from British Columbia knows, Prince Rupert is largely a United States city because there are so many United States (troops there. That was a definite understanding, and I am rather surprised to hear the minister say that the project is not being completed because of a lack of $100,000. An undertaking was given that a road would be built from Hazelton to Prince Rupert, and not carrying out that project meant not carrying out the bargain that was entered into when the road was started.


Thomas Alexander Crerar: Who gave that undertaking
that a road would be built from Hazelton to Prince Rupert?


Olof Hanson: It was to connect up with the provincial highway at Cedarvale. There was no highway from Terrace to Cedar-vale and the section of road to Kitwanga was impassable.


Thomas Reid: If the United States government had not carried out its agreement to build the Alaska highway-


An hon. MEMBER:: Or Canol.


Thomas Reid: -we would have claimed a breach of the agreement. I urge the minister to consider this matter and see to it that this road is completed.
Item stands.
Progress reported.


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