1945-12-01

[Stage Direction]
On the order of motions:
Right Hon. W. L. MACKENZIE KING (Prime Minister):: I desire to lay on the table copies in English and French of the declaration on atomic energy made by the President of the United States of America, the Prime Minister of the United Kingdom and the Prime Minister of Canada at Washington November 15, 1945. Hon. members will recall that the Minister of Justice (Mr. St. Laurent) placed the declaration on Hansard the day on which it was made, November 15. These are printed copies of the declaration by itself.



DOMESTIC AND EXPORT PRICES

[Stage Direction]
On the orders of the day:
Mr. H. C. GREEN (Vancouver South):: Mr. Speaker, I believe some statement has been made by the wartime prices and trade board concerning a change in the price of silver in Canada. Would the minister make a statement on the subject?


Hon. J. L. ILSLEY (Minister of Finance):: Arrangements have been completed with the major silver refiners whereby approximately fifty per cent of the silver which will be refined by them in 1946 will be reserved for domestic consumers and sold in Canada at Canadian silver prices. This silver will be distributed in accordance with normal usage. At the same time arrangements have been made by which small silver producers in the Cobalt area whose silver is refined in Canada will receive the export price for their production. The small producers in British Columbia whose silver is refined at Trail, British Columbia, will be treated in the same manner. The mint has agreed to pay gold producers shipping
Demobilization-Employment

bullion to the mint the export price for one-half of the by-product silver recovered and the domestic price for the other half.


Howard Charles Green: Does that mean the domestic price of silver is still to remain under the ceiling?


James Lorimer Ilsley: Yes.



EMPLOYMENT


[Stage Direction]
On the orders of the day:
Mr. G. R. PEARKES (Nanaimo):: I desire to direct an urgent question to the Minister of National Defence. Since he is not here perhaps the Minister of Labour will bring it to his attention or give me the answer. My question is: will the minister cease demobilizing troops in Vancouver and Victoria other than those who resided in British *Columbia before enlistment?


Mr. SPEAKER:: Order. I would suggest that the hon. member place his question on the order paper.


Howard Charles Green: I't is very urgent.


George Randolph Pearkes: Mr. Speaker, I have not come to the urgency of the situation. At the moment it is a matter of great urgency.


James Horace King: I would point out to the hon. member that when I say a question is not urgent I do not mean that the situation itself may not be urgent. The point is, if the question is put in the house will the immediate afiswer of the minister relieve the situation? In most cases, even if the question is put in the house, for some reason or other the minister is not ready to give an answer and it does not help anyone. If the question is placed upon the order paper the minister can look at it and give an answer which will be useful to hon. members. That is why I suggest that such questions be placed on the order paper.


Mr. STIRLING:: In view of the urgency *of this matter in the city of Vancouver and the province of British Columbia would it *not be possible to allow the hon. member to complete his question?


James Horace King: I want to be generous to hon. members as far as questions on the orders of the day are concerned, and I have tried to be; but under the rules of the house most of the questions should be placed on the order paper, and I believe the question of the hon. member for Nanaimo is one that should be dealt with in that way.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Hon. HUMPHREY MITCHELL (Minister of Labour):: Mr. Speaker, yesterday the hon. member for Vancouver-Burrard (Mr. Merritt),
gave notice of a question. I said at that time that while I could make a reply, perhaps it would be better to make a statement to-day.
I shall now do so. .
In answer to the first part of the question of the hon. member for Vancouver-Burrard, namely, as to what steps are being taken by the Department of Labour to overcome the shortage of skilled men in certain industries,
I would advise that under the Canadian vocational training plan extensive vocational training has been undertaken both in classes as well as "on the job," and in addition the provinces, including the province of British Columbia, a're assisted in extending apprenticeship plans.
Until quite recently it has been very difficult to interest men in training plans because work at good rates, without any particular training, was easy to obtain. The situation, however, has since changed and candidates are now coming forward and vocational training classes, are being organized as rapidly as possible. Already there are 12,641 in training in Canada and 1.081 in British Columbia.
In regard tb the second part of the question, which relates specifically to the employment situation in Vancouver, I should point out that the employment situation throughout Canada naturally has changed since V-J day, and now for the first time for several years there is a deficiency in the number of jobs available as compared with the number of unplaced applicants. The total is approximately 40,000.
Since V-J day, of course, there has been a very large cut-back in war manufacturing. On V-J day there were approximately 450,000 men and women engaged in war work, the majority of whom have since been laid off.
In addition, since V-J day approximately 240,000 men and women have been released from the armed forces. When these figures of lay-offs and discharges are considered, it is clear that the absorption of man-power in * civilian production and services has been very satisfactory.
Vancouver is one of the points in Canada where there are grounds for concern. The number of unplaced applicants as at November 29 was 14.680. The explanation is that Vancouver had a great deal of war work, principally shipbuilding, aircraft work and

Unemployment in Vancouver
work along the coast on defence projects by the governments of Canada and the United States, and consequently there has been a correspondingly heavy reduction in employment. Up to a few days ago there has been a big demand for men in the lumber camps, but the heavy snowfall has slowed up this activity. It was noticeable that when men were being sought, for lumber camps there were few willing to take this work, or indeed any work outside Vancouver.
There are still jobs available in mines and in other occupations outside Vancouver. The job opportunities are being advertised and men are assisted to move if they are without means to pay for their own transportation. Employers are being advised of particulars of the occupations of the men and women who are applying for jobs.
It is true that in Vancouver the shock of the change-over from war activity to production for civilian use has been somewhat greater than in some other parts of Canada. However, the view is held that the peak has probably been reached, that an improvement can be expected very soon, and that work will be
available for all, if not in Vancouver city
certainly at other points.
I would like to place on the record a set of figures which has just been issued by the Dominion Bureau of Statistics showing that the reduction in employment on October 1, 1945, as compared with September 1, 1945, despite the very great reduction in war work, was in nine leading industries only 2-2 per cent. This gives some idea, Mr. Speaker, of the resiliency and the powers of absorption of the Canadian industrial, commercial and agricultural structure.
In conclusion let me say that the government is concerned in regard to the situation in Vancouver and in several other cities in Canada, especially those which have had considerable war work. The present season is of course not favourable to commencement of new projects. The shortage of materials in many lines is creating difficulties, but no effort will be spared and I am satisfied that , early spring will see a great improvement in. the employment situation.
The table is as follows:
November 27, 1945.
Dominion Bureau of Statistics Employment and Payroll Statistics Ottawa
Summary of the October 1, 1945, Tabulation on Employment
Change from Sept. 1, 1945 Employees Percentage Index No. of employees (Decrease indicated by numbers reported at	the minus sign)
Industry	(1926-100) Oct. 1, 1945	No.	P.C.Manufacturing 	.... 188-4	989.739	-53,281	- 5-	*1Durable goods 	.... 197-3	461,018	-59,992	-11-	[DOT]5Non-durable goods 	.... 182-3	508,291	.7,056	1-	*4Electric light and power 	.... 160-2	20,421	- 345	- 1	[DOT]7Logging 	.... 205-2	61,968	77,201	13-	1Mining 	.... 143-6	67,631	- 117	
.	[DOT]2Coal mining 	.... 90-4	24,933	297 *	1-	*2Communications 	.... 123-8	33,179	107	*3Transportation 	.... 127-3	164,463	- 1,346	[DOT]8Construction 	159,798	975	[DOT]6Services 	52,467	- 797	- 1-	-5Trade 	195,313	4,821	2-	*5Eight leading industries 	.... 168-7	1,724,549	-42,437	- 2	[DOT]4Finance 	.... 134-0	69.372	2,054	3	[DOT]1Nine leading industries 	,... 167-0	1,793,921	-40,383	- 2-	*2


Mr. BLACK (Yukon):: I should like to say to the Minister of Labour that my information, received not later than this morning, is that there is a great surplus of men seeking employment in the lumber woods-far more than the operating lumber companies can employ, and that the unemployment situation
there is being aggravated by the discharge of many men from the army who do not belong in British Columbia and who did not enlist from that province. They should be sent to-where they enlisted or where they belong, rather 'than be permitted to aggravate the situation in British Columbia.
Trans-Canada Air Lines



TRANS-CANADA AIR LINES INCREASE OP CAPITAL-CREATION OP CORPORATION TO OPERATE SERVICES UNDER CONTRACT- CONSIDERATION OF SENATE AMENDMENTS

[Stage Direction]
Hon. C. D. HOWE (Minister of Reconstruction) moved the second reading of and concurrence in amendments made by the senate to bill No. 21, to amend the Trans-Canada Air Lines Act, 1937.
He said: The government agrees to these amendments, and the motion is now that the house concur. The amendments are entirely consistent with the existing practice. The first amendment provides that orders in council made under the act shall be tabled in the House of Commons. The second amendment is practically a quotation from The Canadian National Railways Act, of 1932, which requires an annual report from the company. The third amendment requires that the reports of the board of directors and the auditor respectively be tabled in parliament.
Grote Stirling: I understand these are beneficial amendments.


Mr. HOWE:: At least they are not harmful.


Grote Stirling: May I draw attention of the house to the fact that we have had no warning of these amendments, and only at this moment have heard their contents. They may be quite beneficial but I think we ought to know more about them and should have an opportunity to consider them.


Clarence Decatur Howe: Very well; allow it to stand.
Motion stands.

The house in committee of supply, Mr. Golding in the chair.



DEPARTMENT OP FISHERIES

[Stage Direction]
72. Departmental administration, $163,760.
Mr. REID:: "Mr. Chairman, there is one matter I should- like to draw to the attention [DOT]of the Minister of Fisheries. I do not expect he will be able to give a definite answer at the moment, but I would ask him to give [DOT] some thought to it between now and the :next session. I refer to the offshore fisheries <of British Columbia. As is well known, we spend millions of dollars hatching, rearing and protecting the great salmon fisheries of British Columbia. These fish head out to sea in their first or second year, and after they pass the three-mile limit they are at the mercy of the fishermen of any country. The United States has taken note of the calamity that might occur if foreign nations come

close-I mean within ten or fifteen miles- of the shores of the United States in order to fish. After some investigation they passed a bill this year to take care of offshore fishing beyond the three-mile limit.
It may be remembered that prior to the outbreak of the war, Japan sent mother ships down along the Alaska and British Columbia coasts. These ships returned home with great quantities of canned salmon. The war interfered with their activities, but under international law we had no control of any ships beyond the three-mile limit. The United States became greatly alarmed at what had taken place in Alaska bay. The Japanese had many ships in that bay, and strange to say when they were accused of this there was an official denial by the government of Japan. The fishermen there knew what was going on, and they went to the expense of hiring an aeroplane which took photographs of the Japanese actually fishing in Alaska bay.
Very few nations have gone to -the trouble of rehabilitating or preserving or regulating their fisheries. Most nations, including Japan, have only one thought in their minds, to secure all the fish possible and market them. Here is what the United States have done, and I quote from a dispatch dated September 28:
President Truman announced to-day the United States government has decided to regulate and control fisheries on the high seas contiguous to the United States. The new policy will safeguard the valuable Alaska salmon fishery, he said.	.
The order provided for establishment, under recommendation of the interior and state departments, of fishery conservation zones, in areas of the high seas contiguous to the United States coast.
Until -the present the only high seas fisheries in which the United States has participated in regulating are those for whales, Pacific halibut and fur seals.
"In areas where fisheries have been or hereafter shall be developed and maintained by nationals of the United States alone," the White House said, "explicitly bounded zones will be set up in which the United States may regulate and control all fishing activities."
In areas where the nationals of other countries may be involved, the announcement continued, zones will be established by agreements and joint regulations made effective.
This new policy, the White House asserted will enable the United States "to protect ' effectively, for instance, its most valuable fishery, that for'the Alaska salmon."
"Uncontrolled fishery activities^ of this and other countries," the statement said, "have constituted an ever-increasing menace to the salmon fishery."
My suggestion is that the minister give this matter serious thought. When the salmon which are hatched and reared at great expense

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F isheries
by our government head out through Juan de Fuca strait, they feed for the next two or three years probably fifteen to twenty miles out. There is nothing to prevent the fishermen of any country from coming in there and destroying or taking the entire catch.
There is another matter I should like to bring to the attention of the minister. The waters of Hecate strait between the Queen Charlotte islands and the mainland of British Columbia should be declared Canadian waters. This strait is eighty or more miles wide, but it lies between the Queen Charlotte islands, which is Canadian territory, and the mainland. Considerable fishing is done in these waters, and at present under international law they are open to United States, Japan or any other nation. I know that if these waters had been contiguous to the United States they would long before this have been declared United States waters.


Mr. MacNICOL:: I agree with the hon.
member. Why have they not been declared to be Canadian waters? Our territory should extend to' three miles beyond the Queen Charlotte islands.


Thomas Reid: I do not know. I understand that some years ago the Canadian government attempted to declare the waters of Hecate strait as Canadian .waters for the purposes of control. Apparently in those days we were a little afraid to take a bold stand, and the matter was dropped. However, it is my opinion that if we had then declared these waters to be Canadian waters, no country would seriously dispute our stand.


John Ritchie MacNicol: The hon. member is right.


Thomas Reid: The matter is serious. When we consider the future I think we must realize that now is the time for us to declare to other countries that these waters are Canadian. We should also be ready to cooperate with the United States government, who have declared that the waters contiguous to Alaska will be open to fishing only to United States fishermen. I wanted to bring these matters to the. attention of the minister so that he may consider them between sessions. I urge that Canada cooperate with the United States and that we follow their example.


Mr. HAZEN:: Mr. Chairman, there are a few matters I should like to bring to the attention of the Minister of Fisheries, and there are one or two questions I should like to ask. Before I do so, I should like to take this opportunity to congratulate him upon being appointed to the position he now holds in the government of Canada. I think the
Prime Minister made a wise choice in selecting him for that office. It is a matter of satisfaction, I believe, not only to the members from New Brunswick who sit on the government side but also to the members from that province who sit on the opposition side, that the hon. member for York-Sunbury was appointed to this responsible position.
I call it a responsible position, but I notice that not long ago a Toronto newspaper, commenting on the appointment, said that the fisheries post was not one, to say the least, that involved great responsibilities. I do not-agree with that statemefit. I believe the minister has great responsibilities. It is his responsibility and duty to assist in conserving, developing and improving the fishing resources and fishing industry of this country in order that an improvement may be made in the living conditions of tens of thousands of men who are primary producers and who make their living from the harvest of the sea. I think that is a great responsibility.
When the estimates of the Minister of Public Works were before the committee a few days ago I pointed out to him the necessity of certain repairs being made to wharves at fishing villages along the shores of the bay of Fundy. I have already written to the Minister of Fisheries about repairs 'hat are necessary and I do not think I should take up the time of the committee now by going into details. As the minister knows, repairs are necessary at Chance harbour, at Lorneville, and at other harbours along the shore. They are urgently needed by the fishermen of these different communities. In addition to these repairs it is essential that dredging be done at Dipper harbour in New Brunswick.
There is another matter I wish to refer to and in connection with which I want to make a suggestion to the minister. I suggest that he take steps to have established lobster hatcheries along the shores of New Brunswick. I will go further and say. in the maritime provinces. I understand that at one time a good many years ago lobster hatcheries were established in the maritimes and later they were abandoned. I would ask the minister not. to be discouraged by the fact that these lobster hatcheries were done away with at that time; for if he will look into the matter he will find that in the state of Maine, which admins New Brunswick, lobster hatcheries that were established some time ago have proved a great success. Not only have they benefited fishermen in the state of Maine and along the New England shores, but they have also
Supply

Fisheries

benefited the fishermen on the Island of Grand Manan, which is part of New Brunswick.
The lobster industry is an important one, and it could be, made much more important than it is to-day. To illustrate the size of the business, I may-say that at St. Andrew's in Charlotte county there is being shipped this year by one firm lobsters to the value of $3,500,000. It is big business, and it could be made larger. It therefore deserves encouragement.
There is a. member of this house who knows a great deal more about this matter than I do, and that is the member for Charlotte, New Brunswick (Mr. Stuart). For a good many years he has been intimately connected with the fish business in more ways than one, and I am sure he will back me up in urging the minister to establish lobster hatcheries in the maritime provinces in the interests of our fishermen and in order to add to the wealth of the dominion.
There are one or two items under the war appropriation estimates, if I may so describe them, on page 553 of Hansard, about which I should like to ask the minister a question.
I do not expect him to answer now, but I think we should have some information on these subjects before he gets through with his estimates. One of the items I have in mind is a sum of $1,200,000 to provide for payment of subsidies in connection with the purchase of Canadian canned salmon. I should like to have a statement from the minister about the amount of subsidies paid, to whom , paid, the quantity of salmon represented, and where that salmon was disposed of. Another item about which I should like to have some information is the one that is worded "operation of experimental long line fishing vessel, $50,000''. Will the minister tell us what that experiment was, where it was held, what the results were, and so on?
I asked the Minister of Fisheries when the Fisheries Act was up about fishery inspectors and fishery guardians, and at that time I referred to a case at Shediac, New Brunswick. A fishery inspector had resigned his position in order to take up a job with the provincial government. The position was not advertised by the civil service commission, but a man whose name it is not necessary to mention was given the job. I understand from what the minister said that he knew about that' case and that the job was only a temporary one. I understood that ultimately the position would be advertised. What I should like to know is this. How long are these positions to be kept open in this way or filled tempor-

arily before they are advertised by the civil service commission. It seems to me that if a man gives up a position of this kind the proper course is to advertise it right away or very soon after it is relinquished. In this particular case an application was made for the job by a man who had served four years overseas and had been wounded in the fighting in France. He was told, if I have the facts correctly, that the position would be ultimately advertised, but in the meantime somebody else was given- the job, a man who had never served overseas. What I fear is that the man who had no service overseas will get the preference, when these examinations are held, if he is kept there long enough; that the examiners will say7 that his qualifications are so much higher, that he knows so much more about the work than the man who returned from- overseas, that it will not be an overseas man that gets the job. If our men who served overseas are to have the preference, as I think they should have, that situation is not right. I have here a clipping with reference to a meeting of the Legion, held in the city of Montreal, in which there is reported a resolution passed at that meeting. The clipping is from the Montreal Star. The resolution urged that all temporary7 employees of the dominion civil service be placed in examinations in competition with veterans and t.hat a representative of the provincial command of the Canadian Legion should be on the examining board.	That resolution was
passed without dissent at a meeting of R.M.R. branch No. 14 of the Legion, held at West-mount Armoury.
I am interested in this particular case because I want to see a returned man, a man who served overseas, get the appointment. I believe a returned man is entitled to it and should get it in preference to one who did not go overseas. I do not ask the minister to make a statement now, but I would ask him to look into the matter and see that the position is advertised and that, so far as it lies in his power, he see to it that a man who served overseas gets the appointment.


Mr. BROOKS:: I wish to take only a few
minutes of the time of the committee. I must confess I am not very well versed in the subject of fisheries; my constituency is an inland constituency. When I was the sole New Brunswick representative of my party from 1935 to 1940 I did make some study7 of the fishing situation, though possibly I succeeded only in showing how little I knew about it. But I was very much interested in the subject.

Supply-Fisheries
I want to take this opportunity of adding my congratulations to those of the hon. member for Saint John-Albert, on the minister's appointment. I feel that these felicitations come with very good grace from the hon. member for Saint John-Albert, because it is entirely due to him that the minister has his position to-day. The fact is that he defeated the candidate who was supposed to be the minister from the province of New Brunswick. When the present minister was appointed there were people unkind enough to say that it was "Hobson's choice". Let me say immediately that that is not at all my opinion.
I feel that the minister compares favourably with men from that province who have held the position on previous occasions, and I am sure he compares favourably with many of the other present members of the cabinet. I might add, though, Mr. Chairman, that that compliment can be taken for whatever it is worth.
The hon. member for Saint John-Albert said that the minister in charge of fisheries had great responsibility. There is no question about that. I would also point out that he is not only the xMinister of Fisheries, but also the minister representing the province of New Brunswick. We have had good reason to complain over the past years of the lack of attention which the government and ministerial representatives from our province have given to our affairs. I sincerely hope, and I wish to impress this upon the present occupant, that we shall receive better treatment in the future, and that his attention will be directed not only to his department but to everything which pertains to the benefit of the province of New Brunswick. I assure him that if he does so he will have every assistance which can be given by hon. members on this side of the house.
The matter upon which I wish to speak for a few moments is that of markets for our fisheries. During the war years Canadian fisheries have been prosperous; we have been able to sell our produce in good markets, and have received good prices. For many years before the war this was not so. Fisheries, in the maritime provinces at least, languished for lack of markets, and I hope one of the chief concerns of the minister and the government will be to provide markets for our fish. The war made it impossible for many other countries, including Norway, Great Britain, Newfoundland to a great extent, and Iceland, to carry on their normal fishing, industries. This was not altogether true in our case, although we lost a good many men to the army who otherwise, probably, would have been carrying on this occupation.
In connection with the problem of providing markets, I wish to ask the minister a question, to which he can reply when he answers other questions which have been and will be asked. Is an investigation being made in his department of the possibility of transporting fresh fish from the maritimes to the larger centres in Quebec and Ontario? I believe that this could be done profitably by plane, and that, with the general use of the aeroplane to-day as a method of transport, the matter of transporting fresh fish should be given very careful consideration. As we all know, it is almost impossible to obtain fresh fish in cities like Ottawa, Montreal, and Toronto. What goes as fish up here is something at which we in the maritimes would be inclined to turn up our noses in scorn. The people of these provinces do not. know what the taste of fresh fish is like, and I am satisfied that if an effort were made to increase the fresh fish market in the central part of Canada, it would be of great benefit to the industry.
There is also the matter of the South American and West Indian markets. Our maritime people lost those for a number of. years, but there is a great possibility of opening up in South America particularly a market for cured fish which would be of great benefit to the fisheries of our part of Canada.
The hon. member for Saint John-Albert spoke about, preference for returned men, in the fisheries department particularly; but it applies to all departments. I know that the committee on veterans affairs which is sitting at the present time is very anxious that this preference shall be honoured. I think that in the past the principle has been fairly -well observed by the government, but there have been exceptions, and we have felt that the act has been got around in many cases. I had occasion to write to the minister the other day about a young man who was applying for an appointment with his department. He is not an overseas man in the sense in which we use the term, but he was a member of the merchant marine and also volunteered for active service but due to low category only served in Canada. We all know that the merchant marine played an important part in winning the war; they were engaged in a most hazardous occupation. Many men . who served in the armed forces did not suffer the hardships and privations endured by the men of the merchant marine, nor did they encounter any more dangers. I hope therefore that the men of the merchant marine will be considered when civil service appointments are being made.
2792 -
Supply-Fisheries


Mr. ISNOR:: I believe I can say that all hon. members from the maritimes are agreed in asking that the minister give every consideration to the question of fisheries. At the outset I should like to associate myself with the congratulations which have already been extended to the minister by the hon. members from Saint John-Albert and Royal upon his appointment as Minister of Fisheries. He has already shown by his interest, his energy and his cooperation with the various sections of Canada that he is alive to the possibilities In his department. It is no minor department, but represents real wealth to our country. The maritimes is perhaps the largest fishing unit in the dominion-with all due respect to the hon. member for New Westminster, who takes such a deep interest in the fisheries. I would remind the house that the fisheries mean something like 838,000,000 to our section of the country, and to Nova Scotia itself a wealth of 823,662,000.
I wish to concur in and support the representations made by the hon. member for Saint John-Albert in his suggestion to the minister that he cooperate in the closest possible manner with the Department of Public Works. Like the hon. member I too made representations to the Minister of Public Works that he give favourable consideration to the requests from the maritimes for breakwaters, particularly in the fishing villages along our coast. Unless they have that protection, and unless there is close cooperation between the two departments, the fishing industry, particularly, the inshore fishery, cannot be carried on to the advantage of the industry and of the country. Both ministers must be familiar with the hazards experienced by the inshore fishermen. They leave their homes as early as four of five o'clock in the morning, go to the fishing grounds, and do not return until towards evening. Unfortunately considerable publicity has been given recently by the radio and the press to gales that are sometimes experienced in Nova Scotia. These gales cause damage all along our coast, and it is to offset such damage that I have urged again and again that the Minister of Public Works cooperate with the Minister of Fisheries with a view to providing the necessary breakwaters. As an illustration of the problems with which the. fishermen are faced, let me point out that many of them operate out of small coves containing from eight to ten fishing boats. Through the months when storms are experienced the openings through which the fishermen pass to and from the fishing grounds are closed by obstructions

piled up by the storms. I am anxious to see that these passages are kept open by the provision of proper breakwaters.
I wish to support the arguments which have been made in support of the development of our export trade, and particularly the' marketing of maritime fish in central Canada. Years ago we established a market in central Canada-Ottawa, Montreal and Toronto-and it was a Halifax man, by the way, who was largely responsible for the inauguration of that market. I am anxious to see it maintained, and I am wondering whether the officials of the department have cooperated with' or made representations to the Department of Transport in the matter of providing modern facilities for the carrying of fresh fish from the maritimes to these central markets which I know wish to have our fish. As the hon. member for Royal has said, in Ottawa we repeatedly ask for fish and cannot get it, and the same is true of Montreal and Toronto but to an even greater extent. It would increase the consumption of fish and be of direct benefit to the maritimes if the Minister of Fisheries would give this matter further thought, and encourage the marketing of our fish from the maritimes.
The minister is no doubt familiar with the merger of a large number of fishery concerns which recently took place in the maritimes.
I think it will be a good thing from the point ' of view of our export, trade, which takes care of something like seventy per cent of our total catch. This large merger no doubt will have the most modern equipment for processing, freezing, and so on; but I am concerned about the future of our inshore fishing. We have in Halifax the largest number of inshore fishermen in any county in Nova Scotia, and that may sound surprising when you think of Halifax rather as a port and an industrial section of Nova Scotia. But the fact remains that we have 750 inshore fishermen's boats, employing 963 men. As I say, I am concerned about these inshore fishermen, and I am going to suggest that the minister endeavour to give them every possible encouragement in the establishment of small processing plants. If there is one department that has efficient and sympathetic officials, from the deputy minister down, it is the Department of Fisheries. I have gone to them time and again with problems and have always had a very attentive hearing, and I have found them ready to lend assistance whenever possible.
I am suggesting to them through the minister that further encouragement be given to the inshore fishermen; that inspectors and their assistants visit these fishing villages along the

Supply-Fisheries
shore, offering advice''as to how the fishermen can better process their catch. If this is done I feel sure it will add largely to the output.
Just recently I put before the Minister of Public Works a problem affecting twelve fishermen who formerly operated from a certain village. A processing plant was established a little further along the shore, and through lack of a breakwater these fishermen were obliged to travel many more miles to the new processing plant, with the result that there has been a gradual dying out of the fishing industry in that section. I feel that there is an opportunity for doing business in both places, and if we had cooperation these eight or ten fishermen would be able to carry their catch to a plant in their immediate vicinity instead of having to waste time in carrying it to a plant at a greater distance.
It is a matter of satisfaction, Mr. Chairman, to have the two ministers sitting in front of me, because I can address one or the other from time to time, and therefore I hope we shall have closer cooperation between the two departments than we have had in the past.
I am glad that the hon. member for Royal mentioned the West Indies trade agreement, which I understand is now under review by the Department of Trade and Commerce. It is quite likely that the Minister of Fisheries will make sure that his officials sit in on those deliberations so as to bring about the best possible results for the fishing industry-in this country.
I corfid speak on the lobster catch. Sometimes this is termed a luxury trade, but it means real money to us in Nova Scotia, particularly to the fishermen in the constituency of the hon. member for Shelburne-Yarmouth-Clare. No doubt he will deal with that question to a greater extent than I would care to do at this time.
I am going to leave just tw-o thoughts with the Minister of Fisheries. I would ask him, as I have said, to give every possible assistance, financial and by way of advice, to those who are prepared to construct small processing and freezing plants. I would also ask him to give every possible encouragement and advice to the fisherman who is anxious to build the type of boat which will permit him to go further to sea, but who is not financially able to do so. I believe the larger type of boat is more economical to operate, but unfortunately the Nova Scotia fishermen are not always in a position to finance the building of such boats. So I would ask the minister and his officials to give these men every consideration with a view to encouraging and helping them in every possible way
I realize, Mr. Chairman, that you wish to , get these and other estimates through as quickly as possible, so I shall not add anything further at this time. From my knowledge of the minister I am sure he is sympathetically inclined toward this industry and will do everything possible to encourage it, both in the maritimes and throughout the dominion.


Mr. BAKER:: 1 will be very brief, Mr. Chairman. I am not a lawyer; I do not believe in repetition, and I have not taken up much of the time of this house. I had a very pretty little speech prepared, but much of what I intended to say has been said already, so I will content myself with saying that I concur in the remarks of the hon. member for Royal, the hon. member for Saint John-Albert and the senior member for Halifax. I will not put those remarks on Hansard again; and I hope other hon. members will take the hint and do likewise.
I come from a province where the actual landed value of fish in 1944 was 814,851,376, which total was exceeded only by the province of British Columbia. ,


Thomas Reid: The value of the fish caught in British Columbia was equal to that of the three maritime provinces put together.


Loran Ellis Baker: I am going to offer what I consider a few practical suggestions. Fishermen are men of few words; often they are a bit bashful and unable to express themselves well, and for this reason it is hard for them to get organized. They are becoming better organized now, and I look to the future with great expectations. But certain things are needed. I spend a great deal of time on salt water myself, so I am going to be practical - and not merely present a thesis. One thing we do need is more protection for the fishermen. We all consider that the men in the armed services require every bit of protection they can get, and we know that their wives and children worry about them. Fishermen, particularly in the part of the world in which I live, the junction of the bay of Fundy and the north Atlantic ocean, also require protection, and their wives and children have the same anxieties that the wives and children of servicemen have had for the past few years, except that they have to put up with these worries all their lives. I want to suggest that when you think of farmers you should always think of fishermen as well. I have the greatest sympathy for the farmers. I have listened to hon. members from the prairies, and have really enjoyed what they had to say. I have every sympathy for their problems; but in
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drawing up legislation for the farmer we should at the same time have regard for the fishermen; and for the benefit of the hon. member for Qu'Appelle I would say that I believe the wives of fishermen should be regarded in the same light as -the wives of farmers. When it comes to the matter of benefits I believe fishermen should always be . considered when farmers are mentioned.
To get down to something practical, we need some sort of coast service, guard service, though I realize the minister cannot look after this all by himself. In the Unite ' States they have a coast guard service which issues weather reports, picks up stray boats,
. and does anything that can be done. Their ships are equipped with ship to shore telephones, and we need something like that in Canada. I would offer what I would term a constructive criticism and suggest that the Minister of Transport, the Minister of Fisheries and possibly the mounted police get together in order to establish some such coast guard patrol. I am sure the minister is sympathetic toward the idea of having protection for the fishermen, and I know this question will be given every consideration. The minister knows all about it, but I am placing these remarks on Hansard so the other departments will see them and cooperate with him.
Then we are very badly in need of rope,- and here I am not speaking only of my own constituency, as I hope hon. members will notice and again follow my example. In southwest Nova Scotia, which also takes in the constituency of the hon. member for Queens-Lunenburg, .they are very much in need of . rope. Anything that can be done by this or any other department to secure more rope for the lobster fishermen this winter will be appreciated.
The question of future markets has been dealt with already. The only suggestion I should like to add is that we must develop our Canadian market more than we have in the past. We need to spend considerable sums on research and advertising. The fisheries department has some excellent research men, and I hope no one will ever object to the moneys that are being spent for research in connection with fisheries; and these remarks do not concern my own province only but apply to British Columbia as well. I can assure you that I will back them up in any way possible, because our problems are so similar.
Last but not least I should like to say a word about lobster hatcheries. The hon. member for Saint John-Albert referred to lobster hatcheries for New Brunswick. If we are to 
have these hatcheries I hope we shall have them for New Brunswick, Nova Scotia, Prince Edward Island and any other area in which lobster fishing is carried on.
In conclusion I want to say how delighted I am with the type o.f man we have as the new Minister of Fisheries. As he has said, he is Frank by name and frank by nature. That is just the way the fishermen are, and that is the kind of man they will appreciate and understand, so I feel sure they will cooperate with him.


Mr. McLURE:: I want to make a few remarks on this important question of fisheries, but first I should like to join in the congratulations that have been extended the new minister. However, since the hon. member for Shelburne-\ armouth-Clare made some kind remarks, and since the minister has hardly stopped smiling following those remarks, I had better not elaborate on the congratulations which are being heaped upon him, except to say that I am proud he is a maritimer. I * should like him to understand that if in the course of my remarks I have anything to say of a critical nature with regard to the Department of Fisheries, he must not take that criticism personally, because he has been in the department only a very short time. This morning we had a warning, or perhaps it could be called a threat, extended in a nice way by the Prime Minister, who said that if we were not good boys this morning and this afternoon, and if we did not do a fair share of work in school we would be kept in after eight o'clock to-night, so I suppose I had better make my remarks as short as I can.
The fisheries are one of the great industries of Canada; it is up to us to take particular notice of it and see what improvements can be made for the benefit of the men who are engaged in it. For after all, the fishermen of the maritime provinces and of Canada generally are doing more to keep down what some people cry about-inflation-than any other class of men. By their production they have been the best safeguard for keeping away that terrible thing known as inflation.
It is my intention to speak about certain things which have happened in the last few years in connection with the fishing industry, and what I shall say will refer more specifically to my own province. One may say the fishing industry in Prince Edward Island is a feast in one year and a famine the next, largely due to regulations, transportation facilities, and lack of proper supervision by the fishing authorities. But worst of all in the past four years, and particularly in the last year, those engaged in the fisheries have been under control boards. As I said in an earlier

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debate, while some of those boards might b'e permissible in wartime, they should now be east to the four winds of oblivion, so that we might get down to something practical in the processing and transportation of fish from the maritime provinces.
I would call the minister's attention to the last directive issued in the maritime provinces. I suppose it was, put out as a result of an order in council. The one in question is dated October 1, 1945-and I mention the date to show that these directives are not put out in time to serve those engaged in the industry. They do not know what is going to happen from one day to the next. The order in question was issued from Halifax by Mr. Mclnerney, allocation officer for Atlantic canned fish. I take it for granted, of course, that he did not authorize its publication, but that it was put out by the administrator of fish products at Ottawa. When the complaint was made, Mr. Mclnerney told the fishermen, the packers and the eanmers that he was not responsible for the directive and did not know anything about it. This directive for 1945-46 for canned fish packs was directed to canners, assemblers, packers and exporters. It told them what they could do, and how and when they should do it. It was really a straight dictatorship in respect of all fish products, and I believe it was made by the administrator of fish products here in Ottawa, whoever he was.
I do not wish to dwell at length on this matter, because its application has passed for this season, but I draw the matter to the attention of the minister so that this condition can be rectified in the future.
Another thing this authoritative body did was to stipulate how quantities should be allocated. For instance, the Canadian Red Cross were allowed only a certain small proportion, to consist only of sardines. A definite quantity of sardines was made available to the British Ministry of Food. At the same time no definite amount of lobster pate or tamale was specified, but it was left to be supplied "as required". A buyer of these goods might buy them and pay a certain price for them; but when he came to sell them he would find that he had some new problem to deal with, namely that of finding out how he could market them at a price on which a ceiling had been set after he had made his purchase. In most cases he would have to take a loss.
When one looks at the instructions issued with reference to lobsters he sees that we did not have an opportunity of selling all our lobster in the United States market, where the highest prices were offered. A certain
quantity, according to the directive, were supposed to be for relief feeding. We know this was absolute foolishness, and the dealers suffered a great loss when seventy-five per cent of their pack which could have been marketed easily in the United States had to be sent in other directions.
Another disturbing factor in the directive is the one pertaining to exports, where it is stated that at the discretion of the Department of Trade and Commerce a limited quantity of ground fish, chicken haddies, mackerel and lobster may be exported to Latin America, but that with reference to mackerel and lobster, permits would be granted on a first-come-first-served basis. In my opinion this is a crude fashion in which to allocate under export quotas, and it is certain to end in controversy when any attempt is made to find out who was first or who was not first. It leaves a condition under which those having the greatest pull with the controller of their goods will receive the favours, and will be given the first export permits. There has been considerable controversy between the department and various shippers on this subject.
The allocation board which operates under the administration is supposed to be represented in the maritime provinces by two members from each province. The two from Prince Edward Island who served on the board were packers, and I am informed that not in one single instance were they asked for advice. They were supposed to give advice concerning the province to which they were - allocated. Again it boils down to the fact that the rules and regulations as laid down might best be done away with by eliminating the bureaucrats from the controls. These boards of control are burdened with red tape to such an extent that they are clogging the wheels of progress in the fishing industry.
May I emphasize this point to the minister who is now in charge of this great fishing industry: Do not permit the fishing trade or industry to be dominated by any administrator-no matter who he may be or where he is

who either does not know fishing conditions, especially in Prince Edward Island, or desires to make it a non-profitable business both to the packers and to the fishermen. There is no doubt that thousands of dollars have been lost to the fishermen through the actions of these administrators and boards of control.
I should like to mention another matter in connection with lobster fishing. It would appear that this fish products controller or administrator knows very little about the
27%
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fishing industry in our province, or perhaps even in the maritimes. For instance, in one report with reference to Prince Edward Island it is stated that the lobster industry is only a home packing proposition. If some of the fishermen down there ever get their hands on 'he man who said that about their lobster canning plant, I am sure he will be canned in more ways than one.


Mr. BRIDGES:: To what report is the hon. member referring?


Winfield Chester Scott McLure: It was one issued by the department.


Hedley Francis Gregory Bridges: By the Department of Fisheries?


Winfield Chester Scott McLure: Oh, no. I am glad the minister asked that. It was issued by one of these boards of control or agencies that are not under the minister's control. I thank the minister for bringing that to my attention, because I did not intend to saddle that on him. I should like to give one example of their lack of knowledge. There are two lobster seasons in Prince Edward Island, one in the spring and one in the fall, on different sides of the island. This control board or fisheries product controller at the beginning of the season of 1941 placed a ceiling on the lobster pack of $28 per case. Then just as the spring pack had been marketed, they came along in the fall and raised the ceiling price $10 per case. Those who had fished in the spring were faced with a loss of $10 per case. What did they do in 1943? Up until September, 1943, there was no price ceiling on chicken haddies, herring and mackerel processed in Prince Edward Island. These packs were yielding the packers 'from $9.50 to $10 per case. On September 3, 1943, when two-thirds of the pack was up, they put on a ceiling price of $10.50 per case for chicken haddie and a ceiling price of only $8.80 per case for mackerel, which has just as good food value. This resulted in a loss of thousands of dollars to the fishermen of Prince Edward Island, because they were fishing mackerel at that time	.
I want to remind the minister again that I am not holding these things against him, because he was not directing the affairs of the Department of Fisheries at that time. This fish products board must have some special favourites, because we find that price ceilings were placed on special articles at certain times. In 1943, through the efforts of the Department of Trade and Commerce, some dealers in Prince Edward Island were able to sell several carloads of herring to the West Indies. When those dealers applied for an

export permit it was turned down by the administrator, regardless of. the fact that a dominion government department had negotiated the sale for the fishermen and packers. This showed that the administrator of fish products could override the trade and the Department of Trade and Commerce; he appeared to have full dictatorial powers. I am sure that this is the sort of thing the minister will see does not occur in the future in Prince Edward Island or anywhere else.
It has been most annoying to the fishermen that the Department of Fisheries have not cooperated with the packers and the fishermen in an effort to educate them to put out a better article for the market. For the last three or four years the matter of production has been left mostly to these boards of control, and probably they did not give the Department of Fisheries an opportunity to take action.
The industry in our province, is growing. It provides a livelihood for quite a number of people. It may be a matter of some interest to this committee to know,that the fish canning industry of our province produced $543,000 worth in 1939, which represented fourteen per cent of the total canned fish production of the maritime provinces and Quebec. In 1943 the production of the fish canning industry of Prince Edward Island had a value of $2,074,000, or twenty-five per cent of the total production of the maritimes and Quebec for that year. This great increase in the production of canned fish was due largely to the fact that the people were patriotic; when the government asked them to do their bit in the way of supplying food for military and relief purposes, they did so. I have not the figures for 1944, but I think they showed a still greater increase.
I know that the minister will give proper supervision to the work of his department, which will result in the fishing industry, not only of Prince Edward Island and the maritimes but of Canada generally, growing still greater.


George Randolph Pearkes: Mr. Chairman, I should not like the Minister of Fisheries to think that the only source of congraulations to him is to be found on the Atlantic seaboard. I should like to join with previous speakers who have offered their congratulations, and I should like to congratulate him on two scores particularly: first of all, on having overcome that initial handicap of hailing from New Brunswick, and second, on being a returned man of this war, who has achieved cabinet position.

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I am sure that in the industry which his department supervises there will be opportunities for a limited number of returned veterans to find gainful employment. I believe that in' British Columbia some 70,000 people derive their livelihood either directly from or indirectly from the fishing industry. But that fishing industry is surrounded by uncertainties and by risks and dangers for those who are catching the fish at sea. The uncertainties are governed partly by the course of nature, which if left to itself wTould ensure a continuation of the supply, but when nature is tampered with by human beings its full cycle of production is upset, and it is inevitable that with the development on the coasts and at sea in other industries, the course of nature is interfered with. Therefore I welcome the items which are included in his estimates for the conservation of fish and research into the methods by which fish can be conserved. I would almost wish that more funds could be made available for that purpose.
Other activities are apt to interfere with this fishing industry, and I am pleased to see that quite recently improvements have been made at Hell's Gate which will enable the fish to work their way up the Fraser river. But there are other streams where fish work up to the spawning ground, and I suggest to the minister that research work be carried out with a view to seeing what streams on Vancouver island should have dams built in them in order to conserve the water. The logging industry has removed much of the undergrowth on the slopes, thus making a quick run-off in the spring; many of the streams become dry later on in the year, thus preventing the salmon from working up those streams to their proper spawning grounds.	-
The fishermen on the Pacific coast have now, I think, better floating equipment than they ever had before. But in some cases a great deal of capital is required to enable men to start with the right type of floating equipment for the catching of fish. During the war years it has not been possible to spend much money on the improvement of the berthing facilities in the small harbours which abound on the Pacific coast, and therefore this new equipment the men have is running risks of being destroyed by winter storms. While I know that the development of fishermen's wharves does not come directly under the responsibility of the minister, I do hope that he will use his influence with the Minister of Public Works in order to ensure that safe harbourage is provided for the fishing fleet.
I referred to the risks which the men run while they are at sea; and likewise during the
war it has not been possible to maintain all the aids to navigation which are necessary. The Pacific coast is strewn with small islands and rocks. Many of these are a distinct hazard to the fishing fleets. I hope that a more active development scheme for marking those rocks and islands will be provided; and if it is possible to initiate some investigation which would provide a cheap form of radar set which could be used in the larger fishing boats, that would help to remove some of the hazards which are met with by the fishermen.
There are one or two suggestions which I would like to offer the minister in connection with the employment of returned men in this fishing industry. I mentioned at the beginning that the industry supported only a limited number of men. At the present time we have a serious unemployment situation in British Columbia, and any work which could be started in the way of improving the harbour facilities would be appreciated at this time. Also, in order to give those men who came from British Columbia full opportunity of entering into the fishing industry, I suggest very seriously that steps be taken to stop the demobilization of men in Vancouver and British Columbia who have not lived in that area before they enlisted or whose families are not there at the present time. -
There are various new branches of industry opening up. One, which seems perhaps foolish to mention by name but it is likely to develop into an important industry, is that of the utilization of seaweed and the development of certain types of seaweed which are now being used for medicinal purposes. Important medicines can be obtained from seaweeds, and at the same time the banks of seaweed provide safe cover for the young fish. I feel that it may be necessary in the not too far distant future to have some form of control regarding the cutting away of the seaweed banks in order that the young fish may seek the cover of that shelter.
I would suggest also to the minister that investigations be carried out as to the possibility of reestablishing the whaling industry on the Pacific coast. Years ago a whaling fleet used to sail from Victoria harbour; but the whalers have, in 1.1 le maim been commandeered for other purposes during this war, and there is a shortage of whalers to leave our coasts for the whaling grounds in the Antarctic. At the present time I believe there are negotiations under way regarding the limitation of the kill of whales. I picked up a copy of "Time", one of the October issues, in which attention is drawn to the fact that there are agencies suggesting that the restriction on the number of blue whales to be
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killed be removed. At the present |ime there is a restriction of the kill to some 16,000 per year. Quite Vecently the killing season was considerably extended; and I should like to know if the minister has any information as to the international agreement regarding limitation of the number of whales which are to be killed annually. I do hope that he will give consideration to stimulating in some way the whaling industry, which might possibly be revived again in our British Columbia ports.


Thomas Reid: It was not my intention to deal extensively with the fishing industry at this time, but from remarks which have been made this morning, emanating principally from hon. members from the maritime provinces, I feel sure that anyone sitting in the gallery and coming from the prairie provinces would draw the inference, after listening to the discussion this morning, that the maritime provinces were greater in fishing than any other province in Canada. Earlier in the session the hon. member for Queens-Lunen-burg made the statement that his province was one of the greatest fishing provinces in Canada. I feel that, even at this late date, it is just as well that the record be kept straight. If wheat was being discussed, naturally the members from Saskatchewan, Alberta and Manitoba would be taking a great part in the debate. So far this morning most of the speeches have come from hon. members from the maritimes, and I want to congratulate them, because when this subject comes up they immediately band together, as is their right, and so place their representations before the government.
May I say that. I think I was one of the first members of the House of 'Commons to visit personally the new Minister of Fisheries and congratulate him. If I may add a personal note, perhaps congratulations from members from British Columbia should be taken with better grace than from hon. members from the maritimes, who believe there should always be a minister of fisheries from the maritimes; and while we in British Columbia produce over fifty per cent of the entire fish supply, we, generally speaking, are the first to congratulate the mfnister of fisheries when appointed from the east.
Let me first briefly tell the members from the maritimes how the fishing industry of Canada stands in the point of value. I have here a return which was brought down this year, when I asked what was the total value of the fishery products, including fresh and salt water fish products, during each of the years 1934 to 1944. I quite realize you can pick perhaps one year which would be good

on the Atlantic and poor on the Pacific or good on the Pacific and poor on the Atlantic. So I have looked over the past number of years, and roughly this is what I find. The total marketed value for the past ten years has been approximately S550 million for all the fisheries, including inland fisheries, products from the lakes, the Pacific fisheries and the Atlantic. Therefore the average for the ten years is $55 million. Of that amount, British Columbia produced an average of $26,500,000. The average for the three maritime provinces-Prince Edward Island, Nova Scotia and New Brunswick is $22 million. One could devote considerable time to this matter to show the great position in fisheries which British Columbia occupies. As I have said, it might appear, to an outsider at least, that British Columbia hardly exists in the matter of fisheries. The same thing happened with the shipbuilding in the maritimes, years ago. They were in days past the great shipbuilding provinces. But we in British Columbia started to build ships. Now we are doing a larger job building ships than any other province or place in Canada. I can say that without fear of contradiction, because I was a member of the war expenditures committee and have the figures under my hand.


The ACTING CHAIRMAN (Mr. Golding):: Order.


Thomas Reid: Digressing for a moment, may I say I am reminded, when I look across at the hon. member for Nanaimo, how much pleased we in British Columbia are to see that a new honour has been conferred on his deskmate, the hon. member for Vancouver-Burrard. I just noticed that he had received another distinguished honour.


John Ritchie MacNicol: We did not hear the title.


Thomas Reid: The hon. member for Vancouver-Burrard has received a new honour, in addition to his having been granted the V.C. The announcement has just appeared in the press, and I am taking the first opportunity to congratulate him.


John Ritchie MacNicol: What is the honour?


Thomas Reid: Mentioned in Dispatches.
Now regarding the subject I was dealing with, the maritime provinces as compared with British Columbia, I have the feeling that they are somewhat against British Columbia, perhaps a little jealous. The only variety of fish in the maritimes in which the product is greater than that of British Columbia is cod. Lobsters they produce to the extent of about $10 million. But in the herring industry British Columbia is producing more in respect

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of both quality and value. Of halibut we produce great quantities. Of salmon, the amount produced from maritime waters is infinitesimal compared with the great quantities of salmon obtained off the Pacific coast shores.
May I also refer to the timely statement made by the hon. member for Nanaimo when he urged the minister to give consideration to the establishment of more returned men in the fisheries. But we on the Pacific coast are faced with this problem: there is only a certain quantity of fish, and the more men who go into the industry the less there is for each fisherman. It is one of the problems which particularly affects the runs of fish to the Fraser river, that the more men go into that industry, the less will be the returns to each individual fisherman; and likewise with those who are fishing off, Vancouver island and in the other waters of British Columbia. The catch is going down year by year, many of these varieties reproducing in the United States waters, over which we have no control. -
But I wanted particularly to keep the record straight for those hon. members from the maritimes, that British Columbia takes first place in fisheries. Ovei; a period of years she has produced more than fifty per cent of the total fisheries of Canada.


Loran Ellis Baker: On a point of order, I remarked that Nova Scotia was second only to British Columbia in 1944. Possibly the hon. member, the president of the fisheries committee, for whom I have a great admiration, did not hear me.


Thomas Reid: I do not think I singled out any hon. member at all; I dealt with all members, and I am very sorry if the hon. member thought I was dealing particularly with him. But I did hear speeches this year to the effect that Nova Scotia was the greatest fishing province in Canada, and I, from British Columbia, with the record of the facts before me, do not intend to sit quietly by, even if we are kept here longer.


Alfred Johnson Brooks: The hon. member has injected the only discordant note into the debate since it started.


Thomas Reid: If facts are discordant, I am sorry. Perhaps the facts are not pleasant to some. The record however should be kept straight, and facts are facts.


Alfred Johnson Brooks: We know that.


Thomas Reid: I am doing just the same as the other members, and yet you are finding fault with me because I uphold my province. If you are going to find fault with me because I uphold British Columbia, call it a discordant note. I read in the paper that hundreds of thousands of dollars have been given to the fishermen in the maritimes, while British Columbia has got not one red cent.
If you wanted a discordant note I could easily raise it. But I do not want to do so.


Mr. KNIGHT:: I do not know whether it is the eating of so much fish that promotes local patriotism, but hon. gentlemen from the east and from the west have told us about the virtues of the waters in their respective parts of the country. I come from the centre of Saskatchewan where we are currently supposed not to have any fishing industry. But that is not quite correct. In the northern part of our province there are lakes that are well stocked with white fish, pickerel and lake trout, but unfortunately, except for a few persons who like to spend a little time fishing with rod and line up there, that fishing has not had an^ particular significance. Quoting from the public accounts, part II, I find that in 1944 the dominion government spent the magnificent total of $13.08 on general account in connection with the fisheries of Saskatchewan. In the previous year, I may say, the government, by order in council P.C. 4812, passed in June of that year, authorized the establishment of a committee to make inquiries concerning the difficulties attending the production, processing and marketing of fish in the prairie provinces, and to make recommendations for the improvement of the situation as it then existed. I trust that when I, have finished with this short address the minister will tell us what has happened as a result of that investigation. I should like to know what has come of it. What has the dominion government done?
I am particularly interested in any industry from the point of view of the degree to which that industry brings prosperity and happiness to the lives of the people who are engaged in it. A new impetus has been given the fishing industry in northern Saskatchewan. The old method of laissez-faire has not worked satisfactorily. We know that if there is too much laissez-faire with fish, particularly when the weather is warm, the results will not be desirable. At any rate, the old method of laissez-faire was not conducive to a good living on the part of Indians and other people engaged in that trade.
Transportation in that part of the country, as hon. members know, is tremendously difficult because there is no way of getting into it except by sled. They go by tractor train in the winter time, but transportation at all times is exceedingly difficult. The method of fishing followed is for the men to go in during the winter and throw the, fish in heaps at the edge of the lake, exposed to the open weather,
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including sun-because there is an occasional thaw even in that part of the country-and [DOT]then the product is taken out if and when a tractor train comes along.
These were the conditions up to a short time ago, and needless to say the financial returns were not great, because these people sold their product in the first stage of production. There was no processing in the primary stage and, as I have said, they could carry on only at one time of the year.
_ The picture of these people's lives-and that is the aspect of it in which I am interested-[DOT] has changed. The Saskatchewan government has seen to that. It is building three modem filleting plants from lumber cut in their own woods and processed in local mills, with the result that a year-round industry is being established. That is the point L wish particularly to emphasize.. These people are being provided with proper facilities, ice storage and so on, and that will bring' at least a better standard of living to them. It will make for their happiness, and that is what I am concerned with. They can now cease to live the gypsy life which has been their habit in the past. They can settle down and bring up their children in schools that are being built with their own lumber. Several schools have been built and others are in process of construction. These children can now go to school, where before they had never seen the inside of a schoolhouse, even a log school-house.
One of my colleagues has just handed me the figures giving the value of commercial fishing in Saskatchewan for a period of years, and before I must conclude, due to the fact that it is almost one o'clock, I should like to draw these figures to the attention of the committee. I presume the minister is acquainted with them. In 1937 the value of the industry was $527,000 in round figures; in 1939, $478,000; in 1941, $414,000; and in 1942, $585,000-this out of a dominion total, in 1942, of $75,000,000.
This industry, so far as Saskatchewan is concerned, might be called an infant industry, but it is growing up, and that is more than I can say for some "infant industries" in this country. The little change that.I have mentioned has brought about an improvement in the lives of these poor people in the form of financial results, and it has been a revolution in the life of that northern part of the province. I commend it to the attentiqn of the dominion ministry.
Progress reported.
At one o'clock the house took recess.
The house resumed at three o'clock.



WAYS AND MEANS


[Stage Direction]
The house in committee of ways and means, Mr. Golding in the chair.
6. That the exemption of the profits of corporations derived from the operation of any base metal or strategic mineral mines be extended to the profits of corporations derived from the operation * of gold mines and industrial mineral mines, and that such exemption be extended to the profits of such mines which come into production after January 1, 1946.
Howard Charles Green: When the committee rose last evening we were discussing the question of goldi mines. Would the minister tell the committee for what period of years this provision is to apply? Is it for a three-year period or only for a one-year period?


James Lorimer Ilsley: It applies for the period of the excess profits tax. It may be extended, of course, but this resolution does not provide for any particular period.


Howard Charles Green: It does not apply for a period of three years?


James Lorimer Ilsley: No.


Howard Charles Green: Am I to understand that it will be in effect as long as there is an excess profits tax act?


James Lorimer Ilsley: Yesy unless it is taken away by some subsequent parliament; but this is what it provides, and there will be no excess profits tax from January 1 on in connection with these new mines.


Howard Charles Green: And is a tuning-up period to be allowed? There was some discussion about that last evening, but the minister made no statement as to whether or not provision would be made for a tuning-up period.


James Lorimer Ilsley: There will be, in proper cases. I am saying that without much technical knowledge, but when a similar provision was in force previously a tuning-up period was allowed. Of course at that time it applied first to gold mines and later to base metal mines, and tuning-up periods were allowed. AYhen you move into industrial minerals you may not need any tuning-up period; the nature of the operation may be such that it would, not be required. The purpose of a 'tuning-up period is to determine when the mine actually comes into production, and it will be for the Department of National Revenue to determine when that takes place.


Howard Charles Green: Does not the minister think gold mines and base metal mines should be dealt with in a different way from the production of industrial material?

Excess Profits Tax


James Lorimer Ilsley: Not as far as exemption from tax is concerned.


Howard Charles Green: But I mean in working out the details of the application of the tax.


James Lorimer Ilsley: Yes, I should think so; that is, I should think you would have such a range of minerals covered by this exemption now that conditions would vary tremendously as to the time required to get the mine into production.


Howard Charles Green: That will be kept in mind in working out the application of the new provision?


James Lorimer Ilsley: Oh, yes; I cam assure my hon. friend of that.


Mr. NICHOLSON:: Would the minister be good enough to make a statement as to why this particular resolution is being introduced?
I do not think the minister has made a statement of that kind so far.


James Lorimer Ilsley: It is to encourage the opening of mines.


Alexander Malcolm Nicholson: Gold mines?


James Lorimer Ilsley: No, mines generally; not all mines, but the kind of mines the rapid development of which is possible and desirable now. There would be gold mines, base metal mines and industrial mineral mines. I do not think strategic mineral mines now would be of much importance, comparatively speaking, at least as compared with the period of the war.


Alexander Malcolm Nicholson: I do not want to go into the argument behind the opening up of base metals, but I wonder whether at this stage it is wise to have a government policy under which quite a large amount of our man-power and our tight materials will be made available for the gold mining industry. If we have customers throughout the world who are anxious to get large quantities of gold, that might be a very good reason; but in view of the fact that we managed so well during the war without worrying very much about the production of gold, I wonder why, just at this particular time, the administration has found it necessary to extend this consideration, particularly to the operation of gold mines.


James Lorimer Ilsley: Well, it increases the wealth and income of the nation. It would have been desirable to do that during the war if we could have affordeid the manpower, but we could not; the man-power was much more necessary in other activities, but I do not think that is the case now.


Alexander Malcolm Nicholson: Even at this stage I doubt the wisdom of using man-power and materials in this particular field.


Mr. BENIDICKSON:: I thought you people said there was unemployment.


Alexander Malcolm Nicholson: There is, but we need houses desperately; we need hospitals and so many other things much more than we need gold, and I do not see any very good reason for extending this privilege to the operation of gold mines.
Mr. MacN'ICOL: I want to support this resolution. I do not know of anything that will provide as much employment for men of a particular type, many of whom have been unemployed for some time, as gold mining.
I doubt if there is a large factory, such as Canada Foundry in Toronto or John Bertram in Dundas, anywhere in Ontario that is not now engaged in the production of some equipment required in connection with the reopening of the gold mines, resulting from just such legislation as this. So I say all power to the minister, and I hope he will continue to do his best to open as many mines as possible. They wall produce brand new wealth and provide a vast amount of employment in other branches of industry. I am not thinking of houses at the moment, though of course the miners will require houses too. I am thinking about the type of men engaged in mining. They are not the men who build houses; they are miners, and many of them have been unemployed during the war. I -support the minister's programme of getting on with the opening of mines, or anything that can be done to encourage mining. This is brand new money, which goes into circulation, and gives jobs not only to those engaged in the mines but to hundreds of factories in Ontario. I have been through many of those factories myself. It gives jobs to those who supply food to the miners. This applies particularly to the southern part of Ontario, because in the northern part, farm products are not produced extensively. In and around Kirkland Lake and Timmins, where the Pre-camforian shield crosses northern Ontario, they are large consumers but not large producers, of farm products, and so that in opening up mines, not only do you give employment to miners and those who work with them, and not only do you give employment to large numbers of men in Ontario and Quebec where equipment is manufactured for mining companies, but you also give employment to those producing farm products-and at good prices,

2S02
_______________Excess Profits Tax
because they pay good prices up there for everything they use in connection with their mining efforts.


Thomas Reid: As one who in past years in the house has taken an interest in the min-* ing of silver may I ask the minister if silver mining is included in this resolution. I ask that because silver is sometimes a by-product of gold mining. Members of the House of Commons, and people generally throughout Canada, have come to look upon silver as a coinage pertaining to the dark ages. It will come as a surprise to many people, therefore, to learn that seventy-five per cent of the world's population still look upon silver as their real money. As a matter of fact in countries where governments take office one day and are expelled from office two hours later, the paper currency issued has no more value than kindling paper. For that reason the people of those countries look to metals, and since the dawn of the ages they have accepted silver as a medium of exchange. People in China or India will sell their gold to purchase silver. Even on the continent of Europe at the present time I understand there are certain countries in which the form of currency is a fine leaf of silver or gold. They cut off a little corner and use it instead of paper currency.
In British Columbia, and I suppose in other provinces as well, we have large areas that have been lying idle. In those areas are ghost towns which used to employ thousands of people in- the mining of silver. If we ever want to raise our standard of living in countries where the standard is so low that one * hesitates even to speak about it, we should give some thought to the use of silver, and have those countries use some of the silver produced here.
May I repeat my question: Does this resolution include silver?


James Lorimer Ilsley: The intention was to include silver, but after reading the resolution I doubt whether it does. It was to cover precious metal mines, base metal mines and industrial minerals. It would seem, however, from the wording that the only precious metal included is gold. I can see no reason why it should not include silver as well.


Mr. COCKERAM:: For the information of the hon. member for Mackenzie (Mr. Nicholson) let me say that many thousands of young men who recently returned from overseas are at present finding their way back to employment in the mining industry. We find that we are getting a very fine type of man.


Mr. MacINNIS:: Mr. Chairman, in considering the question of giving encouragement to any kind of production, I should think the purpose would be, first, to determine the need for that particular kind of production. I do not believe it is good policy to say that because any particular kind of mining is going to give employment in the mines and on the farms, this government should encourage it. Digging holes in the ground where there is no gold would give employment; and if the persons were paid it w'ould create some amount of purchasing power, and in that respect would be just as effective as digging a gold mine.
I am not questioning the policy of the Min- ' ister of Finance in this connection, because very likely he has had advice that I have not had. However, as I see things at the present time, the world stands in need of an enormous amount of goods of various kinds- goods that can be used by individual men and women who require houses, clothing, food, and so forth.
During the war we were producing war materials, and that production provided purchasing power and employment. But surely no one would suggest that we should continue producing war materials just because it gives employment. The same is true of gold. If there is a demand for gold in the world to-day, and if there , is some human function or requirement, it can meet, we should encourage its production. But as I see it now, there seems to be no great use for gold. The use it had at one time as a standard for currency was discussed the other night by the minister, when he said it was no longer possible to go back to the gold standard. Surely we should get away from this hit or miss policy of doing something because it gives work to industry in Toronto or somewhere else. We should consider the permanent improvement of the standard of living of the masses of our people in this and in other countries. I do not know; there may be ever so much need for gold-


Thomas Reid: And silver.


John Ritchie MacNicol: Yes.


Thomas Reid: They need it in other countries to raise the standard of living There is no doubt about that.
Mr. MacINNIS. As I understand it, what they need is more food, and they do not eat silver.


Thomas Reid: We will give it to them.


Mr. IRVINE:: They need a silver spoon to take it.


Thomas Reid: We will give it to them, free.

Excess Profits Tax


Angus MacInnis: We could give it to them free, but it would not have any value. That is not the kind of thing we give free. I am glad we are able to give some things free, but there would be no use in handing out silver in that way, because the people are not in dire need of it-even if it were served up with a silver spoon such as the hon. member for Cariboo would use to eat his porridge.
As I said, we should try to have a more rational basis for the things we do, something more rational than the mere fact that someone wants to put someone else to work producing gold from a hole in the ground so as to put it in another hole somewhere else.


James Lorimer Ilsley: I agree with one point the hon. member has made, and that is that the mere spending of government money to furnish employment is not necessarily desirable. That is, raking leaves, digging holes, and the like, at the expense of the government is an undesirable form of activity for the government to subsidize. But I believe the government is justified in encouraging the production of valuable things, as distinguished from useful things. If we should concentrate on the production of useful things, it would be a useful form of concentration. I am quite prepared to say that we have not reached the point where humanity or the world at large can disregard the importance of producing valuable things-that is, things which we can exchange for useful things. The production of gold is one 'way in which we can secure the goods and materials which will improve the standard of living of our people. There being persons who will buy gold, whether or not it is useful in the sense in which the hon. member uses the word, the fact is that gold is valuable. It is the production of something valuable which can be converted into goods.


Alan Cockeram: There is a market for it.


James Lorimer Ilsley: There is a market for it. In the ideal world perhaps we would not concentrate on producing things of value, but at the present time we have to if we are to keep our nation running.


Mr. ARCHIBALD:: As I understand it,
this assistance is being given to gold mines so that they may carry on development work. But there are many other industries that need aid. It is not so long ago that the price of gold was raised to $35 an ounce; and then these gold mines have the further advantage of the discount on Canadian money. Now we are to give them further help. Why not give help to industries, such as the fishing industry on our coasts, which really require it?


Howard Charles Green: Last night the hon. member for York West dealt with the provision concerning depreciation of plant and depletion allowance, and so far the minister has said nothing in reply to those suggestions. I believe one suggestion was that for a period of three years, or so long as this exemption applies, new mines should not be obliged to provide for depreciation of plant or depletion of ore. Could the minister tell us the attitude of the government toward those suggestions?


James Lorimer Ilsley: That is not a matter to be provided for by legislation; it is a matter within the discretion of the Minister of National Revenue, like all other depreciation and depletion allowances. The practice in the past, the legitimate practice, has been to compel the company to charge depreciation when the depreciation is taking place and to take into its accounts its pre-development expenses during the period after it goes into production and while it is in operation, even though that may be in the tax-free period. It would be an extension of that practice and under certain circumstances it would be a decided additional advantage to companies to say that during the period when they are tax free they should be permitted to accumulate their depreciation charges or pre-development charges and not begin to take them in until they move into the taxable period.
As the hon. member for York West was talking last night I was turning over in my mind the advantages to a company of postponement, and it seems to me that there are two. If the write-off of depreciation and predevelopment expenses is postponed until the end of the tax-free period, then the write-off will have longer to run. That is one advantage. If they are obliged to write off the pre-development expenses and depreciation in the tax-free period, they may find themselves in 3'ears of loss and be depriving themselves of part of the privilege, which they otherwise would have, of write-off in subsequent years. That is the other advantage. But it certainly would sound natural and reasonable to me to say that they should be obliged to begin their write-offs when they begin to produce. That is when the depreciation is actually taking place, and that is the period over which predevelopment expenses naturally would be spread, the period beginning with production
All I can say about the suggestions-the hon. member for York West did not press me for an answer-is that I could not give any undertaking about them at all. That is something that would have to be brought to the attention of the Department of National Revenue, which would give it consideration.
Excess Profits Tax

This is not something to be provided for by legislation. I could not give any encouragement to the expectation that it might be done, nor would I deny the possibility that something might be done.


Howard Charles Green: Is there anything to the belief that the department has been forcing write-offs at too high a percentage, that is, more than the actual depreciation; that it has been compelling companies to write off a much larger amount than would be written off in the normal course of business? I understand there is a belief that that is what the department has been doing-in effect giving an exemption from tax with one hand while cutting down on the exemption with the other.


James Lorimer Ilsley: I did not take it the hon. member for York West was suggesting that the rate was too high. I do not know whether it is too high. I think, generally speaking, fifteen per cent is the normal rate of depreciation in the mining industry, and I do not think the mining industry would argue that it is too high. They might wish it was not so high in the tax-free period, but they would want it as high as that in the taxable period.


William Irvine: Perhaps the question I am about to ask should come under some other resolution, but I cannot find one that seems more appropriate. I am given to understand that a special effort is being made to collect arrears of income tax from farmers.
Mr. MoCANN: I think the hon. gentleman js quite right. If there is money owing to die crown, no matter by whom, an attempt js made to collect it.


William Henry Golding: This resolution deals with excess profits.


William Irvine: I appreciate that. As the Minister of National Revenue was with the Minister of Finance I thought he might discuss it. If it is better to leave it until some other time, I shall have to do so.


[Stage Direction]
Resolution agreed to.

[Stage Direction]
Resolved that it is expedient to amend the Dominion Succession Duty Act, and to provide:
1.	That no duty shall be leviable on the value of any pension or portion thereof which is receivable as taxable income within the meaning of the Income War Tax Act.
Alfred Johnson Brooks: Would the minister explain this resolution?


James Lorimer Ilsley: This is to implement a recommendation of the Ives commission. At the present time a widow of a civil servant-I am taking this simply by way of- illustration

CMr. Dsley.l
who is entitled to a pension on the death of her husband under the superannuation act must pay succession duties on the commuted value of her pension, and then she pays an income tax on each annual pension payment. It was considered that in certain circumstances that was harsh, and the Ives commission made the recommendation that if income tax was payable on amounts paid under an^ pension scheme such as the superannuation act, the widow should not be obliged to pay succession duties as well. I refer to this only as a typical case; it is not confined, of course, to civil servants or to the superannuation scheme, but applies also to others.


Alfred Johnson Brooks: Soldiers' pensions are
exempt?


James Lorimer Ilsley: Soldiers' disability pensions are exempt from income tax, but I do not know of any exemption from succession duty of the commuted value of a disability pension. I think it is never large enough for that.


Alan Cockeram: Would they come under this?


James Lorimer Ilsley: Not under this, because this applies only to pensions which are taxable income within the meaning of the Income War Tax Act.


Mr. PROBE:: Suppose a man buys six months prior to his death an annuity for a fairly large sum, say $100,000. If .he had willed that $100,000 to his family it would be subject to succession duty. By virtue of this proposed resolution will the $100,000 which was used to purchase an annuity under these circumstances be free from succession duty?


James Lorimer Ilsley: This resolution does not cover a case of the kind-, which, as the hon. gentleman has described it, is covered by our proposed legislation regarding the purchase of annuities. The taxation will be on the interest element alone.


John Oliver Probe: Is that capital of $100,000 which is used to purchase an annuity a short time before the purchaser's death free from succession duty?


James Lorimer Ilsley: I do not know. One would have to look at the act and see whether it is a succession or not.


John Oliver Probe: That is the point.


James Lorimer Ilsley: It is a difficult question to answer. A man buys an annuity, we will say. He does not know that he is going to die in six months' time. Suppose he lives fifteen years and the annuity has a guaranteed life of twenty years.

Succession Duty


John Oliver Probe: I am referring to an annuity certain for fifteen or twenty years, payable to the estate or to the widow.


James Lorimer Ilsley: That would come under our proposed annuity legislation, not under this resolution. There is no doubt that he pays income tax only on the interest element in the annuity. If the annuity runs from the date of his death, and it was for fifteen years, I am confident there would not be any succession because it is not a succession at all. The point I am doubtful about, and I would have to get some information on this before answering, is whether if he dies within three years that is not a succession. Ordinarily if a husband makes a transfer to his wife or to anybody else within three years before he dies, it is regarded as passing to her on his death. That is covered by the provisions of the succession duty act. I imagine it would apply to this kind of transaction, but I am not sure.


John Oliver Probe: I want to know if this is a means of avoiding the succession duty act. A man on his death-bed could buy an annuity for fifteen or twenty years certain, using the whole or a large portion of his estate to do so. If under the terms of this resolution he could by that means evade the succession duty act, I should like to know it. Will the minister please give that information to the committee?


James Lorimer Ilsley: Yes, and I am very much obliged to my hon. friend for bringing up that point. If a man can do it, I want to know it too. I will give consideration to the matter before the bill comes in. But this resolution does not cover a case of the kind, because that is not the kind of pension we are talking about. It is the purchase of an annuity.


John Oliver Probe: That is the point I want cleared up, because if a man could do that, then technically one could buy an annuity with his estate. I am not going to do* it with mine, because mine is not a big one, but the Minister of Finance might.


John Ritchie MacNicol: You are a young man yet. You have lots of time.


Douglas King Hazen: Is the pension that the widow of a. member of our armed forces receives regarded as taxable income?


James Lorimer Ilsley: A disability pension?


Douglas King Hazen: The husband has been killed overseas and his widow receives a pension. Is that regarded as taxable income?


James Lorimer Ilsley: No.


Douglas King Hazen: How does this work out as the law now stands in the case of a widow of a man killed overseas?


James Lorimer Ilsley: With regard to succession duty?


Douglas King Hazen: Yes. What does she get, or what does she pay?


James Lorimer Ilsley: The wording is pretty bad, but I think that the intention of section 7(1) (k) is to make the commuted value of such a pension free from succession duty. These are the exemptions and allowances from succession duties. The following exemptions are allowed and no duty is leviable in respect of them:
(k) in respect of pensions granted or payable under the provisions of the Pension Act, or other payments in the nature of pensions which are being administered on the thirty-first day of July, 1942, by the Canadian Pension Commission as directed by the governor in council under section six of the Pension Act;
That is the provision with regard to the succession duties which might, but for that, be leviable on the commuted value of a disability pension which a widow gets as the result of the death of her husband as a consequence of the war. The hon. gentleman may have in mind the succession duty leviable on the estate of a man who lost his life in the war. Did he have that in mind too?


Douglas King Hazen: Really, just the words "taxable income" struck me as I read the section, and I wanted to get it cleared up. As I understand the minister now, there would be no succession duty leviable on this pension, or there would not be any tax levied on the income the widow receives in the form of a pension?


James Lorimer Ilsley: There is no tax on a disability pension.


Douglas King Hazen: There is no tax on the pension
itself?


James Lorimer Ilsley: No.


Douglas King Hazen: And, as I understand the minister, there would be no succession duty tax on that which the widow would be obliged to pay because of that pension?


James Lorimer Ilsley: That is right.


Alfred Johnson Brooks: The minister mentioned the matter of estates of men who were killed in the war or died as a result of wounds received in the war. I should like to know what the situation is as to succession duties on those estates. In this connection the Canadian Legion passed a resolution at one of their meetings held in 1944 which reads as follows:
Be it resolved that we strongly urge the federal government to so amend the Dominion Succession Duty Act as to provide remission of
Succession Duty

succession duties for deceased members of the armed forces who died on active service or within one year of discharge.
The general opinion seems to be that the provinces are more generous in respect of these succession duty charges than the federal government is. As a matter of fact I received a letter the other day with reference to succession duties on the estate of a young man who was killed overseas and left his estate to his mother. I quote:
Estates of unmarried men who were killed in the forces, where the estate is over $5,000, are payable to the mother of the deceased. The province of Ontario, generally speaking, give consent so that the assets may be dealt with. As far as the Dominion of Canada is concerned if the estate is over $5,000 and if payable, as I have said above, to the mother there is no special consideration.
It went on to s'ay:
In my opinion there should be. If a boy gives his life for his country and has a little over $5,000 which is left for the benefit of the mother, I do not think the nation should tax this sum. My opinion is that up to $10,000 should be tax free under the conditions I have mentioned.
I should like to ask the minister what the present situation is with reference to succession duty on estates of this kind.


James Lorimer Ilsley: It is very clearly set out, I may tell the hon. member, in section 7, subsection 3 of the Dominion Succession Duty Act. This section reads as follows:
(3) (a) Where the deceased dies from woumjs inflicted, accident occurring, or disease contracted while Canada is or was at war, and while on service with Canadian or any other of His Majesty's naval, military or air forces or with allied or associated naval, military or air forces, and where the Canadian pension commission finds that the circumstances are such that the widow or children of the deceased are entitled, or would, if such service had been with the Canadian naval, military or air forces, have been entitled to receive a pension under the Pension Act in respect of such death, or where the Canadian pension commission finds that the deceased died from wounds inflicted, accident occurring, or disease contracted, as a result of enemy action within twelve months before death;
(i)	the exemptions allowed in paragraphs
(a), (b) and (c) of subsection one of this section shall be increased by fifty per centum; and
(ii)	the amount of the duty payable in respect of a succession by any successor coming with class A or class B in the first schedule to this act shall be reduced to such sum as would, if accumulated at compound interest at the rate of three per centum per annum from the date of death with half-yearly rests, at the expiration of the period of the normal expectation of life of a person of the age of the deceased at the time of death (calculated in accordance with mortality tables approved by the minister), amount to the duty otherwise payable.
(b)	The Canadian pension commission shall on the request of the commissioner investigate the circumstances and report its findings in respect of any case arising under paragraph (a) of this subsectipn.

I would refer the hon. gentleman to a very considerable debate on this section, which the hon. member for Vancouver South will remember, and which took place in the summer of 1941 when we passed the Dominion Succession Duty Act.


Alfred Johnson Brooks: Have there been any amendments since then?


James Lorimer Ilsley: There have been no amendments. It does not grant complete exemption, but it grants a very considerable exemption.


Alan Cockeram: I believe that in the budget debate last year the hon. member for Hastings-Peterborough asked the minister to give consideration to the soldiers' insurance which men coming back from overseas are taking out to-day, and he asked that it should be excluded from any computation of succession duties. If I remember the discussion at that time, the minister seemed very favourably disposed to the suggestion and said he would look into it further. I cannot tell the minister what date it was; he may have some recollection of it.


James Lorimer Ilsley: I have no recollection of it: I am sorry. It may have been my parliamentary assistant.


Alan Cockeram: No. I am pretty sure it was the minister. Will the minister give some consideration to that?-because this insurance is in an entirely different class from other insurance. Under the act the insured or the beneficiary can receive only $1,000, and the rest payable in the form of annual instalments spread over a period of years. Under the succession duty act, the whole thing would be amortized and computed under the tables which the minister used, and if the woman who was the beneficiary was a young woman the estate might be very large. If they take out the maximum insurance it is $10,000. By the time they pay duty there might be very little left.


James Lorimer Ilsley: I do not understand how anything could depend upon the age of the widow.


Alan Cockeram: Yes; it is payable on an annuity basis, and $9,006 will bring a pretty fair annuity. Under the government's system of assessing annuities or succession duties they would assess a pretty high value on a $10,000 policy.


James Lorimer Ilsley: I will look into the question.
I am sorry, but I do not seem to remember anything about it at all.


Alan Cockeram: It was brought up in the last, budget debate.

Succession Duty


James Lorimer Ilsley: My officials do not remember about it either.


Alan Cockeram: I saw it the other day.


James Lorimer Ilsley: I do not want to give any impression that I am favourable or unfavourable to the suggestion, but I will look into the matter. It is new.


Howard Charles Green: Is there any reciprocal agreement between Canada and the United Kingdom concerning succession duties?


James Lorimer Ilsley: No, there is not.


Howard Charles Green: Have there been submissions made that such an agreement should be negotiated?


James Lorimer Ilsley: Yes, many; and the matter is under consideration at the present time.


John Ritchie MacNicol: When an estate pays a succession duty on funds or property held in the United States does it also have to pay on the same amount in Canada?


James Lorimer Ilsley: Not on real estate held in the United States.


John Ritchie MacNicol: On bonds?


James Lorimer Ilsley: On other property. He pays on whatever property he has in the world if he is domiciled in Canada. That is my recollection.


John Ritchie MacNicol: If he has $50,000 worth of bonds in the United States and he pays succession duty in the United States and has to pay on the same amount in Ontario and in Canada, he might as well sell out.


James Lorimer Ilsley: He is taxed1 here on the whole estate, but if he is taxed in the United States on property there, there is a convention by which he is given credit.


John Ritchie MacNicol: On bonds?


James Lorimer Ilsley: Bonds, yes. There is a convention between Canada and the United States providing for a credit.


John Ritchie MacNicol: A credit in respect of what he pays in the United States.


James Lorimer Ilsley: That is substantially right. The convention went through this house.


Douglas King Hazen: Last year.


James Lorimer Ilsley: In 1944.


Douglas King Hazen: But did it go through
congress?


James Lorimer Ilsley: It was later ratified in the United States.


Howard Charles Green: What are the difficulties in negotiating a convention of that type with the United Kingdom?


James Lorimer Ilsley: I think I can say that discussions will go on. My information is that the difficulties are numerous, but what they are I do not know. However, the situation is not hopeless by any means.


Howard Charles Green: Perhaps the minister could find out.


James Lorimer Ilsley: It would take a long time. The complications of interrelated tax systems are terrific. I am informed that there are very numerous difficulties, but discussions will undoubtedly take place. It is not at all hopeless that a convention will be arrived at. There is a widespread demand for it in Canada.


Howard Charles Green: It is only fair that there should be a convention. Does not the minister agree with that statement?


James Lorimer Ilsley: Yes.


[Stage Direction]
Resolution agreed to.
2.	Where the minister is satisfied that succession duty has become payable upon or with respect to the succession to any property and that subsequently within five years succession duty has again become payable upon or with respect to the succession to the same property or any part thereof, on the death of the person to whom the property passed on the first death, the amount of succession duty payable on the second death with respect to the succession to such property shall be reduced as follows:
(a)	where the second death occurs within one year of the first death, by fifty per centum;
(b)	where the second death occurs within two years of the first death, by forty per centum;
(c)	where the second death occurs within three years of the first death, by thirty per centum;
(d)	where the second death occurs within four years of the first death, by twenty per centum;
(e)	where the second death occurs within five years of the first death, by ten per centum.
Douglas King Hazen: How do the rates under this resolution compare with the rates in the United Kingdom and the'United States? Are these equally or more generous?


James Lorimer Ilsley: I could give that information on the bill. I have not the rates here for either the United Kingdom or the United States.


Douglas King Hazen: In his budget speech the minister said he had made an examination,


James Lorimer Ilsley: I certainly did, of both countries, but I have not the rates here. In the United Kingdom the only quick successions that are partly relieved from tax are quick successions of real estate and established businesses. There is a limitation.


Douglas King Hazen: Five years?

Succession Duty


James Lorimer Ilsley: Yes, and the period in. the United States is aiso five years. I do not know what the .rates are.


Douglas King Hazen: This legislation will mean a reduction in the revenue the dominion receives.


James Lorimer Ilsley: Yes.


Douglas King Hazen: Why is it being made?


James Lorimer Ilsley: Because it is so oppressive.
If a man dies and leaves a substantial estate and his wife dies within six months and leaves the estate over again and the son who inherits it dies in another six months and leaves it, it gets very tiresome.


John Ritchie MacNicol: More than tiresome; the estate shrinks.


Douglas King Hazen: I agree that it is oppressive.
It is not fair. Why then is this not made retroactive? Last night when we were discussing resolution No. 5 the minister said, I understood, that it was made retroactive in its operations because certain people had taken advantage of the law, although they were within the law, to get ahead of the government. If that is to be made a principle of our legislation, it should work both ways. If the government is going to make legislation retroactive in order to get after people who, it thinks, have got the best of the government, although they have kept within the law, then it should make its legislation retroactive when the provisions of the law work a hardship or are oppressive upon people. I do not think you can have it . both ways. The government cannot say that certain people have got ahead of the administration, although they were within the law, and therefore the provision will be made retroactive against them, while on the other hand, where a provision has worked a hardship on people, it will not be made retroactive. There is no principle there, and there must be a principle in these matters. The government should not have it all its own way.


James Lorimer Ilsley: Am I to understand that if I accept the suggestion made last night, and do not make the other change retroactive, the hon. gentleman does not press this?


Douglas King Hazen: I do press it, though I do not expect to get anywhere with it, because in my opinion this is not fair. The minister says this has been oppressive and unjust and therefore he is going to change it, but he will not remedy the injustice. This act was passed in 1940-


James Lorimer Ilsley: 1941.
[Mr. Hazen.l


Douglas King Hazen: Well, 1941, and these people have been forced to pay, and they have not been reimbursed. The minister admits that it is oppressive and unjust. I repeat, there should be some principle about it.


James Lorimer Ilsley: My argument last night
was that the intention of the legislation had been frustrated. The intention of our legislation in this regard has always been clear. The trouble with making everything retroactive is that if amendments were made in 1960 it might be suggested that we should go back to 1941. We have to stop making retroactive amendments to our succession duty act. We have made two or three running back to 1941. We talked the matter over this year and decided that we could not carry this on for ever. When we change the Income Tax Act we do not go back a year or two or three years, although we are pressed to, because it would mean reopening so many assessments that it would be administratively very difficult. The law changes from time to time. This is an alleviation. I do not know of any quick successions or any oppressive or unjust cases since 1941. There may be some, but we had not any in mind in considering this.


Mr. JAENICKE:: I agree with the principle of this resolution, and I agree with the case as outlined by the minister, where the property remains within the family. But suppose some of the subsequent beneficiaries are entire strangers? I see no oppression or hardship if they should be taxed again. I suggest that perhaps the provision contained in this section should be confined to class (a) and (b) beneficiaries as set forth in the succession duty act.


James Lorimer Ilsley: I think there is a great deal of merit in the hon. gentleman's suggestion, and it will be taken into account when the legislation is prepared.


John Ritchie MacNicol: In the case of estates now before the succession duty administrators and not settled, are they permitted to benefit by this legislation?


James Lorimer Ilsley: The intention is that it will apply to deaths after enactment of the measure.


[Stage Direction]
Resolution agreed to.

[Stage Direction]
1. That the consumption or sales tax shall not apply to machinery and apparatus and complete parts thereof ^which, in the opinion of the Minister of National Revenue, are to be used directly in the process of manufacture or production of goods; provided that this exemption shall not apply to office equipment or motor vehicles.

Special War Revenue
Mr. MaeNICOL: This is a step in the right direction, but I should like to ask the minister whether this will apply when a firm buys used machinery, or whether the machinery must be new.
James Lorimer Ilsley: Second-hand machinery is not subject to sales tax in any case. .
Mr. MaeNICOL: Then this would have nothing at all to do with second-hand machinery?


James Lorimer Ilsley: No.
Mr. MaeNICOL: Why is office equipment exempted from the benefits of this provision? Anyone opening a plant or starting a new business requires office equipment; it is most important if one is to conduct a business with any kind of success. I can understand the exclusion of motor vehicles, but why office equipment?


James Lorimer Ilsley: It is so hard to tie up office equipment to the production of goods. This sales tax is taken off machinery and apparatus to be used directly in the process of the manufacture or production of goods. The office end of it is not the production end. That part of the activities is administrative or commercial rather than industrial, and it is not intended to free office furniture generally, certainly not for any other commercial activities. We would not regard the office equipment used by a factory as industrial equipment; therefore we take it out.
Mr. MaeNICOL: You exempt motor vehicles. Would horse-drawn trucks be exempt also?


James Lorimer Ilsley: Well, wagons used in the distribution of the product would not be exempt. They would not be regarded as used strictly in the process of manufacture or production. Team wagons on a farm are exempt now, as a matter of fact.


Mr. WRIGHT:: Has the government any means of ascertaining whether the goods are actually reduced in price to the consumer when the sales tax is taken off? I remember when the sales tax was taken off lumber, for instance, and certain building materials; in some cases that reduction was not passed on to the consumer but was retained by the manufacturer in order to give him a larger margin of profit. Has the government any means of seeing to it that the benefit of the reduction in these cases is passed on to the consumers?


James Lorimer Ilsley: No. In this case it would not be consumers in the ordinary sense of the term; it would be users of the machinery or
47696-177i
apparatus. The national revenue department has no way in the world of seeing that the benefit is passed on, and needless to say the finance department has no way of seeing that it is passed on either. The only, agency is the wartime prices and trade board, and that board is reluctant to go beyond its mandate, which is to keep prices down to what they were in the fall of 1941.
Mr. MaeNICOL: Competition would keep the prices down.


James Lorimer Ilsley: The matter will be fought out, all right, between the manufacturer or producer and the buyer. I do not know whether conditions in this seller's market are such that the buyer will be able to get the benefit of bargaining methods, but the time will come when he will be able to get that benefit. In a great many cases he will get it now, I should say; prices will just come down as a matter, of course.


Percy Ellis Wright: In some cases prices do come down, where there is a competitive factor in the market, but in some other cases, where the article is made by only one firm in Canada and there is no>
competition at all, I think the manufacturers have absorbed any reduction. I do not say that is so in all cases, or even in many cases, but some manufacturers have said they had held down their costs during the war, they were working at a loss, and now they had a chance to recoup themselves to some extent, so these benefits were not being passed on to the users or consumers of the material. I think the wartime prices and trade board might very well investigate in certain cases to see that these benefits are passed on to the people who are supposed to get them.


Mr. CHARLTON:: Does this include all electrical appliances used on the farm for production purposes, such as electric motors for milking machines?


James Lorimer Ilsley: Yes; if they are used for production purposes on the farm they are free from sales tax. Most of them are free now, but the rest of them will be.


John Alpheus Charlton: And what about a farm truck used exclusively for trucking farm produce?


James Lorimer Ilsley: No, not a farm truck. It is just a motor vehicle, and it is simply impossible to go into the realm of motor vehicles. They can be used on and off the farm, for purposes of production, distribution and transportation.


Mr. BOUCHER:: What about a tractor?

special War Revenue


James Lorimer Ilsley: They are exempt now.


George Russell Boucher: In connection with passing on charges to purchasers, is it not a fact that when selling materials the vendors must quote prices plus the taxation element? In this way are not those charges passed on to the purchaser? The custom of the trade is to do it, but I am not sure whether it is compulsory.


James Lorimer Ilsley: It is not compulsory.


Mr. BRYCE:: Does this new regulation allow small gasoline engines in without tax? The minister will recall that I spoke to him about this last year.


James Lorimer Ilsley: This has nothing to do with customs duties. It relates to the sales tax.


William Scottie Bryce: The tax was left on them last year.


James Lorimer Ilsley: If they are used for production purposes they are free from sales tax, under this proposal.


William Scottie Bryce: The minister and I could not see eye-to-eye on this question last year. I pointed out to him that these gasoline engines were used in milking machines. Did the minister take the matter up with the machinery companies? He said he could not agree to 'that because they are not agricultural implements. The minister will remember the incident.


James Lorimer Ilsley: I remember it very well, but not just as the hon. member states it. I [DOT] hesitate to resuscitate the argument because it was long drawn out. The hon. member was submitting that gasoline engines if used on farms should be free from customs duties. As they did not come within the agricultural implement items, they were not free. I did not say that they were not used for production purposes or for purposes of agriculture, but I said they were not covered by the items and that it would be very difficult to make a new item which would cover gasoline engines when used on farms. I pointed out how easy it would be to have them imported and entered for use on farms, and then to put them to some other use. At any rate the question was whether I should make a change in the tariff, or recommend a change at that time. I said I would not open the question of tariffs for gasoline engines, because it was too far reaching. There would have to be hearings and investigations before anything of that kind could be done.


William Scottie Bryce: I hope the minister will take this matter into consideration, because the fact is that they are used for production pur-

poses. We use them extensively on our farms in western Canada, particularly the smaller engines up to two horse-power, for pumping water and to operate milking machines. There are half a dozen uses to which they can be put.


[Stage Direction]
Resolution agreed to.
2. That the retail purchase tax shall not apply to goods valued at not more than $100 included in baggage accompanying residents returning from abroad after an absence of not less than 48 hours such as is presently allowed in the case of other excise taxes.
Alexander Malcolm Nicholson: I wish to support this resolution. What is the amount of revenue we have received under this provision in the past, and have the United States imposed similar taxation on citizens of that country who have made purchases in Canada in the past two or three years.


James Lorimer Ilsley: It has not produced much revenue. The item permitting the importation of $100 worth of goods, free, by returning Canadian residents who are returning from a trip to the United States is not a revenue producing item. It is a revenue sacrificing item.


Alexander Malcolm Nicholson: Why was it proposed in the first place?


James Lorimer Ilsley: I understand the hon. member is talking about the item which gives returning Canadian residents the privilege of bringing in goods up to a value of $100?


Alexander Malcolm Nicholson: One has to pay sales tax on what he buys when he crosses the border.


James Lorimer Ilsley: Sales tax did not have to be paid on it, but the taxes that have been collectible upon those importations have been the war exchange taxes amounting to ten per cent of the retail purchase price-which is pretty heavy. In respect of jewelry it is twenty-five per cent. This proposal is to free those goods from the retail purchase tax. I do not know how much revenue was collected, but it would not be very much. I have not heard of people bringing back goods from the United States in these small lots recently to any great extent. The prices on a great many commodities are higher in the United States than they are in Canada, and there has not been any considerable importation.


Alexander Malcolm Nicholson: The Canadian understood that he could buy up to $100 worth without having to pay duty. Then when he crossed the border he was obliged to pay a few dollars-it was not a large amount, but it was enough to be irritating when in the

Special War Revenue
middle of the night he would have to pay even a fairly small amount. I am wondering how much revenue it brought in. Did the United States impose a similar tax on their citizens during the same time?


James Lorimer Ilsley: I do not think they did; I have never heard of it. However we collected the war exchange tax.


Alexander Malcolm Nicholson: The minister does not know how much.


James Lorimer Ilsley: No. It would be insignificant, in the total revenue picture.


John Ritchie MacNicol: Has any record been kept, or is it possible to keep a record, of the total value of goods brought in by Canadians returning from trips to the United States, and the amount of goods taken out by tourists leaving Canada for the United States?


James Lorimer Ilsley: I am informed no record is kept.


[Stage Direction]
Resolution agreed to.
3.	That the ten per cent war exchange tax be
rescinded.
Resolution agreed to.
4.	That the excise tax of twenty-five per centum imposed on fur and furs be reduced to ten per centum, and that on a date to be determined by the Minister of National Revenue the existing exemption from sales tax of fur garment manufacturers as small manufacturers be withdrawn.
Alfred Johnson Brooks: I notice in this resolution there is a reduction from 25 per cent to 10 per cent on all furs and fur goods. Does this mean that certain people who have been exempted from tax will now have imposed upon them a small sales tax?


James Lorimer Ilsley: That is correct.


Alfred Johnson Brooks: Fur dressers and small
tailors will now have a tax imposed upon them, where previously they were exempt.


James Lorimer Ilsley: Not the tailor.


Alfred Johnson Brooks: I am referring to the man who deals in fur garments.


James Lorimer Ilsley: Correct.


Alfred Johnson Brooks: Then it is simply taking the tax off one class of manufacturers and putting it on the smaller man?


James Lorimer Ilsley: No; it will be borne by the same person, the consumer. The picture, a complicated and difficult one, is something like this: Some years ago before the 25 per cent fur tax was imposed we had a tax of 12 per cent on the value of the furs as sold by dressers and dyers, which included the charge for dressing and dyeing.


Alfred Johnson Brooks: That applied to the dressed furs, not to the raw furs.


James Lorimer Ilsley: That was the situation some years ago. I shall have to give this background in order to explain the resolution, he I say, we had that tax of 12 per cent. When the furs were made into a fur coat and the fur coat was sold by the manufacturer, it was free of sales tax; the 8 per cent did not apply on fur coats. The 12 per cent tax at the point of dressing and dyeing was estimated to be the equivalent of the 8 per cent sales tax on the value of the coat. The value of the coat would be greater, and in order to realize the same amount of money, the percentage would be less. Perhaps that should have been 13 or 14 per cent, but it was 12 per cent. With regard to furs used for trimming fur coats the situation was different. Those coats were free of the 12 per cent tax, but the value of the fur-trimmed cloth coat was taxed at 8 per cent. That situation went on and there were strong protests year after year from the manufacturers of cloth coats. Then we imposed this tax of 25 per cent on furs and removed the 12 per cent tax. The result was that a fur coat was taxed in this way: there was a 25 per cent tax on the value of the furs, and no sales tax on the value of the coat. Fur-trimmed coats were taxed in this way: there was a 25 per cent tax on the value of the furs going into the fur-trimmed coat, and 8 per cent on the fur-trimmed coat. There were still strong protests from the manufacturers of fur-trimmed cloth coats. What we have done here is to reduce the 25 per cent to 10 per cent for all those furs and place a tax of 8 per cent on all coats. This eliminates the alleged discrimination against the manufacturers of cloth coats. The total tax on furs is reduced considerably in the case of furs used in the trimming of cloth coats, because instead of 25 and 8 per cent, it is now 10 and 8 per cent. The tax on furs used in fur coats is not reduced so much; it is almost the same as it was before.


Alfred Johnson Brooks: It is reduced from 25 to 10 per cent?


James Lorimer Ilsley: The 8 per cent goes on there, but the 8 per cent is equivalent to 12 or 14 per cent on the furs. If there is still 12 or 14 per cent on the furs and you have another 10.per cent, you are up to between 20 and 25 per cent on the furs used in fur coats. On the furs used on fur-trimmed coats there has been a substantial reduction.
Special War Revenue


Alexander Malcolm Nicholson: A day or two after the budget was brought down the hon. member for Rosetown-Biggar inquired about a report in one of the Ottawa papers which indicated that there had been a leak of information and that the operators had secured some advance details. Will the minister give a statement if the facts are available?


James Lorimer Ilsley: I have sent out for some notes I thought I had here. As a matter of fact, there was no leak. The matter was investigated and the people who were reported to have said that there was a leak stated that they did not have any information. They had been surmising that there might foe some change in the tax on furs. I shall get a little more detailed information on it.


Winfield Chester Scott McLure: I listened to the explanation given by the minister and it seems to me to be about as clear as mud. It looked like an increase in the taxation on raw furs, whereas we understood when the budget was brought down that there was going to be a reduction.


James Lorimer Ilsley: There is no increase.


Winfield Chester Scott McLure: It is reduced to 10 per cent, no matter where the furs go, and it all comes back to the producer.


James Lorimer Ilsley: I do not agree with that at all.


Winfield Chester Scott McLure: I think practical experience would make you agree with it. At the present time there is a sales tax, and that added to the 10 per cent would total 18 per cent. The tax of 12| per cent that wTas originally on furs was a processing tax. Then the 25 per cent tax was put on with no sales tax. Now *the tax has been reduced to 10 per cent on the raw furs. This is still a processing tax. But the furs may be manufactured and put into a garment which would have to sell for at least four times the cost of the raw materials, that is the retail price. The 8 per cent tax, I understand, is on the retail value.


James Lorimer Ilsley: The 8 per cent is reckoned on the manufacturer's or wholesale price.


Winfield Chester Scott McLure: Is that collected from the manufacturer?	,


James Lorimer Ilsley: That is right.


Winfield Chester Scott McLure: In that case it means that the producer, who ultimately pays it, would have a tax of 25 or 26 per cent. So the scripture has been fulfilled in that case, and the man is worse off at the last than he was at the first.
[Mr. Ilsley.I


James Lorimer Ilsley: There is some reduction on furs that go into fur coats, and there is a big reduction on furs that go into fur-trimmed coats.


Winfield Chester Scott McLure: That is if the ceiling price were removed. It cannot happen the way it is now.


Mr. CASE:: The minister says that there is an apparent reduction which would be passed on to the consumer. There has been quite a substantial increase in the price of furs. I am thinking of an Alaska seal coat which sold at retail last year for around $1,000 and which now costs over $1,200. Was it intended that this saving should be passed on to the purchaser, and if so, how can the department make sure that it is passed on?


James Lorimer Ilsley: It is just about impossible to take any action to see whether it is passed on to the consumer or the producer. Perhaps I should not say this, but I would rather see it passed back to the producer because I think he needs it more than the consumer.


Wilfrid Garfield Case: But the intention was that the saving would be passed on to the consumer. You wanted no increase in price for the benefit of the manufacturer and to the disadvantage of the consumer?


James Lorimer Ilsley: There is a big saving in fur-trimmed goods, but it is just about impossible to say upon whom and in what proportion a tax like this falls. The producers claim, as the hon. member for Queens claimed, that the producer pays it all. That is disputed and denied by others who think that the consumer pays it or that others absorb part of it. It is hard to answer that question; I have tried several times, but the fact remains that when you lighten a tax-and the tax on fur-trimmed goods has been lightened substantially-eventually, if not under prfesent conditions, somebody will get the benefit of it. Just who it will be will depend upon the interplay of market conditions.
With regard to fur goods-not fur-trimmed -the reduction is slight, but that reduction is subject to the same observations. One cannot say that the producer pays the tax, and on the other hand one cannot say with assurance that the consumer pays it.


Wilfrid Garfield Case: I recognize the difficulty; I think we all do because the factor of quality enters in, and it is difficult to determine today under the price-ceiling policy whether the same quality is being sold at the -same price as before. I inquired only to ascertain whether it was the policy of the government

Special War Revenue
to maintain a reasonable price level and pass the saving on at least to someone, and not to increase profits.


James Lorimer Ilsley: The hon. member for Mackenzie asked me about a rumoured leak of advance information about the change in this fur tax. In the Ottawa Evening Journal of October 20, 1945, appeared this item:
"The manufacturing fur trade had a feeling, but no definite'information, that there might be some changes made in the new budget m the application of the sales tax, due to dissatisfaction among other sections of the fur industry where the twenty-five per cent tax was applied on the value of the raw pelt," Henry H. Wilson, president of the Ottawa Fur Standards Association, told the Journal last night..
Then, further on:
It was to be noted that the tax of ten per cent on the raw fur, but with an additional eight per cent sales tax on the finished product, would not lower the cost of the furs on the retail market.
The Ottawa Fur Standards Association stated that they had no "tip-off," but felt "there might be some changes made in the application of the tax."
The government's decision with regard to this fur tax was not made until the Thursday-before the Friday on which the budget was presented. My recollection is that I took the matter to council on Wednesday and that no decision was reached; I took it back again on Thursday, when a decision was arrived at between one and two o'clock, and the. budget was brought down on Friday. Nobody knew what we were going to do about this tax until then. I did not tell anybody and I am sure that the officials did not tell anybody; they never do. We have had very important budgetary discussions over the past few years, sometimes covering a period of as much as six weeks; at some meetings there have been as many as fifteen officials present, and the nature of the matter discussed has been of extreme importance at times; important in this way, that if anyone knew what we intended to do, affecting the price of shares, for example, it would be of value in a business way to many people. Yet never since I have been minister has there been any allegation of a leak from the officials. This rumour or story arose, I think, from the fact that the newspaper headline was as follows: "Furriers knew of cut in excise tax on all furs". Then follows a story, beginning:	.
The grapevine of Canada's capital was working well for the Ottawa furriers.
Then there is a story that they knew what was going to happen. Well, I did not know myself until Thursday, noon, and none of my colleagues knew and none of the officials knew. We were considering alternative ways
of dealing with the matter, and I am satisfied- myself that no one told anybody anything. Of course these people in the fur industry are thinking and speculating about these things all the time and there is a certain type of person who likes to pretend that he has information. It makes him look like a-


George Russell Boucher: A big shot.


James Lorimer Ilsley: A big shot, yes, and somebody might have. boasted or said that he knew what was going to be done. But he did not.


Alexander Malcolm Nicholson: That is quite satisfactory.


[Stage Direction]
Resolution agreed to.
5.	That the net premium tax on insurance companies be reduced by a credit for premium tax paid in any other country.
Resolution agreed to.
_ 6. That enactments founded on these resolutions come into force on the thirteenth day of October, 1945.
Mr. HANSELL:: May I ask on this resolution, or would the minister tell me on what item I may ask, with respect to whether or not the government has set up any machinery at all to discover who may be trying to defeat the income tax laws?


Mr. CRUICKSHANK:: Who is it?


Ernest George Hansell: That is the important question. As a chap once said to me: If you do not beat the system, the system will beat you, and there is a good deal of truth in that. I am not advocating that anyone try to do it. But I read an article some time ago that in the United States the government gives rewards to people who furnish information leading to the collection of taxes that have not been paid. It does not always follow that the person or the firm or corporation is crooked; it may be that misunderstandings have occurred or mistakes have been made; certain things may have been done very innocently. But I recall reading that in the United States they had been able to collect by this method millions upon millions of dollars which otherwise would never have been collected, and that they gave rewards to people who supplied information which led to the collection of these taxes. One of these rewards was as much as $60,000; I think it was paid to an accountant who made a discovery which led to the collection of about a million dollars.
Special War Revenue

The fact of the matter is, of course, that in a way the whole system of taxation is a system of confiscation. To my mind there is no doubt about that. Of course the people of the country tolerate it because they believe it takes money to run the country and this is the method used to get the money for that purpose. Some of us may believe that that is so; some of us may not. But as the situation is, any person, firm or corporation that does not pay his or its taxes is not bearing his or its fair share of the load which is required to run the country.
I do not want it to appear that I think we have a nation of crooks, neither do I want it to appear that we should bring about a nation full of informers; but it has been mentioned to me on occasions, "There is Mr. So-and-so; that man has never paid a dollar of taxation; yet we know for a fact-" this or that. I just wondered what method the government has of searching out such cases; I am not going to say, searching out crooks, or persons that have deliberately avoided payment. Perhaps the minister can tell us something about that.


Mr. McCANN:: All the information we
require in that regard is the name and address of the individual, and the matter will be followed up quickly and expeditiously.


Ernest George Hansell: What about rewards?


James Joseph McCann: Under the act any person, whether taxable or not, may be asked to make a return of his income.


Ernest George Hansell: The department does not give any reward?


James Joseph McCann: No reward, except that
you are doing your duty to the state in reporting it.


Ernest George Hansell: I do not know whether that is altogether so or not. I suppose a man should do so, but the fact is that people do not like' to do these things. Take, however, chartered accountants, for instance, men who are dealing with these matters all the time; they may discover certain discrepancies here or there which will lead to the collection of taxes which have been lost sight of, but they may not want to inform about it; they may not like to give information. I know they should. But evidently in the United States they have regarded the offer of rewards as an appropriate thing to do.


[Stage Direction]
Resolution agreed to.
William Henry Golding: Shall I report the resolution?


Grote Stirling: May I ask the minister what he proposes to do with the customs tariff? I believe there was a statement outside this house with regard to it, but surely he is going to make a statement inside.


James Lorimer Ilsley: I made a statement on that in this house, that I was withdrawing all proposed changes in the customs tariff, and I am not moving that resolution.


Ernest George Hansell: Just so that we shall get this thing clear, does the Minister of National Revenue answer my question? Does he want the country to know now that it is the duty of the citizens of this country to give the names and addresses of those people or firms that they believe are evading payment of taxes?


James Joseph McCann: I think I can answer in the affirmative to that, that the department and the government, although they do not want the ordinary individual to be a "spotter" -as they are called-on anybody else, believe that it is in the interests of every individual who is paying income tax, and in the interests of the state, that those who are taxable should be called upon to make a return. I may tell the hon. member that I do not think there are many who are missed, or very many evasions, because the country is divided into regions, and the regional officers through the inspectors, who go to different communities, usually catch up with anybody in a community who has not put in a return. For instance, an inspector from the district of Ottawa will go to one of the Ottawa valley towns. He knows everybody there who is paying, and as he goes through that town, if it strikes him that the proprietor of a certain place of business, or certain individuals who are interlocked in the business activities of the community, have not made a return, he will very soon catch up with them. The number of people who should make returns and do not make them is almost a negligible quantity. But I repeat that if a citizen knows of people who are not paying their due amounts of taxes, I regard it as the duty of that citizen to acquaint the Department of National Revenue with the fact, and I assure you that those people will get the opportunity and the demand to make an income tax return, whether or not they are taxable.


William Irvine: I wish to bring to the attention of the Minister of National Revenue a question I asked a little while ago, with respect to the attempt which is being made to collect arrears of income tax from farmers. I am not objecting to the collecting of arrears of taxes from anybody, but I wish to bring to
December i, 1945
Supply-Post Office
the minister's attention a certain situation which the organized farmers have presented to me with the request that I bring it to his notice. It is represented that for several years after the thirties the farmers had to put up with worn-out machinery and depletion of their capital equipment1, and then after the war broke out they had great difficulty, when they began to get in better condition, in buying the machinery they wanted, and naturally so, because there was a real shortage. The result is that now, or as soon as they have an opportunity, they will make up the capital investment which they should have been making during those years, and meanwhile taxes will be placed on all that income which in reality ought to be capital. They are urging that a reprieve of five years from this form of'taxation is needed to give the farmers an opportunity to recover their economic position. I should like to know what the minister's view is of that representation.


James Joseph McCann: Perhaps I am not in a position to make the hon. member an answer which he would care to accept at this particular time. I will say that the representations he has made will be taken into consideration. But I can readily see many of the difficulties. If one class in the community asked for a remission of taxes for five years it would open up an avenue leading to all types of difficulties. I appreciate the difficulties the farmers have had; in this house in the last day or so the whole question of returns to farmers and fishermen has been discussed and the suggestion has been made that their returns might be placed on what one would call an average basis over a few years. That, together with the representations made by hon. gentlemen, will be taken into consideration with a view to dealing with all classes of the community in a spirit of justice and equity.


Mr. ROSS (Souris):: On that point I would ask the minister whether the same system of revenue collecting is followed in all parts of Canada. I believe there is an office in each , province. I am a little at sea about the last question raised. The officials in the province from which I come have done an efficient job of collection from the farmers in the past three years.


An hon. MEMBER:: That goes for Saskatchewan.


James Arthur Ross: I am speaking of those I know. The officials in my province have done a great deal to cooperate and have gone to every municipal office and obtained the record of the people. They have called them
in and made collections for the past two' or three years and I do not see how anyone could be missed. I was wondering if the same system is followed throughout Canada.
Mr. McCANN.: The system is absolutely uniform, the purpose being to treat all alike.
Resolutions reported, read the second time and concurred in.

The house in committee of supply, Mr. Golding in the chair.



POST OFFICE

[Stage Direction]
281. Departmental administration, $811,425.
John Ritchie MacNicol: A few years ago in the city of Toronto, in, my own end of the city and I suppose in other parts as well, we had two deliveries of mail a day. Now we have only one. When are we to return to normal? If I posted a letter in Toronto on Friday night to myself I would not get it until Monday morning, but I would get it on Saturday afternoon if we had a normal delivery.


Hon. ERNEST BERTRAND (Postmaster General):: This matter is under consideration. We still have over 1,100 employees with the forces and we need 390 more men to reestablish two deliveries a day.


John Ritchie MacNicol: In Toronto alone?


Ernest Bertrand: In all Canada. That does not seem very much for all Canada, but it does not take twice as many men as we have now to reestablish two deliveries a day, because the run is shorter when there are two deliveries. We expect to be able to have two deliveries shortly. Some time next spring there will be two.


John Ritchie MacNicol: The postal employees, in my opinion, are as hard worked as any servants of the government. Certainly there are no employees who work harder than these men. They have long hours, and the mailmen carry heavy loads in all sorts of weather. I have observed them on my own street in Toronto and, whatever the reason is, their -work seems to play them out more quickly than others. [DOT] Too many of them have to retire because of hard work and long hours. I think they are poorly paid-I am speaking of the men who deliver the mails. Their job is a most important one, because the letters they deliver are sometimes priceless to those who receive them; yet you rarely hear of any misdeliveries or any mail troubles in this country. I for one am proud of the men in the postal service of Canada.

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Ernest Bertrand: It is well organized.


John Ritchie MacNicol: I do not know what the minister means by being well organized. If he is speaking of the staff, yes. I was not thinking of organization from the labour point of view because these men do not cause any trouble. They keep right on with their work. They never threaten to quit or to go on strike. I do not know what we would do if we did have such a strike. I hope the time is coming when the government will consider increasing the remuneration paid to postal employees and will also provide better working conditions. Some post offices furnish satisfactory conditions but many do not. In many the men are sorting down in the basement of some store or building in which they work. The government should make every effort to see that their working conditions are the best. Do they get two or three weeks' holiday in the summer?


Ernest Bertrand: Three weeks.


John Ritchie MacNicol: That is fair. Do they get paid during that time?


Ernest Bertrand: Yes.


John Ritchie MacNicol: That is as it should be. With improved conditions, if they receive greater remuneration I have nothing more to say.


Alexander Malcolm Nicholson: This is the first time the minister has appeared before the committee in his new capacity as Postmaster General, and I take this opportunity of expressing the hope that he will be happy in his new responsibilities. The members of this group are very much interested in his administration. We frequently refer to it as one impressive demonstration of what can be done under-


Wilfrid Garfield Case: Public monopoly.


Alexander Malcolm Nicholson: -government administration,-	_


William Irvine: Public monopoly is a misnomer.


Alexander Malcolm Nicholson: -where the principle of free enterprise and competition has not been a factor. My hon. friends to the right have never suggested that the government should go out of this important service and turn it over to free enterprise to see how they would make out.


Wilfrid Garfield Case: I could say a lot in a few words on that suggestion.


Alexander Malcolm Nicholson: I think we have had a practical demonstration of what can be done under social planning where the greatest good

to the greatest number is concerned. I understand there have been some changes in the staff of the department, and I wonder if the minister would tell us who is now the deputy postmaster general, who is the assistant deputy, and what has become of the previous assistant deputy postmaster general.


Ernest Bertrand: We in fact have been paid a great compliment by a foreign country. Recently the republic of Peru entered into communication with my department asking us to send one of our officials in order to improve their postal system. We had a gentleman, Mr. Coolican, who was on the verge of reaching the age of superannuation, whom we asked if he would like to go to Peru for a few years. Mr. Coolican has accepted,, and the government has also accepted. The same thing has been done in regard to another official of the Canadian government in the Department of Public Works, whose services have been requested to improve the telephone and telegraph systems of that country. We have sent Mr. Sims to undertake that task. So that Mr. Coolican is now on leave, but he is the only high official who has left the department for some time. There are a few who have almost attained the superannuation age, and there may be some sort of reorganization in the near future, but at this time I could not say very much about that.


Alexander Malcolm Nicholson: I was wondering if Mr. Coolican will be returning to the department or if he has retired.


Ernest Bertrand: He has now gone to Peru in order to make definite arrangements with the government of that country. I do not know whether he is going to return. He was quite prepared to go there and help the government of Peru, and I am quite sure he will stay there for some time.


Thomas Reid: Is he not over age now?


Ernest Bertrand: He has had one extension.


James Arthur Ross: In view of what has been said by hon. members to my left about, this socialistic department and their experiences, I wish to ask the minister a question. I am hesitant about raising local problems on the floor of the house, but in my constituency I have a situation which is baffling to me and perhaps the minister could clear it up by stating his general policy in connection with the construction of post offices. I am quite aware that the Department of Public Works actually constructs or lets the contracts for these buildings, but I understand that is done on the recommendation of the Postmaster

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General. All during the war I have hesitated to bring up this matter, but according to the information I have received from responsible officials, in the instance I have in mind the government bought an old property and an adjoining property-with the intention of constructing a new post office just prior to the war. I am not sure what amount was paid for the property, but it is a matter of principle anyway. Ever since then the department has been paying the same people quite a nice monthly rent for the property, and I should like to understand why this has been done.
As I said, I realized that it would be unfair to say anything about the matter during the war years, but now that the war is over, these people are becoming agitated, and they think I should do- something about this on their behalf. The building is quite dilapidated; it is embarrassing to the officials of this town of about 1,200; it is an eyesore on the main street, and because it is crown property they are unable to tax it. They believe they should have a new post office now that the war is over. I understand that there is some policy followed by the department under which new post office buildings are not constructed unless there is a net revenue of something like S 10,000, but I should like to know from the minister just what the policy is, in fairness to these people who were content to stay quiet about the matter all during the war years but who consider they now deserve some reasonable explanation in regard to this unusual situation.


Ernest Bertrand: It is true
that during the war the Department of Public Works was not called upon to construct any buildings for the Post Office Department, but we have had a survey made and intend to go ahead with quite a large number of buildings as soon as conditions permit. We do not want to enter into competition with the housing programme at this time, but we have definite plans to build quite a large number of post offices when the time comes. For a long time a rule has been established in the department that we put up public buildings in places where the net revenue is over $10,000, as the hon. member has said, and I must admit that in quite a few places where the revenue to-day is more than this amount they have not yet got their buildings, but we hope to be able to construct these buildings as soon as conditions permit.


James Arthur Ross: I hope the minister will keep in mind the fact that his department is still paying rent on the property which belongs to it. I do not know what the argument in support of this may be, but to me
it is an unusual case. In view of that fact I think some exception might be made in this case. I should be glad if later on the minister would give some explanation of this unusual situation.


Ernest Bertrand: I am not
familiar with this particular case, but we do intend to commence the construction of these buildings as soon as possible.


Mr. HLYNKA:: I should like to ask the minister if we may soon expect the opening of postal service between Canada and the various camps in the British, United States and French occupied zones. I noticed an item in the New York Times under date of November 24, 1945, which stated:
Opening of a limited mail service for exchange of personal correspondence between Americans and displaced persons in the United States zones of Austria and Germany was announced to-day.
The state department, making the announcement, said it would also be possible to send five-pound gift parcels from this country to displaced persons in those zones.
The announcement said that in the interest of efficiency, it would be necessary that the first dispatch of mail originate in every case with the displaced person. Special postcard forms are being distributed in the American zones for this purpose.
Americans wishing to carry on the correspondence must present these cards before United States post offices will accept letters or parcels for mailing.
My question is, would it not be advisable for the minister to get in touch with the Department of External Affairs, and also to consult his own officials and endeavour to formulate a similar policy for the reestablishment of this postal service on the part of Canada. I should like to mention also that there are many Canadians who, particularly at this time, are interested in their own relatives who find themselves in these displaced persons' camps, and who certainly would be anxious to assist such people by sending parcels of food, clothing, medical supplies and so on. At the same time they are most anxious to correspond with their relatives as soon as this service is made available. Since the United States has been able to reopen the service I believe Canada should not lag far behind in following that good example.


Ernest Bertrand: We are in communication with the intermediary countries, and expect to be able to make an announcement any day now. We will do so as soon as we have reached an arrangement.


Mr. McKAY:: Would the minister give the committee details as to revenue from the Post Office Department which has been turned over to the treasury in the past year?
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Ernest Bertrand: I had intended to say a few words at the beginning. However, at this time I shall point out that in 1944-45 the net revenue was $66,055,519, and the net surplus, $13,097,000.


Eric Bowness McKay: That is, more than $13 million has been turned over to the treasury as surplus.


Ernest Bertrand: Yes.


Wilfrid Garfield Case: Our custom has been to have a discussion when we deal with the first item. May I say to the minister that, from my limited acquaintance, I regard him very kindly indeed. I should also like to join in the complimentary remarks which have been made by hon. members to my left, but I find that I should make some further observations in view of what I have said about public monopolies. What I said was not said offensively, because this is one place where I agree that there is possibly good reason for a public monopoly. If it were handled in the manner for which my good friends would have you believe I have a preference, namely by private enterprise, it would be a very much muddled system. This is one instance where one can say that public enterprise is the most effective. I should like to emphasize, however, that, even here, there must be a degree of cooperation with private enterprise. Many of our common carriers, both air and rail, enter into this public service provided by the post office, and are doing a first-class job. Further, I can think of a score of smaller post offices owned by private individuals, where space is rented to provide this public service.
While the post office has been more or less a profitable venture-and perhaps I should use the word "service" rather than "venture"-because it- is bringing in a considerable amount of revenue to the public treasury, nevertheless the fact remains that with post office buildings as with other government buildings in- almost every locality, no taxes are being paid. Therefore it is hard to assess or to determine exactly the degree 3f efficiency of this organization, when one compares what it does with what private enterprise is required to do.
When I discovered the other day that the Department of Agriculture was paying $2,560 a year rental for 300 acres of land, I did not hear a shout from the other side of the house to the effect that this property should be owned by the people. I felt that it should.
I should like to know from the minister if at this time of the year postmen are receiving overtime pay.
[Mr. McKay.)


Ernest Bertrand: Yes.


Wilfrid Garfield Case: The men who are delivering the mail on the many routes in the towns and cities, or wherever service is provided, are performing a tremendously long and laborious job. During the past number of years I know that our postman, in the process of his afternoon route, did not arrive at our home until around ten o'clock at night. Probably he would have a boy with him, pulling a sleigh laden with bags and parcels.
I join with the hon. member for Davenport in paying a real word of tribute to this' faithful army of men who are doing a remarkably fine job and are certainly not overpaid. I have always hesitated to' say too much about pay, because hon. members on this side of the house particularly, it seems to me, are always critical of expenditures made by the government, and I do not see how we can be consistent if in this instance we say, "You should pay more." I will, however, go so far as to say, that this is a group of men who are not overpaid and who have earned the admiration of all.


John Ritchie MacNicol: They are underpaid.


Wilfrid Garfield Case: I hope they are receiving consideration for the extra long hours they must put in at certain seasons of the year.


Ernest Bertrand: They receive extra pay for that.


Mr. JAQUES:: I have a number of complaints from my constituents in the districts of Breton, Lindale and Berrymore. They are isolated districts, and at present they have only one mail delivery a week. These people enjoy few conveniences and would be most thankful if the minister could see his way clear to give them two mails a week instead of the one they are now getting. Will the minister look into this matter?


Ernest Bertrand: I shall, with pleasure.


Percy Ellis Wright: I should like to say a word respecting another group in the postal service, who, I believe, are not overpaid. I refer to those who carry out the rural mail delivery. Probably they are the most underpaid group in the service, despite the fact that they render a real service to the Canadian rural population. Although there may have been some increases in pay. I believe they are still being paid a fairly low stipend.
I should like now to call the minister's attention to the necessity for the establishment of more rural mail delivery routes in western Canada. If one would travel through the

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west he would find that, in comparison with the east, we have comparatively little in the way of rural mail delivery. I realize, of course, that there are difficulties in that part of the country, because of our people being scattered. However, I notice that the department has a surplus of more than $13 million, and while during the war we have not urged that this service be extended, I consider that we are now justified in asking for an extension at as early a day as possible.
The rural routes in western Canada with which I am familiar have only two deliveries a week. There, again, improvement could be made by giving three deliveries on such routes. This would mean a great convenience to the people out there.
I should like to bring one further matter to the minister's attention. I have been told that quite recently the department issued regulations respecting the closing of all post offices on Sunday. I have had notification from my own constituents to the effect that certain post offices in that locality which formerly remained open for one hour on Sunday are now closed. In certain areas it happens that Saturday's mail does not arrive until after ten o'clock on Saturday evening, when the post offices in those areas are closed. The train leaves on Monday morning, with the result that business men are not able to answer their mail arriving on Saturday until Tuesday. This condition would be relieved if the post offices were left open for one hour on Sunday.
I leave these points for the minister's consideration.


Ernest Bertrand: We have
given the war-time bonus to mail carriers, and a little later on we gave also the cost of operation bonus. We have discovered that some of these contract rates are quite low. In many cases we are asking for new tenders and there will likely be a larger drain on the treasury, I said that in 1944-45 our net surplus was $13 million, but it must be remembered that that was a war year and we do not expect to be able to have the same surplus in the future. I shall consider what the hon. gentleman has said, and I wish he would send me details about those places where he wants three deliveries a week because I should like to refer that to the superintendent of the postal district. If we can do it, we shall be glad to do it. I wish to emphasize that this is not a revenue department; it is a service department.


John Oliver Probe: There are some matters in my constituency which are somewhat at variance with the statement the minister made
earlier. First of all, I wish to refer to the retirement age of permanent and temporary employees of the Post Office Department. I understand that that age limit was waived during the war.


Ernest Bertrand: That is right.


John Oliver Probe: The result is that in Regina- and I imagine the same is true of other places-there are a number of employees who should be given the opportunity to resign in order to make way for younger employees returning from overseas and elsewhere. In our city a number of requests have been received from returned persons to be taken on the post office staffs, and many of them have had to be refused.
Another problem is that cpnceming temporary employees. This relates not only to the Post Office Department but to all departments. The government policy of hiring persons requires serious revision. Temporary employees should be made permanent after a fixed period of employment, regardless of whether they are on an establishment or not. I have one specific case in mind which would come under the minister's department. This man has been employed by the Post Office Department in Regina for 23i years, having joined shortly after the last war. He is now 63i years of age, or li years from the usual retirement age. He was a veteran of the South African and the first world wars, and had two sons in the services during this war, one of whom was drowned in the North sea when his ship crashed.
This man wrote a civil service examination before being taken on the staff and he thought he had qualified for permanent employment. He has been permanently employed in the sense that he has not missed work in 23i years, but he is considered to be a temporary civil servant. He is now in poor health and is ready to retire. He has been thrifty, and I am sure he would not want me to mention his case on the floor of this house. He has never brought it up by way of complaint, but the fact is that he has no pension rights because he was not allowed to pay into the superannuation fund.
I am sure this case could be multiplied thousands of times in the government service. When a person is taken into the civil service and works for a period of five years or so without having been placed in a permanent establishment, he should be automatically classified as a permanent civil servant. I should like to know how this is handled in the minister's department.
I have a further request to make, one which was received just this morning. There are a
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number of veterans in Regina who would like to be reabsorbed into the Post Office Department. I urge that there be two deliveries daily in Regina so that these men may be taken into the employment stream. Then, with the retirement of the men and women who are sixty-five years of age or over there would 'be an added possibility of employment in that city. The minister said that there were too many postal employees still in uniform to permit the inauguration of two services daily, but I think by the time we retire the older employees we should be able to function with two services daily.
Then there is the matter of the revision of the wage schedule which would apply to the Post Office Department as well as to all branches of the civil service. I am glad that for once hon. gentlemen to my right and I can agree that it is time that we raised the salaries of civil servants. Would the minister care to make a statement at this time about the retirement age and making permanent those civil servants who have worked for a few years without being placed in a regular establishment?


Ernest Bertrand: During the war employees were not retired at retiring age because of shortage of manpower, but our policy now is to retire them as soon as they reach the age of sixty-five years in order to give younger men a chance to be promoted.


John Oliver Probe: Is that an automatic arrangement?


Ernest Bertrand: Yes. ,


Mr. BLACKMORE:: Is their retirement at sixty-five years regardless of whether they have pensions?


Ernest Bertrand: If they are employees of the Post Office Department they would be under the superannuation scheme and have a pension at sixty-five years. There may be some employees who are employed in what are known as revenue post offices. In these offices the postmaster gets a percentage of the revenue. Such employees would not be under the superannuation system. Previously they were not retired at sixty-five years. They might be postmasters in villages or small towns and were kept on as long as they were able to do their work properly, but in the near future it is our intention to ask them to retire at sixty-five years.


John Horne Blackmore: Would the minister give the committee some indication of what security these people are to have, or are we just going to turn them out like an old work-horse to rough it on the prairie and support themselves as best they can?


Ernest Bertrand: These men have a contract with the government under which they receive a certain percentage of the revenue, and in some places more than the revenue. But we have a minimum. There are small post offices where the revenue is not half the amount that we are paying to the postmaster. As I said before, this is a service department, not a department for revenue. Most of these men have some other job besides running the post office, which is very often looked after by the son or the daughter or the wife. Like anybody else working on a contract with anybody they must look to their own future. Of course ' there is the old age pension which begins at a certain age, but there is no machinery established to-day, just for the Post Office Department, to superannuate these postmasters when they leave at sixty-five years of age.
The hon. member also asked about temporary employees, and I am in great sympathy with what he said. But especially during the war every employee that we have taken on has had to sign a document clearly explaining that he was only working in a temporary capacity in order that we might keep the position open for a returned man.
As to the returned man who has been in the department before, he is taken on again immediately he presents himself. My hon. friend mentioned one employee who had been a temporary for twenty-three years. I do not quite understand how he has been with us so long as a temporary. I do not know just what we can do for him, but if the hon gentleman will give me the details I shall be very glad to see if we can do something for him if he is a veteran.


John Oliver Probe: There was one other question, about reclassification of wages.


Ernest Bertrand: That question is being studied generally, not only in my department but in all departments. Of course the treasury board has something to say about that.


Angus MacInnis: I have one general question that I wish to ask the Postmaster General, but before I do so I wish to comment briefly on one or two things that have been said in the discussion.
I was very glad to hear the Postmaster General say that something was being done to raise the remuneration of rural mail couriers. At every session of parliament that I can remember, for quite a number of years, this question has been discussed and demands have been made for increased remuneration for rural mail couriers, and if the Postmaster

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General has a general plan for improving their remuneration ! hope that when it comes before us the house will support him, because it is a reform, if that is the proper term, that is long overdue.
The hon. member for Grey North mentioned overtime for letter carriers. I did not refresh my memory before coming into the chamber, but my understanding is that the present system of overtime payment is very unsatisfactory, at least from the letter carrier's point of veiw, because I understand that overtime is not a matter of a cash payment but compensation in the form of holidays later on. I may be mistaken in that, but I do not think I am. I think the letter carriers have to take days off during the summer to compensate them for overtime work during the Christmas and New Year's rush.
The question of temporary civil servants raised by the hon. member for Regina City, as every hon. member knows who has been in the house very long, is an old one. In almost every department there are civil servants who have been there for years and are still temporaries. I do not think the one with twenty-three years temporary service is a particularly outstanding case, because I have heard of longer periods of temporary service than that. On the house staff the situation was corrected following recommendations made by a civil service committee some few years ago. It is a question that I think should be dealt with in the manner suggested by the hon. member for Regina City. That is, any person taken into the employ of the government in a permanent department should, after two years' service at most-I would not say five years because that is too long-become a permanent civil servant. The situation is quite different, of course, if the department itself is only a temporary one.
The question I was going to ask the Postmaster General was, what is the method of printing and selling postage stamps? Does the government purchase stamps; where are they printed, and how are they sold? In the larger post offices such as Toronto, Vancouver and Montreal, are the stamps sold on a commission?


Ernest Bertrand: In normal times the employee who works overtime is given time off to compensate him, but during the Christmas rush, which lasts for almost the whole of December and part of January, we pay for overtime.


Angus MacInnis: At what rate?


Ernest Bertrand: At the regular rate.


John Oliver Probe: At the regular hourly rate or the regular overtime rate?


Ernest Bertrand: At the regular hourly rate, and we give them time off. In the city of Toronto we take on almost 5,000 temporary employees just for the Christmas rush, and almost as many, if not more, in Montreal.
As to the stamps, we ask for tenders for the printing of the stamps. They are printed to-day and have been for some time by the Canadian Bank Note company, and by the way, our stamps are considered by philatelists as the best in the world. In the large post office the custom for many years has been to permit certain people to have the privilege of selling stamps on a commission. They have to employ and pay their own assistants, and they have to buy the stamps for cash. That system is in operation in a great number of the large post offices. In the smaller post offices we sell the stamps ourselves, and that practice has also been followed in some of the large cities where drug stores ano other stores have the privilege of selling stamps on a commission, but this practice is disappearing in the larger cities. In Toronto the department is selling its own stamps Wherever a man is doing his work properly and giving satisfaction to the public we dc not disturb him in his position, but when he dies or ceases to operate his franchise the department takes it over.


Angus MacInnis: Would the minister give me some further information on that, if not now on some future day? Is that system of selling stamps on commission used in the general post office at Vancouver? Who is the contractor and what is the commission paid?


Ernest Bertrand: I have all the details here for every town and city, the number of employees and so forth.


Angus MacInnis: I should like to know
the number of employees in the Vancouver post office, the rate of commission paid, the amount paid in commissions and the profit that the contractor is making.


Mr. CASTLEDEN:: Do the contractors
, include any wholesale merchants?


Ernest Bertrand: We have what we call lobby vendors selling stamps in the post office. We have not what might be termed wholesale vendors of stamps.


Mr. McCUBBIN:: It is now over thirtj years since the rural mail service was set up It has been of great service to the rural people, who appreciate it very much, and I
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wish to pay my tr^oute to the rural mail couriers for the splendid work they are doing in good weather and bad the year round, going out in the storms of winter and making their way through snowbanks and over the fields to take the mail to the boxholders. It is over thirty years since that system was established, and I think a resurvey should be made of a good many of the rural routes with a view to giving more contract service to bring this convenience to more rural box-holders. I know of numerous instances where thirty years ago there was only a grass farm but where to-day there are houses and buddings, and yet the farmer has to walk three-quarters of a mile to a mile to get his mail. In western Ontario particularly, which I know better than any other part, a resurvey of the rural mail routes should be made to serve better the rural people in that part of the province.


Ernest George Hansell: I was quite interested to hear the hon. member for Mackenzie pay a tribute to the government for the example which the post office is of public enterprise, but of course there never has been anything else but government management of the post office. It is one department where there is absolutely no competition, and I do not think it is a just comparison because, if there were any competition, the post office picture might not look quite so rosy. Again, I do not know that we can be so proud of some of the post offices that we have to go into. I know the method which the minister has described, that some of the offices are what are known as revenue offices and some of the postmasters are revenue postmasters. They supply the best equipment they can and at the same time make a living, which means, of course, that some of the post offices are very dingy, some broken down, needing electric light bulbs so that we can see to write our name on an envelope, and lacking in other respects. I am quite certain that if there were any competition many of these post offices would not do very much business.
Since this is one department of government that is revenue producing, it is only natural that we can expect it to show an annual profit. This is one public enterprise that believes in the profit system, because it is producing a profit eveiy year; $19,000,000, I think the minister said wTas the surplus this year.
I would ask the minister when the country can expect a reduction in the postage rate now that the department has a $19,000,000 profit. Since there is no competition, all the government have to do is to boost the postage
TMr. McCubbin.]
rate and of course they would have a biggpr profit. If they lowered the rate too much they would have a loss. Just how many employees are there in the postal service in Canada, taking in everyone? The government might not have to raise their wages very much to use up that $19,000,000 surplus. There are a good many ways of looking at this matter of public enterprise.
I should like to refer to the mail couriers again. The phrase that they are out in the winter storms has been used by nearly every hon. member who has spoken, and I should also like to pay my tribute to these men. I do not know whether that is what they want to be paid. I think they want to be paid in cash.


Angus MacInnis: That is what I advocated. We cannot blame them for that.


Ernest George Hansell: It will be very nice for
them to get Hansard and to read all the tributes we have been paying them. But what they want payment in is cash, not tributes. I am sure that the people of Canada are waiting to hear from the Postmaster-General about a reduction in the postage rate. Did I hear him say something, or was it just imagination?


Ernest Bertrand: I must correct a few misapprehensions. The Post Office Department cannot give a statement showing the net profit because like every other department our revenues are deposited in the consolidated revenue fund, and for the money we need we come before the house, as every other department must do, and ask in the estimates for the sum that is required to carry on for the next year. That gives the house an opportunity of checking everything that we are doing.


John Ritchie MacNicol: Not so late in the session; you cannot do so.


Ernest Bertrand: If we were a company showing a statement, whether we have profits or not, we would have our money in the bank and might not in times like these have to come to the house and ask for a subsidy of $60,000,000 or something like that. We increased the postage during the war by one cent, which has brought to the government about $10,000,000 more in revenue. The department intends to ask for a reduction from the present rate and come back to two cents for drop letters and three cents for the others. Our aim is even higher, but I will not say exactly what it is in case my target is too high. We want as soon as possible to transport all our first-class mail

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2S23
by plane from one end of Canada to the other so that, as far as the postal department is concerned, the dominion will be only twenty-four or thirty-six hours, or, at the utmost, forty-eight hours large, so to speak. That would be a great thing for the unity of the country. Of course we are waiting on the department administered by my colleague the Minister of Reconstruction to inform us when we shall be able to carry all first-class mail by plane.	.


John Ritchie MacNicol: Would that include the far north, the Yukon and the Northwest Territories?


Ernest Bertrand: Yes, I do not know if it is the intention of the committee to go through the different estimates, but if hon. members would like to go fast I may say that we are asking this year for over 810,000,000 for air mail services. Of course we are losing money on the operation, because it costs us more than it would if we were sending our mail by some other means, especially when we send it into the far north where planes carry very little except mail. We expect to be able to reduce the rate very soon both on land and in the air. We have 39,208 employees, including rural mail carriers. There are a large number of rural mail carriers and sometimes they work only part of the day, but that is the number of employees we have. There are 1,098 at headquarters in Ottawa and we still have 1,651 who are with the army. As a matter of fact, the number is really eleven hundred and something but when this figure was prepared it was 1,651.


John Ritchie MacNicol: Why not give the committee a report on the quantity of air mail carried?


Ernest Bertrand: I could do that.


Howard Charles Green: The hon. member for Peterborough West requested me last night to ask a question with regard to salaries paid to postal men. Apparently they were promised an increase of 8300 per annum, but instead of being given that increase-


Ernest Bertrand: My hon.
friend is confusing what is promised with what is asked for.	.


Howard Charles Green: This is what I am told. I understand that they were granted an increase of $120 a year, from $1,500 to $1,620, whereas they were led to believe that they would get an increase of $300.


Ernest Bertrand: It seems that I shall have to be the one questioning instead of being the one questioned. I do not know by whom they were promised S300.


John Ritchie MacNicol: They asked for it.


Ernest Bertrand: They asked for $300 and were given $120.


Howard Charles Green: Does the minister say that no such promise was given?


Ernest Bertrand: There is no such promise, I am informed.


Howard Charles Green: One other question. I am told that if a person uses the blue airmail form for delivery in Canada the letter is returned; it is not delivered, although the fee for that letter is ten cents, whereas for the ordinary airmail letter it is only seven. Why is that? There is nothing on the form itself to show that it is for use only for overseas. I suggest that if this blue form is to be used only for letters sent overseas a notation to that effect should be printed on it.


Ernest Bertrand: We abandoned the airgraph form in July of this year.


Howard Charles Green: I do not mean the airgraph form but the blue form which is in use. I sent one overseas myself the other day.


Ernest Bertrand: There must be some confusion, because we have no particular form of letters to-day for airmail in Canada, although we did have at the start. We were using a very light envelope. To-day businessmen use ordinary envelopes and letterheads for airmail and the fee is seven cents.


Howard Charles Green: I am speaking of the blue form. A person can go into the post office and pick up one of these forms, and in fact that was done by the person who wrote to me. He did not send a letter overseas but posted one from Winnipeg to Vancouver. He paid ten cents postage and the letter was not delivered in Vancouver. After a long delay it was returned to the sender, and yet there is nothing on the form to show that it must be used only for overseas.


Ernest Bertrand: I shall make inquiries concerning the matter.


William Scottie Bryce: I wish to bring up a couple of matters.


Mr. MACKENZIE:: I move that the committee rise and report progress and ask leave to sit again.


William Scottie Bryce: I have waited all afternoon for an opportunity to bring up this matter on behalf of my colleague the hon. member for Winnipeg North. It has reference to the
Questions

Winnipeg post office. They have a service once a day now. They had service twice a day before the war. There were 261 employees then and only 228 now, and men are being laid off. There are 103 who went to the services, only twenty-seven having come back. I wanted to bring this matter up to see what could be done.	.


Ernest Bertrand: I will look into it.


William Scottie Bryce: I am afraid I shall have to leave the matter for the time being because I shall not get a hearing anyway. I will bring it up on another occasion.
Progress reported.
On motion of Mr. Mackenzie King the house adjourned at six p.m.
Monday, December 3, 1945.