1945-11-06

PRIVATE BILLS


[Stage Direction]
Bill No. 34, for the relief of Martha Louise Manful Hatch.-Mr. Maybank.
Bill No. 35, for the relief of Nora Jean Cunningham Brisbane.-Mr. Maybank.
Bill No. 36, for the relief of Therese Bon-enfant Fusco.-Mr. Boucher.
Bill No. 37, for the relief of Mildred Euretta Mackay Disher.-Mr. Emmerson.
Bill No. 38, for the relief of Mary Emerson Whittmore Schlemm.-Mr. MacLean.
Bill No. 39, for the relief of Andrew Lawrence Card.-Mr. Maybank.
Bill No. 40, for the relief of Annie Morrison Wisely Pitbaldo.-Mr. McGregor.
Bill No. 41, for the relief of Joe Eisen.- Mr. Maybank.
Bill No. 42, for the relief of Ellen Therese Cramer Watson.-Mr. Maybank.
Bill No. 43, for the relief of Rita Gendron Reid.-Mr. Brown.
Bill No. 44, for the relief of Evelyine Pearl Edwards Aird.-Mr. Emmerson.
Bill No. 45, for the relief of Helen Turner Luke.-Mr. Hazen.
Bill No. 46, for the relief of Lois Elizabeth Allworth Pierce.-Mr. Emmerson.
Bill No, 47, for the relief of Armandine Ceeile LeBrun Lachance.-Mr. Emmerson.
Bill No. 48, for the relief of Grace Irene Paquet Hopkins.-Mr. MacLean.
Bill No. 49, for the relief of Alma Joan Begin Oswald.-Mr. Hazen.
Bill No. 50, for the relief of George Ernest Reed.-Mr. Maybank.
Bill No. 51, for the relief of Sylvia Heather McCulloch Peck.-Mr. Maybank.
Bill No. 52, for the relief of Frederick Keith Beattie.-Mr. Emmerson.
Bill No. 53, for the relief of Robert Coull. -Mr. Homuth.
Bill No. 54, for the relief of Violet Beach Meredith.-Mr. Croll.
Bill No. 55, for the relief of Max Engleberg. -Mr. Casselman.
Bill No. 56, for the relief of Bertha Harris Fineberg.-Mr. Maybank.
Bill No. 57, for the relief of Nils Jens Pettersen.-Mr. Hazen.
IMr. Coldwell.] "
Bill No. 58, for the relief of Benjamin Charles Stafford.-Mr. MacLean.
Bill No. 59, for the relief of Florence Mary Daniel Nightingale.-Mr. Benidickson.
Bill No. 60, for the relief of Edward Stephen Vasselin.-Mr. Homuth.
Bill No. 61, for the relief of Robert Marshall Miller.-Mr. Merritt.
Bill No. 62, for the relief of Dorina Laurin Wallis.-Mr. Casselman.
Bill No. 63, for the relief of Helen Louise Clark Leet.-Mr. Maybank.
Bill No. 64, for the relief of Dorothy Anita Duffy Gregson.-Mr. Casselman.
Bill No. 65, for the relief of Irene Grace Harman Smith.-Mr. Casselman.
Bill No. 66, for the relief of Lorna Maud Clerk Kingsland.-Mr. Casselman. .
Bill No. 67, for the relief of Edgar Jean.- Mr. Maybank.
Bill No. 68, for the relief of Ethel Maybird Wright Latremouille.-Mr. Croll.
Bill No. 69, for the relief of Marie Rose Alba Germaine Belair Blanchard.-Mr. Cleaver.
Bill No. 70, for the relief of William Bernard McCarrick.-Mr. Croll.
Bill No. 71, for the relief of Lome Edward Souva.-Mr. Casselman.
Bill No. 72, for the relief of Edith Gertrude Jackson Holloway.-Mr. Maybank.
Bill No. 73, for the relief of George Allenby Bradshaw.-Mr. Maybank.
Bill No. 74, for the relief of Phyllis Fitch Farber.-Mr. Maybank.
Bill No. 75, for the relief of Vencel Hume-nay.-Mr. Rose.
Bill No. 76, for the relief of Waldo James Cousins.-Mr. Maybank.
Bill No. 77, for the relief of Albert Wilson Harvey.-Mr. Maybank.
Bill No. 78, for the relief of Iris Ester Wes-terberg.-Mr. Smith (York North).
Bill No. 79, for the relief of Della Frances Gardner Hudson.-Mr. Maybank.
Bill No. 80, for the relief of Joseph Gerard Fernand Arthur Groleau.-Mr. Croll.
Bill No. 81, for the relief of Audrey Nathaniel Smith MacNair.-Mr. Croll.
Bill No. 82, for the relief of Ovila Bernard. -Mr. Emmerson.
Bill No. 83, for the relief of Albert Edward Spray.-Mr. Emmerson.
Bill No. 84, for the relief of Helen Isabel Dibblee Brown.-Mr. Maybank.
Bill No. 85, for the relief of Robert Hiscock. -Mr. Homuth.

Surplus War Assets
Bill No. 86, for the relief of Jacques Noel Cerminara.-Mr. MacLean.
Bill No. 87, for the relief of Joseph William Henry Beausoleil.-Mr. MacLean.
Bill No. 88, for the relief of Rita Beryl Gwendolyn Scott Lunn.-Mr. MacLean.
Bill No. 89, for the relief of Neil Sinclair McKenzie.-Mr. Maybank.
Bill No. 90, for the relief of'Albert Evariste Gelinas.-Mr. Maybank.


[Stage Direction]
On the order:
The Prime Minister-the following resolution:
Resolved, that in the opinion of this house, it is expedient that Canada possess a distinctive national flag and that a joint committee of the Senate and House of Commons be appointed to consider and report upon a suitable design for such a flag;
That standing order 65 of the House of Commons be suspended in relation thereto;
That the said committee have power to send for persons, papers and records to aid in the discharge of its functions; and
That a message be sent to the Senate to inform their honours that the House of Commons has appointed this committee and to request their honours to appoint members of the Senate to act thereon with the members of the House of Commons as a joint committee of both houses.
Hon. IAN A. MACKENZIE (Minister of Veterans Affairs): Mr. Speaker, last night I intimated that we would proceed with this resolution to-day. I find, however, that we have not yet received from the official opposition the names of the members whom they would like to represent their viewpoint on the committee. I appeal to my good friend the acting leader of the opposition to let me have the names by to-morrow. In the meantime, without infringing on my rights to speak on the ^motion, I ask that it stand.
Mr. COLD  WELL@: Are all the other names in?


Mr. MACKENZIE:: Yes, all the other groups have had1 their names in for some time.	.
Order stands.



DEFENCE AND DEMOBILIZATION


Hon. J. L. ILSLEY (Acting Prime Minister) moved:: That a select committee be appointed to examine the expenditure defrayed out of moneys provided by parliament for national defence and
demobilization, and for other services directly connected with the war, including the disposal of surplus war assets, and to report what, if any, economies consistent with the execution of the policy, decided by the government may be elfeeted therein, and that notwithstanding standing order 65 the committee shall consist of twenty-five members, namely: Messrs. Benidiek-son, Black (Cumberland), Bradette, Cleaver, Cote (Verdun), Dion (Lake St. John-Roberval), G-olding, Homuth, Isnor, Jackman, Knowles, Lalonde, Macdonnell, Marquis, McDonald (Pontiac), McGregor, Mcllraith, McLure, Michaud, Probe, Reid, Shaw, Smith (Calgary West), Stewart (Winnipeg North), Winkler, with power to send for persons, papers and records; to examine witnesses and to report from time to time to the house.
He said: Mr. Speaker, I should like to say a few words to this resolution, and a few only. This resolution takes the place of or succeeds similar resolutions in the past few years for the appointment of committees to examine into war expenditures. The phrase "for national defence and demobilization" is substituted for the phrase "for the defence services". This change is in line with the change in the designation of the war appropriation measure. There is also the insertion of the phrase "including the disposal of surplus war assets." This phrase is inserted to remove any doubts about the powers of the committee in that regard. Otherwise the language of the resolution is similar to the language of the resolutions in previous years.
In this committee, as it has existed in the past and as it will operate this year, it is the intention of the government that the emphasis be laid upon the examination of current expenditures and current practices. The purpose of the committee is not the same as the purpose of the public accounts committee, which is to hold the government to account for its expenditure of money in the past and very often is accompanied by a charge by a member of the opposition as to certain wrongdoing in the expenditure of money for which he takes some responsibility- a very large measure of responsibility. This is rather a committee carried on for the purpose of effecting economies, of saving the country money and assisting the government in operating as economically as possible, and *that point should always be present in the minds of the committee. The committee should not be a fishing expedition; it should not be a roving commission with the intention of ranging over the whole field of war expenditures in the past with a view to bringing out some instance of extravagant expenditure. That is the function of the public accounts committee. This committee should rather examine what is going on and what has been going on recently, with a view to correcting
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and improving any defects in governmental administration so far as expenditures are concerned.
With regard to whether the committee shall sit in secret or not, that has been a bone of contention over the past years. This year the government has no objection to this committee conducting its sitting in the open. In fact, it favours the committee conducting its proceedings in the open unless in some particular instance the committee itself decides that there is some reason for sitting behind closed doors, which rule applies to every committee of the house. Further than that I do not think the government can go. I am stating as clearly as I can the government's attitude towards the question of sitting in camera or sitting in open.


Mr. GRAYDON:: Was it the previous
attitude of the government that the committee should sit in secret?


James Lorimer Ilsley: I understand it was; I
thought it was.


Mr. COLDWELL:: In camera.


Gordon Graydon: We were always told
by the government that the committee was master of its own destiny, that the government took no responsibility for its decision, and I wondered what the minister meant by saying that this was now the attitude of the government.


James Lorimer Ilsley: I am not very familiar with what was said by the Prime Minister in previous years. I do not think the government was even asked two or three years ago to answer the question: Does the government favour open sittings as a matter of practice. But if it had been, I think the government would have said no, not in the ordinary course, because so many things would have come out into the open and would have got into the press at a time when the war was still going on that it would not have been in the public interest. I say I do not know whether the government was specifically asked that question. I think it was asked; shall this committee sit in camera or not? I think the reply of the government was: That lies with the committee. If I am asked to-day. shall this committee sit behind closed doors or sit in open, I shall have to say that that lies with the committee, which is master of its own destiny. But so far as the government's attitude is concerned it would regard it as appropriate, now that the war operations

are over, that the committee should as normal practice sit in the open and' carry on just as any other committee of the house carries on.


Gordon Graydon: This indicates in any
event a change in the attitude of the government?


Ian Alistair Mackenzie: No; the war is over.


James Lorimer Ilsley: I do not know what the hon. member means about a change in attitude. I try to take a position in these things which I may very loosely describe as sensible. I think that the position taken before was sensible, and that the position now taken is sensible, having regard to the changed circumstances.


Gordon Graydon: A little loose, but still sensible.


Mr. J. M. MACDONNELL (Muskoka-Ontario):: I should like to make one or two observations on this resolution. First of all, I was considerably taken aback at the remark of the Minister of Finance; I am sure he would not like anyone else to refer to him as "loose", but if he does it himself I suppose we have to take his own word for it.
I should like to ask a question which seems to me very important. If this resolution passes, and if it goes to the committee as a reference to consider this very wide range of expenditures, notwithstanding the statement of the Minister of Finance that what the committee was primarily to concern itself with was current practices, does it mean that this house is really precluded from considering these expenditures? In other words, if this resolution carries, has every hon. member except those on the committee foreclosed himself from any effective discussion of these items?


Some hon. MEMBERS:: No.


James MacKerras Macdonnell: I should like to have that question answered by the minister, and then I hope to make a few more observations.


James Lorimer Ilsley: Mr. Speaker, as I was rising to move this motion the Clerk of the House came to me and intimated that there might be some clash between the sitting of this committee and a sitting of the committee of the whole house. I certainly never understood until that moment that any such question would arise in this connection. Certainly we must go on with a full discussion of the war appropriation, and of course it was not intended that the sitting of this committee would preclude the discussion of anything in

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the house; but as the point has been raised perhaps it will be necessary to get it settled by a ruling of the Speaker.


Major James William Coldwell: We have had this committee for several years, and no exception has ever been taken to matters being discussed here that were before the committee.


Ian Alistair Mackenzie: No. The only reservation would be that the house would probably be debarred from discussing the proceedings in the committee itself until it reported; otherwise there would not be any interference.


James MacKerras Macdonnell: I should like to be very clear, if I may, as to what the answer is. I appreciate what the Minister of Finance has said, that he was as much surprised to have the other view put to him as I was a few minutes ago. May I take it from what has happened that it is agreed that this resolution will not preclude the house from discussing these items? After all, we are talking not of theoretical but of practical things; and as a matter of practice I should like to ask hon. members who are much better informed on this than I am, if this actually goes to a committee, is it practicable to have it discussed in two places at the same time, and if it is not, does that mean that in the ordinary course of things this, committee will take several weeks to complete its deliberations and that almost inevitably the matter will come back near the end of the session? I raise that question and leave it to be answered later, and would make one or two further observations before I resume my seat.
I wish to say one or two things about what I hope will be the course of this committee, because it seems to me that if may either be a very useful committee or very much the reverse.
As I understand it, over the past five or six years we have spent many hundreds of millions of dollars through the Department of Munitions and Supply, and assets of a very considerable amount-I suppose running into many tens of millions of dollars-have been acquired and are now owned by way of capital assets by War Assets Corporation, it having received them from the government. Now I take it that it is of very great importance that we have a' sensible way of dealing with this, and I suppose the people of Canada would like to have a comprehensible and comprehensive statement covering the whole matter.
There are two or three practical points which the committee can discuss in a noncontentious and constructive manner. One of
them, obviously, is how these assets are to be made the most use of. They should not be thrown on the market indiscriminately. I am sure we can trust the Minister of Munitions and Supply (Mr. Howe) that they will not be, because he is an experienced man of business. I think the other thing which is very important is that in some way or other they should be so dealt with that small business in this country gets all the advantage it possibly can from these assets, and that they do not go into the hands of a few large companies that probably need them very much less.
I shall not take the time of the house to discuss other matters with regard to the com-mitttee, but I suggest that a good start means a good deal, and that if we go into the work of this committee with the idea that we are sensible men, dealing with a business proposition of enormous importance and magnitude, and if we can be received in that committee, regardless of party, in that spirit, we can do a much better job than could otherwise be done.
I come back to the proposition which I mentioned at first. I was a little taken aback at learning that although the committee is captain of its own soul and master of its own destiny, according to what was said in this house and repeated by the minister to-day, its proceedings are not to take place in camera. That, I assume, is a decision which could be overturned by the committee itself, but I suppose that will not be done. But what I am still uncertain about, and would like to be informed upon by people who are much better versed in this than I am, is the practical question as to whether or not, if this reference goes to the committee, there will be parallel and simultaneous discussions going on in this house; because there are hon. members who are not members of this committee who have' views to express. Is it practicable to have these discussions going on in two places? Is it practicable that the committee shall .come back and report the result of its work in sufficient time for discussions in the house itself?


Major James William Coldwell: I should like to say a word in support of the establishment of this committee. I think that as a committee it performed a useful function, and we have never encountered the difficulty which it has just been suggested might arise. After all, the function of the war expenditures committee and the function of a committee of the whole of this house are rather different. In this house we take all the items, item by
Surplus War Assets

item, but we give them, in reality, a superficial consideration-that is, in a general way- whereas in the committee the usual practice is to divide the committee into several subcommittees; to these subcommittees are allotted certain very important segments, if I may put it that way, of the entire expenditure. We are thus able to make a thorough investigation of one particular type of expenditure, with the result that while the house carries on what I have termed, and I think correctly, a somewhat superficial examination of all the expenditures, the committee can pick out important expenditures and go into them thoroughly, and have the advantage not only of questioning the minister-who on the floor of this house places before hon. members information which of necessity he must obtain from his officials-but also of calling the officials before the committee and questioning them on eveiy detail of expenditure.
It is conceivable that while the work of the committee was proceeding some particular matter before the committee might arise in this house. This has never in the past embarrassed either the house or the committee, but there would be a pretty general understanding that the matter in question was being thoroughly investigated by the committee and that we need- not at the moment concern ourselves further about it. I believe that this committee performs a useful function; and may I add, in view of what the minister said, that I believe the committee should be free to go into any expenditure it desires to go into, to inquire into any action of the War Assets Corporation which it wishes to investigate, or anything in relation to the war allocation committee, and so on. After all, while theoretically, the public accounts committee may be the place where that kind of thing can be done, the auditor general's report is always many months behind. Besides, the auditor general's report deals with peace-time expenditures, which are usually referred to the public accounts committee unless something specific is involved. In my opinion the committee should be free. I do not think it has ever taken upon itself to do something it need not do, and I believe that, as now composed, it will carry on in the same way.
I do not want to prolong the discussion, and I will simply say that this committee can perform a useful function. I know what an obligation rests upon the members of the committee, because I was on the committee. I am not on it this time, I am glad to say, but we sat when the house was not sitting, and I suggest that if necessary this committee should again sit while the house is not sitting. It has been established very late.


Mr. McIVOR:: Did this committee ever
save any money for the government?


Mr. T. L. CHURCH (Broadview):: 
Mr. STANLEY KNOWLES (Winnipeg North Centre):: There is just one matter that I should like to ask the Acting Prime Minister (Mr. Ilsley) to take into consideration; and I do so in relation to the closing remarks of my leader, the hon. member for Rosetown-Biggar (Mr. Coldwell).
During the sessions of the last parliament it was a simple matter to arrange for this committee to sit during the recess. As the
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Acting Prime Minister will remember, the various sessions of parliament were never prorogued until .the day before the new session was to be convened, and all that was necessary was for the committee itself to report to the house that it had much work yet to do, and recommend that it be given permission to sit during the recess. Although we do not yet know what the practice will be, now that the war is over, the assumption is that when the work of the session is finished parliament will be prorogued. I raise the question-


Ian Alistair Mackenzie: Not at this rate of progress.


Stanley Howard Knowles: -to find out whether arrangements can be made for the committee to sit between sessions of this parliament, bearing in mind that the period between sessions will not be a recess. I suggest to the government that even if the committee is to make an exhaustive survey of only one or two items-which is all it can do-it will hardly be possible for it to do that while the house is in session, particularly in view of the fact that there is not much time between now and Christmas, or whenever the house rises. I hope that this matter will be taken into consideration and that some way may be found whereby this committee may be enabled to sit between sessions so that it will have the freedom that it can have at such a time to do the exhaustive work on one or two items that it might undertake.


James Lorimer Ilsley: Did the hon. gentleman ask me a question?


Stanley Howard Knowles: I should be glad if the minister would comment on my request.


James Lorimer Ilsley: We are not in committee. I thought the hon. gentleman asked me a question, that is all. I shall have to look into the possibility of sitting between sessions. I do not think it is ever done. I remember at the time ihe price spreads committee of the House of Commons sat, the session closed and the committee was reconstituted as a royal commission so that it could sit between sessions, but I may be wrong about that.


Stanley Howard Knowles: 
Stanley Howard Knowles: No-in the recess; a technical difference.


Mr. SHAW:: In the recess. I was deeply interested in the comment of the minister that such a committee should not go out on a fishing expedition. I am not quite sure that I know the full implications of that remark, but may I say that I sincerely trust the committee will not be restricted in its desire to be helpful, even though it may mean the consideration of certain things which have recently taken place with respect, let us say, to the disposal of surplus crown assets. May I emphasize that in referring to this matter I have no particular desire that we should go back and look into the disposal of surplus or obsolete equipment simply for the purpose of stirring up something. If things of that nature have happened, then possibly we should be concerned about some change in the procedure of handling surplus crown assets. I think the committee can be of invaluable assistance to the government as well as to the people of Canada.
There is one other matter to which I should like to refer. We are no longer at war; therefore the need for this committee sitting in secret no longer exists, as far as 1 can see, and I welcomed the statement of the minister when he indicated that the government had no objection to the committee deciding to sit in open session. I trust that the committee will be guided to some extent by that observation of the minister. We welcome the setting up of this committee, and we really anticipate that it will be able to do some valuable work.


Mr. L. O. BREITHAUPT (Waterloo North):: I wish to compliment the minister and the government in their decision to set up this committee. I take particular interest in this committee because in a speech I made in this house on September 17, I strongly recommended that such a committee be set up. It is an excellent idea, but instead of its being called the "War Expenditures committee" as previously, I believe it should be named the "National Expenditures and Economies committee", with the emphasis on national economy, which is a matter of great importance for the future. I make this suggestion to the minister for his favourable consideration.


Mr. JOHN BRACKEN (Leader of the Opposition):: I am not rising to discuss the merits or demerits of this resolution. As a

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matter of fact with its purpose I am ia complete accord. I am sorry I was not here in the early part of the afternoon. I understand there was some discussion as to the consequences of the passage of such a resolution.
I was informed that if this resolution passes this house will be precluded from discussing the subject matter it covers when we are in committee of the whole.


Some hon. MEMBERS:: No.


John Bracken: I am glad to hear hon. members opposite say no. I understand that certain of them said that would not be the case. Now. that may be their intention; but if there is a rule of this house which states otherwise-


Mr. GOLDING:: There is not.


John Bracken: -no matter what good will there is over there, we may be so precluded. I now ask whether the government is prepared to give us an assurance that in committee of the whole wre shall not be precluded from discussing the matters that this resolution covers.


James Lorimer Ilsley: It is a matter for the
Speaker's ruling, and I shall ask the Speaker to make a ruling on the point raised.


Mr. HOMUTH:: Just a minute. Mr. Speaker, this has to be definitely understood.


Mr. MacKINNON:: Wait for the Speaker.


Karl Kenneth Homuth: It has to be definitely
understood that any matters discussed in the war expenditures committee, the public accounts committee or any other committee may be discussed in the house as well. That has been the practice previously; it is a matter of procedure.


Ian Alistair Mackenzie: Do you want to drop the resolution?


Karl Kenneth Homuth: Don't be like that. The little boy from Vancouver must not try to get away with that. I think you would like to have it dropped, because a lot of things are coming up that you would not want brought out.
Mr. MACKENZIE.:	It seems that you
would like it dropped.


Karl Kenneth Homuth: As our leader has said, it must be definitely understood that hon. members are not precluded from discussing in the house any matters which may come before this committee.


Mr. MacINNIS:: Surely we are discussing two different things. If I understand it correctly, the war appropriation resolution before
the house deals with expenditures that perhaps have not been made as yet; that is the assumption, at least, that the expenditures' have not been made and we are discussing it on that basis. It is an estimate of expenditures that are to be made later. The war expenditures committee will be discussing expenditures that have been made already, transactions that have taken place, so there is no relation at all between the two. I cannot understand all this worry about something that cannot possibly occur.


John Bracken: I had not finished my remarks when I was interrupted, so perhaps I might be permitted one more minute. I am quite serious when I say I want to see this resolution pass, but I should like to understand what is the position if we do pass it. My information did not come from someone who did not know what he was talking about. It was authoritative; I understood we would be giving up the right to discuss these matters in committee of the whole. All I should like is some reasonable assurance from the government that we shall not be so restricted.


Mr. HOWE:: Mr. Speaker is the person to give that assurance.


John Bracken: I understand we are not allowed to ask the Speaker direct questions on these things. I know the house can pass the measure anyway, but I thought perhaps we might have the assurance from the government that after it does pass we shall not be precluded from discussing these items in committee of the whole.


Mr. SPEAKER:: As to the point raised by the hon. member for Muskoka-Ontario (Mr. Macdonnell) and other hon. members I would suggest it would be best to observe the rule that has been followed in the past, and if there is any objection raised in the future it can be considered by the house in due course. The hon. gentleman will see that the resolution gives the committee power to examine witnesses and to report to the house from time to time. Thus at any time the house could hear any complaints or protests made by the committee, and it would be the privilege of the house to give instructions accordingly, as generally speaking the proceedings of a select committee are assimilated, like those of standing committees, to those of a committee of the whole house. So I hope the hon. gentleman will be satisfied with that explanation.


James MacKerras Macdonnell: With great deference, Mr. Speaker, it would seem to me that this leaves the matter in a vague position. It
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means we are now asked to vote for this resolution, as indeed we want to do, but we are going to leave for determination at some future time the question whether or not we may have this right which we think is so essential.


Hon. ALPHONSE FOURNIER (Minister of Public Works):: I agree with the hon. member for Vancouver East (Mr. Maclnnis). If we look at the reference to the committee we see that the inquiry is to be into expenditures defrayed out of money provided by parliament for national defence, and so on. The appropriation for war expenditures and demobilization as actually discussed in the house provides the money necessary for these purposes. The inquiry that will be conducted by this committee will be into the expenditure of those moneys provided by the house. There is no conflict at all. In this committee we will not inquire into the amounts we are voting now, except to see in what way and by what procedure they have been expended. There seems to be some confusion ns to the reference before the house, but if it is read it will be seen that the committee is to inquire into the procedures followed or the policies of the government in connection with the expenditures made. Witnesses will be called before the committee to deal with specific subjects. It will inquire into every transaction in detail, and then report to the house if it finds any better way of proceeding in connection with further expenditures. We are not going to inquire into what is being discussed now under the war appropriation measure but we will discuss the expenditure of the moneys which will have been provided by this bill or the bill brought in last year. I do not see that the house is losing any of its rights, or that the occasion will arise when we will be precluded from continuing the debate on the war appropriation bill. They are two absolutely different things. So I really believe the function of the committee as explained by the hon. member for Vancouver East is the correct procedure, and the house will continue to examine into all moneys required by the government for future expenditures.


Stanley Howard Knowles: On the point of order-


Ian Alistair Mackenzie: There is no point of order.


Stanley Howard Knowles: The acting Prime Minister asked Mr. Speaker to settle the point of order.


James Horace King: Order. I did not decide on the point of order. In his remarks the hon. member for Muskoka-Ontario, if I have

well understood, asked for an explanation and I offered a suggestion. I did not give a ruling.


Stanley Howard Knowles: I wish to address my remarks to the fact that it was suggested Your Honour should give a ruling. I am glad to learn you did not do so, because citation 108 of Beauchesne, second edition, is quite clear on the point:
The Speaker decides the questions of order only _ when they actually arise and not in anticipation.
I suggest that the Minister of Finance should not ask the Speaker for a ruling on the point at this time. If there is any doubt- and, like my colleague from Vancouver East, I do not think there is-all that is necessary is for the government to give an undertaking that it will not. object to a discussion of these estimates in committee. Many a time we have had that experience, with the government giving an undertaking that even though an item is closed it can be discussed on a later item.


James Horace King: The hon. member is not speaking to a point of order; he is replying to the minister, and according to the rules he may not speak twice.


Mr. GLEN:: If hon. members will look at the motion they will see what Your Honour referred to in making your statement. The resolution provides that the committee shall report to the house from time to time. Citation 547 of Beauchesne, third edition, reads:
Generally speaking, the proceedings of a select (special) committee are assimilated, like those of standing committee, to those of a committee oi the whole house.
In other words the rules that would apply in committee of the whole house are the rules which apply also in a select committee. Then citation 555 reads:
555. It is important that the motion for the appointment of the committee should state whether the committee shall report from time to time, for if it should report once without having been given such power, it will be defunct until revived. Special authorization should also be given to sending for persons, papers and records.
All of that has been done. Then citation 560:
566. When the report does not contain any resolutions, recommendations or other propositions for consideration, of the house, it does not appear that any further proceedings in reference to it as a report are necessary. Every session, select committees make reports of this description, containing a statement of facts, or of the evidence on the subject of inquiry; hut as they do not contain any proposition which can he agreed to by the house, they are simply printed for the information of the members.

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Then the next citation reads:
561. Concurrence in reports from select committees is, in non-controversial cases, moved when motions are called by the Speaker during routine business. If it be expedient, the house will appoint the consideration of a report for a future day. By a motion made for that purpose in the British house, the report of a committee presented during a previous session has been taken into consideration.
Then following on page 203:
When a motion is made for concurrence in a select committee report, it is competent for the house to adopt it, reject it, refer it back to the committee or decide that consideration of the report will take place "this day six months".
As I understand the hon. member for Muskoka-Ontario, he was doubtful that there would be a report by the committee oh any matters that would be brought before that committee. So far as discussion of a report that comes to the house is concerned, the rule is that the evidence that is taken before the committee is not before the house while the committee is sitting and is therefore not under discussion. But that does not deprive hon. members from discussing any report when it comes before the house. In my opinion the Speaker is taking the proper position by saying that he cannot decide on a future proceeding of the house. When this matter comes before the house, the house will have to decide.


John Bracken: In view of what the
Minister of Mines and Resources has just said, may we have the assurance of the leader of the government that no one will be precluded from discussing these matters in committee of the whole?


James Allison Glen: I have already said that the
rules are there. The government should not give any such undertaking.


Stanley Howard Knowles: It has done it many
times.


Mr. D. M. FLEMING (Eglinton):: Mr. Speaker, I should like to ask the Acting Prime Minister (Mr. Usley) a question arising out of the remarks he made in introducing this resolution. He indicated that this committee when set up should confine its activities strictly to the field assigned to it, and not go into the field of public accounts, which is a matter for the public accounts committee. If I am correctly informed, the public accounts committee has not met for the last year or two. It may be that the other committee on war expenditures went a little further in order to determine certain things than it would have gone had the public accounts committee been sitting. Could we have some indication from the government as to whether it is the intention that the public accounts committee shall sit during the present
session? It has not been called together yet. The scope of the inquiry ought to be disclosed to hon. members.


James Lorimer Ilsley: We are converting this debate into a discussion in committee, which is out of order. However, with the unanimous consent of the house I will endeavour to answer the question that has just been put to me. As I understand it, any member of the public accounts committee can have the public accounts committee called together at any time. If any member of the house wishes to move that something be referred to the public accounts committee, it is quite in order for him to do so. My recollection of the operations of the public accounts committee in times past is that there is a long-standing and well-established practice. I can remember occasions on which an opposition member rose in his place and made certain charges about wrong expenditures. The tradition and long practice is that when a member does that, he assumes a fairly heavy responsibility. It is considered to be his duty to press the matter in the public accounts committee. If he fails to make good his charges, it is perhaps not greatly to his discredit, but it is recognized as being an instance in which he has failed to make good a serious charge.
That is the course that has been followed in the past. It is not peculiarly the function of the government to organize or call together the public accounts committee. If matters are referred to the committee, or if any member of that committee wants the committee called together the committee can be convened.


Mr. G. RUSSELL BOUCHER (Carleton):: Mr. Speaker, like many others, I feel that we should not pass this resolution until we are clear as to what the position is. As the Minister of Finance has stated, in the past the war expenditures committee was charged primarily with investigations as a means of recommending economies. It was not charged with the responsibility, nor was it intended by the government, that they should examine individual items, or, as the minister termed it, go on fishing trips. As the resolution states, this committee is being formed for the purpose of effecting economies rather than of representing this house in the investigation of expenditures.
It is true enough that under the war appropriations we can discuss expenditures that are contemplated, and, to a limited degree, we can also discuss expenditures that have been made in the past. But there is no way in which the
Surplus War Assets

actual expenditures of war can. be investigated by a war expenditures committee or by this new committee that is to be set up.
It is said that discussion can take place when the committee reports back to the house. That is true enough if it reports back during this session. A select committee may report back two or three times, and according to the wording of this resolution this committee may report back, but the matter may never be opened for discussion in the house because we may be close to what will be the end of the session. At least we are close to the end of the current year. I can conceive of a situation in which this committee would not report to the house and no discussion could be had. In the meantime we would be precluded from going into actual expenditures.
There is another way in which investigation could be had, and that is by means of the public accounts committee. As the Minister of Finance has said, the way to have a matter discussed in the public accounts committee is for a member to stand up and make a charge or charges on his own honour and responsibility. The matter is then brought before the public accounts committee. That is not done very frequently; it is something not likely to be done. The result is that unless we can be certain that the setting up of this committee will permit the house to go into expenditures, I see no possibility of this house ever having a chance to discuss expenditures during this session.


An hon. MEMBER:: Why appoint the
committee?	.


George Russell Boucher: My hon. friend asks,
"Why appoint the committee?" Apparently he was not listening to the Minister of Finance. The Minister of Finance said he wanted the committee to assist him or assist the government in arriving at economies, not to go on fishing trips. We have to face the issue that is before the house. The issue is whether in the house we shall be bound by the rules precluding discussion of actual expenditures if we set up this committee under this resolution. We are bound by the rules of the house and by the Speaker's interpretation of them. Unless I am badly mistaken, I cannot see any possibility of any expenditures being discussed by the members of this house if this resolution passes. I think we should consider this matter carefully before we get into, shall I say, a technical entanglement which will confuse the issue.


Mr. H. C. GREEN (Vancouver South):: Mr. Speaker, before this resolution carries I should like to make a suggestion to the Minister of Munitions and Supply (Mr. Howe).

I suggest that either later to-day or within the next day or two he give a statement on government policy with respect to the disposal of surplus war assets. The members will notice that this resolution for the first time gives the committee power "to examine the expenditures defrayed for other services directly connected with the war, including the disposal of surplus war assets." I should not be surprised if that subject became the main job of this committee, to consider the disposal of surplus war assets. It would be helpful if we could have from the government a general statement of policy on that subject.
Within the past ten days it has become very important in my province of British Columbia because of the sale of thirteen Fairmile boats. There has been some mention of their sale during the discussion of the war estimates. Boats were sold for $3,000 which cost at least $145,000 or $150,000, and some people say they cost up to $200,000. They were sold without any tenders being called, there were no competitive bids. Apparently the sale was arranged here in the east, not by the representatives of the Department of Munitions and Supply in British Columbia, and rightly or wrongly there is great dissatisfaction over that sale. It has been most unfortunate to have the question raised during a victory loan campaign. But there it is, and I think it is serious enough to call for a statement of policy from the government.
It would seem that government policy on the disposal of surplus war assets changes a bit from week to week; in any event we should know what the policy is with regard to calling for tenders, with regard to having sales by auction, with regard to selling direct to buyers rather than to dealers for resale by them to buyers, and with regard to priority to veterans who want to purchase some of these articles that are being disposed of; also as to how prices are set in such cases as the sale of these Fairmile boats.
I do suggest to the minister that it would be very helpful if he would make a statement of government policy on the disposal of these surplus war assets. If he does not do that now, it leaves the whole matter to the committee. The committee will not make a report to this house for a matter of weeks, and in the meantime government policy on this particular question is being discredited. I would ask the minister to let us know what he is prepared to do along the lines I suggest.


Clarence Decatur Howe: I have had a speech prepared for weeks.which I have been waiting to give to the house if we could ever reach the estimates of the Department of Reconstruction.

International Civil Aviation
I -was hopeful that we might reach them to-day or to-morrow, but from the length of time that has been taken in debating the appointing of this committee, which has sat for the last five years, the prospect of ever reaching my estimates seems hopeless. From present appearances it would look as if my hon. friend will have to wait until around Christmas time before I shall be given ah opportunity to make my statement. But whenever wh do reach that stage in the examination of the war appropriation, I shall be very glad to make a statement on government policy and answer any questions that hon. members may ask.


Howard Charles Green: To-day the government has changed the order of business and the war appropriation may not come up again for "weeks.
Motion (Mr. Ilsley) agreed to.



INTERNATIONAL CIVIL AVIATION


Clarence Decatur Howe: That it is expedient that the houses of parliament do approve the interim agreement on international civil aviation signed by Canada on December 7, 1944, tabled on September 7, 1945, the convention on international civil aviation signed by Canada on December 7, 1944, taoled on September 7, 1945, and the international air services transit agreement signed by Canada on February 10, 1945, tabled on September 7, 1945; and that this house do approve the same.
He said: Mr. Speaker, I think I should begin, with an apology for the lengthy statement that I intend to make on this occasion. My reason is that there has been no discussion on international civil aviation policies in this house. The government has represented this country at a world conference at Chicago, and an international world assembly is sitting in Montreal at the present time, and so I think that a rather lengthy statement of Canada's place in international aviation is warranted. The resolution which I am presenting to the house asks for approval of three agreements which have been signed by the government and which were prepared at the international conference on civil aviation held in Chicago in the autumn of 1944.
Canadian Policy in Civil Aviation 1942-44. In order that the house may understand the circumstances which resulted in its preparation, and may comprehend the general pattern of aviation arrangements within which it fits, I propose to explain its background.
As hon. members know from various statements wdiich I have made to the. house, the
Canadian government has over recent years actively concerned itself with problems of external relations arising out of the development of international civil aviation, particularly in view of the rapid war-time developments in this field. A considerable time before these problems came to a head the government foresaw their importance and made preparations to meet them. In 1942 a direction was given to officials of the public service to devote special attention to this subject. In April, 1943, the Prime Minister (Mr. Mackenzie King) presented to parliament a statement of the broad lines of policy which the government proposed to follow in respect of civil aviation both in the domestic and international field.
On March 17, 1944, I presented to parliament a lengthy report upon our policy with regard to the development of civil aviation which carried several steps farther the outline given by the Prime Minister in the previous year. At that time I explained that the government considered that the subject of international aviation was of paramount importance because of its direct relationship with strategic military questions, because of its enormous potential importance in the bridging of time and distance and because the pre-war years had demonstrated that it could all too easily become a subject of serious international friction. I wish to quote to you a few sentences that I used at that time, since they represented', and still represent the basis of our approach to questions of international aviation. Speaking of the pre-war years I said:
Some countries refused to permit air lines to cross the air space above their territory, necessitating costly detours. Others refused landing rights, as well as transit rights. The necessity for hard and persistent bilateral bargaining resulted, especialy in Europe, in the establishment of so many competing national services that air transport became highly uneconomic, and lines were heavily subsidized at the expense of national taxpayers.
Behind much of this friction, lay considerations of national prestige, but more especially of national security. Civil air transport fleets and civil aircraft industries represent a war potential, a reserve both of personnel and of industrial capacity which is all-important in time of war. The truth of this has been obvious in the present conflict. The emphasis in the pre-war period upon security aspects of civil air transport was therefore natural and goes far to explain the failure of nations at that time to agree upon a method of effective international control of international air services. Because of the rapid development of aviation since the outbreak of war the international rivalries which would develop in the future after the conclusion of hostilities would be even sharper than those of the past, unless softie improvement is effected.
In order to meet this situation. I tabled a draft international convention prepared by
International Civil Aviation

officials of the government and1 approved by the government as a suitable basis for approach to questions of international aviation. It was to pur credit that at that time in the spring of 1944 the government of Canada was well ahead of other interested countries, in clarifying the lines along which we believed international cooperation in air matters should be sought and in setting down detailed proposals to accomplish this objective.
Throughout this period we were in close and constant contact with other governments, particularly the United Kingdom and United States. We discussed our proposals with representatives of these other governments; and while our fundamental approach was in no way changed as a result of those discussions, useful suggestions and new ideas emerged which enabled us to add to and improve our proposals.
During that same year, 1944, the war rapidly took a turn for the better and it became apparent that before many months would pass the establishment of regular commercial international air services would become possible. We took the view that the first step should be discussion between the countries particularly interested; otherwise we feared all possibilities of improved international cooperation might be lost and we might return to the pre-war situation of hard bilateral bargaining, inequality and restrictive practices. We found, happily, that the United Kingdom and United States held like views and1, in consequence, the United States government invited the united nations, together with associated and neutral states to attend a conference in Chicago on international civil aviation starting November 1, 1944.
Prior to this conference, and again immediately following, it, commonwealth discussions on air transport took place in Montreal, but, as I have already reported on these, I do not think it necessary to repeat my earlier statements at this time.
The Chicago conference. At Chicago I pressed the Canadian case for international cooperation, and for an international system in civil aviation which would, on the one hand, remove restrictions from the development of international services and provide greater freedom, and, on the [DOT] other hand, maintain a system of regulation based on agreed rules which would prevent misuse of air services. I presented to the Chicago conference a revised version of the Canadian draft convention, as the type of agreement which, in our opinion, would best promote the sound development of international air services. Our proposals were the most detailed,

and carefully prepared, plan submitted to the conference, and we took some pride in the fact that they were adopted as the basis for discussion in the main committees which were working on the preparation of a permanent international aviation convention.
Statements have been made on earlier occasions regarding the role the Canadian delegation played at Chicago, but I seriously doubt whether, at any time, members of this house have fully realized how important that role was. By virtue of our own acknowledged standing and experience in the field of aviation, by virtue of our careful preparation for the conference, by virtue of the ability of those persons who represented us in Chicago, Canada found herself in a foremost position, and was accorded without question the position of one of the great powers at the conference. Nor did we fail to justify this position, for the efforts of our representatives had much to do with the success of the conference and upon more than one occasion brought agreement out of apparent discord between other major powers.
The agreements prepared at Chicago were all tabled and made available to members of ' this house by the Prime Minister (Mr. Mackenzie King) on September 7, 1945, and may also be found in the 1944 treaty series of the Department of External Affairs. No. 36. The five main documents were: the final act; the interim agreement on international civil aviation, with which we are concerned to-day; the convention on international civil aviation; the international air services transit agreement, and the international air transport agreement.
I may say that Canada signed the final act, the interim agreement, the convention, and the international air services transit agreement. Canada did not sign the international air transport agreement.
The Final Act. The final act proper is composed of a series of general resolutions accepted by the conference. The most important of these resolutions sets up a standard form of agreement to be used by nations negotiating bilateral aviation agreements. These standard clauses are intended to provide for reasonable equality in the operation of air services, and to assure a fair chance to all nations desiring to operate air services. Signatory states have undertaken to refrain from including in aviation agreements specific provisions which grant exclusive rights to any other state or airline, and have undertaken not to make agreements discriminating against the airlines of any state. This can do much to

International Civil Aviation
remove the closed systems and preferential agreements which hampered the prewar development of international air services.
Another resolution of the final act refers certain unfinished business of the Chicago conference to the provisional international civil aviation organization, established under the interim agreement. Of this I shall have more to say later.
The Convention on International Civil Aviation. The permanent convention is the most substantial of the agreements prepared at Chicago. We found in the conference general agreement that some international aviation organization must be established. Pre-war machinery in this field was not comprehensive enough in its membership or its functions.
The convention, which in parts bears a striking resemblance to the Canadian draft convention is designed to provide for a satisfactory permanent organization. The general objectives in the development of international aviation, and the rules of the game to be pursued by each nation are, broadly speaking, laid down in the convention, and the permanent organization for which it provides is to watch over the growth of air services in order to keep it within the approved framework.
The first part of the convention deals with technical matters of air navigation and covers in comprehensive fashion all the technical and operational points necessary to the regular and safe functioning of international air services. I need refer to these only briefly:
Chapter 2 provides for flight over the territory of contracting states including such matters as scheduled and non-scheduled flights, reservation of cabotage, prohibited areas and rules of the air, entry and clearance regulations and landing fees. No discrimination is to be made in the matter of fees between national aircraft and those of another nation.
Subsequent chapters cover nationality and registration of aircraft, customs and immigration procedures, investigation of accidents, aircraft and equipment, air worthiness and licensing of personnel.
Chapter 6 which is of considerable importance offers the foundation for certain continuing work by the international organization which is to be established under the convention. In all these fields of air navigation which have been covered in general fashion in the earlier chapters, specific technical annexes elaborating in full detail a system of international standards and recommended practices are to be prepared. Members of the organization are expected to observe the
international standards established in these annexes and if unable to do so, to notify the organization regarding their difficulties.
Preparation of these annexes was begun at Chicago and is now being carried forward under the auspices of the provisional international civil aviation organization in Montreal. Canadian experts and technicians have played and continue to play a very substantial part in their preparation.
The convention, having dealt with air navigation, then goes on in Part Two to provide for the establishment of an international civil aviation organization to be composed of an assembly and a council. The permanent seat of this organization is to be selected by the provisional organization, at present functioning in Montreal, and it is expected that the provisional organization itself will in due course merge into the permanent organization.
The assembly is to meet at least annually and all members are to be represented in it with equal voting powers. Decisions are to be by majority vote. The assembly is to take action on the reports of the council, to approve the budget of the organization and review its expenditures, and may delegate powers and authority to the council, enter into arrangements with other international bodies and deal with any matter not assigned to the council.
The council, which is the working executive of the organization, is to be composed of 21 member states elected by the assembly every three years. It is expected to be in almost continuous session. In electing council members adequate representation is to be given to the states of chief importance in air transport, to states making the greatest contribution to provision of facilities for international aviation and to main geographical areas of the world.
Decisions of the council are to be by majority vote and no member of the council may vote in the consideration by the council of a dispute to which it is a party. It is also provided that any member state not on the council may participate without voting in discussion by the council or its committees of subjects especially affecting the interests of that member state. These features are an important protection to the position and rights of all intermediate and lesser nations, through their provision for fair representation and fair treatment.
The council is to carry out the directions of the assembly, collect and publish information regarding all international aviation matters, report on infractions of the convention and generally consider any matter relating to the convention. It may create subordinate commissions, conduct research into
International Civil Aviation

all matters of air transport and air navigation, study any matters affecting air navigation and air transportation, and investigate and report upon any situation presenting obstacles to the development of international aviation.
The council is to establish an air navigation commission composed of twelve members which is to concern itself primarily with that section of the convention dealing with air navigation and with the technical annexes and all matters related thereto.
The council is also to appoint and define the duties of an air transport committee chosen from its own members. The duties of the committee have deliberately not been defined in this convention because it is hoped that as a result of the work and experience of the provisional organization in Montreal some of the gaps which were left in the convention at Chicago may be filled by the time the air transport committee is established. Accordingly it appeared desirable to leave definition of its duties to the council itself at that time.
The council is also to prepare and submit the annual budget and annual statements of accounts. The assembly may suspend the voting power of any state failing to discharge its financial obligations to the organization.
As in the Canadian draft convention, stress is laid in the Chicago convention upon the maintenance of international peace, both in the preamble and through the provision that the organization may with respect to air matters affecting world security enter into appropriate arrangements with the United Nations organization and where necessary with other international bodies as well. Even though the San Francisco meeting had not taken place when we met in Chicago we were determined that full recognition should be given to the necessity for subordinating the interests of international aviation to those of the maintenance of world peace.
The concluding part of the convention deals with matters of international air transport and it provides for the filing of full reports on all air operations, air agreements and related matters, with the council. It also specifies the right of each member state to designate in its own territory the routes to be followed and the bases to be used by international air services.
Special provision is made whereby the council of the organization may intervene to assist in the provision and maintenance of air navigation facilities where it proves impossible for a state to do this itself. The chapter (15) covering these matters is especially designed to meet the position of small states, which because of geographical location may be of importance in international aviation, but which

are not in a position to meet the heavy expenditures involved in provision of needed aviation facilities. The sovereignty of the state concerned is protected while at the same time the financing of the necessary developments through the international organization with the assistance of the states whose air lines are chiefly involved may take place.
Member states also agree to accept the convention as abrogating all obligations and understandings between them which are inconsistent with its terms and undertake not to enter into new agreements which would be inconsistent with it.
Perhaps one of the strongest features in the convention is the provision for compulsory settlement of disputes, and the penalty for states found in default. In any case of dispute or disagreement between states arising out of the convention, procedure is provided for settlement either through the council, the permanent court of international justice or a special tribunal and members undertake to be bound by the decision reached. If any member breaks this agreement other members undertake not to allow the airlines of the state in default to operate over their territory.
The convention is to come into force when it has been ratified by twenty-six states. It has been signed by forty-seven states.
It was our thought that the permanent convention should go even further and should provide for freedoms of the air, on the one hand, and for a system of regulation to prevent development from following dangerous paths, on the other hand. We contended that if nations were to avoid the restrictive bargaining of the pre-war period, by granting the freedoms of the air to other nations in a multilateral agreement, (that is, the right to cross foreign territory, to land and to pick up traffic), then misuse of these freedoms must be prevented by some adequate rules of the game which would provide a fair opportunity for all, and prevent unfair practices. To some extent this has been done in the convention, particularly in provisions for the settlement of disputes. We did not, however, manage to agree upon the principles that should apply in respect of settlement of rates, and allocations of and changes in services. The differences which existed, particularly between the United States and United Kingdom, and which were not bridged at that time, have been referred to the interim organization for further examination with a view to settlement.
Problems not settled in Chicago. Let me say, however, that it is a great mistake to assume that impassable gulfs existed at Chicago, and that the conference could be dwiHed

International Civil Aviation
into those nations who favoured strict regulation and those who preferred unhampered freedoms of development, with the two groups at opposite poles. Reading some of the comment after the conference, I have feared that the impression might be created in the United States that those who wanted regulation wished to introduce a harsh system of control which would hamper any reasonable development; and that, on the other hand, other nations, including the United Kingdom, would be led to believe that those who were inclined to minimize regulation were concerned only with their own selfish interest at the cost of driving smaller and less well-equipped nations out of the field of air operations. Any impression of this sort is mistaken. Virtually all countries at Chicago had the same objectives; and while the approach to these objectives may have been from different backgrounds, complete agreement was achieved on a substantial number of points, and on those matters which were not finally settled the difference of opinion at the conclusion of the conference was relatively slight, particularly in comparison with the progress achieved.
I propose to review briefly the attempts at Chicago to deal with rates, allocation of services and freedom of the air.
In the first instance the United States, the United Kingdom and Canada sought a formula which could apply to these matters. Canada suggested that rates should be calculated on each service in relation to cost of operation, and in relation to speed and type of accommodation provided. The costs of the most economical operator on the route were to be the standard accepted for calculation. In following these principles the operators themselves were in the first instance to decide upon suitable rates which would then be subject, if necessary, to review by the international organization. This -approach seemed generally acceptable.
On the question of regulation of services, we tried to find a formula to govern both initial allocations and later modifications. Despite various differences in the course of discussion, at the end there was only one relatively small point of difference, but It proved impossible to settle this point.
Generally we agreed that any country should have the right to operate on any international route terminating in its territory a minimum service of one round trip a week. This would in the first instance provide fair opportunity for all. Beyond this minimum right, it seemed appropriate that further services should be
adjusted in accordance with the amount of traffic on the route terminating or originating in the country operating the service.
When it came to the question of changes in existing services, we put forward a principle which became known as the "escalator clause". This proposed that any line which proved its efficiency by increasing the amount of traffic it carried should be rewarded by the right to increase its services; nations losing traffic below a certain proportion should be expected to reduce services. While this general approach also seemed satisfactory difficulty arose over application of the formula to fifth freedom traffic.
Fifth freedom traffic is the so-called intermediary traffic on any given route; third and fourth freedom traffic is the originating and terminating traffic. In other words on a route between Canada and France by way of Newfoundland, Ireland and England any traffic starting from Canada and going to any place on the route or any traffic on the return journey coming to Canada, no matter where it came from would come under the third and fourth freedoms. Any other traffic on the route, that is, between Newfoundland and Ireland, between the United Kingdom or France, between Ireland and the United Kingdom or France or between the United Kingdom or France is intermediary or fifth freedom traffic.
The United Kingdom argument was that fifth freedom traffic should not be considered in estimating the right of any nation to increase its services. The reward for efficiency should 'be Ibased only on traffic starting from or coming to the country of origin of the service; otherwise the large and powerful airlines of major nations would encroach upon the lesser local traffic market and, by poaching on remote sections of a route, would be able to increase their services until all reasonable chances of development for smaller local operations had been killed1.
The opposing case to this presented by the United Stages, was that experience had already demonstrated on any long operation that fifth freedom traffic made tha difference between reasonable economic operation and operation at a loss; no nation should be expected to base development of its air services solely on traffic from its own territory. This argument was soundly based in the logic and experience of lengthy operations.
Various attempts to bridge this gap were made and at the end the only difference that existed was whether the escalator clause should apply to all traffic, including fifth freedom traffic or whether it should apply primarily
International Civil Aviation

to third and fourth freedom traffic with however a special committee of the international organization given discretion to take fifth freedom traffic into' consideration in any given case.
This was a small difference, but the weariness arising out of a protracted and exhausting period of meetings, at a time when weather and immediate surroundings were apt to add to the general restlessness, as well as other * incidental difficulties, resulted in a cessation of attempts to bridge the gap. Instead the provisional international civil aviation organization has been directed to pursue study of the principles to be followed in establishing rates and services. I believe they will be successful; the necessity for a set of rules will become more and more apparent as development of international air services takes place, and the development itself should provide, out of experience, some indication of the desirable pattern of rules.
With regard to the freedoms of the air, we felt that since arrangements for regulation, which were in effect general rules of the game to be observed by each nation, were not to be inserted in the convention it would be unwise to insert the freedoms since there would be no safeguard against their misuse, even though without them arrangements for international air services would involve a great deal more bilateral negotiation than would otherwise be the case.
The United States however suggested that those nations which wished to accept the freedoms might be given the opportunity to do so in separate documents, pending further discussion of the method by which arrangements could be made to insert them into the permanent convention. Accordingly the other two agreements which I mentioned earlier were prepared at Chicago, namely the international air services transit agreement, commonly known as the two freedoms agreement and the international air transport agreement, commonly known as the five freedoms agreement.
The Two Freedoms Agreement. The transit agreement, which has been signed by Canada, provides for a multilateral granting of the first two freedoms of the air. These two freedoms cover the right to fly across and to land in the territory of other nations, but do not include the right to pick up or set down any traffic. Canada agreed that, if these two freedoms could be removed from the realm of bilateral negotiation, a substantial contribution to the development of international air services would be made. Accordingly the government has accepted the two freedoms agreement. The 
airlines of other countries which have accepted the agreement may now fly across or land in Canadian territory while Canadian services in return may fly across or land in the territory of these other states. Designated routes and airports are of course to be used in each case. As a matter of fact, the first two countries to bring these two freedoms into effect between each other were Canada and the United States, and the first use of the two freedoms was when Trans-Canada Airlines some months ago began to fly across American territory on the transcontinental route between Winnipeg and Toronto on occasions when the weather in the Canadian territory north of the great lakes did not permit use of the Canadian route. Forty-five nations have signed the air transit agreement and eighteen nations have accepted it.


Mr. DIEFENBAKER:: Would the minister give the list of the nations which have signed the agreement? I think it would be very helpful.


Clarence Decatur Howe: I have not the list before me, but I shall try to have it by eight o'clock.


Stanley Howard Knowles: Is it any longer than the list in this document?


Clarence Decatur Howe: Does that give the fifty-two nations represented?


Stanley Howard Knowles: Yes-


John George Diefenbaker: Did the U.S.S.R. sign?


Clarence Decatur Howe: No; the U.S.S.R. were not present in Chicago.
The Five Freedoms Agreement. The transport agreement provides for a multilateral exchange of the first five freedoms; that is, the right not only to fly over and land in the territory of other states but the right to pick up and set down traffic in those other states. Holding to the view which we expressed throughout the conference that greater freedom oif the air must be placed in a framework of principles which would prevent discrimination, unfair competition, and unequal developments, we took the view that while we could accept the first two freedoms we could not give up all the rights involved in the third, fourth and fifth freedoms until some solution had been reached on the questions of rates and allocation of services, which had not been settled at Chicago. A substantial number of other nations also took this position. We'have not signed the five freedoms agreement, which has been, however, accepted by nine governments. We hope, however, that all interested nations will accept all these freedoms when it has been possible to reach agreement upon the

International Civil Aviation
principles and practices to apply in the matter of rates and services. Our efforts in the provisional international civil aviation organization in Montreal remain devoted to this objective.
The Interim Agreement. I turn now to the interim agreement establishing the provisional international civil aviation organization, which is referred to as "PICAO" in this country. At Chicago it was recognized that some time must elapse before the permanent convention could be approved by all the member governments, and could come into effect. It was also recognized that a period of experience and experiment would be a useful preliminary to the establishment of a permanent organization. Therefore an interim agreement was prepared which, while following generally the lines of the permanent convention, went into less detail, and could be accepted more promptly by signatory governments, so that an interim organization might be created without delay to open the way for the creation of the permanent organization.	-
The interim agreement has been accepted by the Canadian government, as well as by the necessary number of other states, and the provisional organization which it provided for has heen set up in Montreal, which the Chicago conference selected as its seat. It held its first meeting of an organizational nature there this summer. The real work of the organization has now begun in earnest, with the establishment of various subcommittees and agencies which have been functioning since the beginning of October.
While (he interim agreement follows generally the lines of the permanent convention, it does not contain the provision for compulsory settlement of disputes, which is included in the convention. There are a number of other less important differences which arise chiefly out of the fact that the convention is written in greater detail. Basically the framework of an assembly, a council, and air transport and air navigation committees is the same.
The first council for the provisional organization was elected at Chicago and Canada was among those given representation on the council. A seat has been kept vacant in the hope that U.S.S.R., which was not represented at Chicago, may in due course find it possible to participate in the organization. I understand that subsequently Russia has been invited to send an observer to the meetings in Montreal.
The council elects its own president, and, as you are probably aware, the highly respected and eminent Doctor Edward Warner, former member 'of the United States
civil aeronautics board, has been chosen to fill this post, with the complete approval of all participating states.
The council has also appointed Mr. Albert Roper of France, secretary general of the organization. Mr. Roper brings to his work a vast experience in the field of air navigation, since he has been the secretary of the ICAN, the international air navigation organization which existed in Paris between the two wars.
Each member state is to bear the expenses of its own representatives to the assembly, and the salary and expenses of its own delegate on the council, and of any representatives it may have on working committees. In addition, each state is to make a ~ contribution to the operating costs of the organization. It is expected that our initial annual contribution will be around $60,000. As a sanction to ensure the adequate financing of the organization, it is provided that the assembly may suspend the voting power of any member state in default financially.
Further, the provisional organization is to administer the international air services transit agreement, and the international transport agreement, to which I have already referred, pending the coming into force of the permanent convention.
The interim agreement also provides certain general conditions to be observed in the field of air navigation, pending the final working out and acceptance of the numerous annexes in this field. These conditions, which are largely in accordance with our own present accepted practices, cover such matters as flight over the territory of member states, landing regulations, designation of routes and of airports, measures to facilitate air navigation, certification of aircraft equipment and personnel, and similar matters.
In addition to accepting the general principles and standards laid down in these provisions, member states have undertaken to transmit to the council all present and future contracts and agreements relating to international air matters, and to file statistics on ' operations, so that the council may have at its disposal full information upon which it may base its report and examinations. Fifty-one nations have signed the interim agreement, and thirty-five nations have indicated their acceptance of it.
I believe that in the preparation of the documents covered by this resolution, and in the establishment of the provisional international civil aviation organization, the Canadian government, and other participating governments, have made a substantial contribution to international development, and international understanding, and in so doing
International Civil Aviation

have risen above petty partisan considerations. The framework provided is good, and the potentialities for the future are great. There can be no question in my mind upon the desirability of prompt approval of the resolution which I am presenting, for it represents the logical outcome of an enlightened policy of international cooperation, which should receive the support of every group in this house.


John George Diefenbaker: Mr. Speaker, the house has listened with rapt attention to the resume given by the minister in regard to the conference at Chicago. It reveals one more step along the road of Canada's participation with the great nations of the world in the setting up of instruments for the preservation of peace. It is impossible, properly to discuss the subject matter of the address delivered here this afternoon by the minister, who has gone into a great deal of detail; and for that reason after a few observations I intend to move the adjournment of the debate on this resolution.
- I agree with the minister when he says that those who participated in this conference at Chicago made a magnificent contribution to the establishment of an international set-up to control aviation. Aviation, internationally, must be controlled, for all realize that aeroplanes carry not only passengers but also bombs. I was very much impressed by the minister's explanation of the necessity of all the nations participating being in agreement that all arrangements into which they have entered prior to this conference be abrogated or in any event filed with the organization.
Possible disagreements among the nations of the world make control of international aviation necessary. Aviation, properly controlled internationally, can become mankind's handmaiden for peace. Uncontrolled, it will remain a potential destroyer of mankind in the years to come.
In the minister's peroration he mentioned the fact that Canada had made a fine contribution through its representation at Chicago. I am happy to join him in that statement. I followed that conference through the press 'as fully as it was possible to do through that medium. Canada's representatives, as they did at San Francisco, performed a proud part and made a great contribution. The minister asks that as far as this debate is concerned it be kept above the-realm of partisanship and party politics. With that view and with that request I am in entire agreement.
I have noticed a distinct trend during the past two years in this house. By reason of the fact that the government has shown in

international affairs a desire to cooperate with the parties in other parts of the house, there is springing up in this chamber a common denominator among all parties, namely, a cooperative desire to assure that in international affairs there shall be a united front in this House of Commons and that Canada shall speak with a united voice.
There was one phase with which the minister did not deal. He mentioned the fact that some fifty-two nations had agreed to this international agreement. One of the nations is China, which was denied an opportunity to participate in the international conference of 1919. Russia was another nation that did not participate in 1919. We all realize the difficulties that occurred in Europe during the nineteen-twenties and thirties by reason of the fact that the agreements made at that conference were not generally accepted. Having regard to all the circumstances and being controlled, as he necessarily would be, by the exigencies of international diplomacy, the minister, I would have thought, would have given us some insight into the reason why the U.S.S.R. did not actively participate in this conference at Chicago.
The U.S.S.R. has a tremendous potential value in any international organization having to do with aviation. The U.S.S.R. is so situ- ' ated that she does not require freedom of transit or any of the other air freedoms the minister referred to in order to fly directly into China, Japan, Iran, Turkey, Roumania, Poland, Canada and the United States, to mention only a few of the nations I jotted down while the minister was speaking. Russia is so placed that she can develop her own aviation set-up without regard to those being developed in contiguous or adjoining nations. I feel bound to add that unless the cooperation of the U.S.S.R. can be obtained in connection with this organization, the great hopes expressed by the minister may very well not be possible of attainment.
I am sure that every effort was made to secure the cooperation of this country. She cooperated in San Francisco. Under the air agreement entered into at Chicago there is no greater denial or abdication of sovereignty in so far as any member nation is concerned than there was under the San Francisco organization, with the one possible exception, in connection with disputes and defaults. If I understood the minister aright, he stated that all the signatory nations to these agreements were bound to accept the decisions of the permanent court of international justice on any disputes submitted to it. I do not so read articles 84 and 85. I may be misinterpreting

Armed Forces-Transportation
their meaning, but those two articles lead me to believe that all that has actually been agreed upon is that if a nation expresses a willingness and desire to have adjudication made by the international court of justice, in that event the decision of the court is final. But if any nation which is a signatory to this agreement decides that it will not accept the decision of the international court of justice, it would not in fact either be bound to have its disputes adjudicated upon or be bound by the decisions of that court.
I realize the difficulty of seeing an obligatory submission by sovereign nations to the court. I realize that nations are still endeavouring to retain their sovereignty. In my opinion one of the weaknesses of the united nations organization is the fact that nations are not bound to accept adjudication by the international court of justice. One of the weaknesses of this agreement or convention is the fact that in respect of infractions of its provisions there is not that compulsory adjudication which alone can assure the application of the rule of law in international affairs.
By and large, and subject to an examination of what the minister has said, we on this side of the house are going to give undivided support to the convention reached at the international civil aviation conference. We realize that it lacks all the force which we ^iad hoped it would possess. The fact that it does not include the U.S.S.R. is one of the most-serious drawbacks in so far as Canada is concerned, having regard to her strategic position. Realizing that one can never expect complete perfection in international agreements, no less than in any other type of agreement; believing that the representatives of Canada have exercised every endeavour to assure even greater powers than those comprised within the agreement, this party accords complete acceptance of the principles of the agreement and intends to support the resolution in its entirety.
With those few words and with a view to giving other members of the house and myself an opportunity of studying the speech just delivered by the minister, I move the adjournment of the debate.


Stanley Howard Knowles: Mr. Speaker, I am not objecting to the motion made by the hon. member; ' in fact I am quite prepared to second it, but since its adoption will adjourn the discussion I would just like to have a moment before we leave this subject to-day, to say that we in this group wish it to be known that we support the resolution now before the house. We would like .to commend the government
for the steps they have taken to achieve as much as possible of international cooperation in the field of civil aviation. With those remarks and with the hope that they will not exhaust my right to speak further when the debate is resumed, I have pleasure in seconding the motion made by the hon. member for Lake Centre.
Motion (Mr. Diefenbaker) agreed to and debate adjourned.



CANADIAN ARMED FORCES


[Stage Direction]
On the orders of the day:
Hon. LIONEL CHEVRIER (Minister of Transport):: Mr. Speaker, on Friday of last
week the hon. member for Cumberland (Mr. Black) asked what the government's policy, was with respect to the transportation of men who fought in the Canadian services but who have homes in England and desire to return to them. He referred to the fact that on her return voyage the Queen Elizabeth had certain empty berths. The senior member for Halifax (Mr. Isnor) made a similar inquiry of my colleague, the Minister of National Defence (Mr. Abbott), and myself. Yesterday I told the hon. gentleman that the matter was one which came under the jurisdiction of the British ministry of war transport and that a part of his question was perhaps referable to my colleague the Minister of National Defence. I have conferred with him and I find that he has no jurisdiction in the matter either. In order to give my hon. friend full satisfaction, I have communicated with the transport controller, who assures me that the allocation of passage for troops including the Queen Elizabeth, is a matter exclusively under the control of the British ministry of war transport. Probably the best advice I can give my hon. friend is that he address his inquiry to H. W. Eagle, secretary, British ministry of war transport, Windsor station, Montreal.
This morning I received a.telephone call from Mr. Rolfe, president of the veterans of foreign wars, and I gave him the same answer, and assured him that I would make representations to the British .ministry of war transport to ascertain whether the Queen Elizabeth on its return voyage could not carry these men.


Mr. P. C. BLACK (Cumberland):: I thank the minister, but I would point out that other steamers which I understand are under Canadian jurisdiction, the Lady boats, hospital ships, are returning to England with their berths practically empty. Many of these men who have served in the Canadian army and
Veterans Affairs

whose homes are in England are prepared to pay for their transport back to England. All they ask after serving this country is an opportunity to return on some boat going back empty, and up to the present they have not been given that opportunity.


Hon. D. C. ABBOTT (Minister of National Defence):: Perhaps I might answer that question. My hon. friend probably has in mind the Lady Rodney. She is under the Canadiah army so far as troop movements are concerned, but so far as civilian passengers are concerned that matter is entirely under the British ministry of war transport. The Lady Rodney has only about twenty berths for civilian passengers. The rest of the ship is equipped with bunks and so on for troops. There is no staff provided on the ship to care for other than troops. The troops take care of themselves when crossing. The British ministry of war transport do not wish the Lady Rodney to transport civilians. I understand that there are from twenty to twenty-five men in Halifax, but there are several hundred in Canada in this category wanting passage heme to England, and there are varying degrees of priority. The priority on which they will be returned to Great Britain is determined by the British ministry of war transport. I can assure my hon. friend that I, too, have been in touch with Mr. Eagle, and my officers have been advised that the civilian space on the Lady Rodney is fully taken up and that there are no facilities for taking civilian passengers on return trips.


Mr. E. G. HANSELL (Macleod):: May I
ask whether the same answer applies to the wives of men in the active forces who desire to go to England?


Douglas Charles Abbott: It applies still more to
them. On the troopships the servicing of the troops is done by the troops themselves. The regulations will not permit civilian passengers to be carried in space that is not suited to them and where no staff is provided to care for them. So that the answer would apply even more to women under those conditions.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
John George Diefenbaker: May I repeat the question I addressed to the Minister of Veterans Affairs yesterday and about a couple of weeks ago asking whether anything has been done by the government to assure that the men who join the interim armed forces will on their discharge be assured of reinstatement in their civil positions?

Hon. IAN A. MACKENZIE (Minister of Veterans Affairs): An order in council has been passed on the recommendation of the Minister of Labour, and if my colleague is not in his place to-morrow I shall ask permission to table the order on his behalf.


John George Diefenbaker: When was it
passed?


Ian Alistair Mackenzie: Yesterday, I believe.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Thomas Langton Church: Mr. Speaker, I should like to point out that the order of business for to-day as announced last night has not been carried out. I would also ask the leader of the house if the resolution with respect to a distinctive Canadian flag and bill No. 21, to amend the Trans-Canada Air Lines Act, could not stand until the Prime Minister's return. I made that request of the Minister of Reconstruction when the measure was before the house in the resolution stage. I would point out that private members get no chance to discuss these measures because the announced order of business is changed suddenly overnight and, in addition, any member can rise in his place and move the adjournment of the debate on a particular subject, thus preventing further discussion.


James Lorimer Ilsley: The session has reached a late stage. The days are going by rapidly and we must get started on these measures. The house has had full notice of them. I do not think we can wait until the Prime Minister's return to deal with some of these important measures. We shall have to get ahead with them.



TRANS-CANADA AIR LINES INCREASE OF CAPITAL-CREATION OF CORPORATION TO OPERATE SERVICES UNDER CONTRACT

[Stage Direction]
Hon. C. D. HOWE (Minister of Reconstruction) moved that the house go into committee on bill No. 21, to amend the Trans-Canada Air Lines Act, 1937.
Motion agreed to and the house went into committee, Mr. Macdonald (Brantford City) in the chair.
On section 1-Capital shaies.
Thomas Langton Church: I just received this morning report No. 4 of the proceedings of the committee that was considering this bill. The committee scarcely considered the bill at all. There was a discussion between three or four members of the committee and the officials

Trans-Canada Air Lines
of the T.C.A. I cannot understand why the government is so anxious to rush this bill through the house. We had a debate on it the other day: but the second reading, as I contend, is the time to raise objections to a bill. The principle of the bill is one to which I have objected all these years. I am opposed to any monopoly in the air and to both the method and the manner of the civil aviation policy adopted by the present government. At the present time the Prime Minister is either in the old country or on his .way to Washington. We cannot say what effect the atomic bomb and the measures to which it may give rise will have on this whole question of civil aviation. I repeat what I contended at the time the resolution was first mentioned in- the house, namely, that it should be postponed until such time as the Prime Minister comes home.
As to the method of procedure, it will be noticed that when this matter was before the house, I believe on March 23 last, although it was required that the committee which had been set up on railways and shipping, should report back to the committee of supply when the committee reported back the words "committee of supply" had been struck out and it reported to the committee of the whole. The procedure, as I maintained at the time, is all wrong, it is when a bill is up for second reading that there should be a debate. At the conclusion of the debate on the resolution the minister rose and, although a motion requires forty-eight hours' notice, he moved that bill No. 21 be referred to the committee on railways and shipping, although the committee has nothing to do with civil aviation at all. How many meetings did that committee hold? Practically all its deliberations will be found in report of proceedings numbered 4. The committee met last Thursday, adjourned to meet again at four o'clock, and a discussion went on between only three or four members. It will be noticed that, although the committee on railway's and shipping consists of twenty-three members, the quorum was reduced from twelve to eight. When the bill or the resolution embodying its principles went before the committee it should have been understood that those who were interested in the matter -that is the existing aviation companies, the T.C.A., the Canadian Pacific Railway company, and the pioneer branch lines and others which have been pioneers in this field1-should be called before the committee and heard as to the merit.s of the bill, its financial provisions and all the rest of it. That procedure was not followed. The committee just met and whitewashed the whole bill. That is what it is- nothing but a whitewash. It will be noticed that a question was asked at that particular time by the hon. member for Rosedale, and a very proper question it was. He asked what properties the Canadian National Railways turned over to Trans-Canada Air Lines at North Bay. A small safe was mentioned, and the bill not examined at all. I fail to see that the committee complied with the text of the reference, namely to report on the bill itself.
What is to be the cost involved in these proposals? There is a legal matter involved of which the minister has probably not heard. I can tell him this, that the operators of any branch lines or pioneer lines can sue the government of Canada in the exchequer court for all the damages they incur. The principle was decided some years ago by the privy council in the Alberta Great Waterways case, in which the attorney-general of Alberta, the Great West Waterways and the attorney-general of Canada were involved. The privy council decided that when bonds were sold, securities marketed, vested rights of property pledged, and the like proceedings taken, a government is liable in respect of any interferences with private ownership and private rights as outlined and can be compensated.
This particular bill is linked up with what Canada did in Chicago and the agreement must be read into bill No. 21. We have all heard of the proposed agreements which the minister is now trying to get passed by the house and upon which debate was adjourned this afternoon. I will only say that, in adopting the method and manner which the government have proposed, they have abandoned any idea of an empire air scheme. The empire is entirely forgotten; we are simply linking ourselves up with Washington, and it is a leap in the dark. We do not know what will become of civil aviation in Canada. As I said in a debate on this subject eighteen months ago, reported in Hansard, March 31, 1944, at page 2046:	-
We know what science properly applied has done in the last seventy-five years in the utilization of oil, gas and falling water and many other agents of power and industry. It has won the admiration of the whole civilized world. Why? Because science argues from fact; it does not argue in the realm of doubt and opinion. Look at the progress which medicine has made in the last fifty years.
I went on to refer to the fact that the minister's policy of establishing a monopoly in connection with civil aviation in Canada would lead to these factors being ignored, and said:
Canada should try to take the lead in the field of design and should prepare a definite policy for the next twenty-five years. Aviation in Canada is yet only in its infancy. Research,

Trans-Canada Air Lines

design and experimentation will be more important than ever. In Canada and in the empire we are on the threshold of a grand new age which will revolutionize aeroplane construction and the development of aeroplane engines. In this field high speed is essential to supremacy. Problems of all sorts arise; science and research will provide even lighter alloys and new types of wings,_ engines and parts which will withstand various climatic conditions the world over.
I went on to say:
We are now embarking upon a policy of complete isolation from the mother country; we are going over the heads of Australia and New Zealand, and I say we are at the parting of the ways. I warn hon. members of the danger; I say we should stop, look and listen to the advice of those who have seriously considered this matter. When the young people come back fimn the war and look for employment where will they find it? The other night reference was made to Russia. That country will have nothing to do with this internationalization of air routes; neither will the United States.
I have no papers now with me to-day. I had no knowledge that this matter was coming up. But I wish to refer to one or two matters which relate to what may be called the preamble of the bill, because this is probably the last chance w,e shall have.
I cannot understand why more hon. members of the opposition have not risen to oppose a second reading of the bill, because I can truthfully say that I never believed we should be called upon to pass a measure of this kind. How does it come about that a minister of the crown can go to a conference at Chicago and approve four different sets of agreements over the head of parliament which are practically comprised in bill No. 21, with the Chicago agreements read into it, that we are to be asked to pass? A minister of the crown goes to Chicago to attend a conference at the invitation of the United States, and what, does he do? He commits this country to a certain course of action in connection with aviation that will cost millions. I contend that no minister should be allowed, over the head of parliament and while this house is in session, to go to Chicago or anywhere else and make an agreement that is binding upon this country. A constitutional change should veto that. We did this sort of thing in connection with the Kellogg and Locarno pacts and again in connection with the covenant of the league of nations, and when the Abyssinia affair was at its crisis we passed sanctions against Italy. Then another minister rose in his place and abandoned what had already been done by the Prime Minister and vetoed the sanctions. There should be a constitutional change that would make it impossible for any minister of the crown to enter into any such agreements that bind the Canadian people in this way.
Who is to pay the costs entailed by this agreement? Who paid for the war anyway?

Not the ministers. They paid something toward the total, but it is the Canadian people in all the constituencies represented in this house; it is the taxpayers, who paid for the war, and they are the people who will pay again if we pass a bill like this and bankrupt the country. And we are passing this bill with the Prime Minister away.
The conference at Chicago was not attended by Russia. Great Britain was there; she would not have anything to do with it, and has not yet signed it. Britain had already made an agreement with Russia for ten years, and so the United States remains the author of the policy laid down at Chicago. The United States have also entered into secret agreements with a large number of the Latin republics, and this without any regard to the mother country or Russia or the dominions.
The minister has not considered, in connection with this bill, the possible effects which the atomic bomb will have on civil aviation. Apparently that question has not entered his mind, and at this moment the Prime Minister is on his way to Washington to discuss the question. I wonder if the minister has looked into the report submitted by the Kilgore subcommittee of the United States senate that has been considering the question of civil aviation in its post-war development. It is a valuable report on the effect of the allied bombing of Germany. That committee in its report made a reference to the prediction of H. G. Wells and other enthusiasts, before the great war started, that the aeroplane would destroy the enemy in a short time, and when the war was all over, as the committee points out, Germany had a tremendous equipment in machine tools, iron and steel, and the possibility of producing synthetic rubber on a large scale.
When the minister was at Chicago he apparently forgot the contribution which Canada made to the great empire training scheme.
I fail to see that T.C.A. has benefited by or considered at all in its set-up the work done by the training of thousands of young men during the war, in our war air scheme, one of the glories of the late war. Everyone thought that aviation would provide a great source of employment for these brave young R.C.A.F. men, so many of whom died in the battle of Britain.
I referred a moment ago to the Kilgore subcommittee of the United. States senate. That committee published a valuable report on the results of the allied bombing of Germany, and its findings are relevant to the bill before us. The committee states:
When it was over Germany still had four million tons of machine tools capable of immense armament output, the iron and steel industry

Trans-Canada Air Lines
with minor repairs was capable of producing twenty-five million tons yearly, the dye and chemical industry which produces explosives was virtually untouched as also the synthetic rubber plant.
The general damage done to German war output was only twenty per cent.
Bill No. 21 fails to consider this union of civil and war aviation.
I doubt if lion, members now in the house have read the report presented by the committee on railways and shipping with reference to bill No. 21. I read it only this morning when I got it, and I do not believe that five members in this house have read it. If they have, then I am shocked to find that the merits of the bill are not being discussed in the committee. We had a cross-examination * of Mr. Symington. That is all very well; as a private citizen Mr. Symington is all right. But in my opinion he was one of those who contributed to the mistakes made in connection with the Canadian National Railways in this countiy. The Royal Canadian Air Force has received very little aid or recognition from the operations of T.C.A. They prefer America first. When the pilots got out of the war they received little encouragement from Trans-Canada Air Lines; few were drafted by the T.C.A., and if we pass this bill they will get less encouragement in the future. It is the duty of the opposition to examine the bill. If the war had lasted another twelve months I do not think we would have heard anything about this bill, because science would have developed a much greater number and variety of atomic bombs.
I do not believe that science deliberately set out to split the atom in order to discover some terribly destructive weapon, nor do I believe that the late Lord Rutherford ever contemplated its development for war purposes; and if we pass this bill we shall simply be ignoring the questions that will be discussed at the atomic conference which is shortly to take place in Washington. In view of what I have said, Mr. Chairman, I think the committee should rise and report progress and ask leave to sit again, because we have had no opportunity to read the report of the committee on railways and shipping.
The United States and Britain were in the war together fighting a common enemy, and during that time Britain was unable to look after the cause of civil aviation in the Pacific as she would otherwise have done. The result is that the United States has captured the whole Pacific territory. When they were here both Mr. Curtin and Mr. Fraser made strong appeals to Canada for cooperation in the development of aviation in the Pacific, and for an empire air scheme, as they did 47696-1191
in January, 1944, but those appeals have been ignored by the government in this bill. The mother country has been left out altogether, and there is no hope of an empire air scheme. As I have said, the government has failed to consider the agreement between Britain and Russia and the various agreements that the United States has entered into with South American countries. I protest against this bill for the various reasons that I have given all last year and this year. I do not believe that it is in the public interest.


Mr. COCKERAM:: This bill changes the whole set-up as regards civil aviation in Canada, and possibly it is well to review the whole question of the Canadian aviation policy. Active aviation in Canada is from thirty to forty years old. During the first world war it assumed sizable proportions and in 1925 became commercially important in the development of bush operations-and everyone knows what bush operations have meant to the country.
Canadians have taken to the air as the people of the British Isles did to the sea but I believe that, given an opportunity for . development, there is no reason why we in Canada cannot be leaders m the air as our forbears in Britain were in world shipping.
There are many fields in transportation in which the surface carrier is and probably will always remain much more efficient and more useful than the aeroplane. The planning of aviation policy requires a full knowledge of the capabilities of all forms of transport and an understanding of those fields in which the aeroplane is superior and will, therefore, eventually take the business. These include many entirely new types of transportation. The planning of an aviation policy must, therefore, be based on the fundamental fact that air transport does not eliminate the older forms, but is complementary to, and additional to them, and by wise and farsighted planning can be-used to increase the rate of development of the countiy in fields which could not formerly be reached.
In most parts of the world, the tendency has been to develop air services parallel to existing lines of communication, and for many of the older countries this was the only form of air transport development which took place. This type of flying is essential in a progressive world for the fast movement of passengers and mail and some varieties of express. At the same time, it is foolish to wink at the fact that it is not, and probably will never be, a replacement for the older methods of transport. The man whose time means money travels by air because he saves time and, consequently, expense. He used to take a drawing-
Trans-Canada Air Lines

room on the train. The passenger, however, who travels in a day-coach will for a long time to come continue to travel in that way. It must, however, be borne in mind that, even though the cost of air transportation has been considerably reduced in recent years, it is by no means as cheap as transportation, by rail, and rail costs are also coming down. The same applies in an even greater degree to most classes of freight. The result has been that, excluding the war years which are not representative of normal business conditions, intercity air line operations have normally required subsidization running up to as much as fifty per cent or more of the total revenue of the company.
In Canada we have an opportunity for the development of profitable air operations such as is available in few other countries in the world; this is the bush transportation field. In these regions, the alternative methods of transportation are frequently very expensive. They are in general not only slow but are restricted by seasonal climatic conditions, and the relatively small volume generally makes them very expensive per unit carried, as well as making the cost of the ground facilities such as roads, docks, portage railways and stopping places excessively high when calculated on the same basis.
The aeroplane on the' other hand thrives under these conditions. Immediate service can be given without the necessity of building extensive ground facilities, and the service is so flexible that it can be built up to any desired scale immediately the demand is found to exist. It is not restricted by change of season and, in the more remote parts of the country particularly, is not confined by the type of terrain. Even on a straight basis of cost the operational advantages for many types of work are so greatly in favour of the aircraft that it actually becomes cheaper pound for pound than other available forms of transportation.
It is unfortunate that the histoiy of civil aviation in Canada contains so little evidence of sound planning and aggressive government action to foster the development of bush operation. It is quite true that after long delay a determined effort was made to provide a first-class inter-city air sendee and, while the facilities now available on Trans-Canada Air Lines, and the quality of operation which is maintained, are exceedingly good, they are by no means the equal of those available on the main lines in the United States. They are, however, maintained at considerable expense to the public, and the sole operating agency, Trans-Canada Air Lines, receives public support in the form of payment for mail, a direct

cash subsidy, and provision of landing facilities and navigational aid on a scale which is by no means intensively utilized by the limited amount of air traffic from this single line.
The bush services on the other hand-although for nearly twenty years they have filled a vital economic place in the country's development, have done more than any other agency to speed the opening up of the north country, and have given employment both directly and indirectly to far more people than has the government-owned air line-have received no such assistance.
Mail contracts which are used in practically all countries of the world as a means of assuring transportation companies a basic revenue, have in the case of bush operations, been handled in a most parsimonious manner. The contracts were usually written to include a thirty-day cancellation clause. In many cases no contract at all was signed, so that the company was denied even this limited protection. Specifications commonly required a straight poundage rate for which the carrier was obliged to guarantee a fixed schedule of deliveries without any assurance of the volume of mail which he would receive. Competitive bidding was carried to such an extent that mail, although taking more space than normal express, was actually carried at rates below the prevailing express rates, and in one case at least the carrier was required to transport all outbound mail free of charge. Most other government business was offered for open competitive bidding in order to secure the cheapest possible price, and it was not an unheard of practice on occasion for the quotation of one company to be made known to a rival firm in order to secure a lower bid. During all this time there has been no attempt on the part of the civil government agencies responsible for commercial aviation to provide any of the ground facilities or navigational aids in bush areas which are considered as a normal public expense in the assistance of the transcontinental service.
Mr. KNOWLES' I did not get what the hon. member said at the beginning. May I ask what he is reading from?


Alan Cockeram: I am reading from my notes.


Stanley Howard Knowles: Mr. Chairman, it is
obvious that the hon. member is reading so fully that I thought he was reading from a quotation or a book.


Mr. CROLL:: It is his own quotation.

Trans-Canada Air Lines


The CHAIRMAN:: I must remind hon. members of the committee that it is not in accordance with the rules of the committee to read speeches. Of course, hon. members may refer to their notes, but they must not read their speeches.


Mr. McDONALD (Pontiac):: A rule that is honoured in the breach.


Alan Cockeram: I am only referring to my notes. It is true that in the middle of nineteeni-thirties the so-called transport act on aviation as regards bush pilots was introduced. The objective set forth was to assure uniformity of standards of operation, safety for the public and all those things that were considered requisite at that time for people in the flying industry. The act was strongly protested against by almost eveiy company. Among the reasons they gave was one that it placed great-restrictions on their operations. The result was that in the main the companies were made to operate on a basis on which they could not and did not make any money.
We are now coming to the post-war era. We have a tremendous number of young men who have been in the air force, experienced men and many others who have acquired a liking for outdoor life, and who should be the pioneers to open up the north country. All that is offered to them is a traffic survey to be conducted by men who have little if any experience in the bush transport business. At this time I should like to say that it is my opinion that aviation in Canada should be placed under one minister. It should not be handled ii#a department where the minister has many other duties and is busy the whole time. I am of opinion that as far as Canada is concerned all aviation should be placed, in the hands of one minister, with two deputies, one handling civil aviation and the other, military aviation. I believe much of the training carried on by the Royal Canadian Air Force is largely applicable to commercial work. I have in mind particularly photography, surveying and other services of which we can make use in our great north land. The men serving in the Royal Canadian Air Force under this set-up would get a great deal of excellent training in navigation, photography and in many other branches.
Under this bill we are going to put out of business a competitor of Trans-Canada Air Lines. The balance sheet of Trans-Canada Air Lines, which was produced in this house some time ago, showed a very small margin of profit on its operations for the last fiscal year; but it was pointed out that the president of the company received no salary. Had he
received a salary the company would have been in the red; and had the Department of Transport charged Trans-Canada Air Lines for all the sendees that have been made available by that department I feel sure the deficit would have been even greater.
We in this house are interested in seeing that civil aviation in this country is placed on a sound footing. Many times a, majority of the people of Canada have expressed their disapproval of the amalgamation of the two railways, which would have resulted in a state monopoly. For the same reason I believe the people of this country will disapprove the desire of the minister to have Trans-Canada Air Lines the only worth-while air transportation company in Canada. I suggest to the minister that before he does away with the competitors of Trans-Canada he give consideration to what will be the result of such action. My own opinion is that I can see no reason why Canadian Pacific Air Lines as such should not be allowed to compete with Trans-Canada in both the transcontinental and trans-oceanic runs. In the first place, I would rather see Canadian Pacific Air Lines in this business than the Dominion of Canada, because I am positive that transoceanic air routes will not be a paying proposition. Answering a question in committee the other day, Mr. Symington was asked in regard to the proposed routes, and on page 191 of those proceedings he replied:
We have given a great deal of study to these routes. I might state quite frankly to this committee that I believe they will be losers for some time to come and require financial aid. We would prefer to run to Australia and New Zealand via Fairbanks, China, India and Australia, or I should say China-Australia. But that is not now open because of Russia. Therefore we expect to land at Hawaii and on down to Australia and New Zealand under a joint agreement with Australia and New Zealand. That operation depends upon when you get the equipment with which to run it. Because they are long hops you have got to be sure that you have the proper equipment. What the financial result will be I cannot prophesy at all. It depends upon how many people are going to travel and how much mail is carried-
Then this is the important part, because this is the opinion of the president of Trans-Canada Air Lines:.

but I would not rvant to invest my money in it, if I had any to invest.
That is what the president of Trans-Canada Air Lines thinks of the trans-oceanic routes, in connection with which we are being asked now to increase the capital of Trans-Canada Air Lines. When the president of the company has such a doleful outlook on thtse
Trans-Canada Air Lines

operations I see no reason why this committee should vote an additional $23,000,000 or $2S,000,000 for that purpose.


Mr. CASE:: Mr. Chairman, it being our
usual custom to speak generally on the first subsection-


William Ross Macdonald: I would remind the
hon. gentleman that we are on section 1 now.


Wilfrid Garfield Case: As I say, on section 1 we have been accustomed to address ourselves to the bill generally. If we will be given an opportunity to disuss the various details of the other subsections I shall be perfectly satisfied. I intend to make some contribution to the debate, but since it is now six o'clock perhaps I may have an opportunity later.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Wilfrid Garfield Case: Mr. Chairman, the reference I propose to make has to do with the general principles of the bill.


William Ross Macdonald: May I remind hon. members of the committee that we are on clause 1 of the bill which has to do with capital shares. This does not permit a general discussion of the bill, and the debate should be relevant to the clause under discussion. I would ask hon. members to confine their remarks to the clause under discussion.


Howard Charles Green: Mr. Chairman, with all due respect, may I point out to you that it has been the practice in this house for many j'ears to permit a wide latitude in discussion on the first section of a bill. That was mentioned this afternoon. I think it was well understood that the practice was not being questioned. I submit with the greatest respect that you are ruling too strictly in connection with the discussion on this first section.


William Ross Macdonald: I would refer hon. members of the committee to standing order 58, subsection 2, which reads:
Speeches in committee of the whole house must be strictly relevant to the item or clause under discussion.
I have not been able to find any reference in the parliamentary rules and forms to any practice to the contrary. All I can do is to quote the standing order to the hon. member.
[Mr Cockeram.]


Ian Alistair Mackenzie: Mr. Chairman, I think you are absolutely correct in your ruling, but perhaps it w'ould expedite the passage of the bill if we just agreed to have a short discussion.


Howard Charles Green: I should like to ask the leader of the house if it has not been the practice to permit a wide latitude of discussion on the first section of a bill when it is in committee? Surely there is not to be a new ruling made now, especially when several members have taken advantage of that latitude.


William Ross Macdonald: I do not want to make a new ruling, but I must have some precedent pointed out to me. With unanimous consent, the committee can dispense with the rule and allow a general discussion on the first clause.


Ian Alistair Mackenzie: If I may intervene again, I think my hon. friend is confusing the discussion on an' ordinary bill with the practice we have followed in connection with the war appropriations. I remember quite well a former deputy speaker of this house who was most stringent in his application of the rules.
I suggest that possibly it would expedite the matter if we mutually agreed that there be a brief general discussion nowr.


Thomas Langton Church: I do not question your ruling, but was there not some understanding when the bill received second reading that there would be a general discussion in committee? '


William Ross Macdonald: My recollection of the general practice has been that a general discussion is permitted on the short title. I would point out that I am in the hands of the committee; I am your servant and I carry out your wishes. I understand it agreed that there will be a short general discussion on the first clause.


Ian Alistair Mackenzie: This is not a precedent in regard to the rules.


Wilfrid Garfield Case: Mr. Chairman, possibly I can help to expedite matters by confining my remarks to the section before -the committee. By this section it is proposed- to increase the capital from $5,000,000 to $25,000,000. This amendment offers tremendous possibilities, because, it seems to me it places in the hands of the minister a great deal of authority which I doubt it is wise to do. I do not say that in any disrespectful way of the present minister. I think it is thoroughly understood that I have a fine appreciation of -the minister presenting this bill. His long years of public life indicate the confidence that is placed in him.
However, we are dealing with the granting of authority which will be delegated to his successors. We may have sufficient confidence

Trans-Canada Air Lines
in the minister to place this authority in his hands, but it may lead to something which we do not at this time anticipate. I find it difficult to speak on a measure Q.f this kind and not be misunderstood, because it clashes somewhat with one's ideas of public and private ownership. I am presenting my % observations only from the point of view of monopoly, whether it be a public or private monopoly. I feel it would be unwise for Canada to contemplate a monopoly in air transportation under public ownership. _
This country offers tremendous possibilities for air development. As a matter of fact, I think the future of Canada, with its vast expanse of territory, is a challenge to our imagination and our determination to bring into effect transportation which will knit this country more closely together. I am assuming certain things, because the matters I intend to refer to are not written in the bill. Because of remarks which have been made in this house on former occasions it would appear that the object is to have one central authority. That object, as I interpret the bill, is to bring air transportation entirely under one authority, whereas my own considered opinion is that this country could well afford to encourage others to engage in air transportation. It might not be feasible to have various companies engaging in these activities if their resources were not sufficient to carry them through, but I do believe that we might well anticipate our country being opened up and developed by two great air transportation systems run in connection with our two railway systems, each one developing its own individual lines and bringing about an element of competition which, in my opinion, would lead to more efficient .service.
I have also in mind the young men who have served this country during the war years in the air service and who might want to make a career in air transportation. I consider that it is important from that point of view that we should have more than one air transportation system in this country.
I am reminded also of the international aspect. It seems to me that if our goverm-meat operates our air lines, there is bound to be competition and1 interlocking with the services of our great neighbour to the south and perhaps with other countries, so that the government might become sometimes the victim of its oWn system, involving this country in a dispute through some infringement of the laws of another country. There would not be that danger with a private company.
The present stage of development of our Trans-Canada Air Lines is a credit to whoever claims the responsibility for it, but the
possibilities before us are so great that I think we should contemplate having a full-time minister for air transport in Canada. Canada could well afford to give leadership' in this field. We have tremendous possibilities compared with those of many other nations. When I think of what the smaller European nations like Britain and the Scandinavian countries have achieved1 in the shipping world I wonder if we are not taking too much for granted in assuming that Canada will not rapidly develop through air transport and other modern means of communication.
I should like to know more about the objects of this bill. I should like to be certain just what it seeks to accomplish. Is there no danger of setting up a public monopoly? Is it the intention to expand our air transportation and at the same time offer an opportunity to those who care to engage in air transport whether they have limited capital or unlimited capital? That is what I am chiefly concerned about, not with the bill itself particularly, because capital will no doubt be needed if the system is to expand. But I think that we should have an assurance from the minister as to the real objects of the bill. Does it contemplate monopolizing air transportation, or are we to give private enterprise an opportunity to share in the development- of this newer means of transportation?


Mr. HERRIDGE:: Does this bill have anything to do with the government's proposal regarding the divesting the railways of their air lines and the expropriation of other air lines?


Clarence Decatur Howe: It has nothing to do with anything other than TransCanada Air Lines itself. The purpose of the bill is to increase the capital of Trans-Canada Air Lines and to change the basis of its mail contract with the post office. It affects no other aviation enterprise in Canada.


Mr. MacNICOL:: I have a few questions to ask of the minister, and1 he is such a walking encyclopaedia of facts and figures that I have no hesitation in asking him, because I think he will be able to answer them right away. Shall I ask them one at a time?


Clarence Decatur Howe: Yes.


John Ritchie MacNicol: How much is invested in T.C.A. to-day?


Clarence Decatur Howe: The authorized capital of T.C.A. is $5,000,000. The actual investment in T.C.A. is $4,600,000.


Alan Cockeram: What about the profits?

Trans-Canada Air Lines


Clarence Decatur Howe: The book value is over
$8,000,000. I am happy to inform my hon. friend as an old business man that, the capital of T.C.'A. is in cash in the company, and if the government wanted their $4,600,000 T.C.A. could write a cheque for it.


John Ritchie MacNicol: I am glad to hear that. My second question it is hardly necessary to put nowu I had intended to ask, has T.C.A. a deficit?


Clarence Decatur Howe: No.


John Ritchie MacNicol: It. has no liabilities?


Clarence Decatur Howe: No.


John Ritchie MacNicol: As regards the air fields across the country which are used by T.C.A., did T.C.A. build them, or were they built, by the country?


Clarence Decatur Howe: T.C.A. owns no airport and built no airports. They have been built mainly by the federal government.


John Ritchie MacNicol: What about the one at Armstrong?


Clarence Decatur Howe: That is federal.


John Ritchie MacNicol: Does T.C.A. use it?


Clarence Decatur Howe: As an emergency stop, yes.


John Ritchie MacNicol: The Winnipeg airport would be municipal?


Clarence Decatur Howe: Yes.


John Ritchie MacNicol: The minister mentioned the other day that there was a surplus. I presume he meant an operating surplus.


Clarence Decatur Howe: Yes. If my hon. friend has the balance sheet before him-I have in my hand the monthly report but it does not contain the balance sheet of the company- he wall find that the actual assets of the company are some $8,000,000, which has resulted from the ploughing back of earnings.


John Ritchie MacNicol: During the war T.C.A. had a very good service and great public support. I know that I tried to board a T.C.A. plane in Calgary, because I wanted to get home as quickly as possible, a member of the family having died,' and I was informed that I could not get a plane for two weeks, the priorities had been exercised by the military. I presume, therefore, that a great deal of the company's revenue came from the government during the war through military fares. Has the minister any knowledge of the amount of revenue that was derived from that traffic?


Clarence Decatur Howe: I could not say. The density of traffic is just as great now as it was during the war. If my hon. friend tried to get
[Mr Cockeram.]
passage on a plane from Calgary to Toronto to-day, it would be at least two weeks before he could get a seat. The operating ratio for the month just closed was around ninety per cent, which is very high for an air line that must take care of local stops.


John Ritchie MacNicol: Part of this $25,000,000 which is to be invested in Trans-Canada Air Lines is, I understand to be used for improving the service, so that there will be more planes and, of course, more employment of pilots and others. Will the policy be to recruit, for as many positions as are required, the returning airmen who rendered such excellent service overseas?


Clarence Decatur Howe: ' Yes. I believe that for the past year no one has been taken on the strength of Trans-Canada Air Lines as an airman who has not had a tour of duty overseas, and I do not think anyone has been taken on as a groundsman who has not returned from active service. That is the policy of the company.


Mr. SMITH (Calgary West):: It is usual, in speaking in this house, to say immediately that you "had not intended to take part in this debate." The only reason I am rather different from, anyone else is that I really mean it. I have only two thoughts to express which are, perhaps, a question.
In the first place, I wish the minister would tell us something about the route from Fairbanks to Whitehorse. Unfortunately I have been away recently, through no fault of my own, neither was it any good fortune of my own. But I know that Canadian Pacific Air Lines were anxious to carry out that route, which is, I believe, approximately only four hundred miles. They were quite prepared to do that with no expense other than gasoline.
I noticed in my reading on the train a day or so ago that the minister said that Trans-Canada Air Lines was taking that as an international route and had leased to Canadian Pacific Air Lines that area; I think I am quoting fairly correctly. Then I remember reading about two men from the Edmonton chamber of commerce who came here, one of them a great friend of mine of the name of G. Becker, an old pilot and1 a man of much experience not only in flying but in the direction of the industry of flying. He is a grand person, and one of his greatest recommendations was that he was an excellent Liberal, and therefore would do vers7 well for the Edmonton chamber of commerce in get- '. ting that line opened. The simple fact is that some time ago, when most of those people wanted to go from Fairbanks to the eastern borders of the United States, C.P.A. was not

Trans-Canada Air Lines
allowed to fly from White Horse to Fairbanks and back, but it could have been done without any change of schedule, and T.C.A.,
I think, would have received the major portion of that money, which would have meant more United States dollars in Canada, which,
I am sure, the Minister of Finance would assure us was a desirable object. That was never done, but the answer now is that it is being done and that C.P.A. has been chosen to do it.
On the general principle involved' in this bill, I would say that I agree with, the idealistic idea. I remember, a certain prime minister of this country, now a lord overseas, saying to me that private people had taken the water and the land, but "By Jove"-I think that was his roughest expression-"the country would retain the air"-I think that is the way he put it and he is that man who started this business.


Mr. PROBE:: Hear, hear.


Arthur Leroy Smith: I am now
coming to the "hear hear" boys over on my left.


John Oliver Probe: That's the stuff.


Arthur Leroy Smith: Their attitude is this, that "the country"-and by that, of course, they mean the government-should own and operate everything, the means of production, the sources of production. These phrases lose momentum as they go along, but I am old enough to remember how they started in my home town of Calgary quite some time ago. I arp now one of those people -I am not suggesting that I am speaking for my party at all, but I want to make it plain, and I hope I can be heard from here to Calgary-who are utterly opposed to government ownership and operation of anything. Let us make that plain. A great example of government ownership, according to our hon. friends on my left, is the post office; it is a "natural" to use an expression of my learned and1 hon. friend. I beg the hon. member's pardon, but I have been engaged so long in law. May I just say that I apologize to my hon. friend for saying he was learned. I did not mean that.


Stanley Howard Knowles: Now he will have to apologize to the lawyers in the house for making that apology to me.


Arthur Leroy Smith: The hon. member has got one word ahead of me, and I am no good at cross-word puzzles; how is he?
Let us take some other examples of this government ownership we are talking about, and to which the minister-I think his most
recent title is Minister of Reconstruction-has become such a convert. I will admit that he had a Moses in the old days who lived rather close to the place where I lived. As I say, the post office is cited to us as a grand example of government ownership and operation.


John Oliver Probe: Just one of them.


Arthur Leroy Smith: I will cover them all before I am through. I intended to talk for only three or four minutes, but if hon. members mention any more I will take them one at a time. I am now discussing their prize baby. What happened to the post office? The war came upon us, and they doubled their revenue; there was no price ceiling for industries under government ownership, so that the post office's two cents became four cents. There is your first example of government ownership.


Stanley Howard Knowles: Get it straight. Three cents became four cents.


Arthur Leroy Smith: Let us now talk about liquor. Some people do not like to talk about liquor, but I am anxious to.
I am one who, on the odd occasion, when I have a friend who will give me a little, will try it, but I will not admit I go any farther than that. In eight provinces of Canada what happened? Under government ownership and operation, for it was nothing else, they not only increased the price-they never heard of the price ceiling-but they adulterated the product. If your milkman had sold you what they did they would have put him in gaol. There is exhibit B in government ownership. Let us now go on with the others.


An hon. MEMBER:: What about the Ontario hydro?


Arthur Leroy Smith: All right. They never paid five cents in taxes to anybody. Who could not live in time of war if he paid no taxation? Next?


John Oliver Probe: Is the Canadian Pacific Railway company paying fair taxes?


Arthur Leroy Smith: The Canadian Pacific Railway company has paid more taxes in the Dominion of Canada than any other corporation since the inception of this country. Put that in your pipe and smoke it.


An hon. MEMBER:: What about loans?


Arthur Leroy Smith: All right; let us talk about loans to the C.P.R. Is that what hon. members want to talk about? I will go anywhere with them and meet them on any* ground from here to Calgary. Name your own poison, boys.


William Ross Macdonald: Order.

Trans-Canada Air Lines


Arthur Leroy Smith: I beg your pardon. Am I in trouble over the rules?


William Ross Macdonald: Will the hon. member, and all other hon. members when they are addressing the committee, kindly address the Chair? I might point out also that when an hon. member wishes to ask a question he should rise in his place and ask the question through the Chair.


Arthur Leroy Smith: May I say, sir, having the floor, how entirely I am in agreement with you.
In reading this simple bill I noticed that there are three paragraphs and three explanations. It is the only bill I have ever seen introduced by the Minister of Reconstruction in three paragraphs which did no't have nine explanations.
All I wish to say to the committee is this. So far as the member for Calgary West is concerned, he is opposed to government ownership. I can quite agree with my hon. friends to my left supporting the minister, who to-day is the greatest socialist in the Dominion of Canada.


Stanley Howard Knowles: As one who confines his imbibing to milk, I am afraid I may not be able to entertain the committee quite as well as my hon. friend.


Some hon. MEMBERS:: Shame.


Some hon. MEMBERS:: Sit down.


Arthur Leroy Smith: If you think you are smart, you are crazy.


An hon. MEMBER:: The butter has been exhausted from his milk.


Mr. CRUICKSHANK:: He looks like sour milk.


Stanley Howard Knowles: I am glad I am getting assistance in making both interesting and entertaining the few remarks I should like to make. As I have said on one or two occasions, it seems to me that we have had quite sufficient debate on the principle underlying the measure before us and that it should not be necessary to extend this discussion. Hon. members will note that up to this point we in this group have had nothing to say at this stage, hoping that the debate would proceed rapidly. I rose simply to say that, a good deal of time having been taken up, it is not all in vain, for we now know the position of the Tory party. Before the six o'clock recess, the hon. member for York South, speaking for his party-	,


Alan Cockeram: I was giving my own opinion.
[The Chairman.]


Stanley Howard Knowles: Then we still do not know the stand of the Tory party. The hon. member for York South, I thought, was speaking on behalf of the Progressive Conservative group, expressing the view of that party, and I have noticed a similarity between what he said and what the hon. member for Calgary West had to say to-night. Before the six o'clock recess the hon. member for York South said that he would rather see Canadian Pacific Air Lines in the civil aviation business of this country both within Canada and on transoceanic routes than the government. I will be fair to him and say that he gave as his reason for that preference the fact that, as he sees it, the government lines are operated at the present time at a loss. That is not quite correct, but other corporations have been glad to take over, for the advantages to be had later on, undertakings which in their opening stages were run at a loss. At least we have had that clear statement from one member of the Progressive Conservative party, namely, that he would prefer to see the Canadian Pacific run our air lines rather than the government.


Alan Cockeram: On a question of privilege, that was not what I said. I said that I would prefer to see Canadian Pacific Air Lines in competition with the government, and I have not changed my opinion.


Stanley Howard Knowles: We shall have to refer again to Hansard, but I listened closely to what the hon. member had to say, and now the hon. member for Calgary West has said clearly and most definitely that he is opposed to government ownership. I take it that we know now where they stand, and that is good, but if my hon. friends to the right are opposed to the bill the thing for them to do is to vote against it. They have not, however, voted against it at any stage, though they are expressing their opposition to it all along the line. I hope that, now we know where we stand, we shall proceed to settle the matter and pass this measure without further delay.


Clarence Decatur Howe: I do not think any great issue between public ownership and private ownership is involved in the discussion. Trans-Canada Air Lines was started under public ownership because public ownership was the only agency that whs prepared to take the job. I have explained that before.
I am just, so to speak, a young man trying to expand what is given me. This company needs a little more capital, and that is all that the bill involves. We had the power to raise capital to $5 million and we are now

Trans-Canada Air Lines
taking the power to raise capital to $25 million. We have to buy a good deal of larger equipment and undertake some services outside the dominion..


Arthur Leroy Smith: Strangely
enough, that is what I thought.


Clarence Decatur Howe: We are not taking over any
other service in Canada, but just trying to enlarge the service we have been nursing along since 1937, and I assure the committee our motives are pure and not sinister.


Mr. HARKNESS:: There has been a good
deal of talk about Canadian Pacific Air Lines, government ownership, private ownership, and so on. There are only one or two small points I wish to make. I happen to have been a member of the committee; I heard Mr. Symington give his answers to the questions that were asked him, and I also heard the minister. One question I asked at that time, which will be found reported at page 234 of the proceedings of the committee, was this:
Mr. Harkness: How does your cost per mile flown compare with the American airlines, and with C.P.A.?	.
Mr. Symington: I cannot compare it with the C.P.A. I do not think I have seen any of their figures. Our cost per mile flown will of course be higher than the American for the reason which I indicated to you this morning. I did not see you here then, sir.
Mr. Harkness: Yes, I was here all morning.
Mr. Symington:	The U.S. average figure is
88-21. The T.C.A. figure is 96-89, and the American lines range quite widely.
He went on to explain that their cost for gasoline and planes and so on was higher because of tariffs, which I quite agree was correct. However, I came back to the matter of the C.P.A. and I asked whether there were any figures in connection therewith. I said:
I can readily see that your expense would be higher, taking those two items alone into consideration. Have you got the' figures for C.P.A. ?
Mr. Symington: No, I never had.
Mr. Maybank: They are not published.
Mr. Symington: No they are not published. I do not think it would be fair to compare them because they are in entirely different operations.
In other words, no satisfaction was given. I have not the figures of C.P.A., but I have received information that in 1944 when, according to the annual report of T.C.A., that system flew 9,110,474 miles, C.P.A. flew in the same year approximately 8,000,000 miles. In that year T.C.A. had 3,800 employees, whereas C.P.A. had 800 and their costs were materially lower. I have not the figures per mile flown, but I have information in regard to the number of employees.
47696-120|


Clarence Decatur Howe: May I ask the hon. member
a question?


Douglas Scott Harkness: Just a moment, I shall soon have finished. I have information that this was the number of employees, and therefore my inference is that the costs were considerably less. I should like to see produced in this committee the cost per mile flown for Canadian Pacific Air Lines for their eight million miles as opposed to Trans-Canada Air Lines for their nine million miles. As I say,
I am not arguing for public ownership as opposed to private ownership. I am not defending the Canadian Pacific Railway company;, I have no-


Some hon. MEMBERS:: No.


Douglas Scott Harkness: -particular reason to do so. The Canadian Pacific Railway company is nothing to me. As a matter of fact I have had a few arguments with it over the shipping of grain which still rankle a bit in my mind. But apart from personal considerations or anything else, I say that I have no personal interest in the matter. So that we might have some basis on which to judge the cost per mile flown, by Canadian Pacific Air Lines as compared1 with Trans-Canada Air Lines I should like to see that information produced in this committee. The minister and Mr. Symington have stated that the reason why the costs for Trans-Canada Air Lines per mile flown range on the average some ten cents and something per mile higher is the gasoline charges, tariffs and so forth. We have in the country a large air line, Canadian Pacific Air Lines, and I think it is only fair, from the information point alone, that these figures be produced in the committee. If they are produced we shall have a much better basis for judging whether the government air lines are being operated as efficiently and cheaply as this private air line.


Clarence Decatur Howe: Obviously the government can produce only the documents which it has. I am sure that the government has no record of the cost of operation of Canadian Pacific Air Lines; I do not know why it should have. Perhaps my hon. friend can obtain them. I am sure he has not seen them, and I am sure his figures are weird and wonderful. If he can obtain them and lay them on the table we shall be glad to discuss them.


Mr. JACKMAN:: The railways and shipping committee to which this bill was committed, reported back. I understand that the report was tabled as a unanimous report.


Some hon. MEMBERS:: No.

Trans-Canada Air Lines


Harry Rutherford Jackman: However, there were some on that committee who did not agree with the general principle and with some of the detailed clauses of the bill. I just wish to correct any misapprehension there may have been that the bill passed. unanimously in committee.
The question of public ownership versus private ownership bobs up frequently in this debate. I think I may say that I am neither for public ownership per se nor for private ownership per se. It is a question of whether or not one kind of ownership can give better service and better opportunities to our Canadian people.	.
I take my stand on this present matter on the side of private ownership, because I believe that in a new and developing and fast-growing industry, such as the air transport industry promises to be and to become, the people of Canada will be better served if that industry is left, if not entirely in the hands of private enterprise, at least so that private enterprise will have an opportunity and at the same time there will be opportunity for our boys.
We as a country, and the world, are just' on the threshold of air transportation. I shall perhaps give some figures later to indicate why that is so.
Young men in Canada to-day, unless they wish to join a government service, or what is virtually a government service, because the T.C.A. is wholly government owned, cannot get into this air transport industry. Despite the assertions of Mr. Symington in committee that he is the boss, I think we in this chamber know pretty well who is the boss of T.C.A. One need only trace the history of that corporation through the various ministries that we have had since its inception to know that it has continued under one minister, and that he is the boss of T.C.A. Therefore it happens that young men who want to go into this great air transport industry cannot do so unless they wish to become virtually civil servants, with all the restrictions which such an occupation puts upon one, not only restrictions as to opportunity, but certain difficulties in regard to political opinions, and so forth; or perhaps one is forced to have no political opinion whatsoever as a citizen of this country. The result is that young men-and already the trend has been in operation

must go to another country. That trend, of course, is across the border. We find that many young graduates in engineering and science go across the border anyway, but when one puts an artificial restriction on their opportunity, such as a government monopoly of this small, but soon to grow into a vast service, we find that these young men must go

to another country after the expense of bringing them up and educating them has been borne by our own country.
I could not help feeling a real sense of sorrow when I attended a class reunion just two Saturdays ago to find how many letters from graduates were from boys and even girls who are now in the United States. It seems that Canada, coming through two wars as it has, has lost many of the cream of its manhood in the sacrifice to preserve our liberty and) our nationhood; and then, on top of that, we have lost so many to our neighbour across the way which can present such vast opportunities. On top of that, we find that the government of the day encourages that attitude by taking unto itself the sole proprietorship of a substantial part of air transportation. That makes one wonder just what opportunities there will be in the way of attractions to our young men and women as compared with attractions across the border.
We do not find in this bill what will happen to the present air transportation lines in this country which will have to be divested by Canadian Pacific Air Lines because of its association with the Canadian Pacific Railway company. I do not think the government has given any serious thought to what will happen to any of those lines, and there are several references in this regard in the evidence of the committee. I inquired whether or not any of this 825,000,000, of which $20,000,000 is new capital about to be authorized, would be used in acquiring any domestic companies in Canada, and I was told by the minister:
We will not acquire any domestic company in Canada under this act.
Mr. Jackman:	Are you stating that as a
matter of T.C.A. policy or as a matter of government policy?
We now come to the matter of who runs these TranS-Canada Air Lines and just how close they are to the government. The minister then replied:
I state it as both; I am stating it to be government policy.
May I point out to the committee that the men who are operating Canadian Pacific Air Lines are men who, for the most part, were veterans of the last war. We in this committee to a man are, I believe, solicitous of what is to happen to the veterans of this war. We have a veterans committee which is so much concerned about the matter that it sits no less than five days a week in order to make sure that justice is done to the veterans of this war. But let another twenty or twenty-five years go by, and we shall see whether or not there is very much regard to be had for those

Trans-Canada Air Lines
who served so well in great war No. 2. We find that many of the aviators who later became bush pilots have been taken over by Canadian Pacific Air Lines. Indeed the head of C.P.A. is "Punch" Dickenson, who was one of the most famous aviators in the last war. Then he became a notable bush pilot, and later helped in the development of Canadian Pacific Air Lines. Yet this committee seems to have very little regard for what is to become of Canadian Pacific Air Lines and its personnel, who are Canadians just like the rest of us.
I would point out, sir, that Trans-Canada Air Lines, which is owned by the Canadian National Railways, is making serious encroachments on the passenger traffic of that railway. In fact, as the years go by, we can expect to find most of the long-haul passenger traffic going by air. So that we find the government in the invidious position to asking this committee for more money with which to foster and develop a service that will compete with an existing government-owned service and will take away many of the revenue-producing passengers and much mail which that railway enjoys at the present time. Perhaps the committee will also be interested in a remark made by Mr. Symington, president of Trans-Canada Air Lines, in regard to this question of public ownership versus private ownership. He said that he did not think that salaries in the government could ever be as high as in privately-owned companies. That is the future we are to hold out to our young men in Canada. Then Mr. Symington went on to say that this sum of $20,000,000 additional, which will make the capital of Trans-Canada Air Lines $25,000,000, was a mere bagatelle, amounting to very little in comparison with what any of the major lines in the United States were putting up for development at the present time. The minister has explained to the committee that this additonal money is required for the expansion of overseas services by the T.C.A., or some subsidiary corporation under another name; yet when Mr. Symington was asked whether or not the money would be profitably spent he said-


Mr. McILRAITH:: Would the hon. member give us the reference to the quotation he is about to give?


Harry Rutherford Jackman: I am reading from page 191 of the minutes of proceedings.


Mr. McCANN:: Of what?


Harry Rutherford Jackman: Of the committee on railways and shipping. Mr. Symington said:
What the financial result will be I cannot prophesy at all. It depends upon how many people are going to travel and how much mail is carried . . .
The question of volume of business is paramount in running any concern. During the war we found that even the most poorly run business could show some sign of success because of tremendous volume. The question was put to Mr. Vaughan in connection with the Canadian National Railways: what of the future? Are we again to run into deficits, as we did in pre-war years? His reply was, "We have the service. We have the equipment. It is all a question of volume of business." That was the same consideration Mr. Symington proposed when asked whether or not this additional money would show a return for the dollars spent. He concluded his statement by saying:
What the financial result will be I cannot prophesy at all. It depends upon how many people are going to travel and how much mail is carried, but I would not want to invest my money in it. . . .
That is the statement of the man who probably knows more than anyone else about this question of whether or not the money we are asked to vote will be well spent or well invested. The accounts of Trans-Canada Air Lines for 1944 show a slight surplus of $7,000, which is a mere nothing. Because of its association with the Canadian National; because of its tie-in with the government through the Department of Transport and so on, one does not know who pays for what or what item of expense is charged to any particular department. The president of T.C.A. serves in that capacity for nothing, though he may receive some remuneration as a director of the Canadian National. So that not only would this small surplus of $7,000 shown by T.C.A. entirely disappear, but the figure would be in the red if he were to receive a salary commensurate with the position he occupies.
Then, as I mentioned when this bill was introduced, the Department of Transport spends a great deal of money on airways and the various services required to run an air transport line. On more than one occasion the minister has drawn a comparison between shipping and air transport. He has said that docks, harbours, lighthouse facilities, weather reports and so on are all provided free by the Department of Transport or some agency of the government, so why should the government not do the same for the various airways? Of course, when I say "various" the T.C.A. has been given a monopoly and, except in connection with foreign services, the vast expenditures made by the Department of Transport, running not only into many millions of dollars on capital account but into several millions of dollars each year on operating account to provide lighting for the
1S92
Trans-Canada Air Lines

fields and radio services are being made virtually entirely for T.C.A. and whatever development takes place under it. So that if we are to get a true picture of whether or not T.C.A. is a profitable enterprise, we must at least give some consideration to the vast expenditures made on behalf of T.C.A. by that department, because it is in the position of a monopoly. I hope that when the estimates of the Department of Transport are before the committee we may make full inquiry, since we were not able to do so in the select committee, as to how much has been spent by This department in providing airways and what is the annual cost of operation.
The minister stated that T.C.A. pays the regular schedule of landing fees on these fields; but in comparison with the millions of dollars spent each year in maintaining them the total landing fees paid last year by T.C.A. amounted to $105,600. Of course some additional sum, perhaps comparable in size, was paid by United States lines coming into Canada. I might point out, however, that in the bill now before the committee there is no T.C.A. contract such as we have in the present T.C.A. act. Whether or not this parliament is to decide on the terms of operation, what routes shall be operated and the other matters which are in the present T.C.A. contract which is incorporated in the statute is something to which we should give consideration; but under the terms of the proposed bill the contract and its terms are left entirely to the governor in council.
When a country engages in foreign transport it immediately runs into possibilities of international difficulties. While I do not wish to labour this point, nevertheless I think it should be brought before the committee. While it is true that the T.C.A. will be a separate legal entity,' if the line should get into difficulty in a foreign country, say Brazil, it is not beyond the bounds of possibility that this country might be involved with that foreign country. If the foreign operated line were owned by private capital, there would be no likelihood of that occurring. There have been such cases, I understand, in South America. where presidents occasionally flee the country, sometimes taking part of the national treasury with them. If they go on a foreign boat, the country with which it is registered may become subject to possible popular outcry and be involved in diplomatic difficulties.
This committee cannot give too serious attention to the future of air development. If present signs are any indication, it will be one of the great fields of transportation. I

should like to read a report of a forecast made by the civil aeronautics division of the United States government, as follows:
"Civil aviation, more than any other existing industry," the survey states, "offers the immediate hope of creating many new sources of livelihood, not only directly, but through allied and grass-routes sources."
The article then goes on to point out how much money is likely to be spent, and mentions the fact that there may be as many as 280,000 personal aircraft. It continues:
We have an industry which is currently putting in the United States treasury a profit of more than $50,000,000 a year through the excess of air mail revenues over payments of carriers.
The subject now before the committee is one of vast import and the committee cannot give too great consideration to it. Because of its largeness and the great potentialities which it presents, it is my firm belief that more opportunities and greater service will be afforded to the Canadian people if private enterprise is allowed to compete with government ownership in this great and expanding field.


Daniel (Dan) McIvor: It is a well known fact that both railroads had to be subsidized before they could pay their way. It is also well known that before the war neither railroad was able to do more than pay expenses. I should like to ask the minister if the T.C.A. has been able to pay its way?


Clarence Decatur Howe: Yes, it has paid its way.


Daniel (Dan) McIvor: That is one argument why anyone with liberal views or progressive notions should support this bill. How do - accidents on the T.C.A. compare with those on the railroads? Have there been many accidents on the T.C.A.?


Clarence Decatur Howe: No, we have been quite free of accidents. I am happy to say that our record in regard to accidents is better than that of any other air line I know if.


Daniel (Dan) McIvor: That is one reason why the hon. member for Davenport found it difficult to get transportation. He knew he was safe riding on the T.C.A. I cannot understand why anyone who wants to make this country great would not support the minister wholeheartedly in the small way in which he is asking for support, namely, $25,000,000.


Mr. LESAGE (Translation):: Mr. Chairman, I find it most unusual that members of the official opposition should rise, one after the other, and shower praise on the Canadian Pacific. One cannot help wondering whether they want to take up the old economic theories on monopolies and cartels which have led us, a

Trans-Canada Air Lines
few years ago, into the direst economic disasters that have ever been experienced by nations of the world. 'I wonder what satisfaction they can derive in taking the time of the house, each one of them for a second time, in order to uphold private monopolies. After all, why do they not mention, when they rise in defence of the Caandian Pacific, the fact that this company is in receipt of considerable subsidies from the dominion government; why do they not state that the airports used by the Canadian Pacific for its air lines have been built and paid for by the dominion government and are the property of Canada? Would they still have companies with Canadian names but with outside capital, hold sway in this country? Do they want the perpetuation of the situation in which we have unfortunately too long been placed in Canada and whereby foreign capital has controlled us and pulled the strings as if we had been mere puppets?
We know what happened in the case of the merchant marine which belongs to corporations bearing Canadian names like the Canadian Pacific shipping company, for instance. Alas, it bears a Canadian name but is financed by foreign capital. Of what benefit has that been to Canadians? It means that these ships were built outside the country, are repaired abroad and are manned by foreign crews. Do we want our aviation services to share the lot of the merchant marine?
I am not a socialist, but in a country like ours which does not own sufficient private capital, the only way to circumvent monopolies and cartels is to . entrust our services, and particularly our public utilities to the ownership of the state. I repeat that I am no socialist, and I do not think state ownership necessary or even useful in most spheres. In the field of public utilities, however, when trusts and particularly foreign monopolies or foreign capital threaten to exploit our wealth, it is fitting, as is so well understood by the Minister of Reconstruction (Mr. Howe) to act in a true Canadian spirit and protect our most valuable assets, our natural resources, our manpower -and all the wealth that Providence has bestowed on our magnificent country.
Mr. Speaker, this is all I wanted to say, but-


Mr. LOW:: Socialist.


Joseph Arthur Lesage: I am called a socialist bj'
members of the Social Credit party, of all people.


Solon Earl Low: Socialist.


Joseph Arthur Lesage: My hon. friend seems to enjoy the repetition of -that word, but I feel more at home when speaking in my mother -
tongue and I may tell him that the Social Credit party is just as imperialistic, just as Tory, if not more so, and just as much in favour of trusts and international cartels as the worst of those who advocate out and out toryism-


Solon Earl Low: You do not know anything about that.


Joseph Arthur Lesage: And when I hear the
Electors' Union who are the counterpart of the Social Credit party in my province-


Solon Earl Low: You do not know anything about that.


Joseph Arthur Lesage: -advocating socialism and anti-imperialism and when I compare their utterances with the fiery speeches made by the representatives of that party in this house, I cannot but recall what has always taken place within the Conservative party which advocated a policy in the province of Quebec and a different one in the other provinces. You members of the Social Credit party follow the same practice and you will have the same fate; you will always be a party rent by internal strife and you will never be a nation-wide party.
I beg your pardon for digressing, but it seems that I cannot rise in this house without arousing the ire of my friends from the Social Credit party.
In concluding, Mr. Chairman, I feel that the hon. Minister of Reconstruction (Mr. Howe) deserves our heartfelt congratulations for having organized, here, in Canada, a really Canadian air service. He deserves further congratulations for his efforts to expand and enlarge it. With this in mind, I think the hon. members of the house should consider it their duty, when so much work is cut out for us, to stop praising trusts, vote for this measure and get down to work with a will.
(Text) [DOT]


Angus MacInnis: I rise to support the hon. member for Rosedale in his assertion that this is a very important measure, but I think I differ somewhat from that hon. member in my ideas of how important measures should be supported or opposed. I believe that we should support or oppose important measures with sound arguments, but may I say that I never heard in this house anything more fallacious than the arguments with which the hon. member for Rosedale opposed this bill.


Harry Rutherford Jackman: That's what you think!


Angus MacInnis: I leave it to the committee. One of the strong points he made, at least by implication, was that a national air
Trans-Canada Air Lines

service under the control of the federal government or a state-owned air service would employ fewer of our returned servicemen than would be employed by a private service.


Harry Rutherford Jackman: I do not believe the hon. member quite understood me. What I said was that if Canadian Pacific Air Lines were put out of business there would be put out a lot of men who were veterans of the last war.


Angus MacInnis: My hon. friend said more than that, and if he will read his own speech to-morrow he will find that out. The fact of the matter is that the dominion government and perhaps provincial governments are the only employing agencies that I know of where the returned man has the preference under every circumstance.	[DOT]


Mr. MANROSS:: Poppycock.


Angus MacInnis: All right, poppycock.


Park Manross: I am glad you admit it.


Angus MacInnis: I am not admitting it. I am saying that if you say poppycock, it is poppycock to you, but it is sense to me and sense to the people of this country. But people who do not understand sense will not understand that.


Park Manross: How many men did you ever hire?


Angus MacInnis: I never hired anybody.


Park Manross: And never will.


Angus MacInnis: Quite right, and I do not want to because I do not want to make a living by exploiting somebody else. But anybody who wants to make a living in that way has a right to his own ideas, provided that he can get somebody out of whom he can make a living. As people get wiser-and remember they are getting wiser every day-they object to being exploited, and because they object to being exploited they insist on controlling the means by which they make'their living.
An hon. member to my right said a moment ago that he was absolutely opposed to public ownership. He has a right to his own ideas. But the point is this, that the people of this country, of any country, live by having access to the means of life. Somebody must own those means of life. Either the people themselves will own them or some private corporation or individuals will own them. The question is then: Is it better that other people should own the means by which all live or that we should own them collectively ourselves as the people of Canada and operate them through our elected representatives? Public ownership-that is our position. If you do not agree with it, that is your business. But we

believe that it is correct in whichever way you' approach it, and it is becoming so clearly recognized that that is the correct way that in every country in the world to-day the tendency is toward more and more social ownership.
I never thought I would bring Mr. Gladstone Murray to my defence, but I am going to do so now. I suppose all members got a copy of Mr. Gladstone Murray's article in the New English Review, published in Britain.


Harry Rutherford Jackman: A reprint published in
Canada.


Angus MacInnis: Perhaps it was. I am
sure that my hon. friend knows more about him than I do; I am not in Mr. Murray's confidence. This is what he says:
Socialist measures-security and welfare- have become important ingredients of the policies of all the chief political parties in the western democracies. The cleavage in Canada between the official Socialists and the other parties is in method and not in aim. The C.C.F., denouncing the capitalist-enterprise system as bankrupt, desires to replace the individual by the state in a totally "planned" society. The Liberal and the Conservative argue that the good life can be achieved better by guilding the capitalist-enterprise system along the right channels. Contemporary democratic politics on both sides of the Atlantic are largely a competition in promises of the broad objectives of socialism.
Indeed the political parties in Canada have nothing to offer to the people of Canada that has any appeal except more social owmership and more social services.
Another fallacious argument that my hon. friend the member for Rosedale made was that the T.C.A. was encroaching on the business of the C.N.R. I just wonder what is the implication of that remark? Does that mean that we should not have an air service at all? If we have a private air service it will encroach on the business of the C.N.R. and the C.P.R. too. The T.C.A. is already encroaching on the business of the C.N.R. I notice that the hon. member said the C.N.R. and not the C.P.R. Sometimes you can tell what is in people's minds more by what they do not say than by what they do say. But if we are to make progress, surely an efficient service will encroach on an inefficient one. Did not the C.N.R. and the C.P.R. encroach on the covered wagon and in time eliminate it? And who knows? I shall not live to see it; the hon. member for Rosedale may not live to see it, but perhaps the T.C.A. or some other air service will ultimately eliminate the C.N.R. and the C.P.R., too. But whether that is done or not I do not believe it is a matter of any great concern.
I say again that if members are going to oppose this measure let them oppose it with

Trans-Canada Air Lines
worth-while -arguments. On the other hand, if we are going to support it-and I and the group with me are supporting it-we shall do so because we believe it is in the interests of the Canadian people, and for no other reason. I think the logical thing to do when the time comes is to have a recorded vote on this and see who is for it and who is against it.


John George Diefenbaker: I am not going to enter into this controversy regarding public ownership or private ownership. As a matter of fact, the person who enjoys most that particular controversy is the minister, because it enables him to take a rest while it continues.
I have a couple of questions I should like to ask the minister in order to bring him back into the discussion. The first is this: If the capital is increased as is contemplated by this bill, will any portion of that increase be used in connection with the operation of lines within Canada? I see that under sections 20 to 25 inclusive provision is made- and it is somewhat of a novelty, I think-for the setting up of other corporations by Trans-Canada Air Lines. I am going to refer to the sections in question, so that the minister will be able to give an answer to this question, which apparently was not answered or was not asked during the committee's sittings. Section 20 states that "The governor in council may on the petition of the corporation declare that a'ny number of persons named in the petition . . . shall be a body corporate", and then it goes on to set out the circumstances connected with these companies so set up. Then there is this amazing provision, that "the governor in council may authorize the minister to enter into a contract with any corporation incorporated" under these provisions "for the organization, operation and maintenance of air services designated from time to time by the governor in council". Therefore I ask the minister if any portion of this S20 million increase to be used for the setting up of these other corporations which the governor in council will be empowered to set up to provide for corporations which are to confine their operations within the dominion.


Clarence Decatur Howe: I think that point was covered before the committee. It is not the intention to set up any subsidiary corporation to operate lines within Canada.


John George Diefenbaker: And that no portion of the $20 million can at any time be turned over to corporations set up by the governor in council to operate within Canada?


Clarence Decatur Howe: Within Canada?


John George Diefenbaker: Yes.


Clarence Decatur Howe: The $20 million is the capital for the use of the company. It is for the expansion of Trans-Canada Air Lines. It is for obtaining new equipment for corporate purposes. But I made the categorical statement in the committee which I think is the statement my hon. friend is looking for. that it is not the intention to use this capital to purchase Canadian Pacific Air Lines.


John George Diefenbaker: Where is there anything in the statute that bears out that categorical promise on the part of the minister? I suggest that, regardless of the statement of the minister, once this money is voted by parliament without any strings attached, provided that parliament also supports the adoption of sections 20 to 26, regardless of what the minister may have said either in the committee or in the house, those moneys could be used for this purpose. There is nothing whatever to control it.


Clarence Decatur Howe: Suppose they could. Suppose we admit it?


John George Diefenbaker: All right; suppose you admit it. Then I suggest that, because of the desire of the minister to assure that [DOT] these moneys be not used for this purpose-


Clarence Decatur Howe: I have no such desire.


John George Diefenbaker: I beg pardon. No,
. the minister certainly has not any desire, and that is what makes me slightly suspicious of these provisions. He quite frankly admits that, as the bill stands, if it is adopted those moneys could be used to set up corporations in Canada to take over whatever lines such corporations might be designated to take over. I suggest that there should be an amendment providing that in so far as these corporations are concerned they shall operate outside Canada, in order to do away with the possibility of the money being used within Canada.
A further question comes to mind. As I understand the situation, unless that suggestion is adopted this measure can be used as a backdoor method to take over these air lines by the setting up of these corporations. The power is there; once parliament gives this power it can be utilized; whatever private air lines these corporations set up by the governor in council desire to take over they can take over. We have the minister's statement that no portion is to be so used, so that he could have no objection to an amendment to provide categorically for the undertaking which he has given.
Trans-Canada Air Lines

The second thing I wish to bring to his attention is this: has there ever been in this country a case where a government has asked for the power of the governor in council to set up corporations in the manner provided for in sections 20 to 25? I do not know of any. .


Clarence Decatur Howe: It is done every year.


John George Diefenbaker: I beg the minister's pardon.


Clarence Decatur Howe: Trans-Canada Air Lines was set up that way. Canadian National Railways.


John George Diefenbaker: Yes, I appreciate that; but not in the manner provided for in sections 20 to 27. They were set up indirectly in the same manner, but not by provision of parliament enabling the governor in council to set up corporations at his whim and at the wish of the government.
I should like to know something, too, in regard to this question of subsidies. Is it a fact that to-day only one subsidy is being paid to an air company?


Clarence Decatur Howe: That is all.


John George Diefenbaker: Only the one?


Clarence Decatur Howe: Only one as a direct subsidy. I am not sure whether mail contracts are-


John George Diefenbaker: I am not speaking about mail contracts. That brings me to this question of the M. & C. Aviation company of Prince Albert. On April 7 of this year an order in council was passed, making provision for the payment of a subsidy to the M. & C. Aviation company. This company operates in Prince Albert and was operating there before the war. During the war period it enj oyed a very large business in connection with war production, and I note that the order in council states that, upon the recommendation of the air transport board, it is in the opinion of the undersigned desirable, pending full examination and consideration of the possible relations to the post-war air services of the operations of the company, to maintain the company's present operations, and to subsidize the company in amounts not exceeding a total of $12,000 for a period of one year commencing April 1, 1945. This order in council was passed under the Aeronautics Act, the War Appropriation Act and the War Measures Act. This company was not concerned in the operation of these air lines. There was nothing connected with the military affairs of the country.
I should like to know why, in the setting up of this subsidy scheme, it was passed under the AVar Appropriation Act and the War Measures Act. What were the circumstances

under which this subsidy was provided for? In addition to the subsidy, this company has mail contracts and receives regular fees or, indirectly, subsidies, as the minister suggests, under these contracts. On whose recommendation was the subsidy paid to the company, and is it indicative of a change of viewpoint on the part of the government that certain companies, or all private companies, operating feeder services shall be considered as having an opportunity available to them from time to time of receiving subsidies?
That is a very dangerous situation. I see there is a provision, under section 25 of the new bill, which says that "the governor in council may authorize the minister to enter into a contract with any corporation incorporated under section 20 of this act, for the organization, operation and maintenance of air services designated from time to time by the governor in council." It is also provided that they may provide for terms of payment of subsidy to the corporation.
I ask the minister this question: Is he not thereby given a power which might very well be abused, which will allow the minister to designate such companies as he feels are entitled to it to receive subsidies, thereby being placed in unfair competition with other companies operating under similar conditions and [DOT] similar circumstances? What actually will take place under that section if carried to its logical limit is that, without limitation, parliament will in advance be granting to the minister or the governor in council power to make unlimited expenditures, because no limitation is placed on these expenditures under the section for subsidies.
That is a very dangerous and comprehensive power for parliament to place in the hands of a minister or the governor in council. I suggest to the minister that, so far as section 25, subsection 1 is concerned there should be added thereto words of limitation providing that the- organization, operation and maintenance of the air services designated from time, to time by the governor in council shall be beyond the territorial limits of Canada.
Provision should also be made in this bill to limit the amount of subsidy, or the power of the minister and' the governor in council, if any power is granted, instead of giving carte blanche. AVhat we are actually doing under this section is granting in advance to the governor in council uncontrolled, undefined powers of granting subsidies to such companies as are set up, thereby indirectly securing appropriations in advance without the authority of parliament. I suggest that the minister, in regard to those sections, should give consideration to an amendment in order to limit

Trans-Canada Air Lines
the power, because we are witnessing session after session the granting by parliament to the executive, the governor in council, and the minister, extraordinary powers without control on the part of parliament, and' that is a trend) that must be put a'stop to.
Reading the debates in the British House of Commons, one thing that impresses me was the fact that, as soon as the war was over, every endeavour was made by the Churchill government, and now by the Labour government, to ensure that extraordinary powers such as are within the provisions of these sections shall be strictly delimited by parliament.


Ian Alistair Mackenzie: Did the Labour government not renew their powers for five years?
Mr. D'lEFEXBAKER:	I do not want to
get into an argument on that. The minister has mentioned the fact that the Labour party in Great Britain has passed an act extending the extraordinary powers for five years. In this parliament we are going to be asked to extend them for a period of one year, but I would point out that Britain put a control cm the exercise of the powers there by the provision that any order in council which is passed shall be laid on the table of parliament as soon as possible after it is passed, and that any member shall have the right to move to set aside an order in council so passed. While extraordinary powers are given, parliament retains control. That, I suggest, is the attitude which democratic assemblies should take.


Ian Alistair Mackenzie: We have laid on the table all orders in council passed under the War Measures Act.


John George Diefenbaker: Yes, but there is
a difference; and what is more, the government did not lay them all on the table. Some remained secret for a long time, and it was only when the press finally found out about their existence that they came to light. I am not, however, going to deal with that aspect of the matter except to say that laying them on the table does not give rights to individual members of parliament such as are guaranteed under the legislation in Great Britain, where any member of parliament may move and, if he secures the support of a sufficient number of members to that end, have the order in council cancelled, amended or abrogated. With sufficient, support he may move to cancel, amend or abrogate orders in council passed under these extraordinary powers.
I cannot understand why we should have any difference of opinion in this regard. All of us, I am sure, are desirous of returning as soon as possible to democratic principles and representative government now that the war is to all intents and purposes over, and I think these sections indicate a strange attitude on the part of the minister. Now that the war is over, he asks for powers which place him in a position of such absolute irresponsibility that he might subsidize one firm at the expense of another and in competition with a private company operating in the same area. I am sure the minister does not desire to obtain powers at the expense of parliament, and he should be willing to accept an amendment along that line.
There is one other matter, and that has to do with the various air fields.


Clarence Decatur Howe: This has nothing to do with air fields.


John George Diefenbaker: It is wide enough to deal with almost anything. It provides that the governor in council may authorize the minister to enter into a contract with any corporation incorporated under section 20 of the act, for the organization, operation and maintenance of air services, and almost identical words are used in the United States aeronautical act. The maintenance of air services there has been defined as covering as well the operation of airports. I bring up this question of airports at this time because the opportunity may not come again for a considerable time. I am dealing now with the prairie provinces. I bring up with the minister the question of the establishment of the new T.C.A. line between Winnipeg, Saskatoon and Edmonton. I ask that assistance be given to the municipalities in connection with the development of their airfield facilities. Regardless of what part of western Canada we live in, all of us believe that some assistance should be given to assure that the Winnipeg airport shall be made adequate to handle the tremendous traffic that will find its way through that port. Anyone who travels by air realizes that the runways and flyways at each end need to be extended, and that a very great expansion should take place. I believe that representations along that line have been made to the minister from time to time.
This gives me the opportunity to ask him the following questions. I believe that several letters were sent to him by the St. James-Winnipeg airport commission. The last letter is dated October 5; the preceding one wras dated May 17 of this year. These letters were in regard to a plan prepared by the St. James-Winnipeg airport commission, which
189S
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was acceptable to the T.C.A., the municipality of St. James and the city of Winnipeg. I understand that representations were made to the minister and that he has not yet seen fit to reply to these letters; at least that is my information. Does he intend to accept the suggestions or recommendations of the St. James-Winnipeg airport commission, or has some other new plan been approved by the minister in reference to the expansion of airport facilities in Winnipeg? This organization which has been doing good work has been apparently endeavouring to interest the governments in the necessity of developing this airport and making it one of the great airports in the middle west. It has been in communication with the minister over a period of time. My information is that as yet he has not seen fit either to answer its suggestions or to put forth counter proposals. I would appreciate very much, and I know it' would, if he will make a statement generally in regard to the question of assisting municipalities in the prairie provinces and generally throughout the dominion with the development of their airports, and also in particular with respect to the recommendations and suggestions to which I have referred, which came from the St. James-Winnipeg airport commission.
There are great potentialities and possibilities in the development of aviation. All of us admit that one of our great difficulties in this country to-day stems from the fact that our airport facilities are not commensurate with the possibilities and potentialities of the situation. I suggest that the minister would be doing a worth-while work in reconstruction and in assuring employment and in the public works to which he has on occasion referred, to be undertaken in order to assist employment, if he assisted in the development of worth-while airports in this country. I suggest that he would be doing a great service if he undertook that work with a view to assisting in the assurance of employment and also in order to make available the best possible facilities for the post-war period. I offer these suggestions in a spirit of cooperation, desiring, as I know he desires, the greatest possible development for this country at this time.
One more thing which I would ask him to clarify is the matter of rates, the matter of charges, and the matter of transportation costs. In recent months substantial reductions have been made in passenger traffic rates in the United States. As a matter of fact, the reductions on the United States lines make it more attractive to travel by air to-day than by railroad. According to the evidence given (Mr. Diefenbaker.]
before the aeronautics committee in Washington, so far as ocean rates are concerned the reductions are such that in a very short time they will make travel by air less expensive than travel by ship, or certainly not very much greater. I ask the minister generally in regard to the present plans and the future plans of the T.C.A. to indicate to the committee and to the country some of his ideas with regard to transportation costs, the early possibility of reduction of passenger rates, and whether or not it is intended that in the operation of our extra-territorial lines, of our transoceanic lines, that the T.C.A. will be able to compete in rates against United States companies which are doing everything possible within their power to-day to monopolize ocean transportation.


Clarence Decatur Howe: 
Harry Rutherford Jackman: Out of the war appropriation?


Clarence Decatur Howe: Yes.


Alan Cockeram: Is that the only subsidy of the kind?


Clarence Decatur Howe: That is the only subsidy of
that kind, and I give that explanation because it is an exception to the general rule. Perhaps I have covered all the points. .


John George Diefenbaker: No. What about
the possibility of a reduction in rates in order to make them conform reasonably with those in the United States?


Clarence Decatur Howe: Our rates are reasonably competitive with those in the United States. They must be, because much of our business is competitive. We have a main line that runs parallel to the main lines of the United States. There is a difference, in that we allow discounts. We have a reduction for a return ticket, which I think is five per cent; we also have air travel cards which permit a reduction of fifteen per cent, but the net earnings from passengers per mile in Canada is only very slightly higher than the net earnings of competing lines in the United States. Reductions have been made from time to time in the rates charged passengers on Canadian lines. It may be necessary and perhaps desirable to do away with air travel cards and to make the rates exactly comparable with United States rates. Hon. members will appreciate that if we hope to take passengers from Toronto to Vancouver we must bear in mind that these passengers can travel through the Chicago gateway over a United States line to Seattle and thence to Vancouver; and if there is very much difference in the rates that is exactly
Trans-Canada Air Lines

what they will do. Of course across the Atlantic there will be many planes going from New York, and, we hope, a few from Montreal; planes will be coming out from England to both New York and Montreal, and unless Canadian rates across the Atlantic are competitive with both United States and British rates our planes cannot hope to do very -much business.


Stanley Howard Knowles: Since the question of
the Winnipeg airport has been raised, may I just take a moment to say to the minister that the hope that something would be done about extending the runways and enlarging that airport was given impetus last summer when a dispatch appeared in the Winnipeg Tribune, written by Torchy Anderson, from which I read just one paragraph:
Ottawa, July 3. Extensions are being planned to many Canadian airports, including Winnipeg, Hon. C. D. Howe, Minister of Reconstruction, to-day told a press conference on air plans, and he said he expected the work of extension would be started this fall.
These extensions, he said, would be necessary to meet the needs of the big four-motor Douglas 1 jCO planes that Trans-Canada Air Lines expect to put into operation next summer.
Subsequently to this a diagram of the proposed enlarged airport at Winnipeg was tabled in the house by the Secretary of State in response to a motion of mine, which also aroused considerable interest in Winnipeg. Has the minister any further comment to make on this matter?


Clarence Decatur Howe: The only comment I can make is that which I have made many times; that Trans-Canada Air Lines expects to use the Winnipeg airport with the very best equipment that it flies, and the government will see to it that the Winnipeg airport is sufficient in size and character to accommodate the type of aircraft being flown by Trans-Canada.


Stanley Howard Knowles: The extensions which
were indicated in July and which were to have been made this fall not having been carried out, would the minister care to set another date? We would like to know.


Mr. ADAMSON:: I am very glad that the
case of the M. & C. air line came up in this house to-night, because here is an example of what I have been trying to say for several years. That is, the feeder lines went out of business, not because they were bought up or taken over by this appallingly evil corporation known as the C.P.R., but because the volume of business that brought them into being dried up. In other words, the mines closed; prospecting ceased, and there was no business for the feeder air lines. In nearly every case that is why they have ceased to exist, not because

they have been bought up by somebody efse. They went out of existence because the business was not there; and the business was not there because we were in a deteriorating, declining cycle of mining. The M. and C. air service found that their business was gradually decreasing until they had use for only one plane which could not be profitably operated. Eventually, in order to be able to service the isolated mining community, this feeder company had to ask for and obtained a subsidy, and I think rightly so.
I should like to add one or two words about the proposed transpacific air line. There are several types of transoceanic air lines. There is the simple ferry type from here to Europe. That is intensely competitive, with rates carefully checked. In the near future we shall probably see the same arrangement with regard to air lines as the North Atlantic conference in connection with passenger shipping rates.
Then there is the somewhat longer but stilt highly competitive service to South America, a peculiarly attractive field for Canadian endeavour. Then there is the transpacific air line. It is quite probable that for many years this line, particularly the one to the orient. will not be a profitable venture. But it is a venture which in my opinion is most essential for the Canadian economy.
I wish to give one or two examples of what I mean. I represent an industrial riding. In that riding is a manufacturer of stoves. I understand that he does several times the amount of business outside Canada that he does inside Canada. His business outside Canada is in a large part with the orient. When the Sino-Japanese war occurred the result was a direct loss of employment in my constituency. When he was shipping to the orient he had the advantage of the assistance of the Canadian Pacific railway. Those people knew the orient; they knew the peculiarities of that market.
For instance, they found out-I mention this just to show the committee the intricacies of international trade-that a stove would not sell in China unless it had red handles and a red oven door. That may seem a simple thing to the committee, but to the Chinaman who was buying the stove it was very important. The Canadian Pacific agents and the people who knew the orient were able to point out to this stove manufacturer what he needed to do in order to sell his stoves.
I can give another example of the complexities of international trade. In China it is the practice to buy hot water from street vendors for the smallest Chinese coin, one cash. A great number of Chinese have the habit of buying one cash worth of hot water and

Trans-Canada Air Lines
putting this in a hot-water bottle to be carried in their belts in order to keep their stomachs warm in the cold weather. It is a simple and most practicable device. They had been able to buy only the larger hot-water bottles, but the people who were interested in developing trade suggested to a Canadian rubber manufacturer that he make a type of hot-water bottle that would hold just one cash worth of hot water. This was done, and a considerable amount of business developed providing additional employment and increased weekly payrolls.
This trade is known to the private companies. These companies are familiar with the oriental trade. If they have an interest in the air line they will also have an interest in shipping, because they go hand in glove.' While an air line carries passengers, many of them eventually become freight shippers. The result is that not only will your air line be profitable but your surface carrier will also be profitable if a large volume of business develops. If you divorce the private enterprise with its knowhow of trade in this peculiar market from your air service, are you likely to get the same efficiency as you would if the effectiveness of your service brought increased business in the orient to your surface carrier?
The success of the private company depends upon the success of the manufacturer in Canada. The private concern will do everything in their power to see that you get the service you need in the orient. If you are dealing with the government, the work of the govern-' ment concern will end with the effective transportation of the passenger. The knowledge which the Canadian Pacific has obtained of the oriental route should be utilized in setting up our Canadian transpacific route.
I am satisfied that at the moment no air line across, the Pacific will be profitable, but we should look farther than that. This matter stretches into the very heart of industrial Canada. Which is likely to be the best for the country, the organization which will help you find markets in order that revenues may be created for its surface carrier, or the gov-, emment concern, whose responsibility ends with your safe deliveiy at the airport in the orient? That is the basic difference between a privately operated air line across the Pacific and a government-operated air line.
In the pre-war years we in Canada were,' and I think justly so, proud of having one of the largest transpacific services. It was certainly the fastest, and 'as far as freight goes I think it was even larger than the N.Y.K., the government-owned Japanese line. We are peculiarly interested in the orient which offers a tremendous market for Canadian goods. If we are to develop that market we must use every bit of information upon which we can get our hands. We shall be faced with bitter competition for that market. The Canadian Pacific has the know-how, and I suggest that it is folly to exclude that company from any participation in transpacific air service.


Clarence Decatur Howe: Mr. Chairman, might we now pass on to section 2? We have expressed our opinions on everything having anything to do with the bill, sometimes three or four times.


Alan Cockeram: Can the minister give us statistics showing how many passengers the T.C.A. carried, how much express and the total mileage flown in comparison with the C.P.A.?


Clarence Decatur Howe: I have not the slightest idea, and I have no idea where I can get those figures if they exist.


Alan Cockeram: The figures are available in the C.P.A. report. I have seen them.


Clarence Decatur Howe: Why not put them on the table? I should like to see them myself.


Alan Cockeram: I have not them available right now. The minister should not take that attitude. Hon. members are entitled to have these comparative figures. They must be available to the minister's department.


Harry Rutherford Jackman: The minister would like us to speak on something. relevant to the bill in front of us.


Clarence Decatur Howe: It would be something new anyway.


Harry Rutherford Jackman: The hon. member for Vancouver East said a while ago that I had made the statement that under government ownership there would be fewer jobs than under private ownership, or that was the gist of what he said. I should like to read from the evidence of the standing committee on railways and shipping, at page 203, where Mr. Symington said this in regard to the $25,000,000, which is what we are now considering. He said:
* When you come to the international, of course you need-why $25,000,000 is nothing, nothing at all, in this game. There is not an air line in the United States which has not increased" its capital spending by at least $100,000,000, not $25,009,000. If you could see the money that is being expended in this international game, it would give you pause. It gives me pause. Certainly I am not going to spend money the way those fellows have been spending it. When you look at their balance sheet, I am not in the same class with them.
The reason I bring that point out in answer to the statement of the hon. member for
Trans-Canada Air Lines

Vancouver East is that this is an example quoted by Mr. Symington of what is being done in the United States where private enterprise is allowed to flourish and provide service to the people and create opportunities for young Americans in contrast with what is envisaged under this bill, where $25,000,000 is asked for as compared with the 8100,000,000 asked for by any one of a number of United States companies.


Clarence Decatur Howe: Will the hon. member answer one question? I have listened for hours to him, and I should like to know if he is in favour of expanding the service,, on Trans-Canada Air Lines or if he is opposed. Will he answer yes or no?


Harry Rutherford Jackman: I am in favour of providing service and opportunity to the Canadian people, and I believe that the proper .and best way of doing it is through private enterprise.


[Stage Direction]
Section agreed to.
On section 2-Power to issue securities.
Howard Charles Green: Will the minister explain what procedure will be followed after there has been a divesting order?


Clarence Decatur Howe: There is nothing in this bill which has anything to do with the divesting order. There is nothing here to provide any money, to cover the divesting order. I cannot tell my hon. friend what I am going to do.


Howard Charles Green: I am being polite and the minister had better keep his temper with me. I am not asking provocative questions. I asked a perfectly proper question.


Clarence Decatur Howe: Would my hon. friend give me the reference to the divesting order?


Howard Charles Green: If the minister will sit down and let me put my question he will have no reason for becoming so fussed up. This section provides that the Canadian National Railways shall at some time take up this new capital. We are told that in due course there will be a divesting order, and I am asking the minister what will happen in that event. In the first place, if the shares have already beeft taken up by the C.N.R., or, in the second place, if they have not been taken up by the C.N.R. at that time, what procedure will be followed in either case? Will the shares then be held by the minister personally as trustee for the crown?


Clarence Decatur Howe: While I might say that no plans have so far been made and that the government's policy will be announced in due course, the fact of the matter is that there is a clause in the contract between the govern-

ment and the Canadian National Railways which permits the government to recapture the shares of the company whenever it wishes. It is in the Trans-Canada bill that the government has the right to take over the shares.


[Stage Direction]
Section agreed to.
On section 3-Authorization to deal with shares of companies incorporated under section 20.
Howard Charles Green: This section is one of those about which there was some question with regard to its being used for operations beyond the boundaries of Canada. The minister has said repeatedly to-day and during the sittings of the committee on railways and shipping that there was no intention of acquiring the shares of domestic companies. I submit to him once more, that being the announced government policy, the bill itself should go no farther. Yet the minister said to-night that the bill does go farther and does give Trans-Canada Air Lines power to acquire shares in a company flying in Canada only. Would he have any objection to an amendment to that section by adding the words "outside of Canada" which would give Trans-Canada Air Lines full power to acquire shares in a company operating outside of Canada but would not give them power to acquire shares in a company operating solely within Canada? Then, if at a later date it was the wish of the government to change that policy and * acquire shares of a company flying within Canada, an amendment could be brought in. But I suggest to him that it would be fair only to go so far now in the bill as government policy itself goes, and yet the bill admittedly goes farther.


Clarence Decatur Howe: Would my hon. friend explain his reasoning and show how the public interest would be greatly protected by such a step and the well-being of the Canadian people be served thereby? I should like to have a reason for doing it.


Howard Charles Green: The difficulty is this. When you put a provision of this type in a bill it_ leaves a sword hanging over the heads of people who are trying to develop air lines. That, I think, is unwise because it may prevent them from making the expansions which they otherwise would make. The bill should only go so far as government policy itself goes.


Harry Rutherford Jackman: And what about those veterans of whom the minister spoke?


Clarence Decatur Howe: There is nothing in the section that holds a sword over the head of anyone

Trans-Canada Air Lines
or that could hold a sword over anyone. That theory is entirely without foundation. I think the section should stand without amendment.


John George Diefenbaker: I move, Mr. Chairman, seconded by the hon. member for Vancouver South, that the words "outside of Canada" be added to section 3 (e) after the words "any kind" in line 27 of the bill.
Amendment negatived.


Alan Cockeram: I should like to ask the ministfer whether, under paragraph (f), there will be any limit on the amount of money which can be lent.. Surely there should be some limit in a case like this.


Clarence Decatur Howe: The amount will be limited
to what the operation requires and Trans-Canada Air Lines have at their disposal for the purpose, and subject to the approval of this parliament and of the committee on railways and shipping, which must approve the investment.


[Stage Direction]
Section agreed to.
On section 4-Limitation of power, to sell or dispose of shares of companies incorporated under section 20.
Agar Rodney Adamson: As to flying over certain countries of South America, Brazil, I know7, and Venezuela, I think, demand that a passenger air line must give to the flown-over country a certain percentage of the stock of the company. Can the minister tell us what these percentages are, because we may be flying over a number of countries and that might eat up a considerable percentage of the capital.


Clarence Decatur Howe: There are regulations, differing in every country. They are not such as would prevent Trans-Canada Air Lines from operating into Brazil if it cares to do so. I cannot give the requirements of each country, and I think that matter could be left to a future parliament. No immediate operation is intended.


[Stage Direction]
Section agreed to.
Section 5 agreed to.
On section 6-Contract provisions.
Howard Charles Green: The change which is made
here makes it possible for the Trans-Canada contract to be worded pursuant to order in council, rather than as set out in the original act. It has been my understanding that under this section of the act routes which are to be flown by Trans-Canada have first been designated as such, and that designation is made by order in council. It is not clear from the
bill whether that policy is to be continued. In other words, will government policy be in the future that all routes to be flown by Trans-Canada Air Lines will be designated by order in council, as has been the case in the past?


Clarence Decatur Howe: That is correct, yes.


[Stage Direction]
Section agreed to.
Section 7 agreed to.
On section 8-Mail transport contract terms.
Agar Rodney Adamson: Does section 8 give the minister power to enter into contracts with other countries for mail services?


Clarence Decatur Howe: Yes. These contracts are
made through ou>r own post office as a rule, but we have the power to make contracts with the post office of any country.


Agar Rodney Adamson: They are made through
the post office of the flown-over country?


Clarence Decatur Howe: The Canadian post office, as
a rule.


Agar Rodney Adamson: But they are between the post offices and not between the air lines?


Clarence Decatur Howe: They are made between the
air lines and the post office.


Agar Rodney Adamson: And the post office of the foreign country?


[Stage Direction]
Section agreed to.
Section 9 agreed to.
On section 10-Governor in council may create corporations.
Stanley Howard Knowles: Section 10 has a number of subclauses, one of which is the specific clause which provides for the setting up of these corporations which are to be subsidiary to Trans-Canada Air Lines. In connection with these subsidiary corporations there is a question I should like to address to the minister. If I recall correctly, when he first introduced this matter he said it was felt that, owing to the different kinds of operations- as, for example, over the Atlantic or over the Pacific, or certain new services across Canada -it was desirable to have separate corporations. He said that the experiences in flying these different routes would be different. Is it envisaged to have some sort of coordination of these various companies, so that they will learn from each other's experience; in other words, is there to be a coordination of all the lines under the T.C.A., instead of leaving' too much to the subsidiaries by themselves?
Trans-Canada Air Lines


Clarence Decatur Howe: The lines will be coordinated through common ownership by T.C.A. Training facilities for all lines will probably rest in T.C.A., as they do to-day. The operations of the system will be directed by officials of T.C.A. The purpose of the subsidiary companies is more for accounting than anything .else: it is to make sure that the accounts of the various operations are kept separate.
Mr. HAZEN': When this section came be-:ore the committee on railways and shipping ;he Minister of Munitions and Supply said that it was to provide for the formation of subsidiary companies to operate certain ocean routes. His words are found on page 281 of the evidence. That was the purpose of this section; I should like to lay emphasis on the words "to operate certain ocean routes." If that is the purpose of section 20, why does it not say so in section 20? Why has that section been made so broad? If the intention was as I have stated, the draftsmanship is very bad, because the intention is not limited by the draftsmanship to the purpose' which the Minister of Munitions and Supply had in view'. The minister told us that the purpose of setting up these corporations, of which there may be one, or a number, was to establish separate companies to operate ocean routes, not Trans-Canada routes or any lines which fly from Canada to the United States, . but routes to Great Britain or across the Pacific. If that is the purpose, why are those words not contained in the bill? I say that ' the draftsmanship is bad and, if the purpose is as ^tated by the minister, further words should be added to this section. I will therefore move that after the word "corporate" in line 6 there be added the words, "for the organization, operation and maintenance of ocean routes". If those words are added to the section I think it will make the matter clearer and will carry out the intention of the Minister of Munitions and Supply, who is acting as Minister of Transport in connection with this bill.


Clarence Decatur Howe: Does the hon. member suggest that there is anything in the present paragraph that defeats the objective announced by the Minister of Munitions and Supply?


Mr. HAZEN:: No; but does it meet the obj ective?


Clarence Decatur Howe: I think so, yes.


Douglas King Hazen: It is bad draftsmanship in that it gives the minister powers for which he is not asking. He says that it is his intention to establish' one or more corporations to carry

on ocean routes, to establish a line between here and the United Kingdom, to establish another on the Pacific and1 perhaps a third to the West Indies and South America. If that is the objective, why not draft the section so as to cover that and no more? Looking into the future, the minister may find that this section as it is worded may not work to the advantage of the Minister of Transport who will .be carrying out this measure. The minister has told us what he wants. Why not put it in the bill?


Clarence Decatur Howe: I believe the present drafting covers the situation adequately. We have a bill that meets the purposes intended. The purpose of the bill is to put Trans-Canada Air Lines in a position to enter into transocean aviation and to be equipped to fake such action as may be necessary. It may be necessary to incorporate a company in Brazil; we cannot say. It might very well be necessary under the laws of that country, and I do not see why we should pass an amendment that would make that impossible if it. were needed.


Douglas King Hazen: There is another reason why the section might be amended, and that is that it must be read in conjunction with section 3, which provides that the corporation has the right to purchase and hold1 shares in other companies. Provision is made for the disposition of shares in any company incorporated under section 20, and the companies the minister wishes to incorporate under section. 20 are these ocean routes. .Is the section reads, you can incorporate a company for operations solely in Canada, and then you have the power to acquire their shares. I do not think that is the intention.


Clarence Decatur Howe: This paragraph may be
required for the corporate purposes of the company. It is not government policy to do what my hon. friend suggests could be done; but if he is attempting to defeat something which could be done, and which wre have no intention of doing, he might defeat a desirable object having to do with the expansion of Trans-Canada services across the ocean. I see no purpose in following the suggestion of my hon. friend, because I cannot visualize difficulties that might arise from such action.


Agar Rodney Adamson: Could Trans-Canada Air Lines own shares in competing lines such as Pan-American? It is written loosely enough so that they might be able to do so.


Clarence Decatur Howe: It owns a share in Laguardia airport. If it did not it could not fly there.


Arthur Leroy Smith: May I ask the minister a question, and as usual I am being helpful? Section 23 says that the head

Trans-Canada Air Lines
office of the corporation shall be at such city as the directors may select. Does he not think he has confined himself a good deal? We might like to have it at the Seigniory club. That is a pleasant place, but it is not a city. Everybody is cutting down the minister's authority and I am enlarging it. '


Douglas King Hazen: There is another reason why the suggestion I have made might be considered, and that is the question of taxation. You might get a company established in some cities where you might have to pay taxes, whereas you would not in others.
Amendment negatived on division.


Howard Charles Green: Before the section carries, we have before us another bill entitled "An Act to incorporate International Air Transport Association". I should like the minister to explain whether there is any connection between that bill and the air bills that are being presented to the house. Mr. Symington is one of the incorporators of the International Air Transport Association. There may be no connection at all. Will the minister explain that?


Clarence Decatur Howe: The International Air Transport Association is made up of international air line operators from all parts of the world operating internationally. The headquarters of the association happens to be in Canada and Mr. Symington happens to be president of the organization. Trans-Canada Air Lines is a member of the organization, as is practically every great air line in the world. The headquarters of air transport association being in Canada, it is the desire of the association to incorporate themselves in Canada, and the bill has no connection with this one except that Trans-Canada Air Lines is a member of the association.


Agar Rodney Adamson: Has that association
power to fix rates?


Clarence Decatur Howe: Yes.


[Stage Direction]
Section agreed to.
On section 11-Repeal of section 17 by proclamation.
John Ritchie MacNicol: Does this apply merely To rates on postage and mail?


Clarence Decatur Howe: That is all.


John Ritchie MacNicol: If at some future time Trans-Canada carries freight, will the freight rates be subject to the railway commission or to whom?


Clarence Decatur Howe: The air transport board must approve the rates on express, freight and passengers. Their rates are subject to the
approval of the air transport board. For mail, it is a matter of bargain between the post office and Trans-Canada Air Lines, approved by the governor in council.


John Ritchie MacNicol: What about freight?


Clarence Decatur Howe: Trans-Canada Air Lines must file its rate on freight with the air transport board, and the rate filed will then be approved or disallowed.


John Ritchie MacNicol: The board of railway commissioners wall have nothing to do with the rates?


Clarence Decatur Howe: No.


Agar Rodney Adamson: Subsection 5 of section 17 reads:
In fixing the rates as hereinbefore provided, it shall be assumed that the corporation's gross revenue and operating expenses for the current year will be the same as in the preceding year, except in so far as the gross revenue will be increased or decreased by any change in rates.
Does that give the corporation the flexibility of changing rates according to their revenues?


Clarence Decatur Howe: That particular section is the one we are deleting.


Agar Rodney Adamson: That is the one that is out?


Clarence Decatur Howe: Yes.


[Stage Direction]
Section agreed to.
Preamble agreed to.
Bill reported.
Mr. HOWE moved the third reading of the bill.
James Horace King: Is it the pleasure of the house that the bill shall receive third reading now?


Howard Charles Green: Next sitting.


James Horace King: Carried.
Motion agreed to and bill read the third time and passed.


John Bracken: I rise to a point of order. There was objection to giving the bill third reading, and apparently Your Honour did not hear it.


Ian Alistair Mackenzie: The customary rule is, when there is no amendment, for the third reading to go through automatically. If there is an amendment the bill is held up for further consideration. I cannot lay my hand on the rule at the moment.


Harry Rutherford Jackman: It cannot be there.
Trans-Canada Air Lines


John Bracken: If it is your ruling Mr. Speaker, that third reading can be given to-night we accept it; otherwise I point out that objection was raised to giving it third reading at this time, unless the rules permit it to be done.
Mr.	COLDWELL:	What	is	the	ruling?
Does the bill stand?


Ian Alistair Mackenzie: Third reading has
been given.


Howard Charles Green: Wait a minute; you are not making the rules.
Mr.	COLDWELL:	What	is	the	ruling?
We are anxious to know whether the third reading has been given to-night. We are in favour of the third reading, but a question has been raised and we should like a ruling. I think we should have a recorded vote on this.


Ian Alistair Mackenzie: Mr. Speaker, may I suggest that t.he ruling is obvious. I have not the particular rule in my hand, but this bill was given second reading and then referred to the special committee on railways and shipping. That committee made a report to this house. The bill went through committee of the whole. Surely, if there is no amendment to the bill in committee of the whole, it automatically comes up for third reading by this house. That is the rule that has always been followed in this house.


Major James William Coldwell: That is what I understood, Mr. Speaker, before the matter was questioned' when you called for third reading of the bill, and the ruling was not given. I think the passage of the bill should be called now. We should have a recorded' vote on this bill.


James Horace King: I must call the attention
of the house to the fact that I received the report of the chairman of the committee of the whole. I then presented the following motion:
Moved by Mr. Howe, seconded by Mr. Mackenzie, that the bill be now read a third time.
I put this question to the house-: "Is it the pleasure of the house to adopt the motion?"


Major James William Coldwell: And the putting of the question was questioned by hon. members to my right.


James Horace King: I am sorry, but when I put the question: "Is it the pleasure of the house to adopt the motion?" I received no answer, and so I said: "Adopted"; "carried."


Major James William Coldwell: We shall ask for a
recorded vote.


John George Diefenbaker: What are you going to record?


Ian Alistair Mackenzie: Nobody is opposing
it.


Major James William Coldwell: If nobody opposes it.
then the motion must be carried.


Ian Alistair Mackenzie: It is carried if my hon. friend is not objecting.


Major James William Coldwell: I am not objecting; I
think there should be a recorded vote.


Ian Alistair Mackenzie: Not necessarily.

The house in committee of supply, Mr. Macdonald (Brantford City) in the chair.


Ian Alistair Mackenzie: Last night at the
adjournment I suggested to the house that we might put three departments into supply without discussion. I now ask you, Mr. Chairman, to call item 103 of the Department of Labour.



DEPARTMENT OF LABOUR

[Stage Direction]
103. Departmental administration, .$526,002.
Item stands.

[Stage Direction]
126. Departmental administration, $152,565.
Item stands.

[Stage Direction]
190. Departmental -administration, $287,000.
Item stands.
Progress reported.
On motion of Mr. Mackenzie the house adjourned at 10.50 p.m.
Wednesday, November 7, 1945.