1945-11-20

EXTERNAL AFFAIRS


[Stage Direction]
Hon. IAN A. MACKENZIE (Minister of Veterans Affairs) moved:
That the name of Mr. Jaenicke be substituted for that of Mr. Knowles on the committee on external affairs.	.
Motion agreed to.


Hon. ERNEST BERTRAND (Postmaster General):: Up to the present, gift parcels for Italy could be sent only up to a weight limit
of four pounds to the islands of Sardinia and Sicily, as well as to the cities of Rome and Naples and Vatican City state. I am now glad to say that arrangements have just been completed under which the parcel post service to Italy has been extended to all areas excluding the provinces of Gorizia, Fiume, Trieste, Pola and Zara, but including the cities of Gorizia, Trieste and Pola. The weight limit has been extended from four pounds to eleven pounds, and instructions have already been issued to the postal service in this connection.
This parcel post service has been placed in operation under the same conditions as at present applying to parcel post services from Canada to other countries on the continent to which such services have been resumed.


Mr. BLACK (Yukon):: As to weight, is there any limit, in the composition of parcels, to the proportion comprising food and the proportion covering other things?


Ernest Bertrand: There are
certain regulations which I am unable to indicate at-the moment. I know that there is a certain limitation on foodstuffs. As regards England, it is up to seven pounds, but I do not remember what it is .for other countries. I will get the details for the hon. member.



THE PRIME MINISTER


[Stage Direction]
On the orders of the day:
Mr. JOHN BRACKEN (Leader of the Opposition):: Before the orders of the day are called I should like on behalf of the party I have the honour to represent, and in this respect I should like to think on behalf of the whole house, to extend to the Prime Minister a very cordial welcome home after his approximately seven weeks abroad. I am sure we have all read with interest the account of his movements overseas during this period. We are glad1 to see him back, improved in health and strength and ready again to associate with us in trying to serve Canada for the remainder of this session and in the days ahead.
If I may be permitted to do so, I should like to commend him for such part as he had to play in formulating the tripartite statement with respect to the control and use of atomic energy, and in the effort of the three democratic leaders to see that it is used for the promotion of the arts of peace rather than in the arts of destruction. May I say also that I trust his visit to Britain and to the United States has resulted in still further cementing the good relations between those two great countries and as well between our-
The Prime Minister

selves and them. As I have said', we are all pleased to see him back, and we shall look forward with interest to a statement from him giving his impressions of the international Scene as he has been permitted to view it during the last six or seven weeks.


Mr. M. J. COLDWELL (Rosetown-Biggar):: May I just say that in this instance the leader *f the opposition speaks on behalf of our party as well.
Mr. SOLON E. LOW (Peace River): This party also joins with the leader of the opposition in his welcome to the Prime Minister.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, I do thank my hon. friend the leader of the opposition most warmly for his exceedingly kind welcome so felicitously expressed, and may I at the same time thank with equal warmth the leader of the C.C.F. party and the leader of the Social Credit party for joining, as they have, and on behalf of those they represent, with the leader of the opposition in his words of welcome. I thank all hon. members for the hearty manner in which they have responded to the greetings of the leader of the opposition. It is indeed a joy to me to be back in Canada. I should like to take advantage of this first moment to renew my thanks to the members of the House of Commons for having permitted me, while the house was in session, to have the advantages which the trip I have just 'taken to England and to the United States has afforded. I should also like to express warmest thanks for the greetings which have been extended to me outside the House of Commons as well as within since my return by members of different parties. I do not know which to regard as the greater compliment, the readiness to have me leave or the welcome with which I have been .received since my return.
As my hon. friend who was leading the house mentioned last night, I think it would probably best suit the convenience of all were I to give to hon. members some account of the impressions gained in the last few weeks when we are considering the estimates of the Department of External Affairs. That may be arranged for some time in the very near future. Similarly, I think it would be best to speak also at that time on the allimportant question of atomic energy. However, I should like to avail myself immediately of the opportunity to express in the presence of my fellow members to-day the thanks which I feel I owe to the Prime Minister of the United Kingdom and to the British government for the opportunities which they afforded me while in Britain for

conference not only with members of the present administration but with members of the opposition and with others as well. In addition to the Prime Minister I feel particularly grateful to Lord Addison, the leader of the House of Lords and Secretary of State for the Dominions, and to Mr. Ernest Bevin, the Minister of Foreign Affairs. With these gentlemen I was privileged to have very intimate conversations on matters of general and wide interest.
I should also like to express equally warmly my appreciation of the great kindness and many courtesies extended to me by the President of the United States, Mr. Truman, by the Secretary of State, Mr. Byrnes, and other members of the administration, in the course of my visit to Washington, at the same time as that of the Prime Minister of the United Kingdom. I may say to my hon. friends I do believe the visit which Prime Minister Attlee and I had together at Washington was not only of great service to the three countries represented at the conferences we had with the President of the United States, but will prove to have been of real service to the world itself. Certainly I feel very strongly that the conferences in England and in Washington have helped, if such were needed at this time, to strengthen the bonds of friendship between the peoples of the British commonwealth of nations and of the United States. I am sure that nothing in this world is more needed for the preservation of peace itself than the maintenance of the relations that were so firmly established between those peoples at a time of war, and their continuation throughout the period of post-war reconstruction.



CONDITIONS IN EUROPE


[Stage Direction]
On the orders of the day:
Mrs. GLADYS STRUM (Qu'Appelle):: I should like to address a question to the Minister of National Health and Welfare. I am sorry that I did not have a chance to give him notice of this question. In view of the appalling conditions prevailing in Europe, and the certainty of death from 'starvation facing millions of children there, what steps are being taken to give refuge to the children of the stricken countries and bring them to this country?


Hon. BROOKE CLAXTON (Minister of National Health and Welfare):: I do not know that the question properly falls within the scope of the ministry of National Health

Health Insurance
and Welfare. It would be a question for joint consideration by the government, and the answer will have to be given at a later day.


Gladys Grace Mae Strum: I should like to follow it up with this question: Would the minister consider the setting up of a joint committee of both houses of parliament to consider our moral obligation to alleviate the plight of those children and find ways and means of placing as many as possible in homes in Canada?


Mr. SPEAKER:: I would ask the hon. member to be kind enough to put the question on the order paper.


William Lyon Mackenzie King: May I say just a word to the hon. member who has spoken?-because, like her, I have been deeply impressed by the conditions in Europe, particularly in Germany, where I think a large part of the population will almost certainly face starvation and very large numbers will die in the course of the coming winter owing to the fact thit in many cases they are without food, clothing and shelter. Transportation facilities are bad, and fuel is scarce. It would be impossible to exaggerate what central Europe is facing in regard to the coming winter. Whether that problem can be met in the manner in which the hon. member has suggested is something that will have to be considered very carefully.
I have spoken about the question of transportation being one of great concern. In that connection I was speaking of transportation within Europe itself. But for us an even greater problem arising out of inadequate transportation is one which concerns Canadian men and women who are at this time in Britain and in Europe, namely, the repatriation of those who have been serving overseas in the years of war, some of them for six, a great many of them for several years. It is only fair to say at once that until adequate means are found of bringing back to this continent the men who have been seeking to preserve freedom and to destroy the enemy, it would not be possible to consider asking transportation companies to give the space which would be required for them for any other purpose, however necessary and humane it may be to bring additional people, men, women or children, from Europe to Canada or the United States at this time.
I would join with my colleague in saying that the question is one which would have to be considered very carefully by the ministry before any definite answer could be given. I think it is well at once to make perfectly clear that the great problem to-day is that
of transportation and repatriation of the men who have been fighting at the front, and their wives and children.



HEALTH INSURANCE


[Stage Direction]
On the orders of the day:
Hon. H. A. BRUCE (Parkdale):: May I direct a question to the Prime Minister? The press reports that President Truman has proposed to congress the introduction of a compulsory health insurance system. Could the Prime Minister say whether this important subject is on the agenda for early consideration when the dominion-provincial conference meets next week?


William Lyon Mackenzie King: Yes, it is on the agenda. I might give my hon. friend, as he sent me notice of his question, a fuller answer, to this effect: As he knows, the dominion government included in its proposals placed before the dominion-provincial conference on reconstruction on August 6 of this year a proposal for a nation-wide system of health insurance. That proposal was among those receiving consideration from the provinces, and when the coordinating committee of the conference reconvenes next week, the subject of health insurance, like the other dominion proposals, will be before the premiers for consideration.



INQUIRY AS TO REPORT OF COMMISSION ON SOURCES AND REQUIREMENTS

[Stage Direction]
On the orders of the dav:
Mr. P. C. BLACK (Cumberland):: I should like to know from the Minister of Mines and Resources when we may expect the report of the commission dealing with the sources and requirements of fuel in Canada.


Hon. J. A. GLEN (Minister of Mines and Resources):: The report has not yet come to hand. I will make inquiries as to when I may expect to receive it.
Mr. NORMAN J. M. LOCKHART (Lincoln): This is in the nature of an advance request to the Minister of Munitions and Supply. May I suggest that a statement be given to the Canadian public at an early day indicating exactly what the fuel situation is. as this ambiguous amount of seventy-five per cent which has been suggested is causing much consternation.


Hon. C. D. HOWE (Minister of Munitions and Supply):: I shall be glad to give a reply on the civil estimates.
Veterans Affairs



CANADIAN ARMED FORCES


[Stage Direction]
On the orders of the day:
Percy Chapman Black: Has
the Minister of Transport any report to make with regard to accommodation for service men who fought in the Canadian armed services .and who require accommodation to return to their homes in Great Britain?


Hon. LIONEL CHEVRIER (Minister of Transport ):: I am happy to tell the hon.
member for Cumberland, and the senior member for Halifax (Mr. Isnor) who made similar representations in this behalf, that arrangements have been made with the British ministry of transport in London to accommodate 2b0 ex-service men on the return trip of the Queen Elizabeth, which will be about November 23.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. J. G. DIEFENBAKER (Lake Centre):: I would again direct a question to the Minister of Veterans Affairs in connection with the veteran students in the various universities who. having failed in one examination, find themselves obliged to leave by the end of this month unless something is done regarding them. Is the minister now in a position to advise the house and the country respecting the change which has been made, if any, and what is to be done to enable them to continue with their studies?
Hon. IAN A. MACKENZIE (Minister of Veterans Affairs):	As I advised my hon.
friend the other day, the advisory committee on university training has given extensive consideration to this question. It has now made a recommendation, and it is the intention to submit to parliament within the next few days a proposal with regard to the amendment of the post-discharge reestablishment order.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day :
Mr. D. F. BROWN (Essex West):: Would :he Minister of Labour inform the house as to the progress of the negotiations between the union and the Ford Motor company at Windsor, Ontario?


Hon. HUMPHREY MITCHELL (Minister of Labour):: I am glad to say that representatives of the union and company met yesterday afternoon and this morning and will meet again to-morrow morning with a view to laying a basis for settlement of the strike. Following the meeting held yesterday there was a joint statement which was issued* by Mr. D. B. Greig, treasurer of the Ford Motor Company of Canada Limited. At the conclusion of this morning's meeting the joint statement was issued by Mr. George Addes, international seeretaryM;reasurer of the United Automobile Workers of America. I think this shows an encouraging degree of cooperation.



POSTAL SERVICE


[Stage Direction]
On the orders of the day:
Ernest Bertrand: Yesterday a question was asked
by the hon. member for Winnipeg North Centre (Mr. Knowles), to which I promised to give an answer to-day. It was as to the separation notices which are now being sent to a number of men in the Winnipeg postal district.
While the department has no definite information, there would seem to be no doubt that the employees to whom the advices referred to by the hon. member were sent are those who are not qualified by examination for permanent appointment, or who are not entitled to the overseas preference. They would, therefore, not be retained indefinitely in any event. I feel that the hon. member will agree that it is in the best interests of these men that they be advised of the likelihood of their release to enable them' to look for employment elsewhere if they so dlesire.



PRIVILEGE-MR. WARREN REFERENCE TO PRESS REPORT-OTTAWA &quot;JOURNAL&quot;

Mr. R. M. WARREN (Renfrew North):: Mr. Speaker, on a question of privilege, I hold in my hand an item clipped from the Ottawa Journal, entitled "Appointed members of flag committee." I notice the name "R. M. Warren", with the initials afterwards "P.C."


Mr. HOMUTH:: That is a terrible mistake.


Ralph Melville Warren: I assume that P.C. means Progressive Conservative. In view of the speech of the hon. member for Lake Centre (Mr. Diefenbaker) to which we listened last night, I wonder whether he would* advise me whether I am entitled to legal assistance in a matter of this nature, or an error of this 'kind.
NOVEMBER 20, 1945	22S5
Demobilization-Munitions and Supply



WAR AND DEMOBILIZATION


[Stage Direction]
The house resumed from Monday, November 19, consideration in committee of a resolution to grant to His Majesty certain sums of money for the carrying out of measures deemed necessary or advisable in consequence of the war-Mr. Ilsley-Mr. Macdonald (Brantford City) in the chair.

['I think I will read it\nto-morrow.\nItem stands.\t.\nProgress reported.']
The CHAIRMAN:: The committee has under consideration the estimates of the Department of Munitions and Supply. We are on the item entitled "Housing Development."


Clarence Decatur Howe: Mr. Chairman, at the last sitting I undertook to answer certain questions, and I will now do so.
Questions were asked by the hon. member for Regina City (Mr. Probe) in connection with the Park Steamship company. He asked first: How many ships does Park Steamship company now own? The answer is 154.
What is the present value? I cannot answer that, because I have no recent valuation.
How many have been sold? The answer is that there have been five 3,600-ton tankers, and fourteen 4,700-ton merchant ships.
To whom, and at what prices? There have been ten 4,700-ton ships to the French government at $415,000 per vessel, less a brokerage charge on each ship of $43,000, or a net of $372,000; one 4,700-ton ship to the Swedish government on the same terms; three 4,700-ton ships to Brazilian interests at $390,000 each, less a brokerage of five per cent, leaving a net of $370,500; four 3,600-ton tankers to Branch Lines Limited at $350,000 each; one 3,600-ton tanker to Canada Oils at $350,000.
The next question is: At what fraction of cost? The basis of sales price in relation to cost is set out in a sales formula which I shall give in a minute, in reply to a question of the hon. member for Yorkton.
Then, the following question from the hon. member for York South: How many tankers in the Park fleet? The answer is five of 3,600 tons and twelve of 10,000 tons.
The cost of each type? The answer is for the 3,600-ton type, approximately $1 million each, and for the 10,000-ton type approximately $1,750,000 each.
Then, the number sold and: the selling price: Five 3,600-ton tankers at $350,000 each.
Then, a question by the hon. member for Yorkton with respect to Park Steamship company, dealing with an item of $23,380,058,
cargo vessels operated by Park Steamship Company Limited, and the actual expenditures from April 1 to August 31, 1945:
(a)	What vessels were delivered? The answer is 17.
(b)	The names and amounts of tonnage? The answer is as follows:
Name of Ship-Tonnage-Type	-Cost
Garden Park, 10,000, Canadian		$1,650,000
Simcoe Park, 10,000, Canadian		1,650,000
Albert Park, 10,000. Canadian		1,650,000
Lakeside Park 10,000, Canadian ...	1,65Q,0Q0
Evangeline Park, 4,700, Revised Gray 1,100,000 Mulgrave Park 4,700, Revised Gray 1,100,000
Rupert Park, 10,000, Canadian		1,650,000
Sutherland Park, 4,700, Dominion ..	1,150,000
Bell Park, 4,700, Dominion	 1,150,000
Highland Park, 10,000, Canadian ...	1,650,000
Argyle Park 4,700, Revised Gray ...	1,100,000
Rockland Park, 4,700, Revised Gray, 1,100,000
Lome Park, 4,700, Dominion	 1,150,000
Hamilton Park, 4,700, Revised Gray 1,100,000 Seven Oaks Park, 10,000, Canadian..	1,650,000
Gasperian Park, 10,000, Canadian ..	1,650,000
Cartier Park, 4,700, Revised Gray ..	1,100,000

The equipment for above is placed at $130,058, which brings a total price of $23,380,058, for a total of 122,300 tons.
The second question was a request for the formula for fixing the price for ship sales. The answer is that the sales formula has been worked out in conformity with the sales formula of the United States and the United Kingdom for similar classes of ships. The price is based on the estimated domestic cost as at January 1, 1941, less allowances for increased wartime building costs, obsolescence of types and depreciation at accelerated rates * occasioned by wartime service.
Ships of the "Liberty" class are being sold by the United States government at a net cost to United States purchasers of $5531,500. "Empire" vessels of the 10,500-ton "T" class are being sold by the United Kingdom government to British buyers at $551,S00. The 10,000-ton vessels of the "Canadian," "Victory", and "North Sands" types are being sold by the Canadian government to Canadian purchasers at $625,000, $600,000 and $575,000 respectively.
The hon. member for Dauphin asked this question: What fees have been paid to Park operators? The answer is that the total amounts paid to Park operators from the period April 1, 1942 to August 31, 1945 are as follows: Management and operating, $960,277; agency fees and commissions, $4,334,638.
The next was a question by the hon. member for Vancouver South, who asked the terms for the sale of ships. Therf following statement, which I shall ask to have placed on Hansard, sets out the prices of the various types of vessels and the terms of payment for Canadian operators who will operate the vessels under
22s6	COMMONS
Demobilization-Munitions and Supply
Canadian registry. Will it be satisfactory to the hon. member if this information is placed on Hansard ?


Mr. GREEN:: Yes.


Clarence Decatur Howe: It is as follows:
10,000-TON VESSELS
Type
(a)	"Canadian" ('Scotch Boilers-Oil
burners)	*	$625,000(b)	"Victory" (Water tube boilersoil burners)	
600,000(c)	"North Sands" (Scotch Boilerscoal burners)	
575,000Reduction $25,000 per vessel up to three Floor price-(a)	$575,000	(b)	$550,000(c)	$525,000
Depreciation 5 per cent ordinary and 3 per cent special (war) depreciation on asking price up to 2nd March, 1946; thereafter at 6 per cent.
>
4,700-ton vessels
(a)	Tween deck type	 $475,000
(b) Improved type	 450,000
, (c) Original type	 425,000
Reduction $15,000 per vessel up to three. Floor price, (a) $445,000; (b) $420,000 (c) $395,000.
Depreciation 5 per cent ordinary depreciation plus 3 per cent special (war) depreciation on asking price, up to March 2, 1946, 6 per cent thereafter.
Terms of payment:
-10 per cent on signing contract.
-15 per cent on delivery.
-Balancey-TS per cent in fifteen (15) equal annual instalments.
-Amount outstanding to bear 3J per cent interest.

Buyers to have option to pay balance at any time without prejudice or penalty.
Delivery will be made within thirty days of cessation of U.M.A. control which is presently indicated as March 2, 1946, or of the date commercial liberty is given Canadian flag vessels, whichever of the two dates comes first.
The next is a Question by the hon. member for Eglinton regarding wartime housing.


Mr. MACDONNELL (Muskoka-Ontario):: May I ask the minister to elucidate one point? I understood him to mention a commission of $43,000. If I understood him correctly, this was for the sale of a ship at a price of $430,000; is that correct? I understood the minister to give that figure of ten per cent, and if so it struck me as a generous, if not a most extravagant, commission.


Clarence Decatur Howe: I think there is an error in my statement, and I should like permission to check on it. It is mv understanding that the brokerage fee was seifen per cent, and that does not agree with the figure I have given.


James MacKerras Macdonnell: Well, that sounds better than ten per cent. I

hope it is only seven, although for such a large amount even that would seem to me an extravagant commission.


Clarence Decatur Howe: We look at the net price. If a broker offers a net price which conforms to our schedule for the sale of ships, we worry less about the brokerage than we do about the net price.


James MacKerras Macdonnell: How far would the minister carry that? Does he not care what the broker gets?


Clarence Decatur Howe: Oh, yes. We have had proposals put to us which involved brokerage fees that obviously were not legitimate, and in such cases we have refused to consider offers. Nevertheless, a seven per cent brokerage fee for the sale of ships is not extravagant, because the broker performs certain services that involve expenditures. Ordinary fees for ship brokerage run between five and seven per cent.


James MacKerras Macdonnell: Did the same broker sell all these ships?


Clarence Decatur Howe: The broker offered for ten ships.


James MacKerras Macdonnell: Did he get a commission of $430,000?


Clarence Decatur Howe: I will give the exact
particulars.


Major James William Coldwell: This was a deal between two governments^ Was it necessary to have a broker when the governments would have their own inspection services?


Clarence Decatur Howe: It was only after we had accepted the offer that we discovered it was an offer from a government. The brokers offered for an unknown party. That is the usual practice. When we found out we immediately took steps to advise the French government that in the future we would not deal through brokers; if they wished to offer they could deal direct and the transaction would be on that basis.


James MacKerras Macdonnell: Who was the broker?


Clarence Decatur Howe: The American Ship Brokerage Corporation of New York.


Mr. COCKERAM:: What service did the American Ship Brokerage Corporation give for that amount of commission?


Clarence Decatur Howe: I am told that there are services; otherwise I presume that brokers would not get a commission. I am told that this is the usual commission. I am sure my hon. friend does not know any more about it than I do.

_____________Demobilization-Munitions and Supply


Mr. FERGUSON:: Would the minister give us the personnel of the American Ship Brokerage Corporation?


Clarence Decatur Howe: I am sure I do not know them.


Julian Harcourt Ferguson: Would the minister
mind obtaining those names?


Clarence Decatur Howe: I certainly would not.


Julian Harcourt Ferguson: You will not get the names?


Clarence Decatur Howe: No.


Julian Harcourt Ferguson: What particular representative of that company did the minister's department deal with?


Clarence Decatur Howe: Personally I did not deal with any member of the firm; I had no connection with it. I understand a wired offer was received by War Assets Corporation, and, the price being satisfactory, it was accepted. Payment was to be in United States funds, which was of some advantage.


Julian Harcourt Ferguson: The minister is not answering my question. I want to know the name of the individual who dealt with the department. I did not ask whether the minister dealt with them; I asked who dealt with the department. That is the answer I want.


Clarence Decatur Howe: I have already said that I do not know.


Julian Harcourt Ferguson: I ask the minister to obtain the name from his department; that is the answer I want.


Clarence Decatur Howe: If my department has the name on file I shall be glad to obtain it. It is not customary to get information of that kind; in other words, it is not customary to furnish the names of directors unless we have some way of knowing them.


Julian Harcourt Ferguson: We have an investigation on at the present time regarding - Eldorado, made necessary because we did not know to whom they sold their commodities. Later on we may want to know to whom we sold our ships, and we shall have to appoint an investigator with unlimited powers to find out where our ships have gone and who got them.


James MacKerras Macdonnell: I understand the minister is going to give us the total commission. We regard $430,000 as a substantial sum of money. If that was the amount paid, or anything like it, I think we are entitled to know. While I agree that you often deal with an agent without knowing his principal, it does seem to me that the department was not very clever in not having any suspicion as to who the purchaser was and in committing itself to pay this large amount of money for what I should think was not very great service.


Mr. HATFIELD:: Is it the intention of the government to sell all these ships or to put some of them in the South American and Centra] American service?


Clarence Decatur Howe: We hope to do both; we hope to sell them to operators who will operate them in the South American service.


Heber Harold Hatfield: I understand the United States government have built a number of ships which they have turned over to steamship operators for special services in order that their goods may be carried to the South American and Central American markets. Is it the intention of this government to do that?


Clarence Decatur Howe: We should be pleased to turn them over to an operator who would operate them in the South American service, but I do not know whe'ther we are prepared to subsidize anyone to do that.


William Ross Macdonald: The committee was considering housing development when it rose last night.


Some hon. MEMBERS:: No.


Clarence Decatur Howe: I think it was agreed last night that if the answers I gave called for discussion, the discussion could be held at this time.


William Ross Macdonald: I understood the discussion had been completed.


Major James William Coldwell: We are really not discussing any single item; we are discussing the appropriation as a whole. Hon. members have the right under this resolution to discuss anything at any time that might come under the total expenditures.


William Ross Macdonald: I would point out that it was agreed when the estimates of the Department of Munitions and Supply were first presented to the committee that there would be a general discussion. That general discussion was completed at an early hour last evening and the committee passed the following items: The last item, departmental administration; the first item, additions and extensions to plants, and the second item, cargo vessels operated by Park Steamship Company Limited. When the committee rose last night we were on housing development, but as the minister has pointed out, there was an agreement that further questions could be asked on the answers which he would give to-day.
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Demobilization-Munitions and Supply


Major James William Coldwell: With all due respect I think we agreed to allow these items that we have discussed to stand. No item has been passed.


Mr. MACKENZIE:: Oh, yes, three items.


Mr. COLD  WELL@: Not actually passed.


Ian Alistair Mackenzie: Yes.


Mr. COLD  WELL@: I understood they were to stand.


Ian Alistair Mackenzie: If my hon. friend will look up Hansard of last evening and note the remarks of his colleague, the hon. member for Vancouver East (Mr. Maclnnis), he will see what happened.


Major James William Coldwell: I will.


William Ross Macdonald: I think we are in agreement to this extent; if there are any questions to be asked with respect to the answers the minister made to-day, they are in order.


James MacKerras Macdonnell: Coming back, perhaps rather tiresomely, to this 8430,000, I want to know. if that commission was paid to the same people who received a large amount for managing these steamships. My recollection is that one name is the same, but I just want to make sure. The figure given by the minister would indicate a commission of ten per cent; the minister says he thinks that is wrong, that it should be only seven per cent. Until a correction is made, I think the figure of ten per cent holds the field. I want to be on record as saying that that seems to me to be a particularly large amount to pay to people who were already receiving management fees. On the face of it, it appears to be an extravagant amount.


Clarence Decatur Howe: It was not paid to those who had received management fees; it was paid to a brokerage firm, which I understand is the largest firm on the continent. The amount was seven per cent. I am not sure who prepared the memorandum I have, but I am sure that the amount is wrong. I made it clear that we objected to paying any commission over five per cent, and we refused to pay any commission over seven per cent. I am told that it is customary in the trade for a broker to offer for a ship with the commission reserved; in fact I think most ship sales are made in that way.


Mr. ADAMSON:: Was it the same broker in each case?


Clarence Decatur Howe: No. There were ten French ships and one Scandinavian ship offered through the same broker.
(The Chairman.]


Mr. JACKMAN:: What foreign countries had on order ships to be built in Canada at the time the ships in question were being sold?


Clarence Decatur Howe: I think the only order was one from Brazil.	.


Harry Rutherford Jackman: The French order did not come through?


Clarence Decatur Howe: The French had called for tenders, but the order had mot been placed.


James MacKerras Macdonnell: I should like to know more about this contract. The minister told us that he thought five per cent was high enough, that that is the usual figure. But I am still not satisfied, and I hope we are to ge.t further figures which will give the matter a much better complexion than, it bears at the present time. I have some understanding of the difficulties of selling and of the commissions which should be paid, but everything the minister says makes me feel more and more that this was loosely and carelessly done.


Clarence Decatur Howe: There was nothing loose about the net price paid to the dominion government, which after all is the essential point.


James MacKerras Macdonnell: I find that very difficult to understand. I would want to get the highest price I could get for the Canadian people, and I would not be satisfied to get just * a certain price which might be in my own mind if I thought the brokers were getting 'a little more than they should get. That reasoning does not go down with me at all.


Clarence Decatur Howe: Perhaps we will let my hon, friend sell the other 315 ships.


James MacKerras Macdonnell: We may have a chance later.


Mr. ZAPLITNY:: The minister gave a
figure of $4,350,000 for agency and commission fees. Will he give us a break-down of that figure?


Clarence Decatur Howe: I am afraid I cannot do that, because it would: be necessary to take every voyage and give the port charges on every voyage. These are out-of-pocket expenses paid to ships' agents in foreign ports and for stevedoring in foreign ports. The first figure I gave represented the total commissions paid to the operators for voyages, and the second figure represented the out-of-pocket expenses of these agencies for services abroad.


Julian Harcourt Ferguson: Who set the price at
which the Fairmile boats were sold, and why were these Fairmiles sold for $3,000? Upon

Demobilization-Munitions and Supply
making inquiries of War Assets I was informed that the boats were sold without any tenders or request for tenders, and that the price was $3,000. I then wrote and1 asked if the boats could be purchased for that price and was informed that the boats had been sold. Who determined the price of $3,000 for these Fairmiles and decided to sell them without calling for tenders? How was the figure of $3,000 arrived at? Why were tenders not called for?


Clarence Decatur Howe: That is really a matter for
the Minister of Reconstruction, but if the hon. member wants an answer now I will attempt- to give it to him.
This is a memorandum I have received from War Assets Corporation with regard to the sale of Fairmiles:
A total of sixty-three Fairmiles were declared surplus on the east coast and thirteen on -the west coast. Of the east coast declarations, four were turned over by the navy to .the R.C.M.P.; one was a wreck .and was sold on sight for $470. Three were made available to the .province of Quebec on indefinite loan for educational purposes and were delivered by the navy to Rimousbi.
The balance of fifty-five on the east coast were delivered by the navy to 'Sorel. One of these was made available to the Boy .Scouts on indefinite loan and one to the Sea 'Cadets.
Of the remaining fifty-three, one suffered substantial damage while at Sorel and was sold for $1,500, and the balance for $3,000.	.
Terms of sale provided that if they were resold by the buyer, the corporation would receive additional payments of $4,900 to the end of 1946; $3,850 to the end of 1947; $2,800 to the end of 1948; $1,750 to the end of 1949; $700 to the end of 1950.
Buyers of five 'boats have already fulfilled this undertaking and have paid the additional amount of $4,900 on each ship.
Delivery of these vessels by the navy to War Assets 'Corporation was begun in June. No sales were made until middle September. They were advertised for sale along with other naval ships in the principal papers across Canada from August 21 to middle September. Efforts had been made in the interval between June and September to sell these ships and among other outlets sought were the 'Canadian 'Shipyards who had built these vessels, represented by their Fairmile Association. It was the view of these experts -that
"While over a period there might be a limited market for this type of vessel to be converted into a diesel type pleasure boat . . . with -the difficulties of obtaining diesels without priority, the high cost of conversion and of diesel engines at the present time, it was not considered possible for there to be any interested purchasers this year."
The association were also unable to accept our invitation that they take these boats in on consignment. They expressed the opinion that we would be very fortunate "to secure a few buyers at $5,000 per vessel in so far as the market is concerned."
These vessels are particularly subject to injury from ice and are also subject to heavy depreciation above the water line from idleness. The nature of their wood construction, according to advice given to us would require for their preservation that they be taken out on land on a marine railway and stored in cradles covered over with watertight housing. Dealing with a boat 105 feet long in this way is an expensive undertaking. We were faced with the prospect of making capital expenditures for facilities and for labour that might easily have exceeded the gross proceeds from the sales of the vessels, unless we succeeded in. developing a substantial market which, up to .the time of the first sales .in September, we had no prospect of doing.
Apart from their hull construction, it should be understood that these boats are entirely single purpose in design: the living accommodation on them is incapable of being converted to the comforts of a normal yacht without a great expense. The two engines, whether Hall-Scott or Stirling, consume high octane gasoline at a rate to make their economical use for commercial or for ordinary pleasure purposes out of the question. I have been told that their consumption is around thirty-five gallons an hour for ordinary cruising speed and as high as eighty-five gallons an hour at full speed.
This completes the story of the eastern ships except that, while the selling in the east was going on, fifteen ships were sold to an eastern shipyard and taken delivery of by them and .put under care. They expressed their willing-nes to turn back any ships which are wanted and it was decided on Saturday that we might ask them to give back six. They have already given back one, and buyers will be required to pay $3,900 plus the cost of removal from the mooring grounds at Sorel plus the cost of winterizing. The assumption is in the present weather, such buyers could not take delivery until the spring.
On the west coast, these Fairmiles may have had a greater usefulness than was indicated for the east. We only had thirteen there and these ships were delivered to War Assets Corporation after the advertising period. Also the advertising referred to ships at Sorel and the Fairmiles *in the west were never specifically advertised.
Summarizing it will be seen that the corporation was faced with the problem of either disposing of the vessels prior to the closing of navigation and the icing up of the St. Lawrence river, or alternatively facing the cost of taking the ships out of the water and preserving them at a cost which would have been out of all proportion to the scrap value or, at that time, the estimated sales value of the boats, or leaving the boats in the water and carrying minor winterizing operations into effect, taking the chance that the boats would still be afloat at the time the ice disappeared. The price of $3,000 was therefore, and for the foregoing reasons, .affixed to these boats; and as the policy established by the corporation is a one-price policy, the price of $3,000 applied to all boats in whatever location. Indications are that quite a number of these boats now having passed into the hands of private owners will be put into Canadian shipyards during the winter months for work and in some cases conversion, thus providing employment to follow on the cessation of war contracts.
Mr. COCKE,RAM:	Were these ships sold
to the wreckers, or whatever they are called, with technical equipment and navigational equipment, for 83,000? What happened to all the navigational and technical equipment?
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Munitions and Supply


Clarence Decatur Howe: All equipment was taken off
by the navy before they were delivered to the Sorel yards as surplus. Even the compass was taken off. The boats were stripped of everything usable.


Mr. FRASER:: I have a return in which it is stated that the ships were sold with ordinary running gear except secret equipment or articles still required for the purpose of the Department of National Defence (Navy). It is stated that guns are either removed or rendered useless. Do I understand that the guns are in many instances left on?


Clarence Decatur Howe: Is not my hon. friend talking about corvettes?


Gordon Knapman Fraser: This is in regard to Fairmiles and corvettes.


Clarence Decatur Howe: But these are neither Fairmiles nor corvettes.


Gordon Knapman Fraser: Yes, they are.


Clarence Decatur Howe: My hon. friend is talking
about corvettes when he talks about guns. In these cases all gear was stripped1 off and they were sold as hulls with engines.


Gordon Knapman Fraser: The question I asked had
reference to Fairmiles and corvettes. The question was: Are these ships sold in running condition? That had reference to corvettes and Fairmiles sold by War Assets Corporation. The next question I asked was: Is sale by auction, tender or fixed price? The answer was that a set price is fixed by War Assets Corporation and that the ships are sold with ordinary running gear except secret equipment or articles still required for the purpose of the Department of National Defence (Navy). Further it is stated that the guns are either removed or rendered useless. I asked this question: Are these ships stripped of everything except running gear? The reply was that this was answered by No. 2 and that No. 4 was answered by No. 2.


Clarence Decatur Howe: My hon. friend notices that
it says everything is taken off that is usable.


Gordon Knapman Fraser: Except running gear, and
that includes compass.


Clarence Decatur Howe: No.


Gordon Knapman Fraser: Oh, yes; it certainly would. I understand that in practically all cases the compass is left on.


Clarence Decatur Howe: I can assure my hon. friend
that the compasses were taken off the Fairmiles.


Gordon Knapman Fraser: Then why did not the
answer so indicate?


Clarence Decatur Howe: I cannot say.


Gordon Knapman Fraser: That is the trouble in the
House of Commons. We get a return tabled and it is not complete.


An hon. MEMBER:: What department?


Gordon Knapman Fraser: This is the Department of Reconstruction.	,


Clarence Decatur Howe: That is the trouble; we are talking about munitions and supply now.


Mr. BROOKS:: I understood the minister to say that one reason why these Fairmiles were sold at the present time was that otherwise they would have to be kept at Sorel through the winter and it would be very difficult to keep them during that period. Were there no other ports on the Atlantic coast where they might have been kept through the winter with a view to obtaining a better price next year or at some other time? Was it necessary to keep them at Sorel?


Clarence Decatur Howe: They were advertised in every newspaper in Canada for over a month, and we received no offers at all. It was not encouraging therefore to keep them. How long should we have kept them? Would they become more valuable by age?


Alfred Johnson Brooks: My question was whether it was necessary to keep them at Sorel. Could they not have been kept at some other port? I understood the minister to say that they had to be sold in a hurry.


Clarence Decatur Howe: The department accepts these ships wherever the navy delivers them.


Gordon Knapman Fraser: The minister said they were advertised in every newspaper in Canada.


Clarence Decatur Howe: All the principal newspapers.


Gordon Knapman Fraser: I do not agree with the minister on that.


Clarence Decatur Howe: I shall be glad to table copies of the advertisement.


Julian Harcourt Ferguson: One would gather from the minister's remarks that there was no interest on the part of the shipyards in the purchasing of these boats. Nevertheless by the middle of September they were all sold. There are very few products sold in Canada in respect to the sale of which the same interest is displayed.


Clarence Decatur Howe: They were not sold in that period.


Julian Harcourt Ferguson: I am taking the minister's figures. Perhaps I misunderstood him, but that is what I understood him to say.

Demobilization-Munitions and Supply
Would these ships have been so badly damaged by being kept in the water for the winter? Were Fairmiles taken out of the water every winter during the war for the purpose of preserving them, or were they kept in the water? To listen to the minister one would think they had to be taken out of the water and put on the land. I am sure they were not winterized every year.


Howard Charles Green: The minister did not _say very much about Fairmiles on the Pacific coast, but I think the greater mistake was made in connection with the boats there. Apparently this advertisement stated that the Fairmiles were all at Sorel, Quebec. There was no mention in the advertisement in Vancouver that there were Fairmiles on the Pacific coast, so that the advertisement there was useless, and the sale of those on the Pacific coast was made direct from Ottawa,
I am informed. Is that correct?


Clarence Decatur Howe: No.


Howard Charles Green: The press reports state that the Vancouver office-


Clarence Decatur Howe: It was confirmed at head office of War Assets Corporation in Montreal. The recommendation was telephoned through from Vancouver.


Howard Charles Green: The recommendation was telephoned from the War Assets office in Vancouver?


Clarence Decatur Howe: Yes.


Howard Charles Green: Were any competitive bids called.


Clarence Decatur Howe: I will agree with my hon. friend that the western part of the transaction was not as well handled as the eastern. I have no criticism of the eastern part. I do not see how anything else could have been done. As I said in my statement, the Fair-miles on the west coast were delivered there after the advertisement had been in the press. It was felt that it would be difficult' to put a price of $3,000 on Fairmiles sold in the St. Lawrence and a higher price on Fair-miles sold on the west coast. Whether that was good judgment I do not know.


An hon. MEMBER:: Why?


Clarence Decatur Howe: If my hon. friend will keep quiet I will make my statement. These interruptions hardly elevate the debate. I say that perhaps they could have been treated as a separate problem. The Fairmile is more useful on the west coast than on the east and if we were doing it again we would have treated them as separate ships and advertised separately. I am told that a telephone message came through from the west coast asking
if Fairmiles could be sold on that coast at the same price as on the east coast, and the answer was given, yes, whether rightly or wrongly. Too many were sold in one transaction and then the bids advanced. I think my hon. friend will agree that in selling 75 Fairmiles, if 65 are sold at a uniform price there will be some resentment if the price is raised at a later stage.


Howard Charles Green: Is the minister sure that a telephone call was made from War Assets Corporation in Vancouver and not from some individual who was going to acquire Fair-miles?


Clarence Decatur Howe: No. I am told that it came from the office of the western director of War Assets Corporation.


Howard Charles Green: Apparently one buyer got
seven boats, although there were more people wanting boats than there were boats available for sale.


Clarence Decatur Howe: Only at the end of the sale.


Howard Charles Green: And prices were running up to $15,000 and $20,000.


Clarence Decatur Howe: Yes, I know. Suppose we
had sold one at $15,000 or $20,000 after we had sold sixty-five or seventy at $3,000.


Mr. ROWE:: You would have made one
good deal, anyway.


Howard Charles Green: Are there Fairmiles still
to be sold?


Clarence Decatur Howe: We have no more, no.


Howard Charles Green: What steps have been taken to prevent something of that kind happening again? The. problems of each coast are different, as the minister knows. Have steps been taken to make certain that in the future, surplus assets on the Pacific coast will be advertised on that coast and dealt with in a different way from the assets on the Atlantic?


Clarence Decatur Howe: Yes. We learn from experr
ience, and that experience has changed our procedure. Assets arising on the Pacific coast are being advertised there first, and later back in the interior.


Howard Charles Green: Have the sales of those
boats actually gone through?


Clarence Decatur Howe: Yes.


Howard Charles Green: Can they not be. distributed among the others?


Clarence Decatur Howe: They were sold and paid
for.


Mr. PROBE:: In answer to some questions which were asked yesterday, I understood the
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minister to say that certain Fairmiles were sold to educational authorities. Is that correct?


Clarence Decatur Howe: No. Some of them were
lent, on indefinite loan.


John Oliver Probe: To whom were they lent?


Clarence Decatur Howe: I am sorry; I gave my
manuscript to the Hansard reporter. The hon. member will be able to read it in Hansard.


John Oliver Probe: Will the minister put it on
record so that we shall know what educational authorities have had them?


An hon. MEMBER:: It is on the record.


John Oliver Probe: I did not hear it. I asked
a question yesterday, which the minister said he was unable to answer, with regard to the present value of the 154 vessels held at the present time by Park Steamship Company Limited.


Clarence Decatur Howe: The present-day value is a
matter of opinion, of course.' If my hon. friend had asked for the cost I could have given him that, but he asked for the present-day value.


John Oliver Probe: The reason I asked the
question was that an evaluation of 1111,000,000 and some odd had been put on the holdings of the Park Steamship company as of March 31, 1944. It seems to me that the minister should have, some comparative figures of the present book value or the market value, or the value of the steamships held at the present time.
Mr. HOWE; I think the: figure mentioned by my hon. friend was the cost value. I can give him that later; it is not before me at the moment. When he asked for present-day value we thought he meant, what do we consider that fleet worth at the present time.


John Oliver Probe: I asked the specific question
so that I could get the present figure and relate it to cost. I wank to know the book value or the evaluation of the present holdings.


Clarence Decatur Howe: I shall try to get that.


James MacKerras Macdonnell: I am coming back to this question of commission, because the more I think about it the more it interests me. It is difficult to follow these tens and hundreds of millions of dollars which the department talks about so glibly, and which have been spent, but wThen one notices an item of this kind he can understand it a little better. There are two or three things I want to be clear about. First of all,

I want to be sure that this item is left open until we get more information about it. As I understood it, the minister says that the figure given here is wrong, and that we are to be given the right figure. We are to hear something more about commissions. The minister said he thought five per cent was large enough, but in this case he was prepared to go to seven. He still thinks that the ten per cent which his figures show is wrong, and he is going to make sure of that.
The other matter I wish to bring up is this. I want to be very clear as to what the minister said about the fact that in this case the vendor did not know who the purchaser was. The hon. member for Rosetown-Biggar raised a pertinent question when he said that here were two governments dealing in the matter. I understood the minister to say not that he was satisfied, but that he did not know who the purchaser was. It often happens that you do not know who the purchaser is and therefore the agent is entitled to his commission. Will the minister tell us whether of his own knowledge' he can say that the purchaser in this case was not known? My second question is just as important. Does the minister not think that if the purchaser was not known, he should have been known; and having regard to the relations which existed between the governments and the whole background of the situation, was it not perfectly possible for this fact to be known? If it was known, the commission should not have been paid. If it was not known, did it reflect very little credit on the War Assets Corporation? I am asking these questions because this is one of the few occasions-and after all there are very few-on which we can really get a picture of the efficiency or inefficiency of this organization. I am well aware of the fact that the government have been in the habit of spending large sums of money and that they have not had much time to check; but $430,000 is a lot of money. I want it to be understood that this item will be left open until we get the facts and really know what we are talking about.


Clarence Decatur Howe: I should like to point out to my hon. friend that we were dealing with assets abroad. These ships were not in Canada; they were in the United Kingdom. They had been on loan to the British government; they were being returned to us. The question was, would we bring them back to Canada. We had no particular use for them here. Our present fleet of 4,700-ton boats was more than we could keep employed. We got this offer from a broker.


James MacKerras Macdonnell: In New York.	[DOT]

Demobilization-Munitions and Supply


Clarence Decatur Howe: Yes, a broker in New York. The offer was_made in United States funds. We have credit arrangements with France. The committee might say that P'rance could have come to us and offered to buy those boats and asked us to sell them on credit, which we would have considered. However, they did not do that. We had no way of suspecting that the French government was involved. It was simply an offer from a broker. The offer seemed satisfactory. We were anxious to sell the boats where they were, rather than bring them back to Canada. We accepted the offer, which I am told by shipping men was a perfectly legitimate offer.
My hon. friend has raised the question whether a proper ship broker's commission is seven per cent. I shall be glad1 to get some evidence on that point. I think he will agree that if it is the proper percentage, we were right in paying it. It boils down to that. I shall endeavour to make inquiries and give my hon. friend opinions on that point.


Mr. MacNICOL:: The Indian Affairs branch of the Department of Mines and Resources from time to time have an item in the estimates asking for so much money for the purchase of boats for the Indian agents. Did the Indian Affairs branch know that these boats were to be sold, or whether they would be satisfactory for their agents? If so, was any action taken to see whether or not the Indian Affairs branch could use them? I remember on one occasion we paid as much as $9,000 for repairs on one small boat for the Indian Affairs branch. If these boats have been sold for $3,000 apiece, it would have been better to buy three for the agents than pay $9,000 for repairs.


Clarence Decatur Howe: I am sure that that situation is protected, because all these assets have to be cleared through the war assets allocation committee. Deputy ministers of the departments are members of that committee, and they would have the information.


William Earl Rowe: What harm would have been done if the last of those boats had been sold for more than was received for the first lot? I cannot follow the minister's line of reasoning when he says that because he had evidence that some of them were sold cheaply, he could not get three times as much money for those that were left.


Clarence Decatur Howe: No particular harm would have been done, but we try to operate this on a one-price basis. When we sell automobiles, we try to sell them in all parts of Canada at the same price, with the usual differentials that are followed by the dealers. Ordinarily if -we are selling a corporation
surplus assets wie fix a price for each unit and sell all at that price. I am not suggesting that the sale of those western Fairmiles was well done. I think it could have been done better.


Howard Charles Green: It was pretty badly done, actually.


Clarence Decatur Howe: Perhaps so, but my hon. friend will find that as regards selling this kind of merchandise for which no peace-time use is known or can be predicted, retrospect is a lot better than the decision at the moment.


Howard Charles Green: Well, it was not quite that simple. The seven boats were bought by one man for the tourist trade, and several business executives who got most of the remaining boats were simply told, apparently by War Assets Corporation, to submit a cheque for $3,000 and they would get the boats. I understand that there was loose equipment on the boats-blankets, telephones and so on-worth over $3,000 on the market at the time. Why did War Assets Corporation not follow their regular course of having these boats offered to the dealers? Apparently no offer was made to men in the business of handling boats; they were completely ignored, and these sales were put through from Ottawa. Is it not the practice that War Assets Corporation shall sell through dealers in each line?


Clarence Decatur Howe: Mr. Chairman, I read the
extract from the report of the dealers, the Fairmile association, the manufacturers of the boats, who we thought were the dealers: they would not even handle them on consignment. Perhaps I can get a statement from my hon. friend which may be very helpful : has he no objection to- selling articles at one price on the east Coast and at a much higher price on the west coast?


Howard Charles Green: If the government gives them away on the east coast, I suppose it might as well give them away on the west coast. But actually this is a very bad deal, and I think it should be investigated further by the department; in fact I am not sure that it does not warrant some independent investigation. A deal of this kind shakes-


Clarence Decatur Howe: May I point out that a committee has been set up with no other purpose than to investigate these deals? If my hon. friend will make a charge, it can be investigated before the public accounts committee, or if not, it can go before the war expenditures committee.
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Howard Charles Green: That is a pretty good way to dodge out of a responsibility.


Clarence Decatur Howe: Mr. Chairman, just a minute-


Howard Charles Green: Always we get this story: If you will go and make a charge and put your seat in jeopardy, maybe something will be done about it.


Clarence Decatur Howe: The war expenditures committee meets every day. I have attended the meeting to-day; and the war expenditures committee can investigate it at any moment they like.


Howard Charles Green: Here is a case where the minister admits that the deal was a bad deal, and everybody knows that. He talks about putting it through the boat dealers. Well, a boat dealer could have bought a boat at $3,000, paid the penalties provided for a resale-which I believe is an unusual term in disposing of these assets-and still make a profit, because here is the way it figures out-


Clarence Decatur Howe: He knows that now, of
course, but may I point out that they refused to handle them even on consignment.


Howard Charles Green: I do not think the minister will contend that the boat dealers on the Pacific coast were told or knew anything about this deal.


Clarence Decatur Howe: I assume that they were all members of the Fairmile association.


Howard Charles Green: Will the minister say they were told before the sale that these boats were for sale, or the terms of the sale?


Clarence Decatur Howe: Yes.


Howard Charles Green: Because that is not my information. I believe they were completely surprised; that the sales were made behind their backs.


Mr. CARDIFF:: Does the government or the appropriate authority make any attempt to get a valuation before surplus war assets of this kind are offered for sale?


Clarence Decatur Howe: We obtain the best valuation we can get from the most expert people we can find. In this case we took the valuation of the men who built the boats, their opinion of sales price. We also took other advice. There was no interest taken in the boats. They were offered for five months and they were all sold the last month before the close of navigation.


Mr. CASE:: Was the $3,000 net? Was
any brokerage or commission paid in connection with the Fairmiles?


Clarence Decatur Howe: 
Wilfrid Garfield Case: Did the advertisement say
anything about the price, or just advertise for sale?


Clarence Decatur Howe: It just advertised for sale.


Alan Cockeram: Last night, in reply to a question of mine, the minister was good enough to give me a list of the operators of the steamship companies. Subsequently I asked a question as to the commission that had been paid, and the minister, in his usual evasive manner, told me he could not answer that question. Now in this list of operators I see the name of H. E. Kane and Company Limited, who, I am told, have never operated ships but are purely shipping brokers. What commission has been paid to that firm over a period of years, and what was the justification of putting in charge of ships people who have never been in the shipping business?


Mr. HOW E:: I shall be glad to give the
committee the information as to the amounts of commission. I have known the firm of H. E. Kane and Company for some time, and I thought they had never done anything but shipping business.


Alan Cockeram: Shipping brokers, not
the shipping business. They are like those people to whom you sold the ships.


Percy Chapman Black: I should like
some information from the minister in regard to the equipment on these Fairmiles. There is some confusion in this matter, and it applies not only to this class of ships but to others. I understoqd from the hon. member for Vancouver South that these Fairmiles were sold on the Pacific cdast with the equipment intact, while on the eastern coast they were sold with equipment stripped. The rumour is current, and I think it is only fair to the department that it be cleared up, that this equipment, including clocks, compasses, rope, paint, oil, engine room gear, range appliances, grinders, chart room gear, galley pots, pans and dishes, wardrobe fixtures, linen, silver, ' mattresses and blankets, was removed from these ships while tied up in storage at Sorel, without proper authority, and held for the department-taken off by private indivisuals.
I am not making that charge, but this report is current, and I think it is proper that the minister tell us what became of the equipment taken off those ships, whether it went to the credit of the department, or the naval services, or whether it went into private hands. If it did go into private hands, what payments were made to the department in settlement for the equipment taken off these ships.

Demobilization-Munitions and Supply


Clarence Decatur Howe: All I can say is that the
navy removed what they considered of value. That was the understanding on which the ships were turned over. My hon. friend suggests theft. I do not know personally whether anything was stolen or not; I have no reason to believe that it was, but if the committee on war expenditures care to take this up I shall be glad to produce the caretaker of the ships, and I am sure the naval officers will come along and should be examined. I think we can hardly go into matters of this kind in committee of the whole.


Alan Cockeram: The pilfering is not
while it is on the ships in charge of the naval department; it is after they are stripped.


Clarence Decatur Howe: Perhaps so; I do not know.


Mr. PEARKES:: 
Clarence Decatur Howe: 
Julian Harcourt Ferguson: Yesterday the minister said that in order to expedite construction at Chalk River, German prisoners of war had been employed. What wages are they receiving? How recently were they employed, and was any effort made to try to obtain men who were receiving unemployment insurance? Were attempts made to obtain the services of these men rather than those of German prisoners of war?


Clarence Decatur Howe: What is the hon. member talking about?	*


Julian Harcourt Ferguson: 
Clarence Decatur Howe: I should like to correct the hon. member on one point. No expenditure was made by my department during the war for the purpose of employing people. Expenditures were made for the purpose of producing munitions badly needed for the war effort. Let us get that straight. German prisoners are employed only when it is impossible to get Canadians for the work. They were employed no longer ago than last Sunday at Chalk River-because I saw them there. The reason was that we were not able to get other workmen. I believe the wage received by prisoners is' fifty cents a day.


Julian Harcourt Ferguson: 1 will send men from Collingwood who are on unemployment relief, and thus burdening the taxpayers; they can be sent down to do any work the minister may have for them at Chalk River. They can come on Sunday, Monday, Tuesday, Wednesday, Thursday, Friday or Saturday.


Clarence Decatur Howe: Send me three hundred of them.


Julian Harcourt Ferguson: Apparently the minister wants them. I shall be glad to get ,300 men to /do the work these prisoners of war are doing at Chalk River, and they will do it at reasonable and sane wages.


John George Diefenbaker: The minister has made his explanation respecting the sale of Fairmiles, and also in connection with cargo ships. In a manner somewhat unusual for him, in so far as the Fairmiles case is concerned has admitted that the transaction was an improvident one, and one which he could not justify before the committee.


Clarence Decatur Howe: Just a minute, now; let me say what I said. Do not try to interpret.


John George Diefenbaker: And speaking of interpretation:	The minister gave a fine
demonstration this afternoon of his ability in interpretation when in answer to the hon.

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member for Peterborough West he said, when it was pointed out to him that an answer he gave to-day as Minister of Munitions and Supply was different from his answer on November 15 as Minister of Reconstruction, that the reason for the difference in the answer was that it had been given by a different department. Surely that was the most unusual answer ever given in parliament by any minister, whether occupying a dual portfolio or not. In other words the minister has said that what the Minister of Reconstruction knows in his private or public capacity is kept from the Minister of Munitions and Supply. In view of the fact that he cannot in any way justify what was done in connection with the sale of these Fairmiles. is he now prepared to give an assurance to parliament-and after all, he is responsible to parliament-that in the future sales made by War Assets Corporation, and particularly sales of marine equipment, will be made only after public tenders are called for? I think we have a right to ask that.


Clarence Decatur Howe: These ships were advertised for sale.


John George Diefenbaker: Oh, yes; they were advertised; .and then when offers were received of sums larger than the amounts for which the first ships were sold, the higher offers were not accepted. No minister can justify that. The specious attempt made to justify it on the ground that there would be difficulty if the sales were not kept on a common level was certainly not an explanation which should appeal to the minister as a business man.
Will he now give the assurance that War Assets Corporation will not make disposals except by public tender? The greatest criticism being made to-day on every hand throughout the dominion has to do with the discriminatory way in which War Assets Corporation is disposing of the assets of this country.
A year ago the opposition cooperated with the Department of Munitions and Supply and made the suggestion that the Baruch system being used in the United States, namely the gold-fish bowl plan, should be adopted in this country, so that everyone would have an equal chance in connection with the purchase of war assets, and so that no one would find himself in a preferred position. From the complaints I have received I can state with some knowledge of the subject that War Assets Corporation has proceeded with the disposal of assets of this country with a cavalier disregard for the rights of our citizens. Instance upon instance is coming

to light in connection with sales and disposals being made without regard to the rights of all, and denying equality of opportunity which should be guaranteed in respect of the purchase of the articles it offers for sale. The Fairmile sales have been pointed out. They reveal ineptitude and inefficiency, if not worse. It. is not an out of the way example; it is not isolated. Surely the minister is now prepared to give an assurance that in respect to sales that will be made after this date, everything is to be done to ensure that the disposal is made at the highest possible prices and without any discrimination in favour of any person or group.
The hon. member for Muskoka-Ontario has dealt with the commission on the sale of ships to the French government. The minister said that that commission was paid to an American brokerage company. He was asked who was the intermediary, who was the middleman, who was the individual who approached War Assets Corporation with respect to the offer of the French government. He answered that he did not have that information. That answer I accept, but War Assets Corporation has t'he answer. The minister is in charge of that corporation, and we ask Mm to secure that information and not to permit that corporation to refuse to place before parliament the answers to proper questions asked by members of the house. We have a right to know who was that individual; what was his offer; whether the offer was in writing; who was the offer delivered to. The minister suggests that no careful investigation was made into the circumstances of the sale because the ships were overseas. What difference did that make? That is not an explanation; the answer is simply an alibi. Let the minister lay on the table of the house the correspondence, and all the correspondence, between the American brokerage corporation and War Assets Corporation, and all the correspondence between its intermediary, if there was any, and War Assets Corporation.
Let us get down to the bottom of this, no matter how ready the minister is to stand in his place and endeavour to justify the payment of a commission of $450,000, and regardless of the fact that he stood up yesterday and in answer to the hon. member for Muskoka-Ontario said that you might save a million dollars, but what is a million dollars. That is not the attitude that the people expect of the parliament of this country at this time. A million dollars represents a lot of income tax. While the minister may smile and ridicule the saving of a,million dollars, the people of this country have asked us on this side of the

Demobilization-Munitions and Supply
house to assure them that as many millions as possible will foe saved. The minister says, "We may save a million dollars, but what of it?"
Mr. MoILRAITH: He did not say anything of the sort.


Clarence Decatur Howe: My hon. friend is a past master of distortion. If he will find for me that statement in Hansard-[DOT]


James MacKerras Macdonnell: I think the minister should retract that statement.


John George Diefenbaker: I have listened to the minister display his bad manners on many occasions, and I have let them pass by. Recently I read that much was made of his bad manners in the Lambton golf club, but apparently they had never seem him operating in parliament. I have never asked for a retraction in this parliament at any time, but I . demand the retraction of that statement, improper and unjustified as it is.


An hon. MEMBER:: There is nothing to retraGt.


Clarence Decatur Howe: I made a statement of fact. My hon. friend quoted me and I defy him to show me the quotation.


John George Diefenbaker: Mr. Chairman, I am asking for your order and direction in this regard.


William Ross Macdonald: I understand that the minister stated that the hon. member for Lake Centre had misquoted him.


Some hon. MEMBERS:: No.


William Ross Macdonald: That that is what he meant by the statement of distortion; that he had been misquoted and that a wrong interpretation had been given to his statement. I think the minister might explain whether I am correct or not.


John George Diefenbaker: Your ruling is that a statement made by a minister in this house about an hon. member that he is a master of distortion is not unparliamentary? Is that your ruling?


Lionel Chevrier: You cannot argue with the Deputy Speaker about his ruling.


William Ross Macdonald: I have not given my ruling. I have stated what I understood the minister had1 said, that the hon. member for Lake Centre had misquoted what he had said and that that was a distortion.


Some hon. MEMBERS:: No.
47696-145J


William Ross Macdonald: That is my understanding of what took place. Probably the minister can state exactly what was said by him and what he meant by his statement.


Howard Charles Green: I do not think the minister will deny that he said that the hon. member for Lake Centre was either a master or past master of distortion.


Clarence Decatur Howe: I think I said master.


Howard Charles Green: I have no doubt that he said that in the heat of discussion, but surely a statement of that kind cannot 'be allowed to stand in this house without being withdrawn.


William Earl Rowe: The minister-


An hon. MEMBER:: Oh, oh.


William Earl Rowe: My hon. friend laughs, but if I called him a common liar in this house I would be called fo order.


An hon. MEMBER:: Certainly.	.


William Earl Rowe: The minister said, and every h'on. member except you, Mr. Chairman, must have heard him, that the hon. member for Lake Centre was a past master of distortion. If there ever was a clear-cut case of a neat way of calling an hon. member a liar and getting away with it, that would be it.


Clarence Decatur Howe: Let me tell him what he said. He attempted to-quote me, that I had said we could save a million dollars.


William Earl Rowe: What did you say?


Some hon. MEMBERS:: Order.


William Ross Macdonald: I suggest that the
minister might explain what he said, and I think he should be given that opportunity.


John George Diefenbaker: If you have made your ruling, I wish to appeal from it.


William Ross Macdonald: I have not given my ruling.


John George Diefenbaker: I am asking for a ruling. Surely we have some rights on this side of the house.


William Ross Macdonald: Members of the committee on both sides of the house have equal rights. It is also my duty to direct the committee in their deliberations. The rule is that where a statement is objected to, the Chairman will give a ruling, but before the ruling is given the members concerned may be allowed to speak. I have suggested to the minister that he speak.


Clarence Decatur Howe: I can state what I said yesterday, because I have it before me. I think the hon. member will agree with me. I have no wish to prolong this discussion. My hon.
2298	COMMONS
Demobilization-Munitions and Supply
friend gets all worked up with his own eloquence, and I presume these things are unconscious. I withdraw the statement.


John George Diefenbaker: Everyone is happy now.


William Ross Macdonald: I hope occasions of this kind will not arise in the future, but if they do I think the chairman should be allowed to direct the discussion.
'Mr. DIEFENBAKER: Now that we have restored perfect order, and everybody, including the minister and myself, is happy, possibly the minister will give the assurance that as far as War Assets Corporation is concerned it will be instructed that its policy shall be to sell under reasonable circumstances to the highest bidder and that the things it has for sale that can be offered by public auction will be sold at public auction.


Clarence Decatur Howe: I shall foe glad to take my
hon. friend's suggestion under advisement, but I might point out one difficulty in selling to the highest bidder is that we have price regulations in this country, and I am afraid that if that were done we would1 all land in gaol.


John George Diefenbaker: Within the price
ceiling then.


Clarence Decatur Howe: However I shall be glad to
consider the suggestion.


Alan Cockeram: I understand that there are other types of motor boats, 70-footers, that are being sold. What do these boats cost and at what price are they being sold?


Clarence Decatur Howe: I am sure I do not know. I do not think any of them have been offered for sale. There are a great number of boats that have been or are being declared surplus, but there is not the same urgency about selling them, since they are not in icebound ports.


Alan Cockeram: I am thinking of
7(Efooters, a powerful boat, well constructed. What do these boats cost?


Mr. MERRITT:: I understand that the
minister in answer to the hon. member for Vancouver South said that before these Fair-miles were sold in British Columbia the boat dealers and boat builders-he will correct me if I am wrong-had been notified that these eleven or thirteen craft were up for sale.


Clarence Decatur Howe: 
Charles Cecil Ingersoll Merritt: The question the hon.
member for Vancouver South asked the minister was not about the Fairmile Association but whether boat builders on the Pacific -coast had been notified that these craft were for sale before the sales by private agreement took place, and I certainly understood the minister to answer, yes.	But what brings
me to my feet is that I have in front of me a letter from a boat builder in Vancouver and a newspaper clipping "from a Vancouver newspaper of October 12, 1945, and both state definitely that the boat dealers in Vancouver had no knowledge of these boats being up for sale before the private sales were made. Further, the letter states:
Under an agreement made between the War Assets Corporation and the boatbui'lder's section of the Canadian Manufacturers' Association, this said section were supposed to be given a refusal of all boats being offered for sale before being offered for public tender. Not only was this refusal not given* but the boats also were not offered for public tender.
Did any such agreement exist between Wat Assets Corporation and the boatfouilder's section of the Canadian Manufacturers' association and, if so, why was it not carried out?


Clarence Decatur Howe: I do not know how often I
need repeat this, but in the first place the boats were advertised as being available-


Howard Charles Green: At. Sorel.


Clarence Decatur Howe: Yes; notice was given that the boats were available. They were offered to the Fairmile association on, consignment ; that is* they were asked to aecept them and sell them on account of War Assets, but they did not care to undertake that. After that the price was fixed. But all this is out of order, Mr. Chairman,. AVe are discussing a matter that properly comes under the Department of Reconstruction, and, second, a matter with which a committee of this house is dealing. I suggest that we get back to the Department of Munitions and Supply.


Charles Cecil Ingersoll Merritt: The minister has not answered my question, and we have gone so far on this matter that I think be will agree that it would be better to clear it up now. I did not ask about an agreement with the builders of Fairmiles; I asked whether there was an agreement between War Assets Corporation and the Canadian Manufacturers'

Demobilization-Munitions and Supply
association with respect to their boatbuilder's section that the section would be notified and consulted before sales were made of marine craft by War Assets Corporation and, if there was such an agreement, why it was not carried out. That is my question.


Clarence Decatur Howe: I can assure my hon. friend that no such agreement is in existence.


Gordon Knapman Fraser: I wish to say a word in regard to this return and in regard to pilfering from the Fairmiles which an hon. member has mentioned. If these ships were stripped of all their equipment I think the minister for naval services, who is in the house now, should give to the committee or to the Minister of Munitions and Supply an inventory of what was on these Fairmiles when they were taken over by War Assets Corporation, because I have heard it not just from one side but from men who have been on these boats that there was a regular system of pilfering from them. One dentist told me that medical supplies and medical instruments were taken off the boats wholesale. The minister for naval services shakes his head. He might have turned the boats over complete to War Assets, but he should supply an inventory of what he did turn over, and then we would know what was on these boats and War Assets could let us know what they received.


Mr. ABBOTT:: I do not know whether we have an inventory, but it would be easy for me to ascertain what was on these boats when they were .declared surplus. I shall be glad to furnish that later to the committee.


Gordon Knapman Fraser: I think it is only fair to War Assets and the navy that such an inventory should be supplied, because the navy department might be held responsible for what was found to be stolen.


Alan Cockeram: Last night the minister said that he would get the balance sheet of the Park Steamship company. Is it now available for putting on the record?


Clarence Decatur Howe: I have here the financial statements of the company, the balance sheet as of August 31, 1945-


Alan Cockeram: And the operating
statement?


Clarence Decatur Howe: I think this is the statement my hon. friend wants, but I had better make sure and file it this evening.


Alan Cockeram: Is it an annual
statement?


Clarence Decatur Howe: This is the financial statement of Park Steamship company as of August 31, 1945.


Alan Cockeram: Just for three months?


Clarence Decatur Howe: It is the balance sheet, income statement, list of floating equipment, and so forth.


Alan Cockeram: Might we have that statement put on the record together with the last complete annual report on the operations of the company?


Clarence Decatur Howe: I will take my hon. friend's question under advisement and check it at the dinner hour.


Alan Cockeram: Surely the minister will not turn us down on our request for a financial statement of this crown company.


Clarence Decatur Howe: If my hon. friend will specify the information he wants I shall get it. I wish to make sure that I get what he wants.


Alan Cockeram: I should like to have the annual statement for the last financial year of Park Steamship company including the balance sheet, operating statement and auditor's report thereon, and also from the end of the financial year to date, or within the last month.	'


Clarence Decatur Howe: I cannot give that, surely. I will give it for the last accounting period. The hon. member has specified what he wants and I will give it.


Alfred Johnson Brooks: With further reference to the storage of ships at Sorel, will the minister tell us exactly what the procedure is when a ship is turned over? Who is in charge of the storage at Sorel; what is he paid, and what are his duties as regards equipment on the ship? How is it turned over to War Assets, and what is the procedure in the matter of turning over ships? I also have heard rumours that there has been pilfering from ships after they have been turned over.


Clarence Decatur Howe: All I can say is that there is anchorage at Sorel to which the navy ties up its ships when they are delivered as surplus to requirements. The ships are tied there, stripped of all gear the navy wishes to keep, and declared surplus to us in that location. That has applied to corvettes and Fairmiles. The anchorage was first used in June and it seemed a desirable location at that time of the year, but obviously it is not a location for the delivery of ships late in the autumn, in view of the ice trouble there. The anchorage is in charge of a retired naval officer, whose name I am unable to give at the moment. I remember there was some discussion about his appointment. Protection was afforded by the Royal Canadian Mounted Police. We had quite a force there protecting these vessels,
2300	COMMONS
Demobilization-Munitions and Supply
and that is another reason why we are anxious to get rid of them before ice forms. That is all the information I can give. I may point out that I personally do not operate War Assets Corporation, and even if I did I do not think I would have all that detailed information. I would again suggest that the war expenditures committee can easily obtain this information from persons with first-hand knowledge, and I therefore propose that we move on to matters that can be more properly discussed here.
Mr.. ROSS (St. Paul's): In his earlier remarks the minister made reference to the point raised by the hon. member for Mus-koka-Ontario in connection with the $470,000 commission. Who pays that commission- War Assets Corporation or the buyers?


Clarence Decatur Howe: It is paid by the seller.


Mr. ROSS (St. Paul's):: That is. War Assets Corporation. The minister said that all he was interested in was net cost. Surely he must be interested in the commission that is paid in order to get at what the net cost is. Was it a secret commission?


Clarence Decatur Howe: No. it was not a secret commission; it was paid in the ordinary course.


Agar Rodney Adamson: Are these ships navigable when they are sold to private corporations? That is to say, have they all the navigation instruments on them?


Clarence Decatur Howe: There is a rudder: there is operating gear for the rudder, and there is an engine. With these, it is possible to navigate the boats in the daytime.


Agar Rodney Adamson: But they must have wireless and compasses?


Clarence Decatur Howe: I am told there were no wireless and compasses left on the boats.


Agar Rodney Adamson: They would not be navigable if the compasses were taken off. You cannot run a ship without a compass.


Gordon Knapman Fraser: The statement which the minister put before the committee gives us five different items. Would he give us a statement showing what came under his department last year; what he has this year, what he has turned over; what controls have gone out, and what he has at the present time? Would that come under reconstruction?


Clarence Decatur Howe: I hope to get on to the items of control and I shall be glad to give that. If we can return now to Munitions and Supply the information will come up.


Gordon Knapman Fraser: Under which item? That is what I want to find out. I should like to
[Mr. Howe.1
have a list of the different departments that have been under the minister during the last year, because this statement is very brief. If the minister had made it a little more explicit it would have been better.


Clarence Decatur Howe: If we can revert now to Munitions and Supply I will answer the questions asked by the hon. member for Eglinton (Mr. Fleming) with reference no Wartime Housing.


Julian Harcourt Ferguson: My colleague from the west made a statement with reference to the minister's remark about a million dollars being a trivial matter when it comes to discussing public funds. May I read from page 2258 of Hansard-	*


Clarence Decatur Howe: Quote your colleague correctly. Read in Hansard what he said and read what I said.


Julian Harcourt Ferguson: May I read what the minister said regarding the triviality of a million dollars of public funds?


Clarence Decatur Howe: Yes; you can do that.


Julian Harcourt Ferguson: The minister majle this statement at page 2258:
I daresay my hon. friend could cut a million dollars from this amount; hut a million dollars from the war appropriation hill would not be a very important matter.


Ian Alistair Mackenzie: That is all relative.


Julian Harcourt Ferguson: A million dollars is not an important matter!


Gordon Knapman Fraser: The minister did.not answer my question.


Clarence Decatur Howe: No. I was listening to my hon. friend over there.
Mr; FRASER: But I asked the minister a question before that.


Clarence Decatur Howe: That hon. gentleman contributes a. great deal of information to the debate and I was anxious not to miss it. May I now be permitted to answer the questions asked by the hon. member for Eglinton? They were as follows, with the answers to them:
How many of the 7.000 war-time houses being built for veterans will have foundations?
The answer is: Eight hundred.
How many houses are already constructed, and how many* have been commenced but not yet completed?
The answer is: I am tabling herewith a progress report on the various veterans' projects under the direction of Wartime Housing Limited showing the position as at November 15.	'
How many of these houses are for veterans?

Demobilization-Munitions and Supply
The answer is: All of the houses in the programme are reserved for veterans.
What is the estimated rent of these houses, and how is the rent arrived at?
The answer is:
Rental schedules for veterans' houses without basements:
Small 4-room house	 $22 00
Large 4-room house	 25 00
5- room house	 27 50
6- room house	 30 00
Rental schedules for veterans' houses with basements:
4-	room house	
$27 005-	room house	
33 006- room house	
37 00


Mr. FLEMING:: Will the progress report which the minister is tabling be printed in Hansard?


Clarence Decatur Howe: Yes.


The ACTING CHAIRMAN (Mr. Golding):: It can be put on Hansard only by unanimous consent.


Some hon. MEMBERS:: Agreed.


Clarence Decatur Howe: I will hand it to Hansard:
vetebans'/servicemen's houses
Bona fide requests from municipalities..	7,955
Municipal agreements signed	 6,955
Property approved	 6,480
Contracts awarded	 6,408
Foundations and beams	 2,555
Water and sewer house to street line ..	1,766
Frames erected	 1,448
Roofs shingled	 978
Finished flooring	 426
Plumbing roughed in	 1,044
Wiring roughed in	 835
Exterior finish and porches	 717
Wall and ceiling board	 410
Interior trim installed	   262
Hardware	 229
Plumbing fixtures	  153
Electric work complete	 155
Interior painting and decorating	 140
Exterior painting	 402
Water connection	 848
Drain connection	 918
Electric service connected	 155
Houses occupied	 95
Semi-monthly period ending November 15, 1945.
This chart covers projects started since January 1, 1945.
Wartime Housing Limited progress chart. Ten thousand houses for rental to veterans.



[Stage Direction]
Location Municipality	Municipal Requests	Approved by I.H.C.	Municipal agreement signed	Land approved	Contract awarded
British Columbia-					
Kamloops, No. 1	100	100	100	100	100Kelowna, No. 1	100	100	100	100	100Penticton, No. 1	100	100	100	100	100Vancouver, No. 2 and 3	1,100	1,100	1,100	1,028	1,028Victoria, No. 3 and 4	150	150	150	150	150Victoria, No. 5	150	150	"	-	-Total-B.C	1,700	1,700	1,550	1,478	1,478Alberta-	Calgary, No. 1	200	200	200	200	200Calgary, No. 2	300	300	300	300	300Edmonton, No. 4	100	100	100	100	100Edmonton, No. 5	100	100	100	100	100Edmonton, No. 6	200	200	200	150	150Lethbridge, No. 1'	50	50	50	50	50Total-Alta	950	950	950	900	900Saskatchewan-	Moose Jaw, No. 2	50	50	50	50	'50Moose Jaw, No. 3	50	50	50	50	50Moose Jaw, No. 4	100	100	100	50	50Prince Albert, No. 1	50	50	50	50	50Regina, No. 2	100	100	100	100	100Regina, No. 3	100	100	100	100	100Regina, No. 4	100	100	100	100	100Saskatoon, No. 1	100	100	100	100	100Saskatoon, No. 2	200	200	200	200	200Sutherland, No. 1 and 2	30	30	30	30	30Yorkton, No. 1	50	50	50	50	50Total-Sask	930	930	930	880	8802302	COMMONSDemobilization-Munitions and Supply	____
WARTIME HOUSING LIMITED-VETERANS' HOUSING CHART-NOVEMBER 15, 1945-Con.
Location Municipality	Municipal Bequests	Approved by I.II.C.	Municipal agreement signed	Land approved	Contract awardedManitoba- Fort Garry, No. 1	. 25	25	25	* 25	St. Boniface, No. 1	100	100	100	50	50St. James, No. 1	50	50	50	50	50Transeona, No. 1	25	25	25	25	25Winnipeg, No. 1	100	100	100	100	100Winnipeg, No. 2	100	100	100	100	100Winnipeg, No. 3	200	200	200	200	200Winnipeg, No. 4	150	150	150	-	-Total-Man	750	750	750	550	525Ontario-	Brantford, No. 4	100	100	100	100	100Cornwall, No. 2	50	50	50	50	50Fort William, No. 7	100	100	100	100	-Hamilton, No. 13	200	200	-	-	-London, No. 2	50	So	50	50	50Oshawa, No. 5	75	-	-	-	-Ottawa, No. 3	200	200	200	200	200Ottawa, No. 4	200	200	-	-	-Owen Sound, No. 1	50	50	50	50	50Peterborough, No. 8	100	100	100	100	100Port Arthur, No. 2.	50	50	50	50	50Port Arthur, No. 3	50	50	50	50	50Preston, No. 1	50	50	50	50	50St. Catharines, No. 11	50	50	50	50	50Sarnia, No. 4	150	150	150	150	150Sault Ste. Marie, No. 3	50	50	50	50	50Smiths Falls, No. 1	50	50	50	50	50Toronto, No. 2	205	200	200	205	205Toronto, No. 3	198	200	200	198	198Toronto, No. 4	197	200	200	197	197Windsor, No. 10	200	200	200	100	0Total-Ont	2,375	2,300	1,900	1,800	1,600Quebec-	150	150Hull, No. 5	150	150	-	Montreal, No. 2	128	Move	128	128	128Montreal, No. 3 and 4	300	300	300	300	300Quebec, No. 3	200	-	-	-	-Pointe Aux Trembles	25	25	-	-	75Sherbrooke, No. 1	75	75	75	75	Total-Quo	878	550	503	653	653New Brunswick- [DOT]	100St. John	100	100	100	100	Total-N.B	100	100	100	100	100Nova Scotia-	17Halifax, No. 16-Apt	17	17	17	17	Halifax, No. IS	\	255	255	255	102	255Total-N.S	272	272	272	119	272Ending Nov. loth	7,955	7,552	6,955	6,480	6,408Ending Oct. 31st	7,755	7,352	0,405	5,817	6,005Increase:	200	200	550	663	403
[Stage Direction]
Demobilization-Munitions and Supply
These rental rates are based on the average estimated capital cost of the houses, together with taxes, insurance and maintenance and administrative costs. The amortization is spread over a forty year period.
The next question is:
Are there any subsidies involved in arriving at the rent?
The answer is no.
The next question is:
What is the cost of the sites for these houses, and were any sites provided by the municipalities on the basis of donations, fixed taxes or fixed assessments?
The answer is: In all cases the sites for these houses have been provided by the municipalities at a cost to Wartime Housing of $1 per building lot.
The next question is:
What relationship have the 7,000 houses to those being built by Housing Enterprises Limited?
The answer is: The two programmes are quite independent of each other.
The next question is:
What quantities of materials are being requisitioned?
The answer is: It is impossible to answer this question in its present form. In those cases where contracts have been awarded on a lump-sum basis, the contractor is responsible for obtaining his own materials. In those cases where contracts are on a cost-plus basis, priority assistance is given to the contractor whenever he has any difficulty in obtaining building materials. This assistance involves a directive from the priorities office of the Department of Munitions and Supply, which has the effect of giving the contractor first claim on those building supplies which are required for the completion of his project.
The next question is:
How long will wartime housing continue to requisition materials?
The answer is: Until such time as the supply of building materials increases to the point where priority assistance is no longer necessary.
The next question is:
Has any account been taken of the liability of private contractors for breach of contract resulting from failure to obtain materials?
The answer is: This is a matter entirely as between the contractor and his customer. However, in view of the shortage of building materials which has existed for the past two or three years, it is unlikely that any contractor would accept a contract which would not provide adequate protection on this point.
47696-146	>
The next question is:
What quantities of materials has wartime housing on hand?
The answer is: Wartime Housing Limited does not hold building materials in storage. Materials are ordered for specific projects, and are used immediately or shortly after delivery.
The next question is:
What quantities of 2}-inch nails has Wartime Housing Limited in storage in Toronto?
The answer is: none. At the present time Wartime Housing is having great difficulty in obtaining adequate supplies of 24 inch nails.
Then follows the question:
Hoes the government expect private builders to build 40,000 houses next year?
The answer is: Construction permits for approximately 45,000 homes have been issued since January 1, 1945. No accurate estimate can be made at this time as to what the private building programme will be in 1946. However, building materials and labour should be in more ample supply by the spring of 1946.
The next question is:
How many employees has Wartime Housing Limited?
The answer is, 1,566.
The last question is:
How many employees does Wartime Housing expect to have at the end of the year, and when will its staff be reduced?
The answer is: With the closing of staff houses operated by Wartime Housing Limited at several points, reductions in staff will be made. It is anticipated that the number of employees at the end of the year will be 1,500.
With the unanimous consent of the house I now place on Hansard the standard form of agreement entered into with the municipalities, covering the construction and operation of servicemen's houses.
Servicemen's Project No. 2 50 Houses 29/5/45
This agreement made in triplicate this 30th day of October, A.D., 1945.
Between:	-
The Corporation of the City of Cornwall (hereinafter called "the city"),
of the first part;
-and-
His Majesty the King in right of Canada, herein represented by the Honourable the Minister of Munitions and Supply of Canada acting through Wartime Housing Limited, (hereinafter called "His Majesty"),
of the second part;
[Stage Direction]
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-and-
Wartime Housing Limited, a company incorporated under the Dominion Companies Act, pursuant to the provisions of the Department of Munitions and Supply Act, (being Statutes of Canada, 4 George VI, Chapter 3, as amended), (hereinafter called "the company"),
of the third part;
Whereas the city is the registered owner in fee simple of the various parcels of vacant land now within the limits of the municipality of the city of Cornwall, and originally known as "the fair grounds", on which the said city of Cornwall hereby agrees to install (where it has not already been done) roadways, sidewalks, water mains, sewers, and street lighting services, and to maintain the said services so long as this agreement remains in effect;
And whereas there is a serious shortage of housing accommodation within the said municipality and the city being desirous of taking steps to alleviate such shortage has requested His Majesty to provide additional housing accommodation within the limits of the city of Cornwall;
And whereas His Majesty has agreed to provide such additional housing accommodation of the types, to the extent and upon the terms and conditions all as hereinafter set forth, upon the condition that the city shall convey to His Majesty the land necessary to provide such additional accommodation which as appears by a resolution of the council adopted at a special neeting held on the day of . 10	, the
iity has agreed to do upon the terms and :onditions hereinafter mentioned and set forth.
And whereas the Minister of Munitions and Supply of Canada lias duly delegated to the company the power and duty of providing the said additional housing accommodation upon the terms and conditions of this agreement and pursuant to such delegation and in the exercise and discharge of such power and duty the company enters into and executes this agreement;
Now therefore this agreement witnesseth that the parties hereto mutually covenant and agree as follows:
1.	The city shall convey to His Majesty in fee simple free and clear from all encumbrances including taxes and local improvement rates charged to the date of the said conveyance, such of the said parcels of vacant land owned by the city as aforesaid as are acceptable to His Majesty and as are set forth in the schedule hereto annexed marked "A" (such parcels of land and such schedule being hereinafter referred to respectively as "the building lots" and "the schedule"), by deeds or transfers approved by the solicitors for His Majesty.
2.	His Majesty in consideration of the conveyance provided * for in the next preceding clause shall pay or cause to be paid to the city the sum of one dollar ($1.00) for each of the building lots or each portion thereof upon which His Majesty or the company intends to erect a house as hereinafter provided, such sum to be paid upon the execution and delivery of the deed or transfer of each such building lot or portion thereof.
3.	Upon the execution and delivery of the conveyance provided for -in clause 1 hereof His Majesty or the company shall at his or its own cost and expense proceed forthwith:

A.	To erect on the building lots so conveyed and set forth in the schedule, such number of houses as His Majesty in his sole discretion may deem advisable (such houses being hereinafter referred to as "the houses"), at an average cost of approximately four thousand dollars ($4,000) each, to be of frame construction on cement blocks or solid concrete foundation to consist of any of the three types of houses shown on the plans of the company, numbers H.5, H.6, drawings numbers 1-6 inclusive; .numbers H.15, H.16, drawings numbers 1-7 inclusive and H.43, H.46, drawings numbers 1-8 inclusive and to be constructed in accordance with the specifications of the company, dated June 1, 1945, (which plans and specifications are filed with the city clerk). The houses shall be equipped with heaters, hot water tanks, bath tubs, wash basins, sinks, toilets, light fixtures and blinds, and shall be so erected and equipped with all due diligence and expedition. The said constructing and equipping is subject to the availability of the several materials and equipment and to the provisions of wartime regulations; and
B.	To install all necessary water service and private drain connections from the lot lines of the city to the houses (the installations of the portions of such connections from the water mains and sewers of the city to the lot lines to be under the supervision of and satisfactory to the city engineer), or the city shall make such installations and His Majesty or the company shall pay to the city its reasonable and proper costs thereof forthwith upon receiving accounts therefor, the certificate of the said city engineer as to the amount of such cost shall in the absence of fraud or mistake be conclusive evidence of the same and shall be final and binding on the parties hereto; Provided that such installations shall in all cases include such re-laying of street pavement as shall be required after and as a result of effecting such installations as in the honest opinion of the said city engineer shall be necessary: Provided, also and it is hereby expressly declared and agreed by and between the parties hereto, that upon the completion of all such installations the portions of such connections lying within the boundaries of public streets shall become the sole property of the city without the payment of any compensation whatever therefor by the city to His Majesty and/or the company and shall thereafter be maintained and repaired bv the city at its own cost and expense except the cost of repairs to any private drain connection that has become blocked or obstructed by causes other than faulty construction or maintenance of such connection, which cost of repairs shall be paid by His Majesty or the company to the city.
4.	Upon the erection and equipping of the houses as in clause 3 hereof provided, the company shall lease the houses and lands appurtenant thereto respectively, to sailors, soldiers or airmen of the three armed forces of Canada returned from general service in the present war and/or their dependents and to the dependents of any sailor, soldier or airman of such forces who is on general service outside Canada or who has been killed on active service in such war, at rents ranging from twenty-two dollars ($22.00) to thirty ($30.00) per month per house; Provided, however, that whenever and so often as any of the houses is or becomes vacant and there are no applications of any such sailor, soldier, airman or dependents thereof acceptable to and filed with the company, the. company shall have the right to lease the same at the rents aforesaid to whomever it shall in its un-

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controlled, discretion determine; And it is hereby expressly declared and agreed by and between the parties hereto that all water, gas and electric current supply charges or rates in respect to . the houses shall not be assessed or charged against the lands and premises so leased, it being understood that the same are to be paid by the respective lessees.
5.	His Majesty and/or the company at their
own cost and expense, shall undertake and carry out the management and control of the houses and all appurtenances thereto belonging and shall at all times well and sufficiently repair, maintain, and keep the houses with the appurtenances and all fixtures and things thereto belonging in good and substantial repair, reasonable wear and tear and damage by fire, lightning, tempest, acts of God and His Majesty's enemies, only excepted.	[DOT]	.
6.	The city covenants and agrees to furnish to the houses and to the tenants thereof all such facilities, privileges and services of the city as are furnished or made available to other properties or property owners and tenants in the city including without limiting the generality of the foregoing, fire protection, police protection and schools.
7.	Subject to the provisions of clause 10 hereof His Majesty and/or the company shall pay to the city on the first day of the month of October in each of the years 1946 to 1960, both inclusive, for services rendered and privileges and facilities made available the sum of twenty-four dollars ($24.00) in respect of each of the houses containing two bedrooms and the sum of thirty dollars ($3006) in respect of each of the houses containing more than two bedrooms; provided that the said payments shall be pro rated in respect of the portion of the first year in which each of the houses is constructed.
8.	Subject to the provisions of clause 10 hereof, His Majesty and/or the company in addition to the payments provided for in clause 7 hereof shall pay to the city on the first day of the month of October in each of the years 1946 to 1960 both inclusive, the sum of one dollar ($1.00) in respect of each of the hoijses in consideration for the street lighting services to be supplied by the city for the houses; provided that such payments shall be pro rated in respect of the portion of the first year in which each of the houses is constructed.
(a) Should it be necessary to revise the estimated cost of the houses,_ then it _ will be necessary to revise the duration of this agreement as follows: for each two hundred dollars ($200.00) to be added to the estimated cost of the houses, one year is to be added to the duration of this agreement and for each two hundred dollars ($200.00) to be subtracted from the estimated cost of the houses, one year is to be subtracted from the duration of this agreement.
9.	In consideration of the payments provided for in clauses 7 and 8 hereof the city agrees not to levy or collect or permit to be levied or collected any taxes, assessments, rates or municipal or school charges of any kind or nature on or from the tenants or occupants of the houses while the same are owned by His Majesty; Provided that nothing contained in this clause shall be deemed to limit the right of the city to charge the tenants or occupants of the houses while the same are owned by His Majesty, the public utility rates, and other charges provided for in clause 4 hereof, or to
47696-146J
collect from such tenants or occupants _ any licence or permit fees or dog tax or business tax which the city has the right to collect from inhabitants of the municipality of Cornwall.
Nothing in this agreement contained shall limit the right of the municipality to collect poll tax from any person resident in the houses.
10.	The provisions of this agreement except clause 13 hereof shall only affect the houses and lands appurtenant thereto while owned by His Majesty and Hi's Majesty shall be at liberty to sell or convey any or all of the houses and lands appurtenant thereto at such time or times as His Majesty may see fit. Provided, however, that whenever and so often during the period from the date hereof to the 31st day of December, 1950 (both dates inclusive) as His Majesty shall sell or transfer any of the houses and lands appurtenant thereto, His Majesty and/or the company shall pay to the city the sum of four hundred dollars ($400.00) in respect of the land appurtenant to each house so sold; And provided that whenever during the period from the 1st day of January, 1951 to the 31st day of December, 1955 (both dates inclusive) as His Majesty shall sell or transfer any of the houses and land appurtenant thereto His Majesty and/or the company shall pay to the city the sum of two hundred dollars ($200.00) in respect of the land appurtenant to each house so sold. Provided further that in the year in which any house or houses and the lands appurtenant thereto are so sold by His Majesty, the payments provided for in clauses 7 and 8 hereof shall be pro rated proportionately to the part of the year during which His Majesty was Owner of such house or houses and the lands appurtenant thereto.
11.	His Majesty in consideration of the city entering into and executing these presents, hereby gives to the city an option irrevocable within the time for acceptance herein limited to purchase free from all encumbrances (save and except any encumbrance which may be registered against the building lots at the time of the delivery of the deeds or transfers provided for in clause 1 hereof) the building lots owned by His Majesty on January 1, 1961, as a whole and not individual parcels thereof, together with all houses, buildings, fences, erections and fixtures whatsoever then erected and constructed thereon or contained therein and owned by His Majesty and/or the company for the sum of one thousand dollars ($1,000), for each of the houses. The option hereby given shall be open for acceptance at any time from the 1st day of January, 1961 to the 31st day of March, 1961, both days inclusive, and may be accepted by a letter under the hands of the mayor and clerk of the city sealed with the corporate seal of the city mailed postage prepaid and registered, addressed to His Majesty in care of the company at 55 York street, Toronto, (or such other address as may be designated by His Majesty or the company in writing), stating in- such letter that this option is accepted and enclosing therewith an accepted cheque payable to the order of His Majesty in the amount of ten per centum (10%) of the said purchase price. The balance of the said purchase price, subject to adjustments, shall be paid within sixty (60) days from the date of acceptance, all adjustments to be made as of the 31st day of March, 1961, and the conveyance of the building lots with the appurtenances aforesaid shall be by deeds or transfers approved by the solicitor for the city.
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12.	His Majesty and/or the company from and after the 1st day of April, 1961, shall pay annually to the city in respect of each house and the land appurtenant thereto while owned by His Majesty for services rendered and privileges and facilities made available, a sum equal to the amount of the taxes, rates and/or assessments, including local improvement rates, that would be payable in respect thereof if the same were owned by -a non-exempt person, company and/or corporation. Such sum shall be paid to the city on or before -the 31st day of December in each year commencing with the year 1961; provided that such payments shall be pro-rated in respect of the portion of the year in which each of the said houses and lands appurtenant thereto ceases -to be owned .by His Majesty.
13.	Any existing or future provisions of the charter and/or by-laws of the city respecting the manner, mode, location and type of construction of buildings shall not apply to any of the houses whether owned by His Majesty or otherwise.
14.	In the event that any of the houses while owned by His Majesty are damaged by fire or the elements or otherwise prior to the 1st day of April, 1961, so as in the opinion of His Majesty to render the same uninhabitable, His Majesty or the company may at their discretion either repair or rebuild such house or completely remove the remains of such damaged house from the building lot or portion thereof appurtenant thereto. In the event of the removal of such damaged house His Majesty shall for the nominal sum of one dollar convey to the city in fee simple free from all encumbrances (save and except any encumbrance which may be registered against such building lot or portion thereof at the time of the delivery of the deeds or transfers provided for in clause 1 hereof) the building lot or portion thereof formerly appurtenant to such house. Such conveyance shall be by a deed or transfer approved by the solicitor for the city.
15.	The city at its own cost and expense shall take all possible steps to obtain at the next ensuing session of the legislature of the province of Ontario legislation validating and confirming this agreement.
In witness^ whereof the parties hereto have hereunto affixed their respective corporate eals attested by the hands of their respective ffieers in that behalf duly authorized.
Signed, sealed and delivered:
In the presence of:
The Corporation of the city of Cornwall, per A. Horovitz,
mayor,
per F. B. Brownridge, clerk.
His Majesty the King in right of Canada herein represented by the Minister of Munitions and Supply of Canada acting through Wartime Housing Limited
per	
per	
Wartime Housing Limited
per	
per
Mr. LOCKHART:: In connection with the statement just made by the minister, may I ask if there are any figures as to the contract prices dealt with in detail?


Clarence Decatur Howe: I was not asked for the contract price.	.


Norman James Macdonald Lockhart: Can the minister give the parallel contract prices of the same houses?


Clarence Decatur Howe: What project has my hon. friend in mind?


Norman James Macdonald Lockhart: The minister spoke of low-rental houses, and he has given the rental basis of three or four different projects in each classification. Could we have the contract prices covering the same classification?


Clarence Decatur Howe: They vary. I said they were based on the average price of the houses. What does my hon. friend want? Let him name a project. I cannot give the contract prices all across Canada.


Norman James Macdonald Lockhart: The minister is not building in every town and village in Canada. Take Toronto. Hamilton or any of the main centres. There must be a contract price set up for these houses on which the rental basis has been so clearlv defined by the minister. Take two or three.


Clarence Decatur Howe: Would my hon. friend just pick out one, because we can give him anything he wants in this case. I should like him to be specific.


An hon. MEMBER:: St. Catharines.


Norman James Macdonald Lockhart: Are the rental bases exactly the same all across Canada?


Clarence Decatur Howe: Yes.


Norman James Macdonald Lockhart: Is the contract price different at different centres?


Clarence Decatur Howe: Yes.


Norman James Macdonald Lockhart: I want the minister to pick out two or three different contract prices. Take one in the maritimes and one in Ontario-


Clarence Decatur Howe: Will the hon. member please pick out the projects he has in mind? I have here dozens of projects. If the hon. member will pick out a project I shall be pleased to tell him.


Norman James Macdonald Lockhart: The minister wants me to name a specific project. I should like him to pick out one in the maritimes and one in Ontario, and so on. I have not the list of projects in front of me. I do not see why the minister cannot do what I have asked him to do. Give us the highest contract and the lowest contract in the maritimes, in central Ontario and then farther west. That is

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clear enough. I have now been supplied by the hon. member for Peterborough West, with a list of places where these houses are being built. The list gives British Columbia, Alberta, Manitoba, Saskatchewan, Quebec, New Brunswick, Nova Scotia and Ontario. Could we have one instance of the highest and the lowest contract in one of those centres in these several provinces? The minister can pick out my own particular city if he wants to. I am not concerned about getting my own 'constituency, but I should like to have one in the Ottawa area and in the Port Arthur area in Ontario, and perhaps one in the central part and another one in the western part of Canada.


Clarence Decatur Howe: I have these arranged alphabetically, but I happened to turn up St. Catharines. This project was a small one, four bedroom houses, eighteen; six bedroom houses, eight; and five bedroom houses, twenty-four, a fifty house project. Tenders were called. The lowest tender was $124,233. The next was $132,000, the next, $143,000, and the next, $145,000. It was placed at $124,000. The unit cost was $4,190.68.


Norman James Macdonald Lockhart: Could we have one for this part of Ontario?


Clarence Decatur Howe: I shall give the city of Hull: small four 'bedroom houses, thirty^eight; six bedroom houses, twenty-nine; five bedroom houses, eighty-three, a total of 150. The lowest tender was that of the Atlas Construction company, $628,495. The unit cost was $3,987.67.


Norman James Macdonald Lockhart: There are no foundations under these?


Clarence Decatur Howe: No.


Norman James Macdonald Lockhart: What is the comparative cost in British Columbia? Somebody suggested New Westminster. May I ask if these plans were all identical across Canada. Is the same plan being used, the same construction?


Clarence Decatur Howe: I would not guarantee that,
but there is not much difference. This is a ' project for 446 houses; the low tenderer is Smith Brothers & Wilson; the unit cost is $3,927.68.


Donald Methuen Fleming: I should like at the. outset to say" to the minister that I am obliged for the information he brought down this afternoon. Unfortunately, although I thought there were two copies of the progress report, there is only one copy; that was taken away by the Hansard reporter, and I have not had an opportunity of perusing it. I should like to have had that opportunity.
There is no more important subject to come before parliament at the present session than the subject of housing. It has been discussed already; as far as I am concerned my views of the present situation were expressed in this house on October 25, and I do not intend to repeat what I said at that time, but what I said I believe emphatically to be correct. Anything which has been said since in this house or elsewhere has only gone to confirm the statements I made on that occasion.
We are asked to approve an appropriation of $30,000,000 for housing developments for, as we are told, low-rent housing. In the first place I suggest, that if the government had been vigilant and alive, it would not have been necessary to resort to Wartime Housing Limited to construct low-rent housing. If we had had a proper national policy, that would have, been done under the housing act without resorting to this costly device. The government let the situation go on until they were faced with an emergency requiring them, as they say, to depart from the original intention to confine Wartime Housing to what, we perfectly properly considered was temporary housing, and to go into the field of permanent housing.
The minister said that none of the houses built by Wartime Housing are classified by the government or that corporation as temporary housing. They are alone in that respect, because I believe everybody who has seen them will say that they are temporary housing, not in the sense that they will last, for only a year or two, but temporary in the sense that unless they have a great deal of care they will have deteriorated so far in four or five years that in constructing them in very large numbers we are creating incipient slums.
The minister says, "We do not construct temporary houses." In other words, houses built without foundations are, in the view of the minister and of Wartime Housing Limited, permanent housing. The desired information was obtained, however, in another way. We were told this afternoon that, of the 7,000 houses to be constructed, 800 are to have foundations. In other words, with the war over and with the present necessity of supplying houses for permanent abode, we are still going to have only 800 with foundations, and 6,200 without foundations. In the first place, that is wasteful. If we are to have 7,000 houses built by Wartime Housing Limited, let us have them built with proper foundations and cellars.
My next observation is on the subject of low-rent housing. The minister has indicated
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that no subsidies are provided. I would have no quarrel with the provision of subsidies for the purpose of providing decent housing accommodation for those who otherwise will not be able to afford it. I have said that before in this chamber and I do not need to repeat my position in that respect. But I do not think the committee will enjoy being told that there are ho subsidies in the provision of this housing. When we come to examine the matter further we find that in effect and indirectly subsidies are provided here.
In the first place, what is the cost of the land taken into the project? One dollar per building lot. That is a subsidy which the municipality is required to provide if they want houses built-one dollar per building lot; and I know from' my experience with this corporation in the city of Toronto that they were very "choosy" about the lots they took. Areas which had been held by the city for substantial sums, running into two and three thousand dollars for the better locations, this corporation insisted on buying at a dollar a lot. Do not let us be told that there are no subsidies here.
That is not all. If we examine the standard contract which the minister has just tabled, and look at sections 7 and 8, we shall see that there is a fixed amount to be paid in respect of each of these houses in lieu of taxes. Section 7 provides an annual amount of $24 for some houses and S30 in respect of others, and section 8 provides for the sum of $1 being collected in respect of each house for street lighting services and so on. In section 9 we have the provision that there is to be no realty tax levied by the municipality with respect to the house. If we are to have subsidies-and we should have them in proper cases-let us not have hidden subsidies. Parliament and the people of Canada ought to understand that thefe are indirect subsidies involved in the cost of construction, for the figures we are being offered here to-day of the cost of production are not the whole story.
We are told that 7,000 houses will be built for $30,000,000. That is an average of $4,200, or $4,300 per house. That does not take into account a cost of more than $1 per building lot. I offer that by way of correction which I think, in view of the information given to the committee, is necessary.
We are told this afternoon that this undertaking is entirely independent of the undertaking, Housing Enterprises of Canada Limited, this new corporation set up with $25,000,000 capital by a number of insurance companies and financial institutions of the country. The government, through the Minister of Finance,

under part II of the housing act, provides ninety per cent of the capital, and the corporation jointly provides the other ten per cent for the formation of this limited-dividend housing corporation. Wre are told that these things are absolutely independent of one another. If there is not some attempt to unify government policy with respect to these various schemes to provide needed housing, we shall have continued competition between government departments, and more confusion; and, goodness knows, there is enough confusion. now in government policy. One of the things most urgently needed in the housing field at the present time is a proper coordination of government housing policies. There has been too much confusion, with three departments running in three different directions, and there is great need, at the present time of unification of government policy.
I come now to this matter of the requisitioning of building materials. In this respect I wish to emphasize what I have just said, because here is a first-class illustration of the fact that there is no unity in government policy with respect to housing. I think it is fair to say that Wartime Housing Limited is one of the darlings-and I dio not say this offensively-of the Minister of Munitions and Supply. The method pursued by that corporation has been that when they have required or wanted materials they have just stepped in to the producers and said, "We want your .production for the next two months" -or three months, as the case may be. That was the method used. They stepped right in and requisitioned the materials from the producers.
What has been the result? The result has been chaos and confusion throughout the building trades of Canada. I do not require any further .proof of the fact than simply to refer, by way of contrast, to the methods being pursued by the Department of Veterans Affairs in connection with the administration of the Veterans Land Act. There they have followed a sensible course by making their purchases direct from suppliers of building materials. The result has been an orderly meeting of needs.
But with Wartime Housing Limited that has not happened. There must be a high hand there. There must be a wielding of the big stick, when they step in to the producer and say, "Give us all your production for the next three months, regardless of what happens to the supply houses which have been waiting for those materials, and regardless of what happens to the private builders who are waiting on those supply houses to provide materials."

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Norman James Macdonald Lockhart: And veterans who are building houses of their own.


Donald Methuen Fleming: I am coming to that. We are told this afternoon by the minister-and I made as full a note as I could when he was speaking-that Wartime Housing Limited orders for specific projects, and that it has not quantities of materials on hand. That is an amazing statement. The fact of the matter is that Wartime Housing Limited has been requisitioning far in advance of its immediate requirements. Let us not foe misled by expressions such as "ordering for specific projects." If they are ordering for specific projects, then they are ordering far in advance of their immediate needs -with respect to those projects.
I will give an example. We were told that there are no quantities of 21 inch nails under requisition to-day.
Mr. HOW'E: None in storage.


Donald Methuen Fleming: A reputable builder in Toronto telephoned me ten days ago. He was almost in a state of distraction, and he said to me, "Mr. Fleming, you cannot buy a 21 inch nail in the city of Toronto to-day. I have taken contracts for a hundred houses, many of which are for veterans, and I cannot get a 2J inch nail in this city." He told me that the reason for that condition was that Wartime Housing Limited had requisitioned
50,000	kegs of 21 inch nails. Not only that, but he said that there are in storage in a building on Vaughan road, Toronto, 2,000 kegs of 21 inch nails.


Clarence Decatur Howe: Will the hon. member do me a favour? Will he find out to whom they belong?


Donald Methuen Fleming: Wartime Housing Limited.


Clarence Decatur Howe: No. I spoke to the manager of Wartime Housing Limited, and he said that his work is being held up for lack of 24 inch nails. I think my hon. friend will find that they do not belong to Wartime Housing Limited.


Donald Methuen Fleming: I put it to the minister in this way. My information, which comes from a source I can fully trust, is that they were there under requisition of Wartime Housing Limited.


Clarence Decatur Howe: Not true.


Donald Methuen Fleming: Well, I hope the minister makes that statement after inquiry.


Clarence Decatur Howe: I shall disclose my source of information, if the hon. member will do the same. I got my information from the manager of the construction department of Wartime Housing Limited, and that information was received by telephone only about three or
four hours ago. When my hon. friend gives the source of his information, perhaps we can make a check.


Donald Methuen Fleming: There will be an opportunity to do that. This information comes to me from a man who is fully informed on these matters.
An.hon. MEMBER: Who is the man?


Donald Methuen Fleming: 
Ian Alistair Mackenzie: May I inform the
hon. member that I am afraid the nails in question belong to the Veterans' Land Act administration. So that story is nailed.


Donald Methuen Fleming: I am glad to have the government's responsibility nailed to the mast, at last.
In the vicinity of Toronto 600 houses are being built at the present time under the Veterans' Land Act administration. I suggest, with respect to the Minister of Veterans Affairs that that administration does not need anything like 2,000 kegs of nails for its immediate projects.


Ian Alistair Mackenzie: I shall have the matter looked into right away.


Donald Methuen Fleming: Thank you very much. If those nails can- be made available for the construction of houses in Toronto at the present time, where they are badly needed, a worthy service will be done.
I was dealing with the matter of providing houses for veterans. All are agreed that veterans must have priority at the present time. But let us not be led by that fact into thinking that on all occasions we are helping the veterans when we let Wartime Housing Limited ride roughshod over all others. Many
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of the houses under construction by private builders are houses being built for veterans.
When I was home the week-end before last a man called me-and again almost in a state of distraction-and stated that his two sons who are home from overseas were building houses. He said, "They have their houses partly constructed. Then, along comes Wartime Housing, and requisitions -the supplies the builder needed to complete those buildings. Here are my boys, one of them with five years' service, and the other with four years. They will not have this winter the houses they are putting their money into." I mention these facts so that no one will run away with the idea that the methods followed by Wartime Housing Limited are those which in every case meet the interests of the veterans. That is not so.
There are two other matters I should! like to discuss briefly. I make these observations because of the statement made in the house by the minister on October 25, when he intimated that he was anxious-and I do not wish to quote him incorrectly-to get out of the construction business as fast as he could. I think hon. members will applaud that worthy purpose, or the expression of such a worthy objective, but we should like to see some evidence of a consummation of that purpose greater than has been disclosed this afternoon.
We have been told that there are 1,566 employees on the payroll of Wartime Housing Limited, and that is precisely the same number set out in a return made to the house a month ago. From what the minister has said this afternoon it would) appear that up to the end of this year there will be very little reduction in that number.
If it is the intention and the policy of the administration to get out of the construction of houses, and to leave that work to those who are best qualified to do it, then I suggest we should have evidence of a stronger determination to pursue that intention with greater speed.


Clarence Decatur Howe: Will my hon. friend give me a list of those better equipped1 to do it?


Donald Methuen Fleming: If the minister does not know who are best equipped to build houses in this country, it is the builders of the country.
I have just a word to say in conclusion. The government has determined to support the present policy of the Minister of Munitions and Supply in connection with the construction of what they call permanent houses, and1 during the coming year to do it to a substantial extent, in terms of both the

number of houses to be built and the expenditures which the taxpayers will be called upon to face. It is quite clear from what I have said that the cost of each house will be something like $4,300 for construction alone, not including the cost of the land or municipal services. That is a costly undertaking which can be justified only by proof that the houses could not be constructed for a similar purpose by private builders.
The means of meeting the need for low-rental housing rests, as it has rested for the past several years, in the hands of the government. The reason, if it be a reason in fact, why low-rental housing it not being constructed to-day by private builders is that the government has not used the instrumentality of part II of the National Housing Act to provide that very need. It is no answer for the minister to say, as he said in this house yesterday, that the proof of the fact that Wartime Housing Limited1 is popular is the number of requests that he is receiving from municipalities for the construction of that type of houses. I can tell him why the municipalities have been asking for wartime housing. They do it because the policy of Wartime Housing Limited and the Minister of Munitions and Supply has prevented1 the builders in those municipalities from meeting the need. That is the reason and there is no other reason.
We shall get houses built for veterans; we shall get low-rental houses built for those unable to pay the economic rent of these houses when the government puts to work part II of the housing act in conjunction with the enterprise of the private builders of this country.


Norman James Macdonald Lockhart: The volunteer war services committee in my city has written me within the last week or so pointing out the difficulty the veteran is having in obtaining materials. Perhaps the minister will see if something cannot be done to relieve this situation. I have the particulars of a specific case in my office at the present time. This veteran has been waiting [DOT] for four months to get the necessary gypsum lath to put in his cottage which he started in the early spring. No dealer could supply him with gypsum lath because it had all been requisitioned by Wartime Housing Limited. The local committee mentioned one specific case, but I know of a number of cases. I am trying to show the minister how this works out to the detriment of the veteran who was discharged a year or so ago and has started to build a home. The hon. member for Eglinton has presented this argument in an able manner.

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These men cannot get gypsum lath; they cannot get lumber; they cannot even get sewer pipe because it is all requisitioned. If the minister will consult the local war services committee they can give him the complete picture because they have just written to me. One local lumber dealer told me that he had 200,000 feet of lumber which had been requisitioned for wartime houses before the foundations had even been started. The minister should know these things and I am sure he will do his utmost to try to rectify them. If he can give me any explanation I shall be glad to have it.


Clarence Decatur Howe: Since the beginning of 1945 to date there has been constructed something over 50,000 houses, of which Wartime Housing constructed about 7,000. The requisitioning of material for 7,000 houses could not destroy the market for the other 43,000. This project was started only late in July after it was found that the housebuilding programme of that year did not include low-rental housing which was thought to be necessary by those responsible for housing. Somewhat reluctantly we undertook to do the job because we had hoped we were going out of the housebuilding business. We were liquidating that branch, although there were many employees employed in operating various facilities, such as staff houses, cafeterias and others. We were told it was necessary to have 7,000 low-rental houses, and no other agencies seemed to be able to build them. The insurance companies were considering the proposal, and the government had held back for a long time hoping that they would get under way. By July it was seen there was no hope of their getting under way this year, and Wartime Housing stepped into the field.
I realize that the dealers like to get a commission on materials they never see. They would like to get a commission on the lumber and other commodities that go into these houses. As a builder of some experience and as one who has had some experience in government, I claim that the government is entitled to buy at wholesale in carload lots. I contend that, in doing so, we are violating neither the principles upon which distribution in this country is based nor any other principle that might have obtained in pre-war years.


John Oliver Probe: I was a bit taken aback by the hon. member to my right who insisted on a government policy of coordination in connection with building programmes and in almost the same breath indicated that the best way to get coordination in any programme would be to put all this building into the hands of private builders. He dwelt at some length on
the difficulty that private builders had in getting stocks of materials because these had been requisitioned by the government. I should like to draw attention to certain facts in connection with building material which are not sufficiently emphasized.
Assuming that it takes eight and a half thousand board' feet of lumber for each wartime house, which is an average estimate, these would1 take a total of sixty million board feet of lumber this year. The director of the Veterans' Land Act informed the members of the special committee investigating veterans' affairs a few days ago that they were using something in the neighbourhood of twenty-five million board feet of lumber this year, which, by the way, they had stock-piled. That was the procedure which was recommended by the hon. member for Eglinton. That represents, roughly, 80 million feet of lumber, which is 'being used by the two government agencies, Veterans' Land Act, and Wartime Housing Limited. Last night the minister informed the committee that the average cut of building lumber was somewhat over 4,000 million feet. A simple calculation would suggest to hon. members that these two government agencies are using, roughly, two per cent of the annual cut for the building of veterans' houses. I would suggest that if there is any hoarding of materials, any stock-piling of them to hinder the building of veterans' homes or the homes of other Canadians needing them, it is being done by private individuals who are stockpiling them in their own bailliwick and preventing legitimate builders from getting the lumber, because the foreign market, I [DOT] understand from the prices quoted by the minister, offers a more attractive field than does the Canadian market. I want to congratulate any government agency that would take the necessary steps to make sure that our veterans and our Canadian people generally get prior treatment in the acquisition of building supplies. The supplies hoarded or requisitioned by our government departments are an insignificant percentage of the total year's cut. This is not, of course, by way of congratulating the government upon stock-piling a few million feet of lumber.
Last night the hon. member for Winnipeg North mildly castigated the ministeir's department for building an inferior type of house, and the minister very properly jumped to the defence of his department and said:
I deny absolutely that we are building an inferior house; I deny that rve are building a temporary house.
From my own city there have come definite complaints from the trades and labour coun-

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oil and the trades and labour congress dealing with the infraction of the plumbing by-laws of Regina in the construction of Wartime Housing buildings in that city; also there are no basements for the houses constructed for Wartime Housing in the city of Regina. I do not know how it is in Ottawa-


Gordon Knapman Fraser: None at all.


John Oliver Probe: Then I would suggest that a simple concrete foundation is insufficient for the rigours of a Saskatchewan winter, whatever may be the situation in the comparatively mild climate of Ottawa.
In support of what my colleague the hon. member for Winnipeg North said, if Wartime Housing structures are not of a temporary nature and if these houses are constructed properly, it would seem to me that $4,000, which it has been stated is the average price, is a fair figure for them. But we are given to understand that in Regina Wartime Housing has gone only into temporary houses. Is the minister in a position to say whether that is correct or whether the statement he made in the house last night is correct, when he said:
I deny absolutely that we are building an inferior house; I deny that we are building a temporary house.


Clarence Decatur Howe: We are building these houses under an agreement with the city which provides that we turn them over to the city, or at least give the city the option of buying them for a price at the end of ten, twelve or fourteen years. My hon. friend would have some difficulty, if he has read the standard agreement with the city of Regina, in coming to the conclusion that -these are temporary houses.


Gordon Knapman Fraser: Are they semi-permanent?


Clarence Decatur Howe: No; they are permanent houses.


John Oliver Probe: If they are permanent they definitely require basements in our climate, and further, our labour councils in Regina have stated that the plumbing by-laws of that city are being broken by Wartime [DOT]Housing.
As to the cost of the land on which Wartime Housing erects -its houses, I notice that the Wartime Housing project in Hamilton for 1944 cost the government of Canada $208,139 for the land, on which were constructed $4,000,000 worth of Wartime Housing buildings. But in the city of Moose Jaw, Saskatchewan, the land was apparently given gratis to the government, because no cost of the land is indicated on which Wartime Housing erected buildings of a value of $138,000.

Would the minister state what is -the policy with respect to the acquisition of the land, and would he explain why the Hamilton project involved, an expenditure of over $208,000 for the land?


Clarence Decatur Howe: I would assume that the Hamilton project is not a veterans' project but a working-man's project. The arrangements are different for a working-man's project; so are the tax arrangements. The working-man's project which Wartime Housing built earlier in the war called for houses of a temporary nature. We acquired the land and put in our own improvements. After the agreement expires, there must be made with the city a new agreement which I have no doubt will take that into account.


John Oliver Probe: I got those figures from the 1944 public accounts, and I was wanting definite information with respect to them.


Clarence Decatur Howe: The public accounts for 1944 would cover an earlier period when temporary housing was being erected for munitions workers.


John Oliver Probe: Did the city of Moose Jaw donate the land to Wartime Housing?'


Clarence Decatur Howe: So far as veterans' houses are concerned, we have a uniform policy right across Canada. If the city wants us to build veterans' houses the city must provide the land within its boundaries. It -must be improved land and the city must be prepared to sign a standard agreement.	..
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Lewis Elston Cardiff: It is seldom that I have
the urge to detain the house at any length, but to-night, after listening for a considerable time to many speeches made in this, chamber with regard to housing, I feel that something should be said about one section of our population which I think is heading down a blind alley. Wartime Housing has in my opinion, bottled up our building industry, and private industry has been bogged down in consequence. Nearly everyone who has spoken on this subject has been a member representing a city riding or some congested area. No doubt these areas are congested and housing is limited. Why? The fact is that our economy is lopsided, and when something is proposed to be done one should go to the source of the trouble. One can go into the country in almost any section and drive over

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the country roads, and he will find three or four houses 'vacant in every mile and a *quarter. The reason is that during the war years our country population drifted to the cities. Industry was very attractive. Now, when the boys are coming back, the housing situation in the cities is such that accommodation cannot be obtained.
The boys who are coming bdck have saved one or two -thousand dollars during their service and they will no doubt wish to purchase wartime houses. They will put up the $2,000 of their earnings and will depend on industry to pay the monthly instalments, with The result that it will not be more than a few years before industry itself will be bogged down to the place where these instalments cannot be paid and most of the houses will be taken over by the mortgage .companies or by those who are financing the houses. The boys will then be driven into the country where they belonged in the first place.
Farming is not as attraftive as it should be. If it were, there would be no hesitation on the part of these boys about going to the country and starting in that line, and they could get houses easily. In a few years' time these boys will be driven to the country; the houses, as I have said, will be taken back by the mortgage companies, and at that time there will be plenty of housing accommodation in .the cities. I believe that will be the situation five or six years from now.
Our economy should be such as to obviate the necessity of people being driven to the country. During the last four or five years farming has been much better than it was previously, and yet through these years we have received only about eight per cent of the national income, while we represent thirty or thirty-three per cent of the population. Until that condition is changed we shall be up against such things as wartime housing.
If the trouble were looked into at its source there would be no need of this programme. We would not need to spend all this money because there would be sufficient housing in the country. The population has not increased. If things were as they should be we would have the boys back in an industry where they could make an honest and independent living.


John Ritchie MacNicol: I went to Longueuil
some time ago to see one or two of the Faircraft houses, so called, and the man who showed myself and others through one of the houses said that it had been put up in one day by six men working eight hours. The
minister is familiar with the houses I mean. The price was $3,200. Two weeks afterwards I visited Montreal and saw one of these houses in a park opposite the WTndsor hotel, and on inquiry I was told that the price was $4,000. It was the very same house as far as I could see. If these houses are of the same type, are they available in quantities and, if so, can they be purchased in quantities and put up in the length of time stated? If so, why are more of them not being used to meet the housing problem?


Clarence Decatur Howe: I have no intimate knowledge of Faircraft houses. The selling price is $3,300 f.o.b. plant.


John Ritchie MacNicol: I said $3,200; it may have been $3,300.


Clarence Decatur Howe: The builder must acquire the land and build the foundation for the house. The cost of erection is not much, but that also has to be added. The result is that the house on site costs something over $4,000; just how much more I am not sure. Wartime Housing has built a few. I believe they are coming off the assembly line at the rate of two or three a day. There is a ready market for them. Wartime Housing bought perhaps fifty or sixty of them for erection in Montreal close to the plant. I think they are a satisfactory house. I doubt that they are as good value as the house built on site, if we eliminate the fact that we can get them quickly, however, that is a matter of opinion.


John Ritchie MacNicol: Later on, I visited a part of the country with which the minister is equally well acquainted, namely, the Atikokan area. At Atikokan I learned that they are going to erect fifty of them for the men working in the mines. From the information I received they are warm and comfortable places.


Clarence Decatur Howe: I think they are.


John Ritchie MacNicol: They appear to be well equipped. I wondered whether that would be one method of relieving the housing problem.
Before I sit down I wish to congratulate the hon. member for Huron North. He gave a really sensible talk. There was a great deal in what he said. Anyone driving through the country will see here and there many vacant houses. I believe that at the last session of parliament when the matter was up I suggested that an effort be made to try to persuade numbers of the Toronto people to go out to the many houses which are vacant in the small villages north of Toronto. Of course it would be necessary for them to be on some bus or rail line to get into the city

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to their work. As the hon. member pointed out, if a real effort were made to get some of our people out to the vacant houses in the country, many of which are beautiful houses and well built, our situation might be relieved.


Gordon Knapman Fraser: This afternoon the minister gave the hon. member for Lincoln figures as to the cost of housing in the different areas. I believe he said it ranged from $4,000 to $4,200. Were those figures the estimated cost of the houses, or did that cost include what is put in the contracts for wartime "housing, namely, rental at the rate of five per cent per month of the replacement value of such diesel and gasoline equipment plant, and so forth, which is used by the contractor? Is that extra tin top of the estimated cost?


Clarence Decatur Howe: The estimated cost I gave was the cost of the completed house.


Gordon Knapman Fraser: Completed, including the rental of those machines, or just the estimate?


Clarence Decatur Howe: I am told that is correct; that is the contract price. The cost of rental of equipment would be extra.


Gordon Knapman Fraser: The cost of the rental equipment is extra, five per cent per month of the replacement value of diesel and gasoline plant and three per cent per month of the replacement value thereof for such other items of building plant owned by the contractor or allied firm. Even if they have those machines on the job and are not using them, they are paid for rental.


Clarence Decatur Howe: Yes. Perhaps I can give my hon. friend the make-up of that one at Peterborough.


Gordon Knapman Fraser: I have it here.


Clarence Decatur Howe: Land acquisition was $100; legal expenses, $200; sewer house connections, $7,500; water house connections, $7,500; walks, $5,000; staking of lots, $1,000; grading, $5,000; landscaping, $5,000; building contract, $325,000; supervising architect, $3,250; heating stoves and cooking stoves, $7,000; special services, $2,500. There was a contingent item of $25,000. That built up to $394,050. Therefore the cost of the individual house was $3,940.50.


Mr. BOUCHER:: That was the price as of 1942, rather than as of the present time?


Clarence Decatur Howe: May 26, 1945.


Gordon Knapman Fraser: What was the item for the rental of equipment?


Clarence Decatur Howe: The rental of equipment would be a very small item in comparison with the size of the contract.
[Mr. MacNicol.j


Mr. SKEY:: I have three questions I should like to put to the minister. Does Wartime Housing intend to build more than 7,000
houses?


Clarence Decatur Howe: All I can say to that is that the intention of the government will be made known in due course. I do not think my hon. firend can ask me to predict what we shall do.


Lawrence Wilton Skey: The estimates are for 7,000 houses.


Clarence Decatur Howe: Yes.


Lawrence Wilton Skey: Is compensation to be paid to municipalities which have invested considerable funds in Wartime Housing projects? I refer to the item which the hon. member for Eglinton brought out this afternoon when he mentione'd that the property on which wartime housing was built in municipalities was obtained from the municipalities for $1 per lot. But there are other items. I understand that the municipality of Toronto has spent $1,100,000 for which they can expect no compensation up to the present time, and that they will have to spend another $300,000. Some of the items included in this estimate, which is accurate according to the statement obtained from Toronto to-night, are the conversion of St. George's barracks, $45,000, and Little Norway, $80,000. Will any compensa^ tion be paid to this municipality which I cite, and as regards many other municipalities which must have had a similar experience, will any compensation be made for the moneys which they have expended on wartime housing projects and from which they can now expect no return? I might point out that the government expect a full return from its expenditures on its recent wartime housing project, not only a return on capital but a return of interest on its investment.


Clarence Decatur Howe: I am not familiar with the construction projects in Toronto. They are rather outside the scope of wartime houses. Under what arrangements they were made I do not know. I presume that Toronto, like Wartime Housing, is collecting rents for its accommodation. I presume that the city used the same judgment in the type of project it would undertake that we used.


Lawrence Wilton Skey: Mr. Chairman, may I reserve my right to bring up this question again later in the estimates on receipt of further information?


William Ross Macdonald: I understand the arrangement is that any questions which are left over unanswered during the discussion of

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these estimates are open to debate under the present or under civil estimates after the answers are given.


Lawrence Wilton Skey: I have another question. Does the minister guarantee against any damages which may ensue in a breach of contract suit that may result from the unlawful disposal of lumber which is not the property of the mills but which is disposed of to Wartime Housing on their orders?


Clarence Decatur Howe: I can assure my hon. friend that there is no breach of contract in that case. I would suggest to him that the fact that the crown intervenes is a sufficient defence.


Lawrence Wilton Skey: On that question I have two -'communications. One is from the Ontario t Lumber Dealers' association, the other is from the Canadian Lumbermen's association. The Ontario lumber dealers say that they dispute the right to take the lumber from the yards of a sawmill where it is in pile, but in many cases does not belong to the manufacturer, the owner being a wholesaler or a retailer who has bought it under contract and in some cases has already paid for it. This is from a reputable association, I submit, the lumber dealers' association for the whole of a province. The Canadian Lumbermen's association has the same question, whether the government will assume the damages which may result from breaches of contract by the unlawful disposal of this lumber which, as the hon. member for Eglinton pointed out this afternoon, is being requisitioned and taken from its legitimate owners. The association points out that in some cases it has already been paid for. I submit that the answer I have received in this case is hardly full enough to cover an invasion of property rights of this order; and I would associate myself completely with the hon. member for Lake Centre and the hon. member of Eglinton when they brought up in committee this invasion of property rights. I believe that the feeling of this committee will be that the owners of this lumber should be guaranteed compensation if they are sued for damages.
Before I resume my seat, I should like to tell the committee what the achievement of Wartime Housing is to date, since this year's programme of Wartime Housing came into being, according to the chart submitted by the minister this afternoon, on January 1, 1945. The committee will remember that we were fieed to a certain extent from restrictions after the first week of May. Wartime Housing plans to build 7,000 houses; it has been in operation for ten and a half months of this year and it has produced ninety-five houses which are occupied.


Clarence Decatur Howe: I may say that Wartime Housing came into being either late in 1941 or early in 1942 and has built some 19,000 houses which are occupied. The last programme was decided upon late in July of this year, and it is well under way at this moment. The number of houses built since the programme was undertaken in July, as given by the hon. member, is probably correct; nevertheless the 7,000 houses are well launched.


Lawrence Wilton Skey: I am quoting from the figures which the minister submitted this afternoon. It says quite plainly on the chart that the programme is as from the 1st of January, 1945. It also shows the progress in all fields. I can give him the exact figures. From the municipalities there have been 7,955 requests; there have been 6,955 agreements; property has been appraised in 6,480 cases. It goes all the way through, and -at the end it says, "houses occupied, 95."


Clarence Decatur Howe: If that is the case, how have we caused this great disruption in the lumber market and stopped all other building?


Donald Methuen Fleming: By requisitions.


Clarence Decatur Howe: My hon. friend has made a great case that we are abusing the lumber trade. I have dealt with the lumber trade for the best part of thirty-five years, and I think they are well able to take care of themselves. I doubt if they would welcome any intervention on the part of young members of parliament. Be that as it may, have we not lost sight entirely of the men and women who will occupy these houses? I am trying to do a job for them. If I tread on someone's corns in doing so, I have the satisfaction of knowing that the dealers are doing very nicely, making more money than they ever made and handling more material than they have handled in their history. Just take a thought for- the users of these houses. I am surprised that there is not one man opposite who would say a word for the veterans for whom these houses are being built.


Lawrence Wilton Skey: That is just what I am doing. I am talking for the users of these houses. I am saying exactly this, that there are not enough users to make this a worth-while project, if there are only ninety-five users of these houses for 1945.


Percy Chapman Black: What' is the present policy with respect to the final disposal of these war-time prefabricated 'houses? My understanding is that when they were built, or agreements entered into with the municipalities, there was a provision that they would be removed six months after the termination of the war. I should also dike to
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know what the policy of the department is with respect to the staff houses which are no longer required. We have in the town of Amherst a staff house built when war industries were very active. Although this staff house was not recommended by the local citizens, it was built and served a purpose for a time, but only for a very short time. It has been vacant now for the best, part of a year. I should like to hear from the minister what is the policy with respect to the disposal of the ordinary houses, the sale of them to occupants and others, and also as to the disposal of staff houses.


Clarence Decatur Howe: As long as there is a demand for low-rentail housing it is not the policy of the government to sell houses. In certain cases we have agreements with municipalities calling for the removal of the houses at the end of a certain period, usually twelve months after the war. If municipalities wish to cany out this agreement we are perfectly ready to do so. To date we have had no requests. I think if we had attempted to carry out our agreement there would have been .a strong protest from' the towns. In some cases we have removed houses. We moved some from Nobel, some from Arvida, and several from the explosives plants, but always by agreement with the town. We have simply transferred them from one locality to another where the houses were more urgently needed, but no policy has been determined for the ultimate disposal of the houses because there is no indication that there will be a general surplus of houses for many years to come.
Where the agreements have expired we go to the municipalities and enter into new agreements if the municipalities wish for new agreements. We have entered into new agreements with several municipalities, turning the houses over from. munitions projects to veterans projects.
As far as staff houses are concerned, if the staff houses are no longer required they are put up for disposal. Several have been disposed of. Some have been turned over to the Department of Veterans Affairs to be used as convalescent hospitals; others have been sold to municipalities for municipal purposes. Two or three have been sold- for manufacturing purposes. They are available for disposal, provided that they are not required as staff houses.


Percy Chapman Black: Is the government willing to sell individual houses to occupants who wish them for their homes, or who wish further to improve them by putting basements under them? In some cases I know there is a desire to make individual purchases.


Clarence Decatur Howe: It is not the policy to sell,
as long as there is a dem-and for low-rental houses. We have had many applications for the sale of houses; in some cases for the sale of whole housing developments. In vieiw of the fact that many of- the houses were built at a time of lower costs, perhaps we can sell all our houses at a profit. 'But it is not our intention to do so. The government-, through Wartime Housing Limited, is meeting the requirements for low-rental houses; and as long -as the demand is there, we shall continue, to meet that demand.


Mr. McKAY:: Has the minister explored
the possibility of using prefabricated houses? We appreciate what has 'been done in the past year or two by Wartime Housing Limited. To a small degree it has relieved a serious situation. However, that situation is still grave. Thousands of young chaps are coming back from overseas with wives, and in many instances they are looking for dwelling places.
The minister has referred to the construction of prefabricated houses at Longueuil, Quebec. I understand these are to a great extent, aluminum, constructed houses.


John Ritchie MacNicol: No, they are not.


Eric Bowness McKay: From what I can gather
there are other concerns in Canada which, are constructing homes made of plywood and prefabricated lumber. I do not know a great deal about this -matter, but yesterday or the day before in the veterans affairs committee I suggested that the whole matter might be explored, with a view to relieving the immediate situation as far as shortage of houses is concerned. If England, Sweden, Russia and the United States consider it good business to use prefabricated houses to relieve the immediate housing shortage, then I suggest that it would be good business for Canada to do something along the same lines.


Ian Alistair Mackenzie: 
Mr. KIDD:: I take issue with some parts of what the Minister of Veterans Affairs has said. We have been sitting in the veterans affairs committee for several days. It is hard to nail the minister down to the right point. I have one point and the Minister of Reconstruction has another. But you are not doing anything for the soldiers in outside centres.
I think of my own constituency of Kingston City. The Minister of Reconstruction has about 300 wartime houses there. There the Minister of Veterans Affairs has a project; 50 or 60 houses are under construction outside Kingston. I am trying to urge upon someone who represents some part of the government the necessity for releasing material immediately for the 300 soldiers who are walking the streets, looking for homes.
I pressed this point about two months ago when I put on the order paper a question directed to the Minister of Reconstruction. The returned soldier who has received his discharge from the army, the navy, or the air force, wants to build a home for himself right away, before his gratuity is used up. However, the Minister of Reconstruction says that he cannot do so. The man will be given a permit, but everything is frozen. The man wants to go to a lumber dealer to buy lumber, or take his Ford truck, or his father's truck, and get an order to purchase a few window-frames or doors so that he may proceed to
build his home at once. But that cannot be done. Something should be done immediately for those men.


Ian Alistair Mackenzie: Let me tell my hon. friend that there is, and- for several months has been, an interdepartmental housing committee of permanent and able civil servants, representing the Department of Reconstruction, the Department of Veterans Affairs, the Department of Finance, and other government departments. They are trying to operate a coordinated and unified plan in connection with housing in Canada. There is no minister who can control the question of materials.


Agar Rodney Adamson: Who is in charge of that committee?


Alan Cockeram: Would it not be better
to combine them all?


Ian Alistair Mackenzie: It is an interdepartmental committee reporting to the cabinet.


Agar Rodney Adamson: Who is the chairman
of it?


Ian Alistair Mackenzie: I think it was Doctor Clark. He has been ill for some time.


Agar Rodney Adamson: I thought it was a
colonel somebody. I know of whom you are speaking.


William Ross Macdonald: The Minister of Veterans Affairs has suggested that we might proceed with the consideration of this item with as little repetition as possible. I believe the committee would be agreeable to that suggestion. However, the hon. member for Weyburn has asked certain questions, and in fairness to him I think they should be answered.


Eric Bowness McKay: I had asked the minister if he would explore the possibility of using prefabricated houses.


Clarence Decatur Howe: We have watched closely the prefabricated housing situation. In fact, we gave some assistance to get the factory-built Faircraft houses started. I think we guaranteed the sale of the first 200 houses.
As a matter of fact, any prefabricated houses being built are being sold. Whether they are bought by' the government or by private industry does not matter. They go to fill a gap in housing, and I can assure hon. members that the government will encourage any development of that kind which may be undertaken.


Norman James Macdonald Lockhart: With all due respect
to the Minister of Veterans Affairs, may I ask him a question as to the length of time the interdepartmental committee has been in operation?

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Ian Alistair Mackenzie: My recollection is that it has 'been in operation for about six months.


Norman James Macdonald Lockhart: That is the point. We have npt heard much about the results from that committee. In the light of all that has been said tp-day, it seems to me that coordination is certainly necessary, and that we should have had better results.
I am not going to repeat what has been said, but I should like to correct an impression the minister left, following something I may have said. He rushed in to say something about the dealers making more money. Let me tell the minister there is not any thought about the dealers making more money. The hon. member for Kingston City has touched upon the kernel of the subject to which I was referring when I spoke. The supply dealers have had no trucks; the supply dealers cannot get help; they have been distracted' in trying to deliver the materials they have at their disposal. I want to enlarge a little upon what the hon. member for Kingston City has said.
This afternoon I cited one case which the local volunteer committee had brought to my attention. I knew about this case five months ago. It represents the type of person who came back from overseas and with the assistance of his father'or friends proceeded at once to get a home. I know of a dozen cases of men who have brought back war brides. They did not want to live with their in-laws and they decided to put up a little home. They would get the foundation in and the first obstacle would foe lumber; the next obstacle would be plumbing fixtures; the next would be the plastering because of lack of gypsum lath, and so it went until the local service committee took up the matter and brought these cases to my attention.
This is not an appeal being made on behalf of those who are handling materials because, goodness knows, they have had all they can do to keep going with the trucks and the men they have at their disposal. I want to make that clear to the minister and to correct any wrong impression he may have. I was happy to hear the Minister of Veterans Affairs say that something will be done to help these veterans. There are dozens of these men in my community who are just frantic to get going.
Do not think that all the houses being built are being built by Wartime Housing. I do not believe the minister claims that is so. In many cases houses are being built by men who have just come out of the army. They are ganging up to help one another to get five-roomed cottages built. I just want to impress upon the minister that he has a wrong
 *	.
idea. He seems to overlook the fact that there is a great body of veterans who seem to be out in the cold and who cannot get going. That is the thing I wanted to clear up in the minister's mind. I hope something will be done to take care of them. All power to the Minister of Veterans Affairs for helping a certain number of veterans and providing housing, but there is a great group of men in between who are not getting the break they should because of the restrictions brought about by Wartime Housing.


John Oliver Probe: Far be it from me to defend Wartime Housing, but when I hear a speech like that of the hon. member who has just sat down it makes me boil. As I stated this afternoon, only two per cent of our lumber production for the last three or four years has been taken foy government departments, such as Wartime Housing or Veterans Affairs; the other ninety-eight per cent has been channeled out through private dealers.


Norman James Macdonald Lockhart: Where is that two per cent?


An hon. MEMBER,:: He does not know.


John Oliver Probe: I will show you what I am
talking about.


Norman James Macdonald Lockhart: In what province?


John Oliver Probe: I accept the word of the Minister of Munitions and Supply when he 'says that our average production in the last number of years has been 4,000 million feet of lumber. The Veterans Land Act took 25 million feet.


An hon. MEMBER:: Four thousand million
feet?


John Oliver Probe: Four thousand million feet.


Clarence Decatur Howe: Four billion eight hundred million feet.


John Oliver Probe: During the current year the Veterans' Land Act used 25 million feet, while Wartime Housing used approximately 60 million feet in the construction of 7,000 houses. That is a matter of simple multiplication for my hon. friend over here.


Some hon. MEMBERS:: Hear, hear.


John Oliver Probe: I am not defending the government by any means, but I just wish to be fair. Those two channels have used 80 million feet of our cut. Where is the rest of the lumber going to? According to figures produced by the Minister of Trade and Com-mers, 564 million feet of lumber left Canada in the first eight months of this year. In other words, seven times the amount of lumber used by those two government agencies

Demobilization-Munitions and Supply
left our country through export channels in the first eight months of the current year. That did not all go to the devastated countries of Europe. Hon. gentlemen to my right are pleading that the miserable two per cent which the government has seen fit to buy from the producers is to be taken away from the government, is to be taken away from the veterans. I take second place to no one over here-


Some hon. MEMBERS:: No.


Julian Harcourt Ferguson: You are not the only veteran in this place.


John Oliver Probe: We are just as loyal on behalf of our citizens as any flag waver we have over here. The only thing I ask is that the Minister of Munitions and Supply and the Minister of Veterans Affairs get busy and corral some of the lumber being produced in this country, and go to work and build houses on a national basis. To use only 80 million miserable feet of lumber when we produce
4,000	million feet is a shame.


Mr. TUSTIN:: I am surprised at how much certain people do not know about the building of houses. For several days now the minister has been telling the committee how the government is trying to provide houses for the veterans of this country. All power to him for doing that, but I direct his attention to the fact that while he is trying to provide accommodation for thirty-three or thirty-five per cent of our veterans, he is discriminating against sixty-three to sixty-five per cent of them. My reason for saying that is this: There is not one Wartime Housing project in any small area or rural centre in Canada.


Ian Alistair Mackenzie: That is not correct.


George James Tustin: I said Wartime Housing project.	.


Mr. SMITH (Calgary West):: He was not speaking of Vancouver; he was speaking of a larger place.	.


Ian Alistair Mackenzie: That is a pretty good place to speak of.


George James Tustin: The constituency I have the honour to represent sent more or as many men per capita as any riding in Canada, but as far as I know not a single house has been built by any government organization. There are many veterans in my constituency who want to build homes for themselves without the assistance of the government, but they are not able to do so. Whenever they apply to dealers for materials they are advised that
' the materials cannot be furnished because of the priority granted to Wartime Housing. I have a letter here from a manufacturer to a builder in my constituency stating that the ability of the firm to supply the trade is now further restricted by the order in council giving official priority to Wartime Housing I.imited and soldier settlement housing for door and sash requirements. I have many such letters here, but I do not think it is necessaiy for me to quote them at this late hour because my purpose in rising was 'to say that veterans, wherever they may be in this country, should have an equal chance to build a home for themselves, particularly the man who is going to put his own money into it..
I should like to quote a paragraph from another letter that I received from a dealer a short time ago. He says:
We have veterans in our office every day to buy building materials .and door, sash, and so forth for homes they wish to build with their own funds.
That is not under the Veterans Land Act. These soldiers wish to build their homes with their own funds, and I say that these men deserve consideration. I know full well the difficulties in getting building materials today, but I would urge upon the minister that some arrangement be made, if at all possible, whereby the returned men will be given the preference in getting materials to build a home.


Clarence Decatur Howe: I am quite aware of the fact that this debate arises because I am so niggardly that I will not pay retail prices for lumber and supplies.
Some lion. MEMBERS: Oh, no.


Clarence Decatur Howe: These letters are part of an organized drive by the dealers. They are having a meeting in the Chateau Laurier to-day.


Some hon. MEMBERS:: No.


Clarence Decatur Howe: Hon. members say, no, but do they think I do not get these letters too? Do they think these men never come in to see me? It is a grand organized drive, and every man across the way is lending his support to it.


Karl Kenneth Homuth: I rise to a point of order. Mr. Chairman.


Some hon. MEMBERS:: Oh, oh.


Karl Kenneth Homuth: Mr. Chairman, I would draw your attention to the fact that in the last few weeks a new element has entered this house that reminds one of the sounds one hears in a barnyard. Let me say to you, sir, and I am quite in order in saying it,
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Demobilization-Munitions and Supply
that if they would go back to the barnyard and squawk and scratch on the place where they are more accustomed to being, it would be much better for this house.


Ian Alistair Mackenzie: What is the point of order?


Karl Kenneth Homuth: My point of order is this. The minister has accused hon. members on this side of the house of being the emissaries of those who want to make a profit out of building materials and who,* he says, are conducting a drive. That is not the truth, because we have in all our small towns people who wish to build houses and who have not the opportunity. I think the minister ought to withdraw that remark.


Ian Alistair Mackenzie: I protest, Mr. Chairman. That is no point of order.


Some hon. MEMBERS:: Sit down.


Ian Alistair Mackenzie: I will not sit down for any Tory that ever lived.


William Ross Macdonald: The hon. member for Waterloo South has risen on a point of order and the minister can speak to the point of order.


Ian Alistair Mackenzie: I am saying, Mr. Chairman, that there is no point of order. The minister was criticizing, and quite properly, a matter of policy affecting the party opposite, not a matter affecting any individual member of this house.


William Ross Macdonald: There is no point of order. The hon. member for Prince Edward-Lennox has the floor.


George James Tustin: I resent the remarks made by the Minister of Munitions and Supply, who is always jumping to his feet and making matters worse, and very often making statements that are not statements of fact. First of all, let me tell the minister that I am not interested in any way, shape or form in the building or lumber industry.


Ian Alistair Mackenzie: Of course. AVe all know that.


George James Tustin: But the minister made a statement implying that I was. So far as I know, the small independent lumber dealer does not object to Wartime Housing buying their lumber wholesale by the carload, but it is a strange thing for the minister to be always emphasizing that they have the right to buy the lumber wholesale when they do not pass on the benefit to the men who are going to live in these small houses.


Mr. McMASTER:: I really intended to speak on behalf of the purchaser or occupant of

these houses but, as the hon. member for Regina City has made certain statements and taken out of the books certain figures which he thinks ought to ibe true, I should like to say a word about the lumber business as I have known it for the past many years. There has been a shortage of lumber for several years, and the reason has been that the government has been a large purchaser of lumber for the erection of buildings, aerodromes and camps. If there had not been a shortage of lumber in the last few years there would not be a shortage of houses to-day, because private enterprise is willing to carry on if it can get the lumber. I do not know where all the lumber is of which the hon. member for Regina City speaks. It is not in or near Toronto. I have clients who are in the lumber business, and they have been trying to get lumber for years. They have been out to the lumber mills all over Ontario trying to buy lumber, and they go out for days at a time, but they cannot get it. If the hon. member actually knows where these dealers in Toronto can get it, he can earn a good commission. If there were not a shortage of lumber the government would not have put a priority on it. But we know there is a shortage, and with that shortage facing us we must do the best we can.
I rise to say something on behalf of the prospective occupants of these houses. I was disturbed when I heard the minister say that only 800 out of a total of 7,000 of these houses were to have foundations.


Clarence Decatur Howe: I did not say that.


William Alexander McMaster: Then give me the figures.


Clarence Decatur Howe: I said basements.


William Alexander McMaster: A basement and a cellar are the same thing.


Clarence Decatur Howe: A basement and a foundation
are not the same thing.


William Alexander McMaster: When I said "foundation" I meant "basement." In Toronto we think a house without a cellar is nothing but a shack. I have been practising law for many years, and I have never seen a person who built a house on posts who did not ultimately look forward to putting a basement under it, but you cannot do that as cheaply once the house is built. You have to raise the building, and it is more expensive to put the foundation in then than if you put it in when you are building the house. The government would not need to spend much money in putting basements under these cellars because, up to now at any rate, concrete could have been poured in and the main cost in

Demobilization-Munitions and Supply
putting in a foundation of concrete is in the forms which have to be used. These forms could be used from one building to the next and so on, and the cost of the cellar would be small, perhaps not $200. It would answer an iniportant purpose, in fact two important purposes, because it would provide a place where the family could keep their coal, vegetables and everything else, and it would keep the floor dry upstairs. I know that, because once I owned and rented a house without a foundation, and I put three different floors on the kitchen so as to keep the baby warm when it was on the floor. And remember, the people who will occupy these houses will be young people with families. There is another reason why you cannot put posts under a house in the climate we have in Canada. The ground is damp. These houses will be on damp ground and when the frost comes it will heave some corner of the building. Once that happens, the building will not easily be got back into shape, so that in time, unless there is a foundation, these houses will become shacks. Wherever possible, a foundation should be put in at the beginning. That is a word for the person who will occupy the premises, and it is an important word; but it is intended not only for him but for the owner of the house, because, if you do not put in a foundation, the house will become a' shack.


William Ross Macdonald: Shall the item carry?


Some hon. MEMBERS:: No.


Mr. ROSS (Souris):: I was going to appeal to hon. members to carry the item. Frankly, I think we have to tackle this housing business in a serious way because the situation right now demands it. I have taken issue with the hon. member for Regina City and I am not surprised that he made the appeal he did, coming from a city riding, but on a previous occasion in this house I raised an objection to the tremendous centralization that has been taking place in Canada in more ways than one. The leader of the government this evening spoke of the boards that had been set up representing national housing, wartime housing, and veterans, and I am sure all three are concentrating their efforts on the setting up of colonies in the large centres to-day. All across the prairies, despite what we have heard for a year about national housing, the fact is that no one can get a loan to build a house outside a large city. I do not want to antagonize anybody, but I hope we can get on to something else. I trust the government will discontinue the tendency toward centralizing all the housing business under certain
departments. We have had a good discussion on this question and there are many other items to l?e taken up. I hope we can get along.


Agar Rodney Adamson: There is one question I wish to ask in regard to what the minister is doing now with Wartime Housing as a permanent agency for the construction' of permanent houses. What is being done with reference to the municipalities? A dollar a year is paid for the lot. In Toronto the taxes, as far as the house is concerned, are from $24 to $30 a year, and that is only a fraction of the normal taxes which would be assessed on that property if it were under normal assessment.	>


Clarence Decatur Howe: What are the taxes on a
$3,000 house in Toronto?


Agar Rodney Adamson: It depends on where you are, but it would run considerably more than that. It is at least twice that, if school taxes are taken into account.


Harry Rutherford Jackman: Thirty-five mills.


Agar Rodney Adamson: In my constituency,
which is not part of Toronto, they will run considerably more than that. There is also this fact to be considered. I realize that the minister has great difficulties in building these houses, but when you increase the population by building these houses you have to provide extra services, and a dollar a year rent or the small amount of taxes which the government agency, Wartime Housing, pays the municipality, will not be sufficient to reimburse the municipality for the extra services which the increased population will demand. There will be increased services in the way of schools and increased lighting. A dollar a year does not nearly cover average street lighting. It does not in my riding, nor does it in Toronto. You are building up a liability for the municipality, and I suggest that a revision of the basic contract should be made before you go further ahead with this project.


Clarence Decatur Howe: I shall be glad to tell the
mayor and the city council of Toronto and those who are charged with the responsibility for dealing with this problem that the Conservative members all object to building houses there, in the first place, and in the second place they think a proper deal will not be made.


An hon. MEMBER:: That is not true.


Clarence Decatur Howe: Certainly it is true. Everyone here has said so. Every Toronto member
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Demobilization-Munitions and Supply
has spoken in the debate and objected to building wartime houses, and objected to everything about them.


Agar Rodney Adamson: I do not object to your building houses, but I do object to your putting a liability on the municipality, and the municipalities object too, because you have to expropriate land.


Clarence Decatur Howe: We did not get that land
for a dollar.


Agar Rodney Adamson: You are quite right you did not. You had to expropriate the land in one of the municipalities in my riding for that very reason, and I suggest that while houses are a desperate emergency at the present time, the contract with the municipalities must be reviewed and revised; otherwise, in four or five years' time, you will have a liability which will speedily bankrupt a number of these suburban municipalities. One of the municipalities in my riding required expropriation before they gave the land to Wartime Housing.


Humphrey Mitchell: What is wrong with
expropriating that land to build houses for people to live in?


Ian Alistair Mackenzie: War veterans.


Agar Rodney Adamson: This was not for war veterans but for factory workers.


Humphrey Mitchell: You cannot play both ends against the middle.


Agar Rodney Adamson: If the Minister of Labour will contain himself for a minute I will tell him what is wrong with .the principle. There is nothing wrong with building a house as long as you are prepared to pay for the services it will entail; The family who will live in the house will require certain services. If you build twenty or thirty or fifty or two hundred houses in a municipality, the people who will live there will certainly require services, and they will require services at a greater rate than the government is prepared to pay for at the present time. I suggest that the government should revise the agreement because, as I have said, they are going to build up a considerable liability for the municipalities, which will wreak havoc in the years to come.


Mr. LENNARD:: Is any of this amount for the housing conversion plan? May I ask further if the conversion plan is being extended, or has the extension been discontinued?


Clarence Decatur Howe: I must confess I do not know. It has nothing to do with Munitions and

Supply or the Department of Reconstruction, and my knowledge does not go outside those departments.


Frank Exton Lennard: What department is it under?


Clarence Decatur Howe: I could not tell the hon. member.


Wilfrid Garfield Case: No one knows; it is an orphan.


Clarence Decatur Howe: It is Finance.


Mr. REID:: A great deal was said this afternoon about the building of houses, but very little has been said regarding the solution of the problem. Therefore I am going to make this suggestion to the minister and through him to the government. The question to-day is one of lumber and the crux of the matter is largely the price set for lumber at the mills in British Columbia which produce the greater proportion of the lumber in this country. I am surprised that hon. members, from Ontario particularly, have not risen in their places and complained about the price they are charged for lumber in this province. Let me give an instance of the profit that is being made by the dealer in Ontario.
The mill owners of British Columbia maintain that the price set for lumber on the local market in that province is causing them to take a loss. Were it not for the fact that they are shipping lumber across the line and to the eastern provinces they could not carry on. We want to stop a lot of the shipment of that lumber across the line and use it ourselves. I shall give the committee a few figures as to what the dealers are receiving in Ontario. The ceiling price to the mill in British Columbia on fir lumber of one grade is $25 per thousand feet. The freight on that lumber from British Columbia to Toronto is $29.50, making a total of $54.50 per thousand feet at Toronto. There was a time before the war when the dealer in Toronto had to build a large shed to store lumber and the overhead was very great. To-day he has no overhead because it comes out of the car on the siding and goes right to the house which is being built. What is he charging on that lumber which cost him $54.50 per thousand on the siding? On that lumber he is allowed a ceiling price of $80.


Some hon. MEMBERS:: Shame.
Mr. REID1: Actually he is making $25.50 profit more than the dealer who manufactured the lumber in British Columbia. Let me now take the shipments across the line. The dealer shipping across the line gets some $12 to $15 a thousand feet more for shipping lumber

Demobilization-Munitions and Supply
across the line than he can obtain in British Columbia under the ceiling price. He naturally wants to carry on; he does not want to go bankrupt, and he is shipping all the lumber he is allowed, under the act to ship, into- the United States, with the result that we have not the lumber to build houses; yet we are producing it to the extent of four billion feet a year. There is the crux of the whole matter.


Alan Cockeram: What price do they get across the line?


Clarence Decatur Howe: A good deal has been said about lumber; but lumber is not a very scarce commodity. I hold in my hand a three-page statement of the exact lumber position in Canada year by year for the last ten years. With the permission of the committee I am prepared to put it on Hansard, or if the committee prefers I shall read it.


William Ross Macdonald: With the unanimous consent of the committee.	-
Some ihon. MEMBERS: Read it.	,


Some hon. MEMBERS:: Put it on Hansard.


Karl Kenneth Homuth: No.


William Ross Macdonald: Order. I do not want to have any misunderstanding. I took it for granted that it was with the unanimous consent of the committee that the statement was to be put on Hansard.


Some hon. MEMBERS:: No; read it.


William Ross Macdonald: Without the unanimous consent of the committee it will have to be read.


Clarence Decatur Howe: Mr. Chairman, several speakers have mentioned'-


John Bracken: If the minister requests it, perhaps the committee will approve his putting the statement on Hansard without his taking the time to read it.


William Ross Macdonald: With the unanimous consent of the committee.


Clarence Decatur Howe: Mr. Chairman, several speakers have mentioned the operations of timber control, with special reference to the division of total production as between domestic and export markets. I think I can place this problem in its proper .perspective by giving the committee the allocation of timber for the ten-year period from 1934 to 1944, with the estimated allocation for 1945. The following .figures, which I shall ask to be placed on

Hansard, show production in thousands of feet board measure, and include lumber, flooring, ties and square timber:	Percent
Retained in	of Ex-
Year Production Canada Exported ports
1934..	..	2,578,411	1,087,2851935..	..	2,973,169	1.542,6211936..	..	3,412,151	1.554,1871937..	..	4,005,601	2,039,3031938..	..	3,768,351	2,015,2601939..	..	3,976,882	1.764,9491940..	..	4.629,052	2,080,3711941..	..	4,941,084	2,640,2091942..	..	4,935,145	2,755,1891943..	..	4.363,575	. 2,622,2991944.. ..	l^O.OOO1 2,797,000 1945 (est). 4,800,000! 2,765,0001,491,126 57-83 1.430,548 48-12 1,857,964 54-45 1,966,298 49-08 1.753,091	46-52
2,211.933 55-61 2.548,681 55-05 2,300,875 46-56 2,179,956 44-17 1,741,276 39-91
1.943.0002	40-90
2.035.0002	42-00
1	Timber control preliminary estimate.
2	Including 60,000 MB.F. sawn ties sawn to special order for United Kingdom.
A study of these statistics will show that the average quantity of lumber retained in Canada during the years 1934 to 1944 inclusive was 2,072,607 M feet. We will retain in Canada in 1945 approximately 2,765,000 M feet of lumber which is one billion feet more than was retained in 1939, and will give Canada the largest volume of lumber she has had for domestic use in the years under review, with the exception of 1944 when a large quantity of the lumber retained in Canada was used for war.
The average percentage of Canada's lumber production that was exported in the years under review was 48-45 per cent. Canada's exports this year will be approximately forty-two per cent of production, compared with nearly fifty-eight in 1934; fifty-five per cent in 1939 and 1940.
Of the quantity retained in Canada, now that the war is over, it is estimated that at least four hundred million feet previously taken up for military purposes, will be available for the civilian economy. This, combined with an expected higher production next year, should make available for the civilian economy by far the largest volume of lumber it has had -in the last twenty years.	_
Sufficient lumber is being retained in Canada under rigid export control to handle present building needs, particularly taking into consideration the shortages that exist in such things as labour and other building supplies. It should be noted that there is very definite export control, and that the volume of lumber being exported can be adjusted. On those items which are in short supply at various times in various parts of the country, such as doors, millwork and flooring, no export at present is allowed.


Mr. HANSELL:: The hon. member for New Westminster has almost said what I was going to say. I was going fio compliment the hon. member for Regina City upon touching what I thought to be a very important point in this whole picture, namely, that so much of our lumber was going out - of the country compared with the amount that was staying in. I think he should have pursued the matter farther by asking the minister why this situation is allowed to exist.
The hon. member for New Westminster has, I think, told us what, we already know,
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namely, that the lumbermen in the milling industry are able to get more across the line. I believe the minister should answer this question: Why does the government allow that situation to exist? Are -they more interested in securing United States dollars than in securing Canadian homes? If so, let the minister answer what the government is prepared to do about that situation. The people of Canada do not know these facts; they are not everyday facts that are publicized. I think that answer is due to the people of Canada. I have listened to the debate to-night. Much of it I have not been able to hear; much of it I have not been able to understand, because I wondered whether members were talking in the English language or in- the language of some far-off, distant realm. To-day we have not said very much about this.
We know the minister did well throughout the war years. He has had a responsible position and he has developed into a sort of tough guy. As I say, I have listened to the debate in this committee. This house is the house of free speech, but I can assure hon. members they are not going to change the minister's mind one bit. He is going on in just the same old way, doing just what he wants to do. Will the minister tell us why this situation with respect to the export of lumber exists and what the government is prepared to do to remedy it so that Canadians can get more lumber? If in the statement that the minister has placed on Hansard he says there is no shortage of lumber, then I shall tell him that there is something faulty in the distribution of it, because in many smaller places of this country one cannot buy any lumber; it is not there. Therefore he had better answer either the one question or the other.


Clarence Decatur Howe: Perhaps I should have read the statement. The statement shows that during the past twelve months 4,800,000,000 feet of lumber came on the Canadian market. Of that about forty-two per cent has been exported. The reason for the export is this: We have maintained the level of export that we 'had pre-war; that is, in board feet. We have not increased it. We are exporting to the United States the same amount that we exported in 1938 and 1939. We are exporting the same amount to the United Kingdom as we did pre-war. We are exporting about the same amount to Australia and New Zealand that we did pre-war, but out total cut has increased by one billion feet and that one billion feet is going into the Canadian market. The reason we have been able to maintain fairly well our price level in timber is that

the percentage of export, which has been allowed, which, remember, is only the pre-war level, is at a much higher rate, particularly the exports to the United States. By averaging out the domestic sales and domestic price with the export sales and export prices the lumber dealer is getting a fair return for his labour.
My hon. friend suggested that we cut off the exports to the United States. Let me remind him that if we took that step th6 United States could take similar action with coal, cotton, sugar, gasoline and other commodities of that kind. Across the boundary we have maintained the pre-war position. We are getting about the same amount of coal, perhaps more, than we got pre-war. We are getting our share of gasoline, and in times of great need you do not just say to your neighbour: "I am sorry; we cannot deal with you; we need the lumber ourselves; when we have a surplus we will let you know," because that works two ways, and it would be very unfortunate for Canada if anything of that kind developed.
If my hon. friend will read the statement I have just placed on Hansard it will clear up ' a good many misconceptions about the lumber situation in Canada and the relation of exports to domestic use. The main trouble about lumber is the matter of distribution. Before the war we were accustomed to going to lumber yards which carried large stocks and coming back with just what we needed. We cannot do that to-day; the lumber is going directly into consumption, which is the proper channel when we are working on rock bottom. It would be unfortunate if any part of the country had large stocks of lumber. I believe the statement I put on Hansard will clear up the situation.


John Bracken: 
[Stage Direction]
Item agreed to.
Miscellaneous property acquired, $3,000,000.
Gordon Knapman Fraser: The minister said this afternoon that he would let us know what different organizations were under Munitions and Supply and what had been cancelled during the year.


Clarence Decatur Howe: These companies have been
closed out: Plateau Company Limited, officially closed December 23, 1943; Toronto Shipbuilding Company Limited, officially wound up as at December 31, 1943; Machinery Service Limited, officially closed April 30, 1944; NorthWest Purchasing Limited, officially closed October 31, 1944; Cutting Tools and Gauges Limited, officially wound up January 31, 1945; Wartime Oils Limited, officially closed March 31, 1945; Veneer Log Supply Limited, officially wound up April 30, 1945; Aero Meters Limited, officially wound up May 31, 1945; Atlas Plant Extension Limited, officially wound up as at May 31, 1945; Defence Communications Limited, officially wound up as at June 30, 1945; Quebec Shipyards Limited, officially wound up as at June 30, 1945; Victory Aircraft Limited, to have been wound up at July 31, 1945, but due to a delay on the part of those who took over the plant it will be actually wound up as of December 1, 1945; Wartime Metals Corporation, officially wound up as at August 31, 1945; and Citadel Merchandising Company, wound up about September 1, 1945.
That leaves Aero Timber Products Limited, which is now in process of liquidation; Allied War Supplies Corporation, which is administering several chemical plants still in operation; Eldorado Mining and Refining; Federal Aircraft Limited, which is in process of liquidating our aircraft contracts; Melbourne Merchandising Limited, which has stocks of woo! and silk rvhich are at present being liquidated; Park Steamship Company Limited; Polymer Corporation Limited; Research Enterprises Limited; Small Arms Limited, which is now in process of liquidation; Turbo Research Limited; War Assets Corporation, which is under the Department of Reconstruction; War Supplies Limited, which is liquidating its United States transactions; Wartime Housing Limited,- Wartime Shipbuilding Limited, which is in process of liquidating its shipbuilding accounts; Canadian National Railways Munitions, which has practically-finished its contracts and- will shortly be liquidated.


James MacKerras Macdonnell: Under this item there is one question which I should like to ask. I understood the minister to say yesterday that SI,750,000 of the expenditure here was for four Lancaster planes for T.C.A. .


Clarence Decatur Howe: It is for the government. T.C.A. simply operate as agents of the government across the Atlantic. It is a service to carry mail and official passengers. Only recently charges have been made for passengers. Under the present operation the government supplies the pLanes and pays T.C.A. the cost of operation and collects what revenue arises out of the operation. It is purely a government war-time service.


James MacKerras Macdonnell: What is the relation of that, may I ask, to the increase in capitalization of T.C.A., passed some time ago?


Clarence Decatur Howe: None whatever.


Agar Rodney Adamson: What function was Turbo Research performing?


Clarence Decatur Howe: Turbo Research is developing jet engines. It is generally expected that jet propulsion will have an important place not only in aviation but in industry. Jet company is a subsidiary of Research Enterprises, which has been devoting its efforts to developing a range of jet turbines.


Agar Rodney Adamson: When was the company set up?


Clarence Decatur Howe: About eighteen months ago.


Alan Cockeram: The minister gave us a list of companies now in process of liquidation or eventually to be wound up. There are a
2326	COMMONS
Demobilization-Munitions and Supply
great many other companies in Canada-de Havilland and many other industrial companies-in which the government have a certain control at this time. Can the minister toll the committee what the policy is in regard to such companies as that?


Clarence Decatur Howe: De Havilland Aircraft is a private company. For a time we have had a eontrollership on the plant on account of the large advances to the plant for the Mosquito programme. The Mosquito programme has been ended; the advances are liquidated, and we are in process of turning the plant back to its owners.


Alan Cockeram: I understand there arc many companies like that in the dominion.


Julian Harcourt Ferguson: We have heard to-day that the cost of the houses constructed under Wartime Housing was $4,190. I presume that is for the house-
Some lion. MEMBERS: Order.


William Ross Macdonald: I should like to remind the hon. member that, the item he refers to is carried.


Julian Harcourt Ferguson: That is quite correct, but I also understand that we are able to refer back to the various items. That has been the procedure, I understand.


William Ross Macdonald: May I remind the
hon. member that tKe arrangement was that the item would carry, and that it could not be referred to again, unless in connection with a question which would be answered later. However, I am in the hands of the committee, and if the hon. member has only one question, perhaps he might be allowed to ask it.


Julian Harcourt Ferguson: That has been the procedure in other committees, that we could refer back.


Some hon. MEMBERS:: No.


William Ross Macdonald: I do not wish to be
insistent. My suggestion would be that, with the consent of the committee, the hon. member might be allowed to ask a question.


Julian Harcourt Ferguson: This is not a case of a Toronto lawyer going into the building business. It is the case of a man in the building business disputing figures. I am familiar with these houses which are to cost $4,100. The minister has said that no private corporation could build these buildings as cheaply as he is building them. I dispute his word. If I, as a private builder, were able to figure the loading charges on these buildings that rent at $22 a month I could build for less than the government. The hidden charges

on these buildings built by the government would put the cost under government construction up to about $7,000.
I sell solid brick houses in Toronto for $10,500. They have a living room of twenty-three feet by fourteen feet six inches. If you want the facts, I will give them to you. I know something about the building business.


Harry Rutherford Jackman: Would the minister say
what is to happen to the four Lancasters now flying the Atlantic route after Trans-Canada Air Lines acquire new aircraft for the oceanic service?


Clarence Decatur Howe: I presume that, like all other planes we have, they will be used until they are worn out.


Harry Rutherford Jackman: By Trans-Canada Air Lines or some other service?


Clarence Decatur Howe: They are owned by the government. I presume they will go over to the air force.


Harry Rutherford Jackman: I do not understand what disposition will be made of miscellaneous equipment, which includes four aircraft. I understand at the present time they are flying the Atlantic route. They are government-owned, but operated by Trans-Canada Air Lines. Trans-Canada Air Lines look forward to spending $20 million of the taxpayers' -money in acquiring aircraft to operate the transatlantic route. What is in the mind of the minister or the government in connection with the future use of those four aircraft? Are they to become part and parcel of Trans-Canada Air Lines, or will they always be operated as a separate unit, owned by the government, but operated by Trans-Canada Air Lines, and not integrated so far as ownership is concerned with the other Trans-Canada assets?


Clarence Decatur Howe: Trans-Canada may want to buy them; I am not sure. I wish I could look into the future, as my hon. friend would wish me to do. If I could, I could answer his questions. However, at the present time those planes are owned by the government and are operated by Trans-Canada for government account. It will be some time before Trans-Canada can get the full complement of new planes, and they will use these in the meantime. Whether they buy them or rent them, I cannot say.


Harry Rutherford Jackman: Are they being used entirely for government service?


Clarence Decatur Howe: For official passengers, and for mail.

Demobilization-Munitions and Supply


Agar Rodney Adamson: The minister did not say anything about companies such as Allied Brass. Are they still in existence? When were they liquidated?


Clarence Decatur Howe: Allied Brass was not a crown company; it was a private company.


Alan Cockeram: We have heard about
those four planes. What are the other items covered up in this item, in addition to those four planes?


Clarence Decatur Howe: Does the hon. member mean covered, or covered up?


Alan Cockeram: Probably the minister
is right.


Clarence Decatur Howe: If the hon. member meant
"covered up", I would resent it.


Alan Cockeram: Are there any -other
items?


Clarence Decatur Howe: Yes, there are. There is an
aeronautics inspection school built at Malton.
Mr.. COCKERAM:	How much for that?


Clarence Decatur Howe: That was $50,000. Then, an airport at Cartierville, This was a small extension costing $1,250. Then, there was an expenditure on a ferry boat at Vancouver, owned by the department, involving an amount of $500. Then there is a storage unit for filled ammunition at Delsen, Quebec, for $1,000, and a storage unit at L'Acadie, Quebec, for $5,000. Then, the wood fuel controller has spent $1,477,94, probably for an automobile. There is another item of $137,28.


Alan Cockeram: I do not like the
minister's reply. In the first place, those aircraft are costing $1,700,000, and there is a difference of $1,100,000. The minister has given us details for about $200,000. What is the big stuff? What are the big figures?


Harry Rutherford Jackman: Keep the chicken feed.


Clarence Decatur Howe: What was the question?


Alan Cockeram: The minister has
stated that the four Liberators or Lancasters, or whatever they are, were to cost about $1,700,000. This item covers $2,852,364. The minister has explained the additional $1,100,000 to the extent of some $200,000. He gave us one item of around $100, but I should like to know something about the major items of around a million dollars.


Clarence Decatur Howe: Prior to August 31 we had
spent $147,636, and we anticipate that the requirements for the remainder of the year will be the balance of the $3 million, which is $2,852,364. A good many of these amounts are commitments from the first half of the 47696-147
year which have to be. paid for between now and the end of the year. This is a clean-up item for a large variety of accounts. I could go down the list of forty or fifty items if the hon. member wished. They are all small.


Alan Cockeram: Some of the items the minister mentioned were not principal items. I should like to know something about the principal items, the big items, in dollars and cents.


Clarence Decatur Howe: The items are as follows:
Aeronautical inspection school building, Malton	 $55,085 00
Cartierville airport-runways ....	166,076 38
Perry boat Crosline, Vancouver ..	634 00
Fitting-out berth, Pietou, Nova
Scotia	
87,129	51Fort William airport	
162,773	36Lancaster bombers	
1,804,000	00Levis Tramways	company-construction of a power substation. 15,500 00 Malton airport-storage facilities for Mosquito and Lancaster aircraft spares	
167,211	71Pier No. 7, Halifax-dredging ....	252	60Purchase of vehicles from Department of National Defence	
327,860'	44Repairs to proof trucks (Allied War Supplies Corporation) ....	2,269	.29
:Semi-tidal graving dock-(Saint
John, N.B	
22,614	73*Ship repairs-Dartmouth and Halifax	
51,279	22Sound projection equipment	
7,747	23
South side fitting-out berth, Saint
John, N.B	 809	25
Storage unit for filled ammunition
-Delson, Quebec	 10,588	26
Storage unit for filled ammunition.
[DOT]-De Beaujeu, Quebec	 54,482	90
Storage unit for filled ammunition
-'L'Acadie, Quebec	 38,440	89
Trucks for Allied War Supplies
Corporation	 131	90
Water supply-Dartmouth, Nova
Scotia	
34,385	12Wharf-'Courtenay bay	
22,832	93Wood fuel controller	
56,536	65Ammonia tank cars	
137	28


Alan Cockeram: It is amazing that the minister's department should be buying vehicles from the Department of National Defence to an amount of $327,000. Could the minister explain that?


Clarence Decatur Howe: In producing synthetic rubber tires we carried on extensive tests in western Canada and in Texas, under hot weather and cold weather conditions. That required vehicles, an$ since we had orders for the Department of National Defence, we purchased the necessary vehicles from that department.


[Stage Direction]
Item agreed to.
Production subsidies and other miscellaneous war expenses, $25,000,000.
James MacKerras Macdonnell: Could we have a break-down of this item? I cannot under-

2328	COMMONS
Demobilization-Munitions and Supply
stand why we could not have these breakdowns before. If we had them we could deal with the item much more intelligently.


Clarence Decatur Howe: These subsidies cover a number of items, but by far the largest amount is represented by the coal production subsidies. There are only a few coal mines in Canada that can operate at present ceiling prices without a subsidy. Some of the subsidies. particularly those in the maritime provinces, are substantial indeed.


James MacKerras Macdonnell: What is the amount of those, please?


Clarence Decatur Howe: Algoma Steel Corporation, subsidy on coke for domestic purposes, $44,169.08; Burlington Steel, fuel subsidy, $112,163.33; Canadian Furnace Limited, freight allowance, $23,351, and another subsidy covering transport charges on coke, $144,106.23; Dominion Foundries and Steel, moving trackage to clear the way for government construction, $23,688.27.


James MacKerras Macdonnell: What is the total coal subsidy?


Clarence Decatur Howe: Dominion Shipping Company Limited, which is the transport company of the Dominion Steel and Coal Corporation, subsidy of $4,000,000; Dominion Steel and Coal Corporation, direct subsidy, $4,228,111.35; Canadian copper producers, subsidy on copper sold domestically. $1,973,874.87. The total - related to fuel is $10,549,464.13. Emergency coal production board, advances, et cetera, re coal production, $9,743,027.85. Those are the actual production subsidies other than for coal mining.


Major James William Coldwell: What proportion of the subsidy of $9,000,000 was paid on United States and Canadian coal?


Clarence Decatur Howe: There is no subsidy on bituminous or steam coal from the United States, but there is a subsidy running up to $1 a ton on United States anthracite.


Major James William Coldwell: What does that amount to? If you have not the figure, perhaps you can furnish it at some other time.


Clarence Decatur Howe: I do not know just what our imports are, but I shall be glad to provide that figure.


Mr. MATTHEWS (Kootenay East):: Could the minister give us a break-down of the coal subsidies as between the Nova Scotia area and the Crowsnest Pass area?


Clarence Decatur Howe: Does my hon. friend want the subsidy per ton or the total payment. I can-
"Mr. MaedonneU.]
not give him that. It is too large in both areas, I may say, but I shall have to give that information to-morrow.


Major James William Coldwell: Were any conditions attached to the payment of these subsidies, to the Nova Scotia mines for example? Was there any clause in- the agreement that certain conditions should be attained for the miners?


Humphrey Mitchell: Some of it was a subsidy, but in the main it was an increase in the price of coal. The last increase in wages paid to the miners of Nova Scotia was Taken care of by an increase in the price of coal. The previous increase granted to the miners of Nova Scotia was taken care of by an increase in the price of coal. Prior to that there was a levelling off of conditions which amounted to-I am speaking from memorv- between $800,000 and $1,000,000. That was taken care of by the subsidy. That is the only thing since the war broke out.


Major James William Coldwell: Is that a part of this subsidy?


Humphrey Mitchell: Yes.


Major James William Coldwell: So that the men are entitled to certain conditions, and this payment is conditional on those conditions being observed?


Humphrey Mitchell: Absolutely. The last levelling up of conditions-not the last two increases in pay-was taken care of by subsidy. When the war is over and the coal situation gets more fluid, West Virginia cpal could be delivered in Sydney cheaper than coal can oe produced in Sydney.


Alfred Johnson Brooks: What subsidy is paid per ton in Nova Scotia and what subsidy is paid in New Brunswick? The coal situation is critical in New Brunswick and the coal producers in the coal area there are of the opinion, which I think is justified, that Nova Scotia is receiving better treatment than the coal producers in New Brunswick. What is the basis for the subsidy in each province? I had understood that it was the cost of production, but I know that in my province they are not receiving a subsidy which pays for the cost of production. I would say to the Minister of Labour that when an increase was given to $1 a day in Nova Scotia in 1943, and a week's vacation each year, that was made retroactive on the coal producers, but no subsidy was provided to pay for that $1 a day.


Humphrey Mitchell: There was an increase in the price of coal.

Demobilization-Munitions and Supply


Alfred Johnson Brooks: An increase of ninety-five to ninety-seven cents in the price of coal, but that did not cover the cost at aM. The cost in New Brunswick amounts to something like $1.20 a ton, and the coal producers are receiving a subsidy of $1 a ton. I would respectfully submit that something should be done for the coal area and the coal industry in New Brunswick, for otherwise the coal industry there will be driven out of business. While if is a small industry it is important in our economy, some 1,500 miners receiving employment. But the industry is being starved; it is not receiving the attention it should have. The subsidy paid is not in proper proportion to the cost of production in that area.


Clarence Decatur Howe: The statement just made by my hon. friend on behalf of New Brunswick is the statement that is made to me by every coal operator in Canada. None of them is getting enough. I can say that we are paying plenty, and we are paying it out of emergency funds. We . have a royal commission on coal grappling with this problem and I sincerely hope that it finds a solution, because some day the emergency funds are going to stop and I do not know what the mines which have been leaning increasingly heavily on the government as the war has proceeded will do then. I can tell my hon. friend that coal in the maritime provinces costs $10 a ton at the pit mouth in some mines, and if anyone has any illusion that it can be sold at that price he is due for a rude awakening. I do not know the answer. It is for the future. To meet the needs of the various areas we are paying to-day a flat rate subsidy throughout Canada which would give any serious student of the coal situation reason to pause. I sincerely hope that the Carroll commission will find a solution, but I cannot think what it will be.


Alfred Johnson Brooks: My understanding is that $3 a ton subsidy has been paid in Nova Scotia, while in New Brunswick it is $1; it is less in the west. It is based upon the cost of production, but in the New Brunswick area they have based the subsidy on the wrong premises. In every other province production in the shaft is kept separate from production in stripping. The cost is much less in stripping than in producing coal in the shaft. But in New Brunswick they have averaged the costs for production in the shaft and stripping, which brings the average away below what it ought to be, and the consequence is that our coal operators in New Brunswick are being driven pretty well to the wall. All we ask is that we be treated just the same a3 the 47696-147J
mining areas in every other part of Canada. It is a matter which the minister could very well look into.


James Herbert Matthews: Does the answer which the Minister of Labour gave to the questions asked by the hon. member for Rosetown-Biggar apply also to the Crowsnest Pass area?


Humphrey Mitchell: I do not want to get into an argument on the estimates of my colleague, for one could make a long speech on the subject of coal mining. The averhge production per miner in western Canada is three and a half tons; in the eastern field it is down to 1-63 tons, although it was above two tons before the war. In the United States, averaging stripping and deep mining, the production is about 7 tons per man. In Nova Scotia they have deep mines and subterranean mines. In Alberta in some parts they take the coal off in the strip. They have not deep mines like they have in Nova Scotia. It is a complex question, as my hon. friend has said. As I said in reply to the hon. member for Rosetown-Biggar, when the war is over and price is the determining factor, it will not matter where the coal comes from, Great Britain, the United States, western Canada, eastern Canada or any other country. I indicated to him that at this very moment you could ship west Virginia coal to the mine face in Nova Scotia, pay the transportation charges and deliver it cheaper than it could be mined in that province. That is an alarming situation, and you cannot just wish yourself out of a jam of that kind. As my colleague the Minister of Munitions and Supply has said, we hope that the coal commission has the answer to this difficult economic and competitive question.


Ernest George Hansell: The very forceful speech which the minister has just given-


Humphrey Mitchell: A forty-minute speech in five minutes.


Ernest George Hansell: I am not going to get into a forty-minute speech on monetary technique, but the minister might have to modify his statements a bit if he recognizes that there was a monetary technique to take care of this situation. I do not desire to hurry any report from the coal commission, but since both ministers are in their seats I would ask if they can give us some idea when the report will be submitted. Let the commission take all the time they want to report on this complicated subject, but is there any possibility that the report may be presented this year or early next year?
2330	COMMONS
Demobilization-Munitions and Supply


Clarence Decatur Howe: I am told that the commission has completed its hearings and is now writing its report. Just when it will be brought down I cannot say, but I should think early next year.


Mr. HAZEN:: Are there any subsidies under this item in addition to the coal and coke subsidies?


Clarence Decatur Howe: Yes.


Douglas King Hazen: What would they be?


Agar Rodney Adamson: What was the Canadian copper producers subsidy?


Clarence Decatur Howe: That is worked out by agreement with the copper producers. We kept the domestic price of copper at the pre-war ceiling, and by arrangement the copper producers have been paid an equalization fund for material fabricated in Canada and sold in the export market. In other words, we buy copper here in Canada, change it into shell casings, sell the shell casings in the United States, at the price of copper in the United States, and that is a refund to the copper producers, called an equalization payment.


Agar Rodney Adamson: It has nothing to do with the fact that at the beginning of the war the Canadian copper producers made a voluntary agreement with the United Kingdom government to sell copper to them at what was the then price of 10-2 cents a pound, which was away below the then existing market.


Clarence Decatur Howe: They made the same agreement with Canada as well. The United Kingdom has varied the agreement from time to time. We have not allowed any change in the domestic price, but where domestic copper has been bought and sold in fabricated form in the export market we have allowed it.


Agar Rodney Adamson: But not in the bar or ingot form.


James MacKerras Macdonnell: There are still several million dollars we have not heard about.


Clarence Decatur Howe: I shall have to give this list.


James MacKerras Macdonnell: If the minister can give it out of that unfamiliar statement.


Clarence Decatur Howe: The list is as follows:
Army Engineering Design Branch. .$1,838,467 97
Synthetic Rubber Bogie Tire
Tests-Phoenix, Arizona	 66,064 21
English Skilled Workmen-Wages,
Travelling Expenses, Income
Taxes	
19,094	69Laboratory Tests and Models....	555,553	45National Research Council-Synthetic Rubber	
100,453	38Signals Production Branch	13,510	40Signals Production Branch-Standardization of Components...	13,701	80War Metals Advisory Committee.	5,252	60
[Mr. Hansell.I
Experimental Tests re Synthetic
Rubber	
135,000	00National Research Council-Montreal	
467,353	42Various Warehouses	
75,872	35
Chrysler Corporation of Canada Limited (Storage of Motor
Vehicles)	
42,589	45Transfer Costs of Governmentowned machinery	
35,821	89
C.N.R. Coal Handling Plant-Point
du Chene, N.B	 22,718	55
Cartierville Airport-Maintenance
and Snow Removal	
51,750	26Losses on Chrome Ores	
1,570	00C.N.R. Expenses re Land Surveys..	21,011	68Fire Protection-Yarrows Shipyards and Esquimalt, B.C....	8,750	00
Gauges, Checks, et cetera

National
Research Council	
234	24Reconditioning Automotive Equipment-Chrysler Corporation ..	99,017	47
Reconditioning Box Units-Ford
Motor	
18,552	38Kitsilano Bridge, Vancouver, B.C..	4,909	90Machine Tool War Service Committee	
2,000	00Malton Storage Depot	
88,256	39Marine Railway, Liverpool, N.S....	6	05Metals Reserve Company	
2,212,658	73Molybdenum Losses	
120,746	90Port Hawkesbury Marine Railway.	23,826	53
Reconditioning Dry Docks on East
Coast	 12,879	80
Storage of Motor Vehicles and
Freight	
413,281	70Turner Valley Field-Investigation	24,550	00Thompson Brothers Machinery Company	
43,000	00
Wage Increases-Halifax Shipyards Limited and St. John Dry Dock and Shipbuilding Company
Limited	 350,000	00
Wood Fuel Controller-Loss on
Operation	
145,821	18C.P.R.-Railway Siding-Electric Steels Limited, Cap de la Madeleine	
12,835	44Craft Display Company Limited. .	5,712	00Eastern Lobsters Limited	
35,000	00General Motors of Canada Limited	17,332	30Fraser River	
12,351	95
Removal of Wreck The Craig,
Dartmouth Cove, N.S	 12,974	30
There are several pages more.


James MacKerras Macdonnell: I did not ask the minister to read those items, only the substantial ones. If he wants to amuse himself by reading those, that is his own affair. I do not want chicken-feed'.


James MacKerras Macdonnell: There is one item with regard to army engineering design which I should like the minister to tell us something aibouL Why are there so many items charged up to C.NJEL and C.P.R.? Is that because these were special things done for government account, and done in that way?


Clarence Decatur Howe: Yes.

Demobilization-Munitions and Supply


James MacKerras Macdonnell: Why was army
engineering design done separately?


Clarence Decatur Howe: That branch was responsible for the development particularly of motor vehicles -used in the war. They were put to a good deal of experimental and development costs, chiefly for motor vehicles and for certain ordnance items. The cost of the branch is represented by that item, the cost for the fiscal year.


William Alexander McMaster: With reference to the $415,000 for storage in Ford Motors, would that be stored outside London anfl other places or in the Ford company's plants?


Clarence Decatur Howe: That is to provide outdoor facilities for freight in transit. In order to be able to send full loads of motor vehicles from whatever shipping point, so that boats might be able to carry equipment, it is necessary to carry between one month's and two months' production of motor vehicles in storage. Hon. members who have travelled between Toronto and Windsor have seen the dumps alongside the railway track. That was the cost paid to the Ford Motor company for preparing and supervising certain of these dumps.


Alan Cockeram: I presume this item covers only London, Ontario. Does it cover all the dumps that we see from one end of Canada to the other?	.


Clarence Decatur Howe: This covers the dumps that handle Ford equipment. There are other dumps that handle General Motors cars and Chrysler cars, but they are separate.


Alan Cockeram: There is a similar item for all this storage covered in this one item.


Clarence Decatur Howe: No; this is the Ford.


Alan Cockeram: Where are the others? There were General Motors and other companies. The minister has been storing their equipment all along the line for years. Where is that covered?


Clarence Decatur Howe: There is the cost, $99,017.47.


Alan Cockeram: I do not want to bother the minister on that, but the items for all that storage along the railroad track are covered in this item?


Clarence Decatur Howe: Covered in the general item, yes.


Douglas King Hazen: I am a little puzzled about the figures the minister gave us. He said that the estimated cost for this year is $25,000,000.


Clarence Decatur Howe: Yes.


Douglas King Hazen: Do the figures he gave us total $25,000,000, or do they not go considerably over $25,000,000?


Clarence Decatur Howe: I was heading up toward the $25,000,000 total; I had not read them all.


Douglas King Hazen: I thought they totalled more. I was not able to add them all up, but from the amounts the minister gave it looked as though the figures would amount to over $25,000,000.


Clarence Decatur Howe: I do not think so.


Alfred Johnson Brooks: I want to get an answer
to the question I asked the minister about the bonus paid to the Dominion Coal Company of Nova Scotia and the bonus per ton down in the Minto area, if he can give the answer.


Clarence Decatur Howe: I cannot give the answer. I know the emergency coal production board has given a great deal of study to the subsidy arrangements in all parts of Canada. I know they gave particular attention to the Minto area, and I think they feel that they have been overgenerous there. In any event, if my hon. friend objects to the New Brunswick subsidy I can tell him that every coal miner in Canada objects to his subsidy. They all think it should be larger. All I can say is that the emergency production board is giving as little as it can to keep the mines in operation, which I think is a very sound position to take, having in mind all the subsidies that are required under present conditions.
Mr. LENNA.RD:	Does the Melbourne
Merchandising company or the wool control board come under this item? Where do they come into the picture?


Clarence Decatur Howe: I mentioned the crown companies. Generally speaking, the crown companies are self-supporting. In fact, Melbourne Merchandising company is doing very nicely ; it has a considerable surplus.


Frank Exton Lennard: Where should we discuss it?


Clarence Decatur Howe: Now, if the hon. member
wishes.


Frank Exton Lennard: How much wool was
handled by the Melbourne Merchandising company or the Canadian wool board?


Clarence Decatur Howe: I cannot answer as to the
amount of wool. It would not be a good thing to do anyway. Why should we disclose our stocks to the world? It is a substantial stock of wool which, I may say, is in process of being liquidated, but I would not care to give the poundage.

Demobilization-Munitions and Supply


Frank Exton Lennard: I believe that that company is guaranteed a certain price on tops for two years after the war, or two years after V-J day. Was it two years after V-J day, or two years after this country ceases to be at war?


Clarence Decatur Howe: I am sure I do not know.


James MacKerras Macdonnell: Either now or under Reconstruction, whichever the minister prefers, I think it would be desirable for him to make a brief statement to the committee about the Polymer corporation. As I understand it, we are in business in a big way in the manufacture of synthetic rubber. It would be desirable for the minister to let us know in a general way what he considers to be the future of synthetic rubber. What is the operating picture in that company at the present time? I do not want to waste time. I do not want the statement at any length, but I think the minister should give us a brief statement of the picture of this corporation, and in particular I should like to know, as far as he feels a man can fairly be asked to predict, the future of synthetic as against natural rubber.


Clarence Decatur Howe: The Polymer corporation is in a very healthy condition. It is producing about 40,000 tons of rubber a year, of which about 32,000 tons are Buna-S rubber used in outer casings of tires and similar goods, and about 8,000 tons of butyl rubber. It is selling the Buna rubber at 20T5 cents a pound, f.o.b. Sarnia. It is selling butyl at 17-21 cents a pound, f.o.b. Sarnia. Neither of those prices is a subsidized price. They are both under the wartime prices and trade board ceiling. At this price it is paying all operating expenses; it is setting up a substantial depreciation fund and is showing a substantial profit.
I think the future of butyl rubber is assured. It is a better container of air than natural rubber ever was. I think an inner tube made of butyl rubber would always be preferred to an inner tube made of natural rubber. So far as the outer casing is concerned I think it is wholly a matter of price. Under normal peace-time conditions I think Polymer -can afford to sell Buna rubber at perhaps around sixteen cents a pound. We would not like to do so, but I think we can do so and still cover our depreciation. I think the manufacturers would prefer to buy natural rubber at a cost of twenty cents and perhaps twenty-one cents a pound. If the cost of natural rubber drops below twenty cents a pound I believe Polymer will have a difficult time. However, I see no likelihood of the price of natural rubber ever dropping anywhere near twenty-one cent?

a pound. Before the war the average price was about twenty-five cents a pound. The chances are that rubber will be more expensive than pre-war before it is less expensive.
I think Canada has a valuable asset in the Polymer corporation. It has been running to capacity ever since it was built; it is supplying the needs of Canada in full with a fairly substantial margin for export. At Polymer we have a second string to our bow. If we stop making rubber ^there altogether, I think we shall have a good investment. From the light ends of petroleum we make a great number of organic chemicals, which are valuable for a number of processes. We also make styrene there, which is a valuable base for plastics. As a result of our styrene production, we have had a new industry come to Canada, a very large and substantial industry, which is building a plant near Sarnia in order to use our surplus styrene. We have now requirements for surplus ethylene and surplus butylene, both of which could be the basis of substantial industries. Unfortunately, when we are running to capacity in making rubber we have no surplus of those products; but I believe that, regardless of the future of natural rubber, we shall have at Sarnia an industry of which the dominion government will be proud to retain ownership.


James MacKerras Macdonnell: The minister said, as I understood him, that we are at present able to supply the full Canadian demand. What was the Canadian demand in pre-war days? I think he said it is 40,000 tons now.


Clarence Decatur Howe: Yes, our production is about
40,000	tons. I think the pre-war demand was somewhere around twenty-eight to thirty thousand tons.


Frank Exton Lennard: To get back to the Melbourne Merchandising company and the wool board, what profit was made by that board?


Clarence Decatur Howe: The wool board, of course,
reports to the wartime prices and1 trade board. As far as the company is concerned, we never know what the profit is until we liquidate the company. There is, of course, a reserve built up for price fluctuations. I do not know the position of the company. I can give my hon. friend the last auditor's report, if that will help him.


Frank Exton Lennard: The minister does not
know- what profit it makes each year? Surely they have a balance sheet.


Clarence Decatur Howe: The auditor general's report
indicates that, and we get reports from time to time; but I can tell the hon. member that the company is in a very sound position.

Demobilization-Munitions and Supply
How it will liquidate will depend on the price of wool in the period when it is selling the last wool that is in the inventory.


Frank Exton Lennard: The minister said that
he would not state how much they had sold. Would he state' how much wool they have on hand at the present time?


Clarence Decatur Howe: I should not like to.


Frank Exton Lennard: Could he?


Clarence Decatur Howe: I could, yes.


Ernest George Hansell: It is an enlightening and a happy thing to know that the minister has said that they can supply pretty well Canada's demands for rubber. On the basis of that statement, has the minister anything further he would care to announce with respect to when the country can expect the end of tire rationing?


Clarence Decatur Howe: The end of tire rationing
depends wholly on the fabricators of tires. The limitation is not related to rubber; it is entirely related to fabrication. We are catching up on the demand. Just how soon we shall be able to take off rationing I cannot say, but I hope it will be by next spring. It is off tubes now; they are not rationed. We hope to get the casings off some time next spring.


John Ritchie MacNicol: I am not going to ask
the minister to take time now to answer what I am going to ask, but I should like to know under what items-if he would prefer it, under the civil estimates-he can tell the committee something about the dominion magnesium plant at Haleys, and also the government Abasand plant at Fort McMurray.


Clarence Decatur Howe: I can give a brief statement now. The government has sold the dominion magnesium plant at Haleys. It is now being remodeled to some extent with a view to cutting costs, and I think it has a very good prospect of successful operation. The demand for magnesium seems to be rising rapidly. The plant at Abasand was burned some six or seven months ago and is now closed. I should be glad to present a report on the results of the tests at Abasand over a period, either, when my own civil estimates or those of the Department of Mines and Resources are before the house.


John Ritchie MacNicol: Then I shall leave the
Abasand questions until that time. The minister did not say much about the dominion magnesium plant. As he knows, it is operating moderately right now, the staff having been reduced from three hundred or more to, I believe, about seventy. Did the
government or the country get anything back out of the $5,000,000 they put into that plant?


Clarence Decatur Howe: The plant is sold on the
basis of a down payment, and a payment that is related to the production of magnesium. I think it shares in the sales of magnesium to the extent of either one cent or two cents a pound, I do not know which.


John Ritchie MacNicol: Did the country get anything back out of it?


Clarence Decatur Howe: I say, we got a down payment ; and as magnesium is manufactured, the government receives a payment related to the number of pounds of magnesium manufactured.


John Ritchie MacNicol: I wish in conclusion to express my keen appreciation of the minister's capacity. To almost any question he is asked he is able to give an answer. The question put by the hon. member for Mus-koka-Ontario I was going to ask myself, because I have made exhaustive inquiries into the Polymer corporation production, and I was greatly pleased to hear what the minister said to-night, that it will probably be able to operate and continue in operation after the war in normal times. If things turn out in that way the minister will deserve unstinted praise for what he has done in that plant.
I hope something comes out of this plant at Haleys, although I have not anything like the same hopes, or the same grounds to found my hopes on, as I have with reference to Polymer. Later, I shall be looking anxiously for that statement about Abasand.


Mr. CAMPBELL:: Does the government intend to retain ownership in the crown of the Polymer corporation?


Clarence Decatur Howe: Yes, this government does.


James MacKerras Macdonnell: The minister referred yesterday evening in his statement to controls; twelve, I think he said. I want to know which item they are related to, because I have a question to ask about them when the appropriate item arises; I am not sure which it is.


Clarence Decatur Howe: I have a brief statement on controls which perhaps I might give now.


James MacKerras Macdonnell: The minister might imitate the generosity of the hon. member for Davenport and give us these things without our having to ask for them.


Clarence Decatur Howe: It is hard to remember what is not covered by an item. Controls are free; there is no item in the estimates for them.
2334	COMMONS
Demobilization-Munitions and Supply
The policy of the government with respect to the removal of controls imposed by the Department of Munitions and Supply during the war years has been stated frequently. Since controls, are identified with scarcity, they will be removed just as soon as the supply position permits. Controls were established for one purpose-to conserve strategic materials for war and essential uses. Now that these objectives have been achieved, we are removing controls as quickly as possible.
I do not think the committee realizes the extent to which control regulations have rlready been rescinded. For this reason I propose to make a brief statement reviewing the progress made over the past year in abolishing control restrictions. At the same time I wish to comment on those regulations which are still in effect.
Even before V-E day there was sufficient improvement in the supply position of certain materials to warrant the relaxing of control regulations. The supplies control and the machine tools control were abolished in August and December of 1944 respectively. Some 150 orders issued by controllers operating under the wartime industries control board were either cancelled or relaxed prior to the end of the war in Europe. These orders affected the supply and distribution of aluminum, magnesium, zinc, copper, lead, steel products, machine tools, heavy fuel oil, synthetic rubber, asphalt, glycerine, penicillin, motor vehicle replacement parts and many other items.
In the period between V-E day and V-J day it was possible to issue forty-one orders relaxing control regulations. To mention but a few-the value of the gasoline coupon was increased ; penicillin was freed from control. The rationing of inner tubes was discontinued, and the 35-mile limit on trucking regulations abolished. All restrictions on the installation of oil-burning equipment and on deliveries of light fuel oil for heating private dwellings were removed.
With the end of the war in the Pacific, we reviewed immediately all control regulations to the end that those controls for which there was no longer any need might be rescinded. On V-J day 118 controllers' orders were outstanding. To-day, only thirty-two restrictive orders still remain. Perhaps I can state the position more clearly in terms of the controls themselves. At V-J day there were operating under the Department of Munitions and Supply fourteen controllers, with jurisdiction over aircraft, chemicals, coal, construction, metals, motor vehicles, oil, power, priorities, rubber, ship repairs and salvage,

steel, timber and transit. Since V-J day all orders of the oil, transit, aircraft, chemicals, ship repairs and salvage and steel controllers have been revoked, and the organizations of these controls are now in process of being disbanded; several of them already have been closed out entirely. In addition, it is expected that metals control will be wound up within the next few weeks. This will leave seven control organizations still in existence. These are as follows: Timber, rubber, motor vehicle, construction, priorities, coal and power. I will deal with each of these separately.
Timber control must be continued because of the scarcity of timber products. We . must ensure that adequate supplies of timber products are available for Canadian consumption and, at the same time, we must protect our historical markets by maintaining shipments overseas. I find it curious that criticism of controls and criticism of timber shortages should emanate from the same quarter. The export demand for Canadian timber products at the present time is sufficiently high to drain off a large part of our production. If timber control did not maintain restrictions on exports there would be much less timber available for Canadian consumption than is now the case. I cite this as one of the reasons for timber control. It is likely that this control will remain in existence for a good part of 1946.
Rubber control. Synthetic rubber is now available in a sufficient quantity to meet all consumer demands, and the problem with respect to tires is, therefore, purely one of production. Certain liberalizations in the tirerationing order will be made in the near future, but it will not be possible to do away with rationing completely for some time yet. Hon. members can be certain that all remaining restrictions will be removed as soon as the supply position permits. We do not yet know when large supplies of natural rubber will become available and, accordingly, it is not possible to be certain how long 'the need for rubber control in this field will continue. I would think that the next few months would show - a real improvement in our position.
Motor vehicle control. The remaining control to-day is concerned only with the distribution of trucks and passenger cars. All production restrictions on trucks and passenger cars were removed three days after V-J day. Effective as of September 1, a priority system for the distribution of trucks was instituted to replace the previous arrangement whereby trucks could only be obtained on individual application to the motor vehicle control in Ottawa. Under the new system,

Demobilization-Munitions and Supply
vehicles in excess of the requirements of priority users become available to the general public without a priority certificate. With the production of trucks at full capacity, the abolition of the regulations governing the distribution of trucks should not be far distant. No passenger cars were produced during the war years, which means that the job of conversion is not as easy as in the case of trucks. Obviously it will be necessary to retain some control of distribution during the early stages of production, and a priority system was introduced on November 15 for this purpose. At the outset passenger cars may be sold only to those holding priority certificates, but as soon as the first rush of demand from the highest essentiality users has been met this control will be substantially relaxed or removed entirely.
Construction control. Since the first of the year construction control has been following a policy of steady relaxation designed to encourage home building and to assist industry to convert from war to peace-time production. Many types of projects are now being licensed which were not licensed a few months ago, and the remaining restrictions apply chiefly to certain types of commercial and institutional projects. The control's policy of relaxation will be continued.
Priorities branch. Operations of the priorities branch, which have been closely tied in with the priorities system in the United States, have already been reduced greatly. The services of this branch will, however, continue to be necessary to protect the requirements of certain types of housing projects for, veterans.
Coal control. Canada is dependent on the United States for a part of her supply of bituminous coal, and at present, since shipments from the United Kingdom have virtually ceased, for almost her entire supply of anthracite. We have been aware for some time that shipments from the United States would not meet the current demand, and steps have been taken to warn the people of Canada to take all possible conservation measures because of the shortage which will exist this coming winter. Recently the United States removed its control on the distribution of anthracite. It is not yet possible to say what effect this will have on the supply to Canada, but there is no reason to believe that there will be any improvement over present shipments. Coal control restrictions will certainly have to be retained throughout the heating season of 1945-46. It is impossible at this time to make any accurate prediction as to what the situation will be in the heating season of 1946-47.
Power control. While all restrictions on the use of electric power have been removed, the -power controller is still regulating the use of natural gas in southwestern Ontario. This regulation will continue during the coming winter. Maintenance of these restrictions has been made necessary by the falling off in production of the natural gas wells and the shortage of other fuels.
As I said at the outset, the controls of the Department of Munitions and Supply were an essential part of the war production programme. I think it will be obvious that the continuation of certain of these controls is also essential in terms of an orderly transition to peace-time production.


Alan Cockeram: The minister gave the break-down of the $25 million, and before he finished it was decided to cut out those items. In a haphazard fashion I added the figures the minister gave, and although I have not all the figures, my total comes to $25,962,000. With the items I did not take down, I am sure it would be a great deal more than that. Would the minister state how his figures are made up?


Clarence Decatur Howe: I think what happened was this: I was asked what subsidies referred to coal production. I had already given one or two items under production subsidies, and there was some overlapping, in that I included the same items under' coal production.


Alan Cockeram: All right. The next
question has to do with priorities. Does the minister deal with priorities on the railroads and Trans-Canada which prevent people from getting transportation? The war is over, but apparently when government officials want to get somewhere in a hurry other people are denied the right to travel.


Clarence Decatur Howe: Priorities have been reduced greatly. Only the most urgent business will enable one to get a priority on Trans-Canada, and there are no priorities on the railroads.


Alan Cockeram: A great many men have returned from this war and would like to go into the trucking business. They have placed orders with General Motors, Chrysler or Ford for trucks. They have made down payments as well as completing their- application to the transit controller or the motor vehicles controller to obtain a licence to carry on business. These licences have been denied, and I think a great injustice is being done to these men who want to establish themselves in business. It is time the motor vehicles controller had some regard for these men who have served in the army and who want to reestablish themselves. I do not know of any other department of government that is so arbitrary. I

2336	COMMONS
Demobilization-Munitions and Sup-ply
have brought two or three cases to the attention of the minister. I consider it unjust that men who have served overseas for four or five years and who have the initiative to want to go into business for themselves should be denied that right.


Clarence Decatur Howe: For a time it was necessary to restrict the number of trucks when rationing was being carried on, for reasons my hon. friend will understand, but those restrictions have been lifted pretty well. All veterans' applications are being dealt with promptly.


Alan Cockeram: I have a letter here dated October 29.


Clarence Decatur Howe: I presume he sent the, application to the wrong place.


Alan Cockeram: Oh, no, it was checked up with the minister; he knows all about it.


Mr. MOORE:: I listened with a great deal of interest to the minister's statement in connection with the Polymer corporation, and I am glad to know that Canada has been so successful in the production of synthetic rubber. On looking through the public accounts in connection with that corporation, I find a number of items dealing with royalties and I should like to know what royalties and patent fees have been paid, and on what basis.


Clarence Decatur Howe: A tremendous amount of mechanical equipment went into the Polymer plant. It cost some $50,000,000, and I am not surprised that we used patented items for which royalties would be payable. I do not know what they are at the moment, but I shall be glad to look into the matter.


Ronald Stewart Moore: Could the minister get that information? I should like td know if any money has been paid out to corporations in the United States who have connections with cartels in Germany that are producing synthetic rubber?


Mr. MANROSS:: I should like to inquire about the restrictions on the use of natural gas. Is that handled from Toronto, or would that come under the minister's department?


Clarence Decatur Howe: We had certain emergency powers from the power controller which the province of Ontario was not able to exercise. There was a serious situation in connection with natural gas; at the request of the Ontario government the power controller was retained, and his emergency powers may be used to deal with the situation. The control of natural gas is ordinarily the responsibility of the province of Ontario. I hope that at an early day we can return this to its proper source.


Park Manross: Are people able to get permits to heat with natural gas?


Clarence Decatur Howe: I do not know, but I would not think so. The hon. member will have to take that up with Queen's Park.


Park Manross: New houses are being built to be heated with natural gas, whereas many people living in older houses had it taken out. Would that be under the. controller at Toronto?


Clarence Decatur Howe: Yes.


Douglas King Hazen: Who is the technical adviser of the timber controller? What are his duties? When was he appointed? What is his salary? What did he do in civil life prior to his appointment?


Clarence Decatur Howe: I have not heard of that post. If my hon. friend can tell me the man's name I will look into the matter.


Douglas King Hazen: .I do not know.


Clarence Decatur Howe: I do not think there is such a job.


Douglas King Hazen: Will the minister find out for certain if there is?


Clarence Decatur Howe: I will say now that there is not.


Mr. CASTLEDEN:: I think this item ought to stand until we have had a chance to study it. The minister is asking for $25,000,000 and he has read off a list of about-forty different items. There was one for $2,000,000, but when it was read out I could not even get the name of the firm. Immediately after that was the item of $750 for Liverpool expenditures. Then there was something about reconversion at Chrysler, $94,000, and something about some changes at Ford, $18,000. I should like to have an explanation of that item of $2,212,000.


Clarence Decatur Howe: I could spend months on that and my hon. friend would not be any wiser. ' In the last bill we asked for $25,000,000 and in the seven months to August 31 we have spent $14,795,558. I am now asking for the unexpended balance of $10,204,442. I sincerely hope that the item will pass because we have spent a good deal of time on it.


George Hugh Castleden: Could the minister give us that $2,212,000 item? I did not catch it.


Clarence Decatur Howe: Will my hon. friend give me the tag to it?


George Hugh Castleden: That is what I am trying to get. If we had been provided with this statement before, we might have been able to give some study to it.

Demobilization-Munitions and Supply


Clarence Decatur Howe: I have stacks of papers here and I can give them all to the house, ,but it has never been the practice to give a breakdown of these items.


George Hugh Castleden: I think we should have it now that the war is over. We should scrutinize these expenditures to a greater degree.


Clarence Decatur Howe: The Metals Reserve company purchased certain minerals in the United States, magnesium and so on. These were strategic metals that we did not manufacture in Canada.


George Hugh Castleden: Purchased from the United States?


Clarence Decatur Howe: Yes.


Alan Cockeram: Will the payment of these subsidies be completed this year?


Clarence Decatur Howe: I hope so.


[Stage Direction]
Item agreed to.
Termination of contracts, $175,000,000.
Ian Alistair Mackenzie: Carried.


James MacKerras Macdonnell: The Minister of
Veterans Affairs says "carried", but $175,000,000 is quite a large sum and I think we ought to know something about it. I should like to make one or two suggestions to the minister. He could elucidate this if he would explain to us what method was used in dealing with the termination of these contracts, and explain whether this $175,000,000 covers the whole thing or whether there will be further amounts next year and the year after. Perhaps he would also explain rather an odd thing in this statement. Apparently there has been only $4,500,000 spent in the first six months of this year, and $170,000,000 is to be spent from now on. Particularly I would suggest that the minister give us the main figures and a general statement of this $175,000,000, with an explanation of the principles he adopts in dealing with the termination of these contracts.


Clarence Decatur Howe: The $175,000,000 is only an estimate. It is impossible to arrive at. an exact figure until the claims are received. My hon. friend will appreciate that we were producing at the rate of $150,000,000 a month when the war in Europe ended, and the motor car companies, for instance, had parts manufactured five or six months ahead of final assembly. Everything stopped on V-J day. It takes time to get the claims in, and all the claims have to be checked, the parts examined and the raw material claims assessed. I should be surprised if we get away with $175,000,000. That is not .much more than the 47696-148i
cost of one month's production. I think the cost of cancellation will be more than that. We had ships, for instance, fifty per cent completed. There was very little salvage on them. The contracts must be .terminated. We had war materials in almost every stage of completion. We adopted a more or less arbitrary rule that where an article was ninety per cent completed we allowed i't to be completed on the theory that it would be more valuable completed than as salvage. My hon. friend will have some idea of the magnitude of the problem when I give a few figures.


Harry Rutherford Jackman: What happens to the renegotiating money? Does it come back into this account?


Clarence Decatur Howe: It has nothing to do with this account. The renegotiating money goes directly to the receiver general. The recovery to date on that item has been over $300,000,000.


Alan Cockeram: Are you not taking it out of one pocket and putting it into another?


Clarence Decatur Howe: The net recovery is about $90,000,000.


James MacKerras Macdonnell: I appreciate the difficulty, but I think the minister ought to give us a break-down. We will try to be reasonable in what we ask, but I do not want to vote $175,000,000 without knowing something about it.


Clarence Decatur Howe: This is not new money, my hon. friend will understand. We had continuing requests for these materials. It has been the practice to handle it through a revolving fund and for us to be paid by the services for the finished article. For instance, in building a ship we pay the cost of the ship through the revolving fund until delivery of the ship to the owner; then we get paid. We have rather large revolving funds for which recovery must be made through sale of the finished article or through the cancellation of the contract. It is not new money, but rather the recovery of money and it involves a great deal of accounting. There are claims running into the tens of thousands covering every main contract and every sub-contract. They have all to be audited and settled. We have a very large staff of trained men engaged on that work-all the trained men we cjan lay our hands on.


James MacKerras Macdonnell: This is the kind of thing with respect to which there might be wild criticism, probably most unfair, and I would with deference suggest that it might be worth while to take half an hour when we meet to-morrow for the minister to give some
United Nations Charter

typical cases and outline to us in a little more detail than he has just done the principles followed. Let him give us a few sample cases, and give us the break-down in so far as he can now, because while we are critical in certain things we are also here to cooperate when we can.


Clarence Decatur Howe: I have an interesting statement here on the subject of the settlement of claims arising out of terminated contracts, which I shall be very glad to put on Hansard or read.


Harry Rutherford Jackman: Put it on Hansard.


William Henry Golding: That will require unanimous consent.


Mr. MacINNIS:: I have sat here for the whole of this evening listening to what has been said by the minister and by the members of the committee, and I have come to the conclusion that so far as having any clear idea of what it is all about, we would have been just as far ahead if we had just passed the items as they were called. That is not to say that this matter should not be looked into, but I submit that it is of such magnitude that it camnot be investigated by a committee of this size under the rules of discussion that govern us. The minister said that he could go over these figures with the hon. member for Yorkton for two days and then he would not be any further ahead. I do not think either the minister or the hon. member for Yorkton is as dumb as that, although they may be lacking in some respects. But for the committee to have any real check on the figures we should need experts to explain every item as we went along. This is near the end of the war appropriations, and I hope that we shall never have another war appropriation. We can possibly go into the civil estimates, but even they are becoming of such magnitude that we cannot very well do that, and I submit that we shall have to find some way of dealing with these matters in a more efficient and realistic way if we are to have any understanding of what they are all about.


James MacKerras Macdonnell: I understand that the minister is to give us a break-down and that we can deal with this item at the opening to-morrow. Was the minister not going to put a statement on Hansard?


Clarence Decatur Howe: I think I will read it
to-morrow.
Item stands.	.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
	*
Wednesday, November 21, 1945.