1945-12-03

BANKING AND COMMERCE

[Stage Direction]
Third report of standing committee on banking and commerce.-Mr. Cleaver.


[Stage Direction]
Bill No. 195 for the relief of John Graham Gatehouse.-Mr. Casselman.
Bill No. 196 for the relief of Gertrude Violet Kerwin Desjardins.-Mr. Nixon.
Bill No. 197 for the relief of Winifred Madge Jones Brown.-Mr. Whitman.
Bill No. 198 for the relief of Winnifred Catherine Bird Jackson.-Mr. Benidiekson.
Bill No. 199 for the relief of Archibald John Pratt.-Mr. Maybank. '
Bill No. 200 for the relief of Mary Theresa Sharp Mackay.-Mr. MacLean.
Bill No.-201 for the relief of Edith Elise Holbrook Hume.-Mr. Maybank.
Bill No. 202 for the relief of Amy Helen Bowerman Hume.-Mr. Maybank.
Bill No. 203 for the relief of Mary Anderson Bell Gordon.-Mr. Maybank.

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

Mr. FRASER:: What was the total cost to Canada in connection with the discovery and production of the atomic bomb?
(Mr. Bryce.]


Mr. HOWE:: The wording of this question is such that the answer would be, "no expenditure." Canada has not been working on the development of the atomic bomb. It has been working on the development of atomic energy for peace-time purposes. I would not care to answer the question in its present form, other than to say that no expenditure has been made. If the hon. member wishes to reconstruct the
question we should be pleased to give the amount spent on the other aspect of the matter.


Mr. SPEAKER:: Dropped.


Mr. MACKENZIE:: Answered.


SHORTAGES OF UNDERWEAR
Mr. HANSELL:: 1.	Has the government or any department or board under government supervision received any complaints by way of correspondence or other representation, respecting any shortages of underwear in: (a) Canada; (b) the provinces of Manitoba, Saskatchewan, Alberta?
2.	If so, what steps have been taken to alleviate these shortages?


Mr. MAYHEW:: 1.	(a) Yes, in so far as the wartime prices and trade board is concerned, (b) Yes, in so far as the wartime prices and trade is concerned.
2.	For the past two years the wartime prices and trade board has issued production directives requiring underwear manufacturers to manufacture specific quantities of various types of garments within fixed time periods. Assistance has been given these directed manufacturers in securing the necessary materials and labour. As a result, the production of underwear for civilian use has, despite large military procurement, been maintained at high levels. Special emphasis has been placed on the manufacture of children's underwear and nightwear and current production is approximately double pre-war rates.


HOUSING UNITS-QUEBEC PROVINCE
Mr. NICHOLSON:: 1.	How many permits have been granted for the construction of housing units in the districts of: (a) Ste. Agathe; (b) Ste. Adele; (c) Mont-Tremblant, Quebec?
2.	What is the estimated value per. unit i* each district?
3.	Are there any houses being built for whicu no permits have been issued? If so, how many?

Questions


Mr. McILRAITH:: 1.	(a) 39; (b) 27; (c) 3.
2.	(a) $3,746; (b) $3,859; (c) $3,333.
3.	Reports have been made to the department alleging that houses have been constructed without a licence in the localities stated in question 1. These reports are being investigated but until the investigator's report has been made, the information asked for is not available.


FIBRES, TEXTILES AND TEXTILE PRODUCTS- IMPORTS
Mr. CASE:: What is the value of imports into Canada for the fisc* years ending March 31, 1941, 1942, 1943, 1944 and 1945, of fibres, textiles and textile products?


Mr. MacKLNNON:: Import values of fibres, textile and textile products entered for consumption in Canada during calendar years 1941 to 1944, and ten months' period ended October, 1945:
Calendar year 194L	$161,138,512
1942		 189,065,886
1943		 195,283,341
1944		 190,575,143
Jan. 1st to Oct. 31st, 1945	 163,635,893
Statistical records are on a calendar year basis.


WOOD, WOOD PRODUCTS AND PAPER-EXPORTS
Mr. HODGSON:: 1.	What quantity of wood, ivood products and paper did Canada export during the fiscal years, ending March 31, 1941, 1942, 1943, 1944 and 1945?
2.	What was the value of the export of these products in each of the years, 1941, 1942, 1943, 1944 and 1945?


Mr. MacKINNON:: 1.	Unit of quantity not recorded on some items in this group.
2.	Canadian export values of wood, wood products and paper during calendar years 1941 to 1944, and ten months' period ended October, 1945:
Calendar
Year
1941		 $387,113,232
1942		 389,805,396
1943		 391,069,658
1944	  440,901,011
Jan. 1st to Oct. 31st, 1945	399,635,846
Statistical records are on a calendar year basis.	.


AGREEMENT BETWEEN CHANCE BROTHERS, RESEARCH ENTERPRISES AND THE CROWN
Mrv BRUCE:: 1 Has an agreement been made between Chance Brothers, Research Enterprises and the crown?
2.	If so, what was the date of such agreement?


Mr. McILRAITH:: 1.	An agreement was concluded between Research Enterprises Limited and Chance Brothers June 1, 1941.
2.	Answered by No. 1.


VETERANS ATTENDING UNIVERSITIES
Mr. DIEFENBAKER:: 1.	Has the government given consideration to increasing the maintenance benefits for veterans who are students attending universities under
'the educational and rehabilitation scheme.
2.	If so, what is the decision?


Mr. TUCKER:: These questions seek disclosure of policy and it is not the practice of the government to disclose policy in giving answ-ers to questions.


FAMILY ALLOWANCES .
Mr. McMASTER:: 1.	What number of cheques were issued for each province under the Family Allowance Act, for the month of October, 1945?
2.	What number of such cheques were issued for families of 1, 2. 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 children?


Mr. CLAXTON:: 1. Prince Edward Island...	11,844
Nova Scotia	 74,070
New Brunswick	 57,245
Quebec	 366,080
Ontario	 432,984
Manitoba	 86,647
Saskatchewan	 103,054
Alberta	 99,999
British Columbia	 101,848
N.W.T. and Yukon	 821
1,334,592
2. See table on following page.
Note: The discrepancy between the number of cheques issued (see answer 1 above) and the number of families receiving allowances (see table on following page) is explained by the fact that in respect of payment to Indians and to children's aid societies one cheque may cover a number of family groups.
Furthermore, a number of adjustment cheques may be issued during one month to a single family covering retroactive payments.

Number of Families which Received Family Allowances during the Month of October, 1945, Classified by Number of Children in Each Family
Children per Family	i	2	3	4	5	6	i	8	9	10	11	12	13	14	15	Total FamiliesProvince	Numb	ER OF Fa	MILIES	-	9Prince Edward Island	4,230	2,965	1,809	1,135	699	453	260	132	65	30	6	3	11 S77Nova Scotia	28,703	18,989	11,454	6,552	3,888	2,342	1,174	600	287	112	36	7	2	74 14fiNew Brunswick	19,816	13,790	8,760	5,707	3,809	2,377	1,493	820	429	181	61	18	3	57 2fi4Quebec	111,105	88,012	58,410	39,473	26,167	17,368	11,337	7,225	3,960	1,946	728	210	37	7	2	' 365,987Ontario	190,376	128,170	60,102	28,810	13,816	6,792	3,427	1,631	678	293	100	18	4	1	434,218Manitoba	36,050	24,633	11,968	6,023	3,026	1,536	783	364	162	44	23	7	2	84 fi91Saskatchewan	37,412	29,679	16,970	9,123	4,730	2,640	1,324	633	324	107	43	17	2	2	103,006Alberta	38,336	29,486	16,335	8,440	4,129	2,088	986	455	181	70	21	7	1	100 525British Columbia	46,252	33,007	13,506	5,476	2,199	951	439	175	65	25	5	1	102,101Northwest Territories	and Yukon	289	201	139	93	54	27	10	7	820512,659	368,932	199,453	110,832	62,517	36,574	21,233	12,042	6,151	2,808	1,023	288	51	10	2	1,334,575
Questions ,4 s Orders for Returns


COURTS MARTIAL
Mr. DIEFENBAKER:: 1.	Has the board of review appointed to look into court martial cases authority to review sentences of court martial other than those of penal servitude, detention or imprisonment?
2.	If not, will consideration be given to
widening the terms of reference to enable the board so to do?	[DOT]


Mr. LAPOINTE:: 1.	No. At the present time the board of review is only empowered to review all sentences of penal servitude, imprisonment and detention exceeding ninety days passed by court martial upon members of the Canadian army, both in and outside of Canada.
2.	At the present time the widening of the
powers vested in the board is not being considered.	-


LOAN TO ROUMANIA
Mr. BLACK (Yukon):: Has the loan of $25,000,000, or of any amount, made by the government of Canada to Roumania been repaid?


Mr. MAYHEW:: No. The Roumanian government bonds held by the dominion government mature as to 823,969,720 on April 1, 1968, and as to S359.542.40 on November 1, 1953.


SHIPMENTS OP WHEAT TO EASTERN CANADA
Mr. McCUAIG:: 1.	How many bushels of wheat were shipped from western to eastern Canada in each of the years, 1940 to 1945?
2.	What was the price per bushel paid by the eastern f armer in each of the above years?
M'r. GARDINER: The hon. member who asked this question will have to clarify it somewhat. I do not know whether it is one I should answer, or whether it should be answered by the Minister of Trade and Commerce. It will be noted that the first part of the question reads: " How many bushels of wheat were shipped from western to eastern Canada in each of the years, 1940 to 1945?" From the next question I would assume the hon. member is asking how many bushels were shipped for feeding purposes. If that is what is meant, then it is a question I should answer; if it is not, then I should like the question to be dropped.


James Horace King: Dropped.


NON-FERROUS METALS
Mr. ROSS (St. Paul's):: 
NATIONAL DEBT
Mr. LACOMBE:: 1.	What was the amount of the national debt in 1939. 1940, 1941, 1942 -and 1943?
2.	W-hat is the amount of the national debt at present?


Robert Wellington Mayhew: Figures of the total debt and net debt of Canada as at the end of each fiscal year from 1868 to 1945 will be found in part I of the Public Accounts of Canada, tabled in the House of Commons on November 12, 1945.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. PROBE:: With respect -to (a) the military personnel on strength as of December 1, 1945, .at Canadian military headquarters (overseas), at National Defence headquarters and at the headquarters of each -Canadian military district;
(b)	to the naval personnel on strength as of December 1, 1945, at Canadian Naval headquarters (overseas), at National Defence headquarters and at the headquarters of each naval command in Canada;
(c)	to the -air force personnel on strength as of December 1, 1945, Canadian Air headquarters (overseas), at National Defence headquarters and at the headquarters of each air command
in Canad-a;
1.	What was the total number on strength in each rank of the service?
2.	How many officers of the services of field rank or equivalent included in (1) above, originated in each of Canada's military districts, air commands and naval commands?


SOLDIER SETTLEMENT-MARITIME PROVINCES
Mr. ISNOR:: 1.	Ho-w many regional offices are in operation under the Soldier Settlement and Veterans' Land Act in the maritime provinces?
2.	Where are they located?
3.	Wh-at are the names of persons in charge and members of staff?
4.	What is the annual cost of operating each of these offices?

Questions 4s Orders jor Returns


WARTIME PRICES AND TRADE BOARD- LACHUTE, QUE.
Mr. HEON:: 1.	What has been the cost of the wartime prices and trade board office in Lachute, county of Argenteuil, since its inception to date for: (a) rent; (b) telephone service; (c) salaries; (d) travelling expenses?
2.	How many employees are there in the Lachute office?
3.	What were their total individual salaries during the above period.
4.	What is the amount of their individual
expense accounts for the same period?


SELECTIVE SERVICE-LACHUTE, QUE.
Mr. HEON:: What has been the total expenditure of the selective service office in Lachute, county of Argenteuil, to date in: (a) rent; (b) furniture, equipment, telephone service; (c) wages; (d) travelling expenses?


JAPANESE NATIONALS
Mr. REID:: 1.	What have been the total amounts expended in connection with the Japanese in Canada since Pearl Harbor to the present time?
2.	What is the total amount of money standing to the credit of Japanese in Canada from the sale of properties?
3.	How many Japanese would share in the disposal of such money?


PARLIAMENTARY ASSISTANTS
Mr. GAGNON:: 1.	How many members of parliament or other persons have been appointed parliamentary assistants since 1942?
2.	What are their names?
3.	What salary was paid to each of them during his term of office?
4.	What amount was paid to each of them for expenses during his term of office?


EUCENE PARKER, K.C.
Mr. BLACK (Cumberland):: 1.	Was Eugene Parker, K.C., of Halifax, Nova Scotia, appointed as counsel for the royal commission on cooperatives?
2.	If so, when was he appointed and when was appointment terminated?
3.	What allowances for services and expenses per day is paid to him, stating the total amount?
4.	What is the name of the legal firm with which Mr. Parker is associated in Halifax?
5.	What- is the total amount paid to this legal firm and/or all members thereof by all departments of the government including crown companies, since the beginning of the war?


Mr. GREEN:: 1. How much silver was produced in Canada in each of the years from 1936 to 1944 inclusive and how much has been produced in 1945 up to the last date on which this information is available?
[Mr. TsnorJ
2.	How much silver was used in Canada for each of these years and for such period in 1945?
3.	What was the average price in these respective periods for silver used in Canada?
4.	How much silver was exported from Canada in each of these periods?
5.	To whom was such exported silver sold and at what price?
, Mr. GREEN:
1.	What amount of silver is being held in Canada by the dominion government and for what purpose is it to be used?
2.	How much new Canadian silver was used in Canada in the year 1944, and during 1945 to the latest date for which information is available, for the minting of coins?
3.	What price, per ounce, was paid to the producers of this silver?
4.	What are the estimated requirements of silver for the minting of Canadian coins during 1946?
5.	What are the estimated requirements for other purposes for Canada during that year, listing the purposes and the required amounts for each?


VETERANS AFFAIRS-WELCOME, ONT.
Mr. STEPHENSON:: 1.	Has the Department of Veterans Affairs purchased land at Welcome, Ontario, for small holdings?
2.	If so, how many acres?
3.	What price was paid for same?
4.	How many houses are to be built? '
5.	What construction, how many rooms?
6.	Have any of the houses been started yet?
7.	If so, how many, and when will same by ready for occupancy?
8.	What water system will they have?
9.	What will the selling price be?
10.	If for rent, what rent per month?
11.	Have any applications been received to buy or to rent these houses at the present time?


MOTIONS FOR PAPERS
Mr. POULIOT:: For a photostat copy of all cheques received by the government since the beginning of the war from the law firm of Borden, Elliot, Sankey and Kelley, Toronto, in payment of refund of legal fees.


Mr. MACKENZIE KING:: This is the first time I have seen a request made for photostatic copies of documents. This introduces something that is new and I think it will have to be considered carefully before assent is given. I am not saying that there may not be cases in which it would be wise to produce photostat copies of documents, but there may be other cases in which that request should not be met. This particular motion asks for the production of copies of certain cheques. Cancelled cheques are not in the possession of the government, and they would not be

Supply-Health and Welfare
available for photostating in any event. Unfortunately the hon. member is not in his seat, but I think in the light of these circumstances the motion might well be dropped.


James Horace King: Do I understand that
the motion of the hon. member for Temis-couata should be dropped? Is it the pleasure of the house that this motion be dropped?


Some hon. MEMBERS:: Dropped.
Motion dropped.


APPLICATIONS FOR RADIO STATION LICENCES
Mr. DIEFENBAKER:: For a copy of recommendations from the board of Governors of the Canadian Broadcasting Corporation, made pursuant to the provisions of section 24 subsection 1 of the Canadian Broadcasting Act, to the Minister of Munitions and Supply and/or the Minister of Transport, dealing with applications for radio station licences since January 1, 1944.



NATIONAL HOUSING ACT


[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved that the house go into committee at the next sitting to consider the following resolution:
That the resolution of October 9, respecting a measure to amend the National Housing Act, 1944, be amended by adding the following resolution thereto:
That under the said measure expenditures may be paid out of the consolidated revenue fund to an aggregate amount not exceeding five million dollars incurred under or in carrying out the provisions of part V of the act.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. G. H. CASTLEDEN (Yorkton):: Mr. Speaker, I should like to ask the Minister of Veterans Affairs what steps have been taken to prevent a recurrence of the unwarranted delay which occurred in the issuance of maintenance cheques to veteran students at the university of Saskatchewan and if other veteran students at other universities have experienced the same difficulty.
Hon. IAN A. MACKENZIE (Minister of Veterans Affairs): This matter was brought to my attention two weeks ago by a telegram, and also by the hon. member for Lake Centre. Immediate action was taken and cheques were issued at the end of the month. The last ones will be issued on December 4, which will be to-morrow.



SERVICE PERSONNEL


[Stage Direction]
On the orders of the day:
Mr. WILLIAM IRVINE (Cariboo):: I
should like to ask the appropriate minister if *there is any intention of increasing the fares on January 1, 1946, of soldiers travelling through Canada.


William Lyon Mackenzie King: That could stand as a notice.


James Horace King: I did not understand the question of the hon. member.


William Irvine: I am asking the appropriate minister, probably it is the Minister of Veterans >
Affairs, if it is the intention of the government to increase-


James Horace King: I would ask the hon.
member to place his question on the order paper.


William Irvine: There is no need to do that; it is a simple question.


Some hon. MEMBERS:: Order.


William Irvine: Surely the minister can answer whether-


James Horace King: I have asked the hon.
member to put his question on the order paper.


William Irvine: I shall not.


William Lyon Mackenzie King: The question asked by my hon. friend involves government policy and it could not be answered offhand at this moment. If my hon. friend wishes an answer he will have to put his question on the order paper.



SUPPLY -

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

[Stage Direction]
ISO. Departmental administration, $287,000.
. Hon. BROOKE CLAXTON (Minister of National Health and Welfare): Mr. Chairman, as this is the first time the estimates of the Department of National Health and Welfare have come before the committee I think it
Supply

Health and Welfare
[Stage Direction]
might be convenient to hon. members if I described briefly the organization and functions of the department.
It was created by the Department of National Health and Welfare Act, chapter 22, statutes of 1944, which received ro^al assent on July 27, 1944. That act was proclaimed on October 13, when I Was appointed its first minister. The department took over the health branch of the department of pensions and national health. That department had been created in 1928, when the old department of health and the department of soldiers' civil reestablishment were amalgamated. The department of health itself was created in 1919.
When the Department of National Health and Welfare was created on October 13, 1944, the health branch of the department of health and pensions, which was taken over, had a total personnel of 387. At that time the new department had no administrative staff whatever, and no staff in the welfare branch. It was a time, as hon. members know, of great shortages of space and personnel, and at first the work of the department had to be organized from offices in the House of Com' mans. Later the administration has been carried on from offices in the Birks building, and only now, more than a jrear after its creation, is the department being gradually assembled in one place, in offices in the Jackson building.
The health branch had a number of different functions. It administered many acts of this parliament which went back even to preconfederation days. I might list them for the convenience of hon. members:
(a)	The Foods and Drugs Act;
(b)	The Opium and Narcotics Act;
(c)	The Proprietary or Patent Medicine Act;
(d)	The Quarantine Act;
(e)	The Leprosy Act. The health branch also furnished services with regard to
(f)	Maternal and child hygiene;
(g)	The examination of immigrants;
(h)	Nutrition;
(i)	Public health engineering; for example, public works health service; public health on railways, steamships, et cetera, and particular jobs such as water supply at military camps;
(j)	Sick mariners service, which since confederation has provided medical and surgical treatment to members of crews of vessels in the classes specified in the Canada Shipping Act. In addition the department makes certain grants to institutions to assist sailors;
(k)	Venereal disease control, including assistance to the provinces, coordination of various controls, the distribution of drugs used in veneral disease treatment;

(l)	Administration of the laboratory of
hygiene, including testing and establishing of standards for food and drugs, standardization of reagent^, studying sources of vitamins, et cetera;	[DOT]
(m)	Control of food and drug advertising and labelling;
(n)	Cooperation with other governments in the administration of sanitary conventions, et cetera.
These functions had been carried on, as I say, by the health branch of the department of pensions and national health, and they were taken over by the new department. Since then a number of new developments have taken place, particularly during the last year, and new divisions have been created to deal with the following matters:
1.	Health insurance studies, the purpose of which is to extend the studies that have been carried on by this department and by parliamentary committees in the past.
2.	Dental health.
3.	Civil servants' health. That was announced in May, 1945, in consequence of authorization being given by the government to supply a service to civil servants which would put the Dominion of Canada on a footing with other good employers with regard to the health service to be furnished to the civil service, including examination on entrance, periodical examinations, X-ray examinations, emergency treatment, advice on health matters and education on health matters.
4.	Health facilities. This division is designed to supply advice and information to government departments, to provincial governments and to other agencies with regard to hospital construction. At present there are not a great number of architects qualified to supply consultative advice and assistance in connection with the construction of hospitals, and we feel it is desirable to have such a man with the required knowledge and to equip him and make his services available to other agencies interested in using them. This course was taken in accordance with a resolution of the Dominion Council of Health.
5.	Mental health.
6.	Blindness control. The proposals made by the dominion government to the provinces provide for extending the age at which blindness will be pensionable from forty down to twenty-one, and also, in cooperation with the provinces for both preventive and curative services to the blind. We hope almost at once to undertake a survey of the files and medical records of blind people in Canada registered

Supply-Health and Welfare
with the department so as to arrive at exact statistical knowledge of the different causes of blindness and ascertain how much of it is preventable or curable. On the basis of that information we can start some really constructive work in that field.
7.	Tuberculosis control.
8.	Advertising and labelling control. The purpose of this division would be to coordinate the work previously done in several divisions of the department and cooperate much more actively with those engaged in the pharmaceutical trade, the advertising agencies and others interested in this field, in order to arrive at standards of medicine and health advertising which will be thoroughly understood and readily applied.
9.	National laboratory. Last May I was also authorized to announce that we would plan to have a national laboratory in Canada which would, we hoped, put Canada on a footing with any other country in the world, and which would provide us with the last word in laboratory equipment to conduct the public health business of the dominion. This building is being planned now. It is expected that construction will not begin for some considerable time, but when it is in being we hope it will be something of which the Canadian people can be proud.
In addition to these new divisions which have been created, during the year the department has undertaken a number of other activities. It now publishes the Canadian Health and Welfare Bulletin, which is distributed free to provincial governments, public health authorities and others engaged in that field. The distribution amounts to 50,000 copies in English and 25,000 copies in French. Already it has had a very good reception. It takes the place of a bulletin previously issued by the department, and represents hardly any increase in cost. The department is also working with other government agencies to develop a film library on health matters and also to develop a very much more complete public health and welfare library. In time we hope to be able to provide the provinces and other agencies in the field with information in regard to everything going on in these fields in other countries as well as in every part of Canada, and in this way serve the interests of the provinces and all others concerned. On November 1 the hospitalization and medical treatment of Indians was transferred to the department, but my colleague the Minister of Mines and Resources will include the presentation of those items in his estimates, because since
November 1 we have not had time to take them over. We greatly appreciate his courtesy in this respect.
In the general health field, since the department was created we have endeavoured to get into dose personal relationship with the ministers and department of health of the provinces and with all the agencies working in this field, such as the Canadian Medical Association, the Canadian Dental Association, the Health League of Canada, the Canadian Institute for the Blind, the Canadian Nurses' Association, the Red Cross, and a number of others. I am happy to say that all have not only expressed their desire to cooperate but have given every indication of a genuine wish to cooperate in the great work of improving the 'health and welfare of the Canadian people.
I should say a word about the organization of the welfare department. It started out on October 13 of last year, as I said, with no staff, no quarters, no equipment, and it was faced with the task of seeing that the children of Canada were registered and that cheques were issued by the month of July. There were times when I thought we could not possibly meet that goal, but the thing got going; we commenced the registration of families in Prince Edward Island in February and gained very valuable experience there before undertaking the job of registration in all the provinces, which commenced on March 22 of 1945. At that time we did not even have office space in two of the provinces, and as the forms came in they had to be stored temporarily. In the connection I should like to express a wrarm word of gratitude to the hundreds if not thousands of volunteer workers in 6very part of Canada who helped in the work of sorting the forms and generally in the preliminaries of registration. These women were obtained largely through the women's voluntary agencies; many were office women who voluntarily contributed their free services after office hours so that this job of national importance might be done in time.
We were able to make the first payment on July 18 as planned; payments have been made in respect of the months of July, August, September, October and November. The November payment was made about the 18th of the month, and we already have the figures in regard to that payment, which I am prepared to give the committee. It was made in respect of 1,393,546 families and amounted to a total of 819,722,599. The size of this operation I think may be understood when I say that in the month of October alone we had 40,331 changes of address and 92250 automatic
Supply-Health and Welfare
[Stage Direction]
changes occasioned by the children moving from one age level to another. These automatic changes are made without any action on the part of the parent; they are made from the information we have on file, and are done by changing the address slugs and other equipment used to send out cheques.
The work of registration has been greatly facilitated by the simple form we ultimately selected after a great deal of trial. If you compare the form used in Canada with that in use in Australia or New Zealand or Ireland I think you will see that we have by far the simplest form. We have found that it gives adequate information, and by reason of the cooperation of the Canadian people and the amount of publicity that was given, a large percentage of' the forms were properly filled out, although delays in payment have occurred in a considerable number of cases through the forms not being properly filled out. For example, some thousands of forms were sent in with no addresses on them. The applicants inadvertently left off the addresses, and we had no means of communicating with them until they wrote in again. Then we had tp relate the form to the letter and see that the cheques were mailed in payment. There have been delays, but I think those delays are almost entirely caught up now. They were due to shortages of space, shortages of staff in practically every province, and considerable shortages of equipment arising from delays in obtaining the machinery and office furniture. But to-day in every province except Quebec applications are dealt with the day they are received, and generally speaking correspondence is replied to the following day. In Quebec that is generally true with regard to current applications and correspondence, but there is. still a relatively small backlog of correspondence which we hope to catch up with in the next week, and which will put the whole operation on an absolutely current basis. When it is considered that already six and a half million cheques have been issued and that these delays probably do not affect one-tenth of one per cent of the total it is a record of which the men and women who have worked night and day in the regional offices may well be proud.
This work has been greatly facilitated, and indeed I think was possible only by reason of the very fine cooperation we have received from other government departments. I should like to pay tribute to the accuracy of the estimates made by the dominion bureau of statistics, on which all our calculations and organization had to be based. We had to determine through one means or another, 
sometimes through the post oflice and sometimes through other agencies, how many forms in French or in English would have to be available in each part of Canada and in each post office in Canada. It should be remembered that we delivered the forms to households, in French or English according to the language of the householder, so that people did not even have to call for their forms unless there had been some failure in delivery. In arriving at the size of the staff and at the quantity of equipment we had to have very accurate estimates. The dominion bureau of statistics made these estimates on the basis of the 1941 census projected to July, 1945, and they were extraordinarily accurate. We have a statistical service which is not only a great credit to those responsible for it but is essential if an operation of this kind is to be carried on. Also the treasury officials, who have done great work, and the post . office and the provincial governments as well as the municipal authorities cooperated generously in seeing that this very considerable operation was carried out on time.
It should be remembered that we have had only four months of operation and have been dealing with fifteen years of backlog of children, so that we have not got down to a month-to-month basis. When the bill was being debated in July, 1944, I gave the house an estimate of the cost of family allowance administration in the Department of National Health and Welfare itself; I said we thought it would run not higher than two per cent, and closer to one per cent. I am glad to say that our estimate or guess was well within the limits of actuality; it looks now as if we shall be able to get through the first year with a cost of one per cent and in future years at considerably less. The estimate of staff I made at that time was that we should have 500 in the offices; at present we have 450, with a considerable additional number of casual employees who have been there to take care of the peak load. It may be that we shall need, when the operation settles down, rather more than 500, but it is still too early to say that. On the other hand I said that we would need a field force of 500, and we shall certainly not need anything like that figure. I said that the number of treasury officials would likely total 600; on November 14 they totalled 583. So that generally speaking the estimates were sound, and the aim we set for ourselves at that time has been bettered.

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We decided, after considering the whole subject, that this job could be done only with complete decentralization. Family allowance registrations were made in respect of the children in each province, and the family allowance office where they were made was in the capital of each province. Cheques were issued from that regional office at the capital, and the correspondence was conducted from there. That permitted us to do this very large job of organization. We could not have done it in time had we tried to do it at Ottawa. For one thing, the mails would have been swamped at the end of each month. The total family allowance staff at headquarters in Ottawa totals the rather extraordinary figure of seven.
During the year, in accordance with the intentions expressed when the department was established, the administration of the old age pensions branch, which had been with the Department of Finance, was transferred to the Department of National Health and Welfare.
The department like other departments of government, was also occupied during a considerable part of the year in working on studies which led to the proposals of the dominion government which were put before the dominion-provincial conference. The proposals regarding health and welfare matters will be found in the green book, as we call it. That contains the proposals of the dominion government, set out at length. I will not refer to them except to mention that those with regard to health include:
(a)	A grant for planning.
(b)	A system of health insurance on a nation-wide basis to the administered by the provinces, to which the federal government would contribute approximately sixty per cent of the cost, which would give Canadians in every part of Canada complete health service.
(c)	A programme of health grants under eight different heads, which would total some 813,000,000 and which would provide a very much larger sum, through provincial contributions to be spent on public health measures as well as on preventive and curative medicine.
(d)	Assistance in the construction of hospitals whereby provincial and municipal authorities could borrow money at cost.
These proposals also include the change in the provision for the blind, which I have mentioned, and also a change in old age pensions whereby an old age pension of $30 a month would be payable to everyone in Canada without proof of need at the age of seventy and a similar pension would be payable to those needing it, between the ages
of sixty-five and sixty-nine. The proposals with regard to old age pensions would cost the federal government about $217,000,000 a year, and the proposals with regard to health, if fully implemented, would cost the federal government something like $160,000,000 a year. These proposals are before the provinces now and are receiving their consideration.
That, Mr. Chairman, completes this brief statement of the activities and organization of the department. This department is, I believe, the only one which is by statute charged with responsibility for seeing to the health and welfare of the Canadian people in the federal field, and I believe I am the only minister who is by statute expressly charged with responsibility for seeing to it that these two ingredients of human happiness, health and welfare, shall be attended to in so far as it is within our power. We have been conscious of that responsibility, and we are conscious also of the fact that we have not made along every line the progress we should have liked to make. But in view of the times and of the transition from war to peacq, I feel that the officers and employees of the department have reason to congratulate themselves on a good first year. I hope they will feel encouraged by the results so far obtained and that on the foundations laid in this first year we shall be able to build the health and welfare of the Canadian people.
I should like to say a further word in appreciation of the splendid staff in the old health branch of the Department of Pensions and National Health which, when transferred to me from the Minister of Veterans Affairs, we found to be staffed with a group of public servants whose devotion to the public service and the welfare of Canada it would be hard to exceed. They have fitted into the new organization and we are now, we believe, a well integrated unit, and can build on the foundation already laid.
I believe that health and welfare are two matters in which all hon. members of this house, irrespective of party, and every person in the country, are vitally interested. We have had nothing but the best of cooperation from everyone. I believe that cooperation will still be forthcoming, and it is in that spirit that I lay these estimates before the committee for its consideration.
William Irvine: Is there any grant in the estimates this year for the Registered Nurses Association of British Columbia?


Mr. CLAXTON:: The situation with regard to nurses is this. At the beginning of the year 1942, a grant of $115,000 was made to the
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Canadian Nurses Association. That was increased to $200,000 in 1943-44 and to $250,000 in 1944-45. In this year an amount of $159,950 was fixed as the association's estimate of the cost that it would incur in completing the operations already undertaken. It is not contemplated in these estimates that any grant will be made to the Canadian Nurses Association, or through them to the Provincial Nurses Association for work in peace time. These grants were made to accelerate the recruitment and training of nurses in war because of the special needs of the defence forces and the Department of Veterans Affairs. They had an important effect in stimulating training and recruitment, but it is not intended to carry that grant into peace time. It would be difficult to justify a grant for nurses unless similar grants were made for training doctors, dentists, and others. As all hon. members know, the organization and training of all those classes of professional workers come exclusively under the jurisdiction of the provinces.


William Irvine: The matter that I am most interested in at the moment is this. I understand that the association, anticipating the continuance of the grant to which the minister has made refeTence, had made their plans and commitments, and the discontinuance of the grant appears to have come in the middle of their fiscal year. If the minister will say that his department will make good any such commitments, then that will satisfy my question at the moment.


Brooke Claxton: The estimates provide for all commitments made being met.


John George Diefenbaker: I should like to bring to the attention of the minister one matter which he did not deal with in his factual and interesting resume of the affairs of his department, which, as he says, is entirely removed from the question of partisanship. During the past twenty-five years there has been a 'marked extension of health services and in improvement of conditions of those why by reason of disabilities of one kind and another are unable to enjoy the standard of living which we believe is the minimum for all. 'While much has been done in the matter of old age pensions, there is still much more to be done. Pensions for the blind, family allowances, and the like have been provided but there is one section of our population which faces difficulties that ought not to exist.
I refer to those who while not blind are physically crippled. All of us know of persons who by reason of congenital crippleness or as a result of accidents are unable to carry

on and therefore become a charge on their relatives. Often those relatives are unable to carry on and furnish themselves with the proper standard of living. I do not know the extent to which the minister has statistics on this matter, but it would be of interest to find out how many throughout the dominion are cripples and therefore unable to earn a living. A number of the crippled have formed themselves into organizations and memorialized the minister and communicated with hon. members. I think this is a field which has been neglected. I do not want to go into individual cases, but instances have come to the attention of all of us of the breadwinner, sustaining injury under such circumstances that there is no right of recovery under the provincial workmen's compensation act, and certainly no right of recovery under common law. There is no provision for persons in that category. I shall not discuss in detail the project which has been placed before hon. members in this regard, except to say that the requests made seem to be reasonable. In more than nine other countries provision is made for persons in this category. One can never hope to give them the standard of living that they would have if they had the full use of their faculties, but at least something should be done.
I am not making any emotional appeal in this regard. Any one of us could do that, but something should be done to assist these people. I place before you, sir, the project in general, which is this: In addition to the question of hospitalization, which is being dealt with in the provinces, they suggest that crutches, splints and so forth be supplied to those who can move around, and wheel chairs to those where treatment has failed, in order to give them an opportunity to earn at least a partial living under our competitive system. They ask that classes be set up with specially trained teachers in trades or handicrafts. We are more proud of the training which the Department of Veterans Affairs has given to amputation cases from the armed fqrces, thus enabling them with dignity to take their part in the battle for life without any suggestion of charity, which so many resent.
I think that without any unnecessary expenditure in connection with setting up new facilities, new structures and the like, the plan followed by the Department of Veterans Affairs is one which might very well be extended to cripples in civilian life. To begin with, in my view some opportunity should be given to civilians to take advantage of the courses which to-day are being given to veterans.

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Finally, we have recognized the principle that persons who are working under severe physical handicaps and are unable to earn a fair living are entitled to pension allowances. Pensions are paid' to the aged, and there is the scheme of family allowances in respect of the young. Consideration should now be given by the department to the extension of pension privileges to those who, by reason of physical disablement are unable to carry on and to acquire financial resources. I would ask the minister to give the committee the benefit of his views in this connection, and an estimate as to the cost of such a project on the basis of statistics available to him, with pensions being paid at a rate similar to that paid to-day in respect of old age pensions.
As I indicated a minute ago, this is the kind of submission concerning which one must be restrained. It requires consideration of a state of affairs in every part of Canada which has led to the existence of conditions we should not permit. The suggestion I make is one which I am sure the people of Canada as a whole would support, in the belief that it is necessary to the well-being of this very considerable portion of our population.


Mr. MacINNIS:: I wish to commend the minister and his department upon the efficient manner in which the family allowances scheme has been put into effect. Members of parliament usually find out whether or not these matters are functioning efficiently and smoothly. I represent a large working class constituency, one in which there are a great many children, and it gives me pleasure to say that I have received only one complaint from that constituency in connection with family allowances.
The committee must realize that the minister is heading a most important department, one which in the years ahead in my opinion will increase in importance and in the work if has to do. We are just beginning to appreciate in Canada the enormous scope of social work which only the federal and the provincial governments can carry out.
Perhaps one of the most satisfactory points the minister brought out was that in regard to the decentralization which has taken place in connection with the administration .of his department. A few weeks ago I had the opportunity of reading the debates which took place in this house and in the other place in 1927 when the Old Age Pensions Act was finally passed. It is amusing to note the expressions of opinion given at that time, particularly in the other place, respecting the extreme dangers involved in passing a measure of the kind-the effect upon the morale of the people of Canada; the taking away .from
the family of the right, duty and obligation to look after such members of the family as were unable to look after themselves. The gentlemen in the other place appeared to be deeply concerned about the dangers implicit in that small excursion into social services. Whether we like it or not, the development of our social and economic system leaves no alternative between that of increasing our social services and leaving large masses of the community unprovided for.
The point made by the hon. member for Lake Centre was well taken. Not only should we provide for persons who have reached the age at which they are eligible for old age pension; we should look after those who, for no reason whatsoever within their control, are unable to earn an income which would permit them to provide their own living. There is no reason why the man or the woman who has reached the age of sixty-nine, sixty-eight or sixty-five, whatever it may be, should have to depend upon charity, if he or she is not able to earn an income, while the person who has reached the age of seventy, as the act now applies, may receive at least a small income which prevents the seeking of charity. Whether we like it or not we shall have to make provision for everyone in the country who is not able, or who for some other reason is prevented, from earning a livelihood. Today this should present no difficulty, because our increased production and our ability to produce wealth in the past few years has so largely increased that we can provide almost an unlimited income.
I am pleased again to commend the minister and his department for the excellent work they have done, particularly in connection with family allowances. I hope we may soon go on to the point at which the department will be in a position to erase from every household in Canada care and worry arising from poverty or inability of the breadwinner to earn an income.


Mr. GLADSTONE:: I should like to support the remarks of the hon. member for Lake Centre with regard to persons in unfortunate circumstances who, because of trouble or disaster of one kind or another, are unable to do any work. Reports have come to me from lady investigators of the provincial governments respecting many cases which do not fall within that group to which relief measures could be applied. They tell me that these cases are really the most serious they run into in their investigations. There are some who have been bedridden for
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years and are a heavy charge upon their families. Some means should be found of giving some //consideration to these people.
I should like to ask the minister if in- connection with his relations with the provincial governments he can undertake some investigation of silicosis. This disease is altogether too prevalent in industries such as moulding shops and rubber factories, and many of the workers end up in a sanatorium. I have no doubt that some investigation has been made, but it should be followed up to see whether some means cannot be worked out of preventing this disease. I commend this as a matter to be investigated by the minister in cooperation with the provincial governments.


Mrs. STRUM:: Mr. Chairman, I want to
compliment the minister upon a number of things; first, upon his social vision. There was a time when I feared that the family allowances scheme would have to wait until our own group took office, but I was delighted to see the administration introduce it. I like the method very much; I like the efficiency and the principle upon which the whole thing is operated. I am glad that there are two alternatives open to these families; they can accept the family allowance and return it through income tax if it raises their income beyond a certain limit, or if their income is below that level they can take it without having to give anything back.
The principle of family allowances is sound. The idea of investing in youth is an excellent one, not only from the moral and idealistic point of view, but also from the point of view of actual investment. If we could extend the same principles and vision to the administration of the Old Age Pensions Act we would accomplish a great deal.
The old age pension group is the most pitiful section of our population. I have received many letters from these people, and I know many of them personally.' I know old men who during the last two or three years have almost brought on physical break-downs in their efforts to earn a few dollars to supplement the most inadequate payments on which they are expected to get through the winter. Having made a few dollars in the harvest field, perhaps stooking or attempting in some other way to help bring in the harvest when it was so essential to the war effort, this is the sort of thing they get in their mail boxes:
Dear Sir or Madam:
As a result of improved crop conditions throughout the province, and the consequent improvement in the income of many pensioners,

we are reminding you of the necessity of reporting all income received by you in excess of fifty dollars.
We would like to point out that it is in your own interest to advise us of the receipt of income at the time it is received, and have the pension adjusted immediately, rather than to have us ascertain at a later date that you had excessive income-
These people with an excessive income of $25 per month!
-which would make it necessary for us to suspend your pension to recover -an overpayment at a time when you could ill afford to have your pension suspended.
I have known of old men who earned a few dollars with which they bought victory bonds only to find their pensions reduced, or withheld in full for a short time. This is a shameful condition. If some of these people have the energy and ambition to try to add to the inadequate sums they receive in order to get themselves a little comfort, perhaps a little coal for the winter; in order to pay the rent themselves or to be self-sustaining and regain a little self-respect, it is shameful that we should penalize them like this.
There are few of us who have not some physical ailment as we get older; people rarely reach old age without having illness. There are certain conditions that require treatment. The only province so far that has undertaken to provide for the needs of old age pensioners is the province from which I come, Saskatchewan. I hold in my hand a copy of a blue card which every pensioner received on January 1, last year. This card allows the old age pensioner who is ill to have a doctor, or it admits him to hospital; it supplies him with drugs or appliances like glasses or anything else that he may need. We thought that this was the proper way to provide aid for our pensioners, although we had already added to their pensions to the extent of $3 per month. The pensioners in Saskatchewan all have the advantages of this card, and in addition they have an extra $3 per month,. bringing their pensions up to $28 per month.
Mr. GREEN; Some of the other provinces pay an additional $5 per month.


Gladys Grace Mae Strum: We felt that this would be better for these people than to add a few dollars to their pension cheques.


Mr. GREEN:: And they provide medical benefits too.


Mr. MacNICOL:: I would advise the hon. member that we have provided medical attention in Ontario for some years.

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Gladys Grace Mae Strum: Does that cover drugs, appliances, surgery and hospitalization?


John Ritchie MacNicol: It covers medical attention.


Gladys Grace Mae Strum: Just medical?


John Ritchie MacNicol: I do not know what that covers.-


Gladys Grace Mae Strum: We provide surgery, drugs, medicine,appliances, and everything the old age pensioner may need without limit. This came into effect on January 1 last year. By the way, we also provide for our widows and dependents. They receive a similar card, except that it is white, which covers the widow and her children.
In addition to providing sufficient income for old age pensioners, I think the time has come when we should do something about the housing of these people. I realize that this subject would more likely come up under housing, but we should recognize that Canada as it stands to-day is the result of the energy, ambition and initiative of these people; that what we have to-day we owe to the men and women who are now in that particular period of their lives. It is only just and natural that we should recognize the great gift that they have given to us. If we intend to put purchasing power in the hands of as many people as possible we cannot afford to keep this section of our population on such a low spending level.
There are other persons who are not covered as yet. I was delighted when the minister submitted the proposal which is now under the consideration of the dominion-provincial con, ference. This is a tribute to the vision of the minister in charge of this department. I am glad that he has departmentalized the assistance that he is asking the provinces to cooperate in providing. The planning and organization grant is an excellent thing. I am glad that he has included general public health, tuberculosis, mental health, venereal diseases, crippled children and all others. In our province we shall immediately be able to take advantage of that tuberculosis grant, and the mental health grant, because we have already made mental health treatment free to our people; and the venereal disease grant, which we have made free, and penicillin, which we supply free to our doctors. But I wish the minister would include cancer, because cancer ranks as a killer away up at the top, second only to heart trouble. We have made the care of cancer completely free to our people, including hospitalization, surgery and all other things such as deep ray and radium that are used in its treatment. I hope that the minister will
include cancer in a separate category along with these other valuable things that he has set out.
But in addition to the people who are covered here, there is one group that we have not yet made provision for, and that is the blind who fall between the ages of sixteen and forty. I understand that the blind pension starts at forty, and the family allowance is cut off at sixteen; so there is a period in the life of a blind person between sixteen and forty years of age when he or she must depend on the care of relatives or go on municipal or provincial relief. Many of them perhaps could be assisted in learning a trade to support themselves. I do not think we should leave it to chance; we should start the pension for the blind where the family allowance leaves off;
Then there are the arthritics. Mention has been made of crippling diseases, but the rapidly increasing rate at which arthritis is spreading demands I think that we give it special attention. It is something that we do not know a lot about. There are a great many theories and a great many suggested treatments, but the painful and extended nature of this disease demands I think special attention. In moving about the country I have been alarmed to notice the number of people you meet who have been in wheel chairs for years and who have suffered incredible pain and are a terrific burden to their family.
I do not think that there is much more that I need to say except this. I wish the minister could see fit to extend to the old age pensioners the same conditions and the same type of administration that is now set up for the family allowance. I wish we could abolish the means test now; I wish we could increase the pension now. We are proud that the level of our family allowance compares so favourably with that paid in other countries. We who have such a rich country, such a big country, such tremendous potentials for production, should be satisfied only when our country leads, not when we approach or favourably compare with other countries. We who have so much should be satisfied only when there is abundance in every home and security for every Canadian regardless of age or condition.


Mr. BRUCE:: Mr. Chairman, I listened with interest to the statement made by the minister of the new Department of National Health and Welfare. Although it did not contain many details which some of us would like to have, I presume he will give these in breaking down the various items for which supply will be voted later on. I understood him to say
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that sixty per cent of the cost of health insurance would be borne by the federal government, and if so I consider it a very fair proportion.
I did not hear what amount of money would be available for the construction of new hospitals generally throughout the country, and would ask the minister to tell us the amount which will be appropriated for that purpose. Owing to high taxation, excess profits taxes, corporation taxes and succession duties, the money which formerly was available from private sources for hospital construction has to a large extent dried up, and therefore it is up to the federal government to make a considerable contribution for this purpose. The federal government has taken this money from the people so that they are no longer able to make the contributions they formerly did during their lifetime, and they have ceased to make provision in their wills for the construction of hospitals. They think, and quite rightly, that succession duties will take a much larger amount out of their estate and there may be nothing left with which they might otherwise have contributed to such benevolent purposes as the building of hospitals. So I think there is every reason to expect the government to make a very considerable contribution to hospital construction and maintenance. It might very well be done on a percentage basis, with the government paying one-fifth, say, or one-tenth or some other proportion of the amount raised by public subscription or contributed by municipal and provincial governments. I would ask the minister to take this suggestion into consideration and to give us a decision later.
The minister also spoke of national laboratories. I am glad to know that something is being done in that regard in a very large way when I hope proper provision will be made not only for equipment but for the salaries of research workers. I suggest that a very large sum of money be set aside for research. It is a well known fact that research in medicine in Canada has been starved, and that we spend only a very small proportion per capita of the amount that is spent by other [DOT] countries on research. It is hoped that Canada will take its place among the nations in providing sufficient money to promote research in a much larger way than hitherto. We have had evidence in this house in past sessions of the need for research when one of our members urged that a certain remedy which was found efficacious in a city in the west should be assisted by a federal government money grant. Ultimately I believe some steps were taken in that direction; but if we had had our laboratory here properly equipped

and staffed, it would have been very easy to have this claim of a cure for cancer investigated and the results made known. It is the duty of this government to provide a considerable sum of money for research in cancer, as well as in many other diseases for which cures have not as yet been discovered.
I was glad to hear the minister speak of venereal disease control, and wish to commend the department on the splendid worjf done by Colonel Williams under the former minister. He instituted control throughout Canada, and stimulated the various provinces into similar activity, so we may hope for considerable improvement in the control of this devastating disease.
I should like to speak of another class of cases for whom assistance should be provided in a very large way, that is, the cases to which the hon. member for Lake Centre referred a moment ago, which would include incurable cases of cancer, paralysis and many other diseases. The accommodation for these people is inadequate throughout Canada. In the city of Toronto we have a home which was formerly called the Hospital for Incurables, but the name of which has been changed to the Queen Elizabeth hospital, which was built almost entirely by donations from private individuals. Recently it has extended its accommodation, but still there is a long waiting list of people who never can be accommodated there. I believe the provincial government is doing something in different parts of the province in regard to the hospitalization of chronic cases, and I suggest to the minister that the federal government make a very considerable grant toward the erection of hospitals throughout the country for these incurable cases.
I do not intend to go into all the other matters mentioned by the minister, because I presume we will have an opportunity of discussing them as we go through the estimates item by item. I should like to say just a word on something the minister mentioned, namely, that health insurance has been referred to the provinces. For two sessions I sat as a member of the social security committee considering the question of health insurance. If I may say so, we did a great deal of hard work and received a great deal of information from interested bodies throughout Canada. Our committee received some 116 presentations, and after very careful consideration a draft bill was drawn up called an act respecting health insurance, public health, the conservation of health and the prevention of disease. Of course this legislation could not be put through parliament at that time because it contained a money provision requiring contributions from the provinces; and until the dominion-provin-
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cial conference was held and a decision reached as to the amount to be contributed by the federal and provincial governments respectively one can understand that this measure could not be finally dealt with. However, from what the minister said I take it that this bill now is to be superseded by some other arrangement. I should like the minister to clarify this subject, because I had hoped that thisi bill might still be incorporated in any arrangement made with the. provinces. We drafted a model bill which the provinces might use for the purpose of enabling us to have some uniformity in health legislation throughout Canada. If that is not done we will have nine different kinds of health insurance in this country, and I should be very sorry to see that happen because I think it would materially affect the efficiency of any health act. We devised an act which is comprehensive, providing medical, surgical, obstetrical, dental, pharmaceutical, hospita'1 and nursing benefits, and which I believe is an improvement over any health act in operation in any country. Certainly it is an improvement on the act in operation in Great Britain, because thfey provide only general practitioner services whereas in the act proposed here we provide specialist services, and many other benefits not included in the British Act.
Let me repeat that In my opinion it is highly desirable that there should be one national health-insurance act for Canada which should operate in all provinces. Special provisions may be made to meet local conditions in any province; and it should be possible to do this under the terms of this national act. If the provinces desire to make any changes in the act of course that is their prerogative, but I would dislike to see nine different health acts in Canada. I believe it would make for confusion, inefficiency and additional expense. I understand that already certain proposals made to the provinces in regard to' this matter have not met with the approval of all. For instance, a diagnostic service is proposed by Manitoba and preferred by them to the visiting nursing survice. Alberta does not like the nursing service either, and I understand that British Columbia has made counter proposals. So it would appear that there is not likely to be unanimity as far as health insurance legislation is concerned if the provinces individually are allowed to provide whatever health services they wash, and receive grants from the federal government.
I should like to say further, because there is some little conflict of opinion in regard to it, that health insurance is most applicable to low wage earners and persons in the middle 47699-179
income group, and should not be all-inclusive of the higher income groups. If it applied to everyone in the state it would be an invitation to state medicine, which I believe to be entirely undesirable and unacceptable in Canada. You may ask what is meant by state medicine? It has been clearly defined as a medical system by which doctors are hired, paid and controlled by the state-, there being no free choice of doctor by patient. And the doctor-patient relationship is fundamentally important in the treatment of disease. Health insurance, on the other hand, is a plan which permits the establishment of a fund contributed by the employee and the state, on some agreed basis, out of which fund the doctor of the patient's choice is paid for services rendered. It will be seen therefore that there is a vast difference between state medicine and health insurance.
I may say that the medical profession in Canada do not approve of state medicine and would not operate under it; whereas I believe we have every indication from the Canadian Medical Association and other bodies that they are willing to operate under a system of health insurance. I should like to leave further discussion of this question until the various items are before us. I come now to another matter.
Owing to the acute controversy which has arisen as a result of certain opinions expressed in public addresses in the United States and Canada by the deputy minister of health and welfare; I feel in duty bound, as a medical man, to make some observations. On a previous occasion I did not hesitate to defend Doctor Chisholm in this house when he was under attack, but regeret that I cannot conscientiously do so to-day in spite of the support he has received from seven or eight eminent psychologists in messages conveyed to the Prime Minister; for even psychologists may make mistakes.
1 Doctor Chisholm is a psychiatrist and a thoroughly trained psychiatrist at that. After graduation from the faculty of medicine in the university of Toronto he engaged in general practice for a few years. He then spent several years specializing in neurology and completed his training in psychiatry, at the institute of human relations at Yale university. His psychiatric skill has thus been built on an unusual basis of general medicine and special studies in neurology. When he speaks in this particular field his opinion should be heard with the respect due to his studies. It is also possible that the deputy minister has been unduly irritated by certain criticisms directed at the medical services of the armed forces by members of the clergy, both Pro-

Supply-Health and Welfare

testant and Roman Catholic, especially their concern over the methods of prophylaxis employed against the spread of venereal disease.
In that matter there are both medical and moral aspects. The clergy and many others have properly stressed the mdral aspects. Doctor Chisholm may have been almost exclusively concerned with the medical aspects. Even though the Christian position in regard to marriage and self-control is the normative ideal, we have been living in .an abnormal world, and Doctor Chisholm had to deal with that situation. Nevertheless, in my opinion, this does not justify the addresses which he made and which have shocked the Christian conscience of the country, since they seem to suggest that there are no standards of right and wrong at all, that there is no such thing as the "natural law," and that there is no -creative force in the universe that wills good and abhors evil.
He seems to propose the eradication of prohibitions of all definite moral standards. To him at least, so it would seem, all the moral judgments of society are purely relative and based on no eternal and immutable principles such as the natural law presupposes. While not denying Doctor Chisholm the right to hold any views he wishes as a private citizen, views expressed in public addresses gain in importance and influence by virtue of the high government position which he holds. As I said a moment ago, the expressed opinions of the deputy minister have shocked the public conscience of the Canadian people. For while morals go far beyond the civil law, civil law itself has its sanction only as it aims to prevent evil and to promote the good life.
If we regard morals and the laws of God as only the folly of ecclesiastics, may we not be cutting away the ultimate authority of all legislative bodies that pass criminal legislation? Such theories, in my judgment, attack the fundamental basis of law itself. They attack the very basis on which this house legislates in regard to a vast number of subjects. But they do more, for we are a British people and the British seek to be a Christian people. Since Christianity was brought to the shores of Britain and accepted by her kings and rulers we have never enthroned merely the goddess of reason in Westminster Abbey or St. Paul's cathedral. Though there may remain many un-Christian elements in our society, from the beginnings of our recorded history we have held high both the law of God and the law of man. We British are extremely tolerant, and while we are more concerned with how private people'

behave than with what they think, we are fundamentally a Christian people. Our king at his coronation in 1937 took the oath, as did his predecessors, to preserve the sanctities and liberties of the_ church, and sought the blessing of Almighty God on his reign.
In one of the songs extolling Canada, sung by a great many Canadians and heard nightly over some of our broadcasting systems, we express our loyalty to both throne and altar, although certain Canadians do not seem particularly to care for the reference to the throne while other Canadians are annoyed at the references to the altar. A minister of the crown or even his deputy will not, however, cast aspersions on either throne or altar with impunity.
These are my public judgments, but privately, and even as a member of the medical profession, I take the same position. As a believer in God,I believe in the moral law and accept the Christian revelation. It is increasingly clear to all social students to-day that the whole of civilization stands on the brink of an abyss. Scientists do not hesitate to express their fears that our world may even be wiped out. Scientists who in the past have seemed most neutral are becoming the champions of the moral law. On every hand voices are heard demanding a return to spiritual values, even though the traditional values may need to have some of their dross and barnacles removed. But in my judgment this is no time in the history of the world to do or to say anything that challenges the moral foundations of life.


Mr. ROSS (Souris):: We should all be for Santa Claus in this department.


Mr. CROLL:: Mr. Chairman, I too have
sat here and listened to the commendation of the minister by various members of the house,, and I can assure you that it is gratifying indeed to feel that there are other members who think as I do, that the minister has not only vision but imagination. The administrative job that was done on the family allowances is not only appreciated by the committee, but is a model for the rest of the country. What I particularly like about it is the fact that we are able to point out this particular job to business which always claims the government is inefficient and cannot be run on the same level of efficiency and with the same ability as business. I am sure the minister will share the credit for it with the members of his department.
While we 'are talking about the deputy minister of health, Brock Chisholm, may I say that I too read his speeches. I thought they were good, I thought they were imagina-

Supply-Health and Welfare
tive, and they were thought-provoking. There is one other thing about them; they must have kept the audiences awake. I think it is invigorating to know that in our departments there are men of vision, men who are not afraid to face up to the truth, who are not fearful of new frontiers or afraid to reach for new horizons. We do not all have to agree with what he said, but he does stimulate and alert, our thinking, and that is to the good. In spite of all the hubbub I hope that the minister stands steady. I compliment him at this particular time for maintaining the position which he has maintained to-day. This much I do want to say: if resolution No. 9 on the order paper, which deals with our indemnities, passes the senate, even Brock Chisholm will not convince me that there is not a Santa Claus.
My original reason for rising was to talk about the Connaught laboratories in the city of Toronto. I wish to pay a tribute to three institutions which have had to do with what I have to say, namely, the university of Toronto, the Canadian Red Cross, and the National Research Council. In addition to that I wish to pay tribute to Professor C. H. Best, of the university of Toronto. The best way I can pay tribute to him and the institution is by relating the facts. In September, 1939, at the Connaught laboratories in the university of Toronto, a project for the preparation of dried blood serum, used to treat conditions of secondary shock or bums, was commenced. Most hon. members know that from ten to fifteen per cent of the wounded require some form of transfusion. It may be interesting to note that from June 6 to September the British army used 28,709 pints of dried plasma.
To begin with, the problems were many. First, preliminary studies were made as to the chemical and clinical aspects of plasma. Then it had to be dried so as to make sure that there was no change in the physical or chemical properties of the material. Then there was the further problem of storing the material without its losing its value. As the value of the work was appreciated, naturally the work increased. There was the need of accommodation and funds. Then the federal government took a hand and entered into an agreement with the Connaught laboratories and the Canadian Red Cross on January 1, 1941, whereby the federal government paid for the operation and maintenance costs, the laboratories paid for the management, administration and necessary overhead, and the Red Cross provided the supplies of normal human blood.
47696-179J
It is interesting to note that when Professor Best first started he obtained what blood he could from his own staff, the staff of the school of hygiene and the students of the university of Toronto. His staff consisted of three people, and his accommodation was one laboratory bench, one table, ^nd one bed. As the work increased, the Toronto blood donor clinic was opened by the Red Cross; and as hon. members know some 662 clinics were later opened across this country. I think it. is well to record here the names of the men and women who originally helped Professor Best, because they are names to remember. They were: Doctor D. Y. Solandt, Doctor Jessie Ridout, Doctor R. R. Haist, Doctor L. Chute, Doctor E. Fidler and Mr. Campbell Cowan. They did the preliminary and pioneer work, and the process used in preparation of dried serum even now is a direct result, modified in the light of experience, of their work.
Thus, directly or indirectly, serum prepared, at the university of Toronto from blood collected from volunteer donors has been used by our troops of the three services fromi Alaska to the Mediterranean. There never was a shortage. They worked seven days a week and twenty-four hours a day; but it was the Red Cross which really drew the blood. In 1944 they had 868,000 donations in 662 clinics. The staff was almost entirely voluntary; it consisted of physicians, nurses, housewives, and people right across Canada. In addition to that, the Red Cross established laboratories in Halifax, Fredericton, Winnipeg, Saskatoon, Edmonton and Vancouver for the preliminary preparation of serum in cooperation with the universities in those places. Then the laboratories forwarded the partly processed serum to Toronto for the completion of the process of drying.
The university of Toronto shipped over 400,000 bottles of dried blood to the Canadian and allied, forces; the Red Cross collected altogether over two and a half million donations, and the Canadian government spent one and a half million dollars. Now I get down to the real crux of the situation. The Connaught laboratories spent $90,000 for direction and overhead, and $54,000 for alteration, of the building, a total of $144,000. At the present time the Canadian government has ire the Connaught laboratories $100,000 ini equipment and $42,000 in unexpended supplies, a total of $142,000. The committee has the two figures. The Connaught laboratories spent $144,000, and the Canadian government has equipment and supplies there to the amount of $142,000. I am not pressing the Confiaught laboratories' claim for that extra $2,000, but
Trans-Canada Air Lines

I am asking the minister and through him the government that the equipment and the . unexpended supplies be left with the Connaught laboratories so that they may be able to carry on the work there. From the indications that the committee have given I do not think there is any need for me to speak any further on the subject at this time.
Progress reported.
At one o'clock the house took recess.
The house resumed at three o'clock. TRANS-CANADA AIR LINES


INCREASE OF CAPITAL-CREATION OF CORPORATION TO OPERATE SERVICES UNDER CONTRACT-CONSIDERATION OF SENATE AMENDMENTS
[Stage Direction]
Hon. C. D. HOWE (Minister of Reconstruction) moved the second reading of and concurrence in amendments made by the senate to bill No. 21, to amend the Trans-Canada Air Lines Act, 1937.
John George Diefenbaker: Mr. Speaker, I think no one could take objection to these amendments. They give an opportunity at this time, however, to direct to the attention of the minister the very great reduction in ocean transport rates instituted during the past two weeks by Pan-American Airways. In my opinion Pan-American has struck a body blow at competition from other airways across the Atlantic by setting as a basic rate $275 one way, or a return fare of $495, an amount which is only slightly higher, if indeed at all higher, than steamship rates.
I should like to ascertain from the minister if he is in a position to advise the house and the country of the attitude Trans-Canada Air Lines overseas uhits will take in reference to this matter, and whether or not it will be possible to meet this competition, which has .been so seriously considered by the director-rgeneral of British civil aviation in Great Britain, as well as by those connected with civil aviation in other countries.
All hon. members wish to see Trans-Canada Air Lines give the best possible overseas service, governed always of course by the economy of operation costs and passenger charges. This action on the part of PanAmerican seems to go contrary to the principles agreed upon at the international conference which met at Chicago. It is a step in the direction of cut-throat competition if permitted to persist can lead only to great and serious international difficulties.
[Mr. Croll.3
Will the minister give an outline of the situation, with which he more than anyone else is conversant?


Clarence Decatur Howe: Mr. Speaker, the provisions of the agreement arrived at in Chicago are that rates would be fixed by an international air transport association formed under Picao, the provisional organization, such rates fixed by the air transport council to be subject to review by Picao.
The machinery was proceeding in accordance with that agreement. The meeting of the inter-nationl air transport association was being held in Montreal. The committee studying the Atlantic rates happened to be under the chairmanship of the vice-president of PanAmerican Air Lines; nevertheless in the middle of the session, Pan-American Air Lines published from New York a rate of $275, oneway fare across the Atlantic. Of course this caused serious repercussions at the meeting then in progress. The United States government postponed the application of the rate for one month, but it was put into effect a week or two ago. The government of the United Kingdom have refused to give landing rights to Pan-American unless they will comply with the rate that will be approved by Picao- except for the provisions of an old agreement made in 1935 which permits two landings each week. Those two landings can be made under that, agreement at any rate Pan-American cares to charge. But the United Kingdom have declined to authorize additional landings.


John George Diefenbaker: The agreement was in 1937.


Clarence Decatur Howe: It was 1937, was it? The question of rates is now being studied1 by constituted authorities. Whether a rate of $275 one way is too low is a question that can be debated. The manner in which it was put into effect, and the manner in which constituted- authority was disregarded are, I think, the more serious points.
Trans-Canada Air Lines is charging rates that were established qt the time our service was started, and will continue to do so until a new rate is authorized by the international air transport organization. Meantime our passengers are rather dissatisfied, knowing that they could travel much more cheaply by Pan-American.


John George Diefenbaker: What is our rate?


Clarence Decatur Howe: There is some exchange problem involved, and I am not just sure as to the amount. I think it is about S560 one way. I .believe this matter is bound to resolve itself shortly, but that. is the position at the present time.

National Emergency


John Ritchie MacNicol: Mr. Speaker, after listening to the hon. member for Lake Centre (Mr. Diefenbaker) I have been wondering if in the very near future we shall not be told that the rates from. Seattle and San Francisco to Skagway and Fairbanks have been materially reduced. If so, this undoubtedly would have a material affect upon the proposal discussed by the minister when the bill wa? before the house in connection with having Trans-Canada Air Lines carry on from Whitehorse to Fairbanks. Is there any rumour of a possible reduction on the Pacific coast similar to that on the Atlantic coast?


Clarence Decatur Howe: There has been a general reduction in passenger rates in .the United States. At the present time travellers can travel more cheaply from New York to San Francisco and from New \ork to Seattle over American lines than they can travel from New York to Vancouver over Canadian lines. The difference is not great, but there is a differential which must in time be resolved. At the present time we feel there is over-enthusiasm for establishing the new rates, and the policy of Canadian lines is to proceed slowly until the matter clarifies.
Motion agreed to; amendments read the second time and concurred in.



NATIONAL HOUSING ACT


Hon. J. L. ILSLEY (Minister of Finance):: moved the second reading of and concurrence in amendments made by the Senate to bill No. 23, to incorporate the Central Mortgage and Housing Corporation.
He said: Mr. Speaker, the amendments are as follows:
First, a new subsection 2 has been added to section 32 of the bill dealing with the appointment of auditors. The new subsection is based on subsection 1 of section 55 of the Bank Act and sets out the professional qualifications of persons who may be appointed auditors. This amendment is desirable and really covers an oversight in the original draft. The new subsection reads as follows:
(2)	No person shall be eligible to be an auditor unless he resides in Canada, is an accountant who has for at least six years preceding the date of his appointment practised his profession in Canada, and is a member in good standing of an institute or association of accountants incorporated under the authority of the legislature of any province of Canada.
The second amendment is that a new subsection 3 has been added to section 34 requiring the board to prepare a report "with regard to the administration of the affairs of the-corporation", and this report has to be submitted to parliament. The new subsection reads as follows:
(3)	As soon as practicable after the end of each calendar year, the board shall prepare a report with regard to the administration of the affairs of the corporation during the preceding calendar year, and the report shall be laid before parliament iat the same time as the copy of the accounts and report mentioned in the -preceding subsection.
The general principle of ,the amendment isrr I think, free from objection.
The third amendment suggested is an amendment to section 43 of the bill, to provide-that section 42, the section dealing with the repeal of the Central Mortgage Bank Act and the transfer of its assets to the new corporation, will go into effect only when part II of the act is proclaimed. That amendment also is free from objection; indeed it is desirable.
Motion agreed to; amendments read the second time and concurred in.



NATIONAL EMERGENCY , BILL. TO CONFER CERTAIN POWERS UPON THE GOVERNOR IN COUNCIL

[Stage Direction]
On the order:
Resuming the adjourned debate on the motion of the Minister of Justice for the second reading of Bill No. 15, an act to confer certain powers upon the governor in council during the national emergency following the war.
Mr. STIRLING:: Is the Prime Minister going to explain what the government desires to do?


William Lyon Mackenzie King: I understood that it was the desire of my hon. friend not to go on this afternoon with bill No. 15.


Grote Stirling: That is so.


William Lyon Mackenzie King: I was expecting him to ask that the order be allowed to stand; that is what I was waiting for.


Grote Stirling: I should like to ask for the postponement of the debate on the second reading, because I happen to know that there are three of my colleagues who intended to speak. In conversations which I have had I understand that the government is going to propose some considerable amendments to bill No. 15. It seems to me that it would be desirable to have the reprinted bill in the
*2844
National Emergency

hands of hon. members, before proceeding with the debate on the second reading. In addition, the leader of the opposition is fulfilling an engagement outside of Ottawa to-day; he will be back to-morrow, and I think this is a matter on which it would be reasonable to *consult him as to his views.


William Lyon Mackenzie King: My hon.
friend's request is wholly reasonable; I was expecting it, and was prepared to say that the government would- accede to it. My hon. friend has referred to certain important amend- ments which have been considered and which the minister will be prepared to- propose when the bill comes before the house in committee. During the sittings of the coordination committee of the dominion-provincial conference .[DOT]some of the provisions of the bill were under -discussion. There were certain objections by -some of the premiers to powers that were being *requested under the -bill. The government -undertook to consider the objections that were raised. That has been done, and important amendments have been drafted which we believe and expect will help to meet the objections that have been raised, and incidentally help to meet objections that otherwise might have been raised by hon. gentlemen opposite.
I have in my hand a copy of the bill as reprinted, indicating the proposed amendments. It is the intention of the government to have this distributed at once so that hon. members will have it in their hands to-day. It is not my desire to limit the debate in any way, but there has been an expression from the leaders opposite that this is one measure that it was desirable to get on with as rapidly as possible. After hon. members have had an opportunity of looking at the proposed- amendments they may feel that it would be desirable for the house to get into committee as soon thereafter as possible, if there is no exception, and- I understand there is not likely to -be, taken to the principle of the bill, which is to give the governor in council certain powers required to meet the emergent situation in the transitional period following the iwar. I make that Suggestion in the light of >
the desire of hon. members to proceed as rapidly as possible with this measure.
Order stands.



EXPORT CREDITS INSURANCE ACT


[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved that the house go into committee to consider the following resolution:
That it is expedient to present a measure to
Provide by amendment to the Export Credits nsurance Act that the aggregate -amount of 
loans made and outstanding at any -time and the value of securities purchased or acquired and held at any one time under section twenty-two of the said Act shall be increased from $100,000,000 to $750,000,000.
He said: Mr. Speaker, before you leave the Chair perhaps an explanation would be desirable and- then if any questions arise out of the explanation they can be dealt with in committee.
The house will recall that the Export Credits Insurance Act was passed at the session of 1944. There were two parts to that act. Part I established a corporation to engage in the insurance of commercial export credits. This corporation is responsible to the Minister of Trade and Commerce. Part II permitted- the governor in council to authorize the Minister of Finance to enter into agreements with foreign governments or their agencies to provide them with credits, or to guarantee credits provided to them by others in Canada "for the purpose- of facilitating and developing trade between Canada and- any other country.'r
The purpose of the proposed legislation is to increase the amount which the government may lend to other governments or their agencies under part II of the Export Credits Insurance Act from $100,000,000 to $750,000,000. No alteration is proposed in the amount ,of the guarantees which the government may give, that is, $200,000,000, or in the amount of business which the insurance corporation is authorized to do.
The government has decided not to introduce amendments to part I of the act at this session, because to do so would unduly crowd the legislative programme. Amendments to part I will be proposed at the next session. Perhaps there will be other amendments to part II, but the main- amendments to be proposed at the next session I expect will be to part I. These will include the amendments which were made by order in council last summer prior to the assembling of parliament, when it was necessary to make certain detailed amendments in order to permit the business of export insurance to begin on the most effective basis. The order in council relating to this matter was tabled some months ago. Possibly there will be an opportunity when discussing these amendments for questions in this regard to be answered, but that is a matter for my colleague, the Minister of Trade and, -Commerce (Mr. MacKinnon).
The purpose of the proposed amendment is to give the government sufficient authority to make loans to allied governments in the next year or two to enable them to purchase supplies from Canada required by them during the period of reconstruction to repair the

Export Credits Insurance
damage caused to their countries during the war and reestablish their export trade and normal financial machinery. It is not the purpose of this amendment to provide funds for making loans to the United Kingdom or the sterling area generally. Discussions are proceeding at the present time in Washington regarding credits or a credit from the United States to the United Kingdom, and we expect that Canada will a little later be providing a large credit for the United Kingdom. We hope and expect that as a result of this credit to the United Kingdpm she will not need to follow a programme of such rigid austerity as she is following at this moment and will be able to continue to take from Canada in the next year or two most of the products which our economy has been organized to supply to her in the past.
Grote Stirling: That will be quite apart from this resolution?


James Lorimer Ilsley: Yes. We have not as yet discussed the matter with the United Kingdom and do not expect to do so until they have concluded discussions with the United States. We expect to come back to parliament next session for additional legislative authority to make large credits available to the United Kingdom in one form or another. I therefore do not propose to enter at this time into a discussion of the term's and conditions of credits to the United Kingdom or on the general United Kingdom and sterling area financial and trade situation.
The funds which are to be provided under the legislation which will follow this resolution are to enable us to make loans to allied countries other than the United Kingdom. More specifically, and in accordance with the details which I shall supply, we would propose to use the bulk of this money for loans to our allies in western Europe, the Union of Soviet Socialist Republics, China and the Netherlands East Indies. The government has already told the government of France that if parliament grants the necessary authority we will lend France Canadian dollars to a total of $242,500,000 to make purchases in Canada this year and next year. We have also given similar undertakings to lend the Netherlands' $60,000,000 in addition to the $25,000,000 we have already lent that government; to lend Norway $17,000,000 in addition to the $13,000,000 we have already made available to the Norwegian government; and to lend the Bank for the Netherlands Indies, as agent for the government of the Netherlands Indies, a further $50,000,000 in addition to the $15,000,000 already made available.
In the case of Belgium we have agreed to increase the $25,000,000 we have made available to her government by an amount still to be determined after further consideration of her requirements in Canada and the means of financing them. The amount and terms of a loan to the government of China are at present under discussion with representatives of that government, but we have indicated our willingness to lend an amount to China to enable her to finance part of her post-war requirements in Canada. We are also negotiating with the U.S.S.R., which is interested in obtaining loans from Canada to purchase some supplies originally requested as Mutual Aid, the production of which has been under way, as well as credits to buy ether exports for which will be' placed with the U.S.S.R. after agreements upon the credits. As yet no amount for a credit to U.S.S.R., apart from the small one of $3,000,000 already reported to the house, has been decided upon pending further discussion about terms, but I feel that in forecasting our requirements we should make liberal provision for the needs in Canada of the U.S.S.R.
In addition we have had inquiries from several other allied countries, and it may be that some countries in the sterling area, India, for example, may wish to get credits from us quite apart from any large credit provided to the United Kingdom. We have not yet reached the stage of negotiating with any other countries than those I have mentioned, but we feel that we should have a modest margin to meet new situations.
The basis, then, of the figure of $650,000,000 in addition to the present $100,000,000, is to provide the specific amounts which I have just mentioned-to France, the Netherlands, the Netherlands Indies and Norway-to enable us to conclude negotiations and provide reasonable amounts to Belgium, China and the U.S.S.R., and to leave us some margin for other requirements which may develop in the future.
The house may wish to know something about the major policies being followed in determining these loans. In the first place we are recognizing Canada's interest in the economic reconstruction of the allied countries. Canada has an immediate interest in reviving and developing our export trade during the reconstruction period, and the orders that have been placed by these countries have already been of great value. The credits have enabled our European allies particularly to place large orders with us not only for food and materials but for manufactures, railway equipment, ships and so on.
/
Export Credits Insurance


John Ritchie MacNicol: Including the two?


James Lorimer Ilsley: Yes, including the two. These amounts are to be repaid in ten semi-annual instalments commencing five and a half years from the date of the agreement and ending ten years from the date of the agreement, that is, from 1950 to 1955. It is stipulated that the borrower may at any time repay at par, plus accrued interest. The interest rate is two and a quarter per cent. The amount of credit already utilized is $24,967,000, but we are extending interim credit to the Netherlands . under power which we have under the War Appropriation Act, section 3, which enables the government of Canada to buy as agent of the Netherlands government, and in recent weeks, following the utilization of practically all the $25,000,000, the Canadian government has been incurring costs of these purchases temporarily under section 3, to be reimbursed later by the Netherlands -when additional long-term credit is available.
Another agreement was made with Norway. The date of the agreement is June 25, 1945. The amount of credit is $13,000,000, to be increased subsequently to $30,000,000. It is to be utilized within two years.


Mr. FULTON:: Is that increase out of the $650,000,000?


James Lorimer Ilsley: The additional $17,000,000 must come out of the $650,000,000, and any agreement to make it available is conditional upon its being approved by parliament. It is to be utilized within two years, that is, by June 25, 1947. It is to be repaid in nine equal annual payments commencing six years from
47696-180 .

Export Credits Insurance

the date of the agreement, and ending fourteen years from the date of the agreement, that is, in the period from 1951 to 1959. The interest rate is two and three quarters per cent. The amount already utilized is $2,500,000.
Another agreement was made with the Netherlands Indies. This is an ^agreement to provide credit to the Bank for the Netherlands Indies, an agency of the government of the Netherlands Indies, whose obligations under the agreement are guaranteed by that government. The date of the agreement is October 9, 1945. The agreement was really entered into, although not in legal form, long before that date. The amount of credit is $15,000,000, to be increased subsequently to $65,000,000. The length 'of credit'and the interest rate are the same as for the Netherlands. The amount already utilized is $600,000.
Another agreement is with Belgium. The date of the agreement is October 25, 1945. The amount of credit is $25,000,000, to be increased subsequently to an amount yet to be determined. It is to be utilized up to June 30, 1947. It is to be repaid in thirty equal annual instalments commencing June 30, 1947 and ending June 30, 1976. As in other cases, the borrower may repay before maturity. The interest rate is three per cent. The amount already utilized is $13,000,000. Belgium has already expended many millions in Canada which were rechived in exchange for Belgian francs for the use of Canadian soldiers in Belgium. Many millions more, the exact amount not yet determined, will be - paid by Canada to Belgium for goods and services supplied to the Canadian army. Belgium's requirements of additional credit cannot be established until after the amount of this payment has been determined.
There has also been negotiated an agreement -or agreements-with the U.S.S.R. On the request of the government of the U.S.S.R., and under paragraph (a) of subsection 1 of section 22 of the act, the Minister of Finance entered into guarantee agreements with five manufacturers and one business acting as consulting engineers, to guarantee the obligations of V. O. machinqimport, an agency of the government of the UihS.R., under contracts to purchase hydro-electric equipment from these Manufacturers and also to purchase engineering services in connection with the design and inspection of such equipment. The maximum amount of such guarantees totals $3,466,000. Most of the equipment has now been purchased and payments under the contracts made. The form of guarantee agreement was given in the report of operations for the year 1944-1945, already tabled.
[Mr Ilsley.]
On August 22, 1945, the Minister of Finance agreed to lend to the government of the U.S.S.R. amounts up ,jto a total not exceeding $3,000,000 to enable it to pay the costs of hydro-electric equipment ordered from Canadian manufacturers and in connection with which guarantees, which I have mentioned, were given. This loan is to bear interest at two per cent and to be repaid at the end of five years, that is, on August 31, 1950. Up to date, $2,349,500 of this credit has been utilized.
The representatives of the U.S.S.R. have discussed with us on several occasions possible terms of large credits which the U.S.SR. would like to obtain from Canada. We have offered to provide such credits on terms similar to those we have offered to other countries. The government of the U.S.S.R. has not been prepared to agree to such terms, however, except in the case of the small five-year credit of $3,000,000 for the purchase of hydro-electric equipment:	Discussions on the matter are
continuing from time to time and we hope and expect that in due course an agreement will be concluded, so that the opportunities afforded by this act will be fully utilized by the UR.S.R. to obtain Canadian supplies and equipment for use in the huge task of reconstruction in that country.
With regard to France, no formal agreement has yet been made, since France preferred to wait until we could deal with the large amount of credit requested. We have, however, agreed on the amount and the terms. The amount is to be $242,500,000, this figure being based [DOT]on a detailed programme of purchases and part payment for it in cash. The amount is to be paid in thirty equal annual instalments commencing ip 1947 and ending in 1976. The interest rate is three per cent and, as in the case of the Netherlands, interim credits are being provided undeV section 3 of the War Appropriation Act, pending the completion of the export credit agreement.
With regard to China, we have had a number of discussions with representatives of the Chinese government, including a discussion with Doctor T. V. Soong, premier of China, but as yet we have reached no definite agreement on either the amount or the terms. The Chinese government have said that they wish to borrow from us to purchase equipment and supplies for reconstruction purposes, and we have indicated our willingness to make them loans. We have also expressed our interest in using the guarantee provisions of our act to facilitate credits provided by private Canadian businesses of one kind or another for specific industrial or transportation projects in China. We have discussed one particular project for the supply of ships for river trans-

Export Credits Insurance
port and indicated our willingness to use our guarantee powers in this case if satisfactory arrangements can be worked out for this purpose.
In conclusion I should like to say that in making these large loans to allied nations, and using them >
to send Canadian supplies to those nations, the people of. Canada, through the government, are taking a share in the process of reconstructipn, as they have in war. We are doing something positive and constructive to rebuild allied countries, and in this way we are making it possible for our export trade to get reestablished and indeed to develop beyond pre-war levels and in new directions. But we must do much more if that trade is to continue to flourish. Our exporters must produce efficiently and sell at competitive prices. That is essential if we are to get the business in the sort of trading world which we in this country advocate and support. Finally we must expect to import more, much more than before the war, and more as time goes on. Only in this way can our export trade be maintained on a long term basis and our standard of living be raised.


John Ritchie MacNicol: May I ask the minister a question before he sits down? I did not hear him mention Malta among the countries to which credit is given. Malta, heroic in the defence of her island, was pretty well wiped out during the war. If Malta is entitled to credit, I think it should be mentioned.


James Lorimer Ilsley: Malta is part of the sterling area and has made no application. I would assume that the United Kingdom would perhaps take some interest in Malta. We have not had any discussions in regard to Malta.


Edmund Davie Fulton: Before the question is put I should like to say a few words in connection with the long and detailed statement made by the minister. I think I can say on behalf of all the members of this group that we were very glad indeed to hear of the negotiations now under way leading to the extension of credits to the United Kingdom. We wish those in charge of the negotiations every success in bringing them to a successful conclusion. I believe it is fair to say that the name of Canada stands second to none in the sphere of international cooperation in the countries named. In order to maintain this fair name and to carry out our contribution efficiently, we feel it is essential that we should take our fair share in the promotion of international affairs. Therefore I feel that I can safely speak on behalf of all the members of this group when I say that we welcome in general principle any 47696-180J
provisions designed to promote that object. However, with respect to the many details which the minister put before us this afternoon I cannot promise such general agreement. These will have to be examined in detail and discussed later.
There are one or two questions I should like to ask, arising out of the minister's statement. Perhaps he will answer them later; or if he feels free to do so now we shall welcome an answer at this time. I noticed that the amount which the government may lend to other governments is to be increased to $750,000,000. That is an increase of $650,000,000 over the amount now authorized. Of that amount I gather from the minister's statement that some $400,000,000 have been used up on the negotiations already in progress. How does that lead the minister or his departmental officials to the conclusion that another $250,000,000 will be required? I should like a general outline as to'exactly what they have in mind, as that is all that one can expect in that regard.
The minister said that the measure was not designed to extend credits which would be *made available to countries within the sterling bloc. He indicated that separate agreements were being concluded with the United Kingdom ; but the question arises whether that means that empire countries such as Australia and New Zealand, which I believe financially or economically speaking are within the sterling bloc, will be excluded from the benefits which may flow from this amendment. If that is so we should be interested in knowing *whether any separate provision is contemplated, to take care of those countries; because I think it is fair to say that we should have an eye to the promotion of trade within the empire at the same time that we are seeking to promote international trade without the empire.
There is a technical difficulty which is raised under the terms of this resolution. The question is whether, under the provisions of the section which is to be amended, the goods are sold to a country to the government of which the loan is made to pay for those goods. I realize this is a question of detail, but is there any provision to prevent a conflict between parts I and II of this measure? That is to say, under part I we can extend export credits insurance; we can ensure the exporter against loss. If we are at the same time advancing moneys to foreign governments to enable them to buy, it does seem to me that there is a chance of a conflict and perhaps a rather inefficient use of our credits. We would appreciate it if the minister would look into that question and make some state-
Export Credits Insurance

\
ment, when the amendement is under discussion, assuring us that that will not be the case.	*
Finally, Mr. Speaker, I think I can say on behalf of the official opposition that we do hope that those negotiations with the U.S.S.R., which the minister said had not yet been completed, or a basis of understanding had not yet been arrived at, will be carried to a successful conclusion. We trust that the government will use its best efforts to bring those negotiations to a successful conclusion, because I need hardly emphasize the fact that this trade is most important to the future of Canada, particularly of that section of the country which looks toward the Pacific. The same thing applies to negotiations being carried on with the republic of China. Perhaps it would apply there with even greater force, because the heroism of China has not been exceeded by any other of the united nations during the course of the long struggle, and anything we can do to help to put that country back on its feet again ought to have the unanimous support of all sections of the country. We welcome, the indication given on behalf of the government that measures are being taken looking toward the successful and speedy restoration of free international trade. On behalf of this group I say that we welcome that general principle, while at the same time reserving further discussion of the details.
Mr. ANGUS' MacINNIS (Vancouver East): Mr. Speaker, I believe this measure will commend itself not only to members of the house, without regard to party affiliations, but also to the country as a whole. Among other things, our action in this regard should be based upon the position Canada was in during the war. That is, not only were we free from invasion, but we greatly developed our industrial equipment, and by this means in many respects we were better off when the war ended than when it began. I believe I speak for this group when I say that this is not only a desirable move on the part of the government from the humane point of view, [from the point of view of restoring devastated Europe and helping feed the hungry people, but it is also desirable from the longterm economic view of improving trade relations between Canada and other parts of the world. It is particularly desirable from the point of view of making peace possible in the world-a peace which in my opinion is only possible when the world is prosperous economically.
I do not know just what will happen when repayments of the loans will have to be made, because in the kind of world in which we live' it seems much easier to sell than to buy.
[Mr Fulton. $
Difficulties are very likely to arise when these countries will want to pay us. They may be very anxious to make repayment, but we may not be so ready to' accept the only method by which they can pay, that is, payment in kind. If we do not do that, then in the ultimate analysis I do not believe the people of Canada will receive from these transactions the benefits we otherwise should receive. If the world is really to be prosperous we shall have to exchange in the greatest possible amounts the surplus products of pur country for the surplus products of other countries. Then there will be the domestic problem of equitable distribution of products within each country concerned. This brings me to the point I would make in conclusion.
We have before us a proposed expenditure of $750 million. Earlier iA the session 1 proposed a measure of social security for Canada, and it so happens that the amount of money involved was approximately $750 million. In reply the Minister of National Health and Welfare (Mr. Claxton) said that an expenditure of that amount would put such a burden of taxation upon the people of Canada that we would not be able to afford it. If we can afford it for people outside our country, I say we can afford it for people inside the country.
I do not emphasize this point with a view to detracting from my approval of the enlargement of this measure under the present bill, and of the action of the government in making trade arrangements with other countries which will not only improve their economic conditions-and ours for the time being-but will go a long way toward preserving the peace to which we all look forward.


Mr. THOMAS REID (New Westminster):: Mr. Speaker, I have only one word to say before you leave the' chair. I am sure hon. members must be in entire accord with the object behind this measure, because the helping of various nations of the world has become the task of countries like Canada, the United States and others which are in a prosperous condition. But when I listened' to the Minister of Finance (Mr. Ilsley) this afternoon I was greatly disappointed to hear him say that no concessions were to be asked from these nations when loans were negotiated. What I have in mind is this: It was indicated by the minister -at least the understanding was implicit- that in the state of world affairs as we have it to-day, one of the conditions of the making of loans to countries needing them would be the breaking or tearing down of tariff walls and barriers. Let us consider France for a moment. I do not know what the conditions are to-day, but I know that before the war, from 1930 on, it was almost impossible for Canada to ship

Export Credits Insurance
wheat to' France, owing to the high tariff barriers which had been erected. If one looks over the subsidies paid in France, Italy and Germany from 1930 to 1939, he will readily see that the subsidies paid for wheat alone in those three countries would have bought more wheat from Canada, and have landed it in those countries, than the subsidies amounted to.
There may be those in the house who differ from me when I say that if there was one thing more than anything else which brought on the war it was the fact that the people in one country, because of high tariff walls, could not have the benefit of goods from another country. Before the war, tariff walls were built around each country, and brought poverty in those countries and some distress in this one. Surely the time has come when we should say to those countries who built high tariff walls, "We will help you; we realize you need this money and food; but for the benefit of your own people we want you right now to take down those tariff walls and let Canadian wheat and other goods from this country enter without tariff." If we are to do anything to improve the living conditions of people in other lands, this is one of the limitations we should impose. I was disappointed when the minister told us that such matters were only incidental to the discussion. I should like to know when the Minister of Finance (Mr. Usley) and the Minister of Trade and Commerce (Mr. MacKinnon) are going to deal with these things and say, "We are demanding that you take down tariff walls to help your own people, and help us too." Perhaps we will get an answer in committee on that point.
Then there is one other question which arises. I think it is a fact that some countries are being charged 2 per cent and others 3. The Canadian people, for their own requirements are getting 3 per cent on their loans. I am not objecting, but I am just wondering how it works out. I am not altogether surprised that the hon. member for Vancouver East (Mr. Maclnnis) spoke as he did, because the point he raised had also occurred to me. It seems to me there is no difficulty at all in connection with finance. The government is able to give these countries goods, but how is it that when questions in connection with old age pensions are brought up, the question of where to find the money is always raised? Surely what is possible for one is possible for another.
I rose chiefly to speak about tariff walls, and restrictions against our goods entering other countries. Now is the time to bring down those tariffs and carry out the terms of the
Atlantic charter. There are many people on the North American continent who think that living conditions here are normal. I say that our living conditions are abnormal and the condition of people in other countries is just miserable. Until we help them I can see no possibilities of a return to normal trade, because those people will be unable to buy goods. Perhaps when we go into committee the minister will be in a position to tell us more.


James Arthur Ross: Mr. Speaker, on the matter of tariffs I should like to concur in what the hon. member for New Westminster (Mr. Reid) has said. I agree also with all that was said by my colleague, the hon. member for Kamloops (Mr, Fulton). We-are very much in favour of the general principle of this measure. As the minister has said, it is in Canada's interests that Europe-should be reconstructed- at this time. We are interested in world trade.
The minister said that we must sell at competitive prices, which bring to mind an article I was reading this morning touching on- wheat. According to the newspaper story it is a strange thing, and I have raised this question at other times, that our neighbours to the south are able to export more wheat at S2.10 per bushel seaboard than we are at $1.55 per bushel, basis Fort William. That is something the responsible minister should explain to us when we are in- committee. By government action our agricultural producers have been refused a market in the United States. As I said, I agree whole-heartedly with the principle of this measure. It has been pointed out that free enterprise should not be called upon to carry the entire burden, and- I agree that the state must lend- a hand. But if the state lends a hand, then the producers of the worth-while necessities of life and the taxpayers generally should be asked to bear a fair share of the burden of taxation which will result. That is not so to-day with the agricultural producers. Because of controls put on by this government they have not been allowed to sell on a competitive basis. As compared with the manufacturers of lumber and others they have been placed in an unfair position through not being allowed to. export on a competitive basis.
I do not want to occupy the time of the house any further, but I did want to raise these questions which I hope either the Minister of Finance (Mr. Usley) or the Minister of Trade and Commerce (Mr. MacKinnon) will be able to answer. During the next few years conditions will be very uncertain. Repercussions are bound to occur, and those who-are to-day bearing an unfair share of the cost
Export Credits Insurance

of this thing as compared to those in other occupations may again have to bear a greater share during the period of readjustment. I should like to see this straightened out on some basis, and I trust the ministers will give an explanation in committee.


Mr. E. G. HANSELL (Macleod):: Mr. Speaker, since this resolution appeared on the order paper I believe some publicity has been given to it and I have been reflecting upon the subject. I am not an expert on international trade with all the complications of international finance; I find it a laborious subject to study because there are so many mysterious things about it. Some people think in words while others think in pictures, and I am one of those who has a tendency to think in pictures. I never did care much for .abstract subjects.
I have been trying to think my way through the subject of this resolution to the end' that I could understand it. I cannot understand the particular reason for having to advance credits to foreign nations in order for them to buy our goods, although I suppose there is an answer. The peculiar thing is that when our own people were in need of goods in days *gone by, the government, which was the same government that exists to-day, could not find it possible to advance money to our own people so that they would be able to buy their own goods. I cannot quite see how that ties up.
Thinking of pictures, this is the thought that has gone through my mind. Here is a man in business, perhaps a grocery business- people need food-with a clothing department -people need clothes. He stands behind his counter and would like to sell his goods. People come into his place of business and look around at the goods on his shelves. Upon making inquiries he finds that the people want to buy his goods but they have no money. So a bright idea comes to him. He opens his till and he says to his customers, "I see the only reason you are not buying my goods is that yoil have no money." He takes money from his till and gives it to the people in his .^tore and they immediately begin to buy his .-goods. I do not know whether that is a good policy, but I am quite certain if any business man in Canada did that people would consider lie was crazy. I have never known anybody "ito do it yet, but it seems to me that that is what we are doing with this legislation. If it is not, I should like the minister to explain why 'it is not.
Mr. ILSLEY; Because it is not a gift.
Mr. HANSELiL: I cannot see why we do not just give them the goods and say, "There is a debt standing against you and we hope you

will be able to pay it in full some of these days." Maybe that is what they are doing; I do not know. It is a complicated business, but at least one thing is certain. If ever the time comes when we have plenty of goods in this country and no one to buy them, then the government surely will not say, "We are sorry but we have no money to give to our people so that they can buy those goods." Surely they will not put up that excuse again when they now are saying that they can supply money to people outside our country with which to buy our goods.


Gladys Grace Mae Strum: 
Mr. FRED ROSE (Cartic-r):: Mr. Speaker, I believe it is wrong, as some hon. members have done, to consider credits to foreign countries as one thing and credits to the people of Canada in the form of social services as something entirely distinct and apart from that. I see no contradiction between the two, and those who look forward to a more prosperous Canada and a more prosperous world realize that the two are closely linked together, and that there is no contradiction between them.


Mr. D. KING HAZEN (St. John-Albert):: 
James Lorimer Ilsley: The hon. member for Vancouver East and the hon. member for New Westminster said that if we could raise $750 million for export credits we ought to be able to raise the money just as easily for social services. I suppose the raising of the money is'just as easy in one case as in the other, but the two transactions are different. In the case of payment for social services, that money is paid out and is not recovered. As far as the taxpayers as a whole are concerned, they' get nothing back. On the other hand these are loans, represented by assets, and we hope they will be recovered. We expect that in large measure they will be recovered, because most of these countries are excellent credit risks. As I stated, we must take some risk; any country making loans to other countries takes a risk, the world being in the condition it is in to-day, but as far as the people of Canada as a whole are concerned they are entitled to a return and it is expected that they will get a return in future ye^rs for what they send out of the country now. So that to	mind-and I hope it is
not impaired by concentration on financial considerations-a loan is different from a gift even when one is making the gift to some of the people in one's own country.
Then the hon. member for New Westminster safd that we should have seized the opportunity to tie up these countries in regard to tariffs, to get them to agree to keep their tariffs down, or not to raise them, or something of that kind. Well, in the case of France, which he mentioned, we did get them to insert a clause providing for most favoured nation treatment, and that is as far as we have gone. If you go much further than that you have to embark upon protracted trade negotiations, and of course they would be entitled to obtain similar assurances from.us with reference to our tariff. Negotiations of that type take a-long time. You can go only so far in tying up two matters which are only partly related. These transactions on their face get markets for our goods, apart altogether from the tariffs of these other countries. They effect the purpose, for the time being at any rate, of getting markets for our goods. I do not think the United States, in dealing with these countries through their export-import bank, have undertaken to connect them with commercial negotiations. We considered that, and we decided it was impracticable. The negotiations would be almost endless if we did that. These other countries might very well say, "That is all right, but you must go over your tariff and tell us what you are going to do with it.'' Certainly we could not have concluded such negotiations at all rapidly, and I doubt the [Mr. Ilsley.l
practicability of doing it. The one is a loan transaction by which we get a market for our production. The other is something else again, which of course we shall have to undertake pretty soon. It is very easy to say, "You are in the driver's seat. You can snap your whip and say they must do this or that with their tariffs for the next twenty-five or thirty years or they do not get their money." It is a question how far countries will go ip tying up their future independence in order to obtain loans. They may do so under reciprocal trade agreements, when they are dealing with the same matter and we are giving them a similar concession. From the little experience I have had in dealing with other countries, however, [DOT] they do not like to have dissimilar matters tied up in that way, and I do not like it very much myself when they have tried to do that with the Dominion of Canada. I do not mind making a reciprocal trade agreement, but I do not like tying these things together. Perhaps I have not made a very convincing case on that.


Grote Stirling: Surely the borrowing
country is the importer of the goods so purchased.


James Lorimer Ilsley: That is right.


Grote Stirling: Then we do not know
and do not need to know what their tariff arrangements will be when these goods reach that other country, since it is a government undertaking. It may be that they will not pay themselves the rates under their tariffs.


James Lorimer Ilsley: As far as these particular
goods are concerned, which they buy under these credits, we need not worry. Certainly they will get into that country; it does not make any difference whether they put on a high tariff or no tariff. The hon. member for New Westminster is talking about future transactions, however, I believe.


Grote Stirling: The hon. member may
be peering into the future in that regard, but I cannot see that the tariff question affects these transactions.


James Lorimer Ilsley: No, it does not.


Angus MacInnis: Does not the minister's
difficulty arise at least in some respects from the fact that Canada perhaps has not made up her mind yet that she is in favour of low tariffs?


James Lorimer Ilsley: No; the policy of the Dom- inion of Canada has never changed. The policy of the Dominion of Canada is for reciprocal reduction of world tariffs.

Export Credits Insurance


Angus MacInnis: I was aware that the policy never changed; I had always understood that.


Thomas Reid: Was not a statement made
by the minister or by some other member of the government that when the time came to make loans to help countries rehabilitate themselves, this would be one of the conditions under which they might obtain such loans? That was at least one of the things that prompted me to make the statement I did.


James Lorimer Ilsley: I never made that statement
and never heard of its being made on behalf of the government. In the last year I have made quite a few speeches in behalf of export credits, but I never said that we would attach to those credits a condition that the countries receiving them should keep down their tariffs. Any tariff statements I have made-and I have made quite a few of them, too-have been to the effect that concessions in the way of lower tariffs by other countries and lower tariffs in this country are matters which will have to be dealt -with on a reciprocal basis, and this is a different matter entirely.
Then the hon. member for New Westminster said that he did not understand why these rates of interest were different to different countries, and lower than the rates of interest we pay for money here. If he will look at the Hansard report of my speech he will see that matter very carefully explained The rate of interest -we charge these other countries is the same rate of interest we pay for the money we borrow in Canada, having regard to the term, and a little more, a fraction of one per cent more.


Mr. ISNOR:: One quarter of one per cent,
in one case.


James Lorimer Ilsley: It is pretty hard to reckon quickly just what the correct rate is. Take the case of France. The amount is repayable over a period of thirty years starting one year after- the advance of the money. The rate in that case is 3 per cent. I would say that the average outstanding is around fifteen years, because it has to be paid back over a period of thirty years. The correct rate is 2-9 something. That is the rate we pay our people for money for that term. A little is added to bring it to 3 per cent. If, instead of being repaid beginning one year after the advance, it began ten years, and so on, all paid in thirty years, the average term during which the money was unpaid might be twenty years, in which event the proper rate would be a little over 3 per cent. The rates are very carefully worked out.


Mr. WRIGHT:: How do the rates that we are charging on these long-term loans compare with the rates charged by the United States on similar credits?


James Lorimer Ilsley: They are higher, but they are based on exactly the same principle. The United States borrows money from its people at lower rates of interest than the Dominion of Canada and lends money to other countries at the rate which it has to pay plus a small charge. When I say the rate it has to pay, that is a simple way of stating it. I do not want to go into the complications and complexities, but that is not exactly true. If, say, certain issues of our bonds were selling at 104 and paying 3 per cent, then the rate we would be deemed to be paying at that time would be the effective yield to the investor in those bonds at that time.. It would be less than 3 per cent, even if we were paying 3 per cent. It is the interest yield that we take as the basis for our dealings with other countries. /


Percy Ellis Wright: The point I was trying to bring out was that if the United States makes loans available at the lower rate of interest on which it is able to obtain money in that country, that will give the United States manufacturer or the people wrho are selling goods an advantage over Canadians who are selling a similar type of goods to those countries.


James Lorimer Ilsley: At the present time, if a foreign country wanted a certain quantity of goods and could get them made and delivered in the United States, or in Canada, at its option, they would buy in the United States if they could get the credit, because the interest would be lower. But they want goods wherever they can get them, and a great many of the goods they must have. They try to get them both in the United States and in Canada.


Angus MacInnis: Would not the exchange between those countries and Canada and the United States make some difference?


James Lorimer Ilsley: I do not think so. The United States dollar bears a certain relationship to the Canadian dollar. It is a matter of price; the price factor enters into it.


Angus MacInnis: Yes.


James Lorimer Ilsley: They might have to pay more for the goods in the United States.


Angus MacInnis: Yes; that is the point, and it might be of far more importance than the question of interest.


James Lorimer Ilsley: Yes. A difference in price might outweigh the difference in interest. The hon. member for Souris brought up the ques-
Export Credits Insurance

tion of the price of wheat, and cattle and so on. The fixing of the price of wheat in Canada for foreign purchase has been discussed in this house and I hesitate to embark upon an explanation of that pricing policy, but the reasons for that policy have been given repeatedly. If anyone does go into it again it should be my colleague the Minister of Trade and Commerce rather than myself. I could state it all over again, but I do not think it has any bearing on this resolution.


James Arthur Ross: There was just one question I brought up. I raised one point, namely, the matter of competitive selling, and under our system of supply and demand it seems strange that the United States could be exporting more wheat at 12 a bushel than Canada at $1.55.


James Angus MacKinnon: In answer to the comment of the hon. member for Souris and possibly to correct a false impression, I may say that up to the present day the United States has been exporting about half the quantity of wheat that Canada has been exporting. It is true that the United States have been obtaining more, about $2 at seaboard, than we are obtaining at seaboard, which is not $1.55 but $1.70.	.


James Arthur Ross: That is with freight from Fort William to seaboard.


James Angus MacKinnon: Canada could get the United States price if we were prepared to extract the last cent from our former allies. Wheat is an important item in the imports from Canada of many countries and if they had to pay higher prices now it would retard their rehabilitation.
There is another reason I would emphasize. This decision was taken when the $1.55 f.o.b. Fort William policy for Canada was announced. In return for that the Canadian wheat producer is the only producer in the world to whom a five-year floor price guarantee has been given. At present the floor-price guarantee for the next year is $1.25, but the producer has a guaranteed floor price of $1 for the next five years. The price may be $1.25 or it may be higher, but he has the guarantee that it will not go below $1.	[DOT]


George Hugh Castleden: Only on authorized deliveries.


James Angus MacKinnon: On authorized deliveries, and that is a matter which has to be dealt with each year on the announcement of the wheat programme. A great deal will depend on the * wheat crops in Canada. Canada is not losing the sale of a single bushel of wheat as a result of our price policy. As a matter of (Mr. Ilsley.l
fact, there is to-day a tremendous demand all over the world for wheat and we cannot nearly fill the present orders for this product. Actually we have not the wheat to give them. We are giving a number one priority to the United Kingdom, and we are giving secondary priorities to our allies who have been overrun and who need the product very badly to sustain life in their countries.
The question was mentioned about tying in the price of $1.55 f.o.b. Fort William with our dealings with other countries in the purchase of wheat. It is difficult for anyone to rise in his place in this house and tell about things affecting the internal political policies of other countries, but I think it is a fair and reasonably proper statement to make that we have discussed with prominent representatives of countries concerned the point that, seeing we are doing this for them and putting this price on at the present time, they should not continue the policy they have had of highly subsidizing their ' wheat production. In at least one important country, while I cannot say that we have been given assurances, our representations were certainly treated sympathetically and, I believe, sincerely.
May I say one more word? I do not want to go into all the arguments regarding the announcement of the price of $1.55 a bushel for wheat at this time if I can avoid doing so. I covered that in a statement I made to the house on September 19. I could give that statement again; it covers the government reasons for the action that they took at that time governing the present wheat selling operations.


James Arthur Ross: That is just the point that both the hon. member for New Westminster and I were raising, namely, that the minister would be taking that into consideration in the future in negotiating with those people.


James Angus MacKinnon: Yes.


James Arthur Ross: I think that partly answers the question raised. I hope the minister is not arguing that our friends to the south are using undue pressure in the price they are getting.


James Angus MacKinnon: No; wheat is in great demand. People will pay anything asked.


James Arthur Ross: I want the minister to go farther and explain what the export situation will be in the winter months with regard to our wdieat when navigation closes on the great lakes. Is it not right to say that we shall not be able to supply the demand before next year's crop is harvested, and tha. all we can supply will be taken .before that?

Export Credits Insurance


James Angus MacKinnon: There is no question about that.


Percy Ellis Wright: I wish to raise a question which has to do directly with the conversations that took place. The minister said that a partial agreement was reached with regard to certain policies within the countries importing.	.


James Angus MacKinnon: I would not go so far as to say that a partial agreement was reached. I want to be very careful because my remarks may be quoted elsewhere. I want to be very careful in saying that our representations were sincerely and sympathetically received, and I myself feel that there are going to be results.


Percy Ellis Wright: There was one other question I wanted to raise with respect to that. Was there any conversation with respect to accepting basic quantities by those countries which are importing our products? That is important to us.


James Angus MacKinnon: The conversations to which I am particularly referring were not with countries which are now, or were in the last few years, customarily importers of Canadian wheat. They W'ere former importers of our wheat, and we wanted to get into that market again when we had' surplus wheat for export. In all our negotiations we have been assured as far as possible by the countries which we are supplying that 'basic imports would be continued.


George Hugh Castleden: Would not the same arguments apply to other commodities? Would not -the same principle apply to lumber, farm machinery, electrical machinery and other goods? Would not the high price of lumber or machinery going into those countries seriously affect their rehabilitation? Has there been any other commodity on which the government has set the price arbitrai-ily, as they did this price of S1.55, of other people who are exporting their materials to those countries? After all, Canada is buying; it is Canadian money buying Canadian' goods, and it seems to me that if you are going to arbitrarily set this price on the farmer's wheat in the hope of a better agreement later on, why should you not do it with the other goods?
' The farmer is compelled to take a certain price. If he is paying for the good will, why should the world price of Canadian wheat not be paid to the Canadian farmer so that he could get the benefit? Why should he be discriminated against? It seems to me you are not treating the manufacturer, and the producers of lumber in the same way that
you are treating the' producer of wheat. He is a primary producer and is not being treated in the same way as other producers.


John Ritchie MacNicol: There is no comparison between the shipping of wheat and the shipping of machinery and so forth.


James Angus MacKinnon: It might be advisable for me to make a brief statement in connection with the general price ceiling policy.
I am not now referring to wheat, I am referring to other commodities. The Canadian export board was formed to carry out the procurement of civilian type goods, recognizing that as foreign countries begin to buy these goods rather than to receive them under mutual aid, the same rigorous buying policy that was necessarily and properly followed by the Department of Munitions and Supply -might not now be practicable. For example, purchases through the export board are not subject to renegotiation, as were war contracts, and in agreeing to prices we usually have reference to general market prices rather than follow a prescribed formula of a fixed profit -margin based on specified costing procedures. This policy recognizes that the Canadian export board exists primarily for the benefit of Canadian producers in assisting them to obtain and develop markets for their product and as such is filling an essentially different function from that of the wartime procurement agency primarily occupied in buying -munitions of war with the money of the taxpayers.
What I have just said applies to the general run of goods of a commercial type-nomco-m-*mercial type sales-that is very large items of an especial nature, such as trucks, locomotives and large volume sales of raw materials-are essentially on a cost-plus basis; that is a cost-plus contract or a negotiated price after an examination of costs. May I give the committee some examples? In connection with the Canadian export board, we have skilled and highly trained men of long experience doing the very best and most careful buying for us on behalf of foreign- countries. We have secured capable -men from business and other sources. We have called on, and freely obtained the use of such experts as I referred to from the Canadian National Railways and the Canadian Pacific Railway Company. For instance, trucks are bought on a cost basis plus five per cent; that is, following out the same system as the Department of Munitions and Supply followed. Locomotives are a continuation of a policy adopted by the Department of Munitions and Supply. Skilled and careful negotiations are carried on with -manufacturers. In heavy chemicals exactly the same situation prevails. In all cases the
Export Credits Insurance

buying is done very carefully by hard-headed buyers of great experience. They also have the benefit of the prices which were paid by Munitions and Supply.
In the -matter of subsidized goods, the ceiling price is charged plus the subsidy. One important objective of this very careful buying is to -make the money we are furnishing go just as far as it possibly can in terms of employment.


George Hugh Castleden: I thank the minister for his reply. I think what the minister has said with regard to the ceiling on trucks and machinery is what the farmer wants. He would like someone to give him his cost of production plus.
I do not think the minister has answered my question. I believe it would be better to postpone the whole discussion until the minister's estimates are before the committee. It does not really affect -the Minister of Finance.


James Lorimer Ilsley: I should like to correct one misstatement I made in a minor particular. I was - asked whether our interest rates are higher than those of the United States, and I answered that they were. The interest rates charged by the United States on loans made to enable foreign countries to pay for material that they would have obtained under lease-lend are lower than ours. Those loans are made at lower interest rates than ours, but they are based on the same principle as ours; that is, the interest rate payable by the United States government to the public, plus perhaps a little more. But I am informed that on other post-war credits being extended by the export-import bank, about three per cent is being charged in the United States on long-term loads, payable from five to twenty years from the date of the loan. Therefore, if that is so, it may be found that their rates of interest are not only as high as, but perhaps a little higher than ours.


Mr. LOW:: What form of security is taken by the corporation for any of the advances? In what form are repayments to be made, after credits are due? Are they to be made in bonds, dollars or goods?


James Lorimer Ilsley: The hon. member referred to the "corporation." The corporation does not come into these credits.


Solon Earl Low: In what form are payments to be made? Are they supposed to be paid in dollars?


James Lorimer Ilsley: In dollars.
Mr.. LOW: There is another point. When this $/50 million is utilized over a short number of years-and I believe I understood the minister to say that two or three years is the usual period over which the credits must be utilized?


James Lorimer Ilsley: Yes.


Solon Earl Low: And it is repaid over a rather long term, in some instances stretching to thirty yeare.


James Lorimer Ilsley: Yes.


Solon Earl Low: What provision is the government making to ensure that there is no inflationary effect? We must realize that $750 million is a lot of money, and it is being spent in Canada. The goods are going out of the country and will not. be available. What provision has been made to guard against inflation?


James Lorimer Ilsley: No more than was made during the war. The war set up powerful inflationary influences. But under these credits, plus the credits to Great Britain, I should not think we would be sending out the same volume of exports we sent out during the war. We shall just have to keep up the fight against inflation by the same ' methods we have used formerly.


Solon Earl Low: It is a bad bogey, but I think , we have become more or less accustomed to it.


James Lorimer Ilsley: We have quite a measure of it, at any rate. I do not know whether it is a bogey or not. However, the fact is that prices are up by a substantial percentage, and they would be up considerably more if we did not use every method in the world- taxation, savings and controls of every description-to try to keep them down. '


Solon Earl Low: It seems to me that this $750 million injected into the Canadian economy, with the goods going to some other country, would considerably increase the ministers' problem, and perhaps give rise to the need for exercising controls for some considerable time, perhaps at least for the period during which the credits are being advanced to the other nations.


Solon Earl Low: It is straight government One further point. What will be the effect
business?	upon the Canadian economy when these
ttqtw v , .,	. , . ,	,	credits are being repaid? Will it be possible
* . 1 ^AjLx . les, and they take bonds.	for us to accept goods in repayment, or will
The bonds are paid as they fall due.	these people be able to hustle around and get

Export Credits Insurance
dollars? If so* how will they get them, and what effect will that have upon the Canadian economy at the time repayments are being made?


James Lorimer Ilsley: These countries will have an opportunity of repayment by exporting either to us or to somebody, else. Or they will have to send out gold-if they have gold. However, before Mr. Speaker left the chair I said that we would have to accustom ourselves to the fact that we must have a lot more imports than we had before the war.


Solon Earl Low: I hope so.


The CHAIRMAN:: Shall the resolution
carry?


Grote Stirling: No. Perhaps the minister would be good enough to deal first with the questions asked by the hon. member for St. John-Albert.


James Angus MacKinnon: I believe the hon.
member asked the nature of the goods being taken from Canada.


Douglas King Hazen: Goods that have been taken.


James Angus MacKinnon: Does the hon. member refer to goods that are being taken?


Douglas King Hazen: I am referring to the credit that has already been utilized.


James Angus MacKinnon: The U.S.S.R. took electrical equipment.


Douglas King Hazen: That has been explained.


An hon. MEMBER:: What about Czechoslovakia?


John Ritchie MacNicol: Cutting tools, is it not?


James Angus MacKinnon: Although these credits have been established, only a small part of them has been used. At present Czechoslovakia has taken only wheat.


Douglas King Hazen: Has she taken $700,000 worth of wheat.


James Angus MacKinnon: Does the hon. member want me to confine my answers , to a statement of what has already been shipped., or shall I state what has been shipped and what has been bargained for?


Douglas King Hazen: I shall have to leave that to the minister. The Minister of Finance said that credits to the amount of $2,500,000 have already been utilized by Norway, if we may take that country as an example. I believe that was the way the minister expressed himself. How has that credit been utilized?


James Lorimer Ilsley: So far, Norway has bought
4.000.	000 bushels of wheat, and trucks and tires to the value of $6,414,000. There has been also a small purchase of leather.


Douglas King Hazen: But I understood that the total amount was only $2,500,000 for Norway?


James Lorimer Ilsley: Let us get it straight. I said that the amount already utilized had been
82.500.000.


Douglas King Hazen: And I now understand the minister to say that trucks and tires to a value of $6,414,000 are included.


James Lorimer Ilsley: 
Douglas King Hazen: That is the story with respect to Norway?


James Lorimer Ilsley: Yes.


Douglas King Hazen: Then I understand that the amount of 824,976.000 was utilized in connection with the Netherlands.


James Lorimer Ilsley: That is right. The Netherlands do some private buying which does not go through government agencies. We only know what they have bought through government agencies. They purchased 9,000,000 bushels of wheat and the following:
Trucks	   $11,468,000
Agricultural	machinery	 510,000
Fertilizers	 1,964,000


Percy Ellis Wright: Were those commercial
trucks for peace-time use, or would that purchase include Bren gun carriers or other articles that might be used for war?


Mr. JAENICKE:: Were they new ones?
Mr. ILSiLEY: They may not all be new.


Grote Stirling: Is it a term of the loan that the borrower must pay a certain amount in cash?


James Lorimer Ilsley: Yes.


Grote Stirling: Is he held to a percentage of the loan?


James Lorimer Ilsley: Yes.


Grote Stirling: Has some of that cash been paid already?


James Lorimer Ilsley: Yes.
Export Credits Insurance


Grote Stirling: The borrower would have to buy Canadian dollars as best he could in order to pay?


James Lorimer Ilsley: Yes, he buys them from the foreign exchange control board.


Grote Stirling: He buys and pays in
Canadian dollars?


James Lorimer Ilsley: Ordinarily in gold or United States dollars.


Grote Stirling: Will War Assets Corporation be able to get rid of some of the enormous quantities of surplus goods they have to dispose of? Has that entered into the plan?


James Lorimer Ilsley: Some countries have expressed a desire to purchase our surplus assets with these loans, but I do not know what sales have been made or whether any have been made as yet.


Percy Ellis Wright: Is any precaution being taken to see that these goods are not resold? For instance, our wheat is being sold under the world price.


James Angus MacKinnon: I am not sure that I can give a detailed answer except to say that the wheat board are fully cognizant of that problem and have taken steps to see that the wheat purchased cannot be resold. As a matter of fact, we are not able to give to the usual wheat purchasing countries anything like the quantity they want to buy. As far as I know, these wheat board sales are not sales to private parties but to governments.
Mr. (ILSLEY:	The hon. member for
Cartier asked about the Netherlands East Indies and wanted to know whether arms were being sent there. The request for a loan was merely for economic construction and not for munitions or anything of that kind. I think I can say that we would take great pains to see that the proceeds of these loans are not used for that purpose.


Grote Stirling: Could they be used for the purchase of corvettes or some of the ships that have been declared surplus?


James Lorimer Ilsley: We would be careful about selling military or naval equipment. That is not the purpose of this legislation. That may not be 100 per cent true, but the whole purpose is for reconstruction.


Gordon Benjamin Isnor: One important point that has been overlooked is the fortunate position in which Canada finds herself at the present time through being able to consider a resolution having to do with an amount, of 8750,000,000.
I am thinking of the effect that this will have upon our future economy and its relation to (Mr. Haley. 1	*
manufacturing in our country. Could the minister give us an estimate of the amounts which have been spent up to the present time in the purchase of natural and manufactured products?	'


James Lorimer Ilsley: I have not a division based on the distinction between natural and manufactured products, but naturally there would be a lot of natural products, wheat for instance.


Gordon Benjamin Isnor: Can the minister give us any idea of the effect this will have on manufacturing plants? He has given us details of some of the articles sold.


James Lorimer Ilsley: I can give some idea. I gave some details to one hon. member a while ago. For example, France has bought 12,000,000 bushels of wheat through government agencies, as well as the following purchases:
Railroad equipment	
Road transportation equipment ...
Metals	
Chemicals	
Asbestos	
Machinery and general purpose
equipment	
Agricultural implements	
Electrical equipment	
Fertilizers . .[DOT]	
Prefabricated houses	
Printed matter


Mr. HATFIELD:: Would that be mixed fertilizers or fertilizer .chemicals?


James Lorimer Ilsley: I do not know.


Percy Ellis Wright: In asking these questions I do not want any one to think I am opposed to the measure because I believe it is a good one. I believe that we should assist these countries in becoming reestablished. But the point I was raising was this: Are some of these countries using their cash to purchase war materials or certain other types of goods and then coming to Canada for a credit for the goods with which to reestablish themselves? Has any check been made by the government of Canada on the financial position of the countries to which these credits are being made available to ascertain the use they are making of their own finances? It seems to me that.such a check should be made. I . would not say that many of these countries are purchasing war materials, but there may be some.


James Lorimer Ilsley: We go into the question of their foreign exchange position pretty carefully with them and get all the information we can about it, how much gold they, have, how much in United States dollars, and so on, and we require these cash payments. But we do not require full payment in cash, because these countries that hare been pretty badly

Alberta Tax Agreement
slashed by the war can always make a pretty good case for need. I do not know what they do with the rest of it; they may make some cash purchases in other countries with it, but so' long as they look a fairly good credit risk and will make a reasonable cash payment we lend them the money.


John Ritchie MacNicol: The Netherlands East Indies are entering upon a large programme of rehabilitating their* rubber forests and Malaya is doing the same thing for their tin industry. Are we-I mean the Anglo-Saxon countries-supplying anything to the Netherlands East Indies or to Malaya for those purposes?


James Lorimer Ilsley: They have made inquiries about aluminum latex cups and coagulating pans, which I understand are used in the industry. That is, I think, the only item about which they have made inquiries.


John Ritchie MacNicol: Are we getting some orders from them?


James Lorimer Ilsley: I do not think so as yet, but negotiations are taking place.


George Hugh Castleden: Are the countries mentioned by the minister the only ones that are to be given consideration under this resolution? A serious situation exists in Greece and Austria.


James Lorimer Ilsley: Yes, they are the only ones with which we have made agreements or had negotiations. Some inquiries have been made tentatively on behalf of other countries, but I do not think on behalf of Greece. There have been no negotiations; there has been an inquiry. Of course we have been giving wheat to Greece.
Resolution reported, read the second time and concurred in. Mr. Ilsley thereupon moved for leave to introduce bill No. 217, to amend the Export Credits Insurance Act.
Motion agreed to and bill read the first time.



ALBERTA TAXATION AGREEMENT

[Stage Direction]
PROVISION FOR PAYMENT OF INCREASED COMPENSATION AND SUBSIDY y
Hon. J. L. ILSLEY (Minister of Finance) moved that the house go into committee to consider the following resolution:
That it is expedient to present a measure to authorize the Minister of Finance, with the_ approval of the governor in council to enter into an agreement with the province of Alberta to pay the province increased amounts by way of compensation and subsidy over the amounts agreed to be so paid under an agreement entered into with the province, dated March 30, 1942.
Grote Stirling: Will the minister make a statement?


James Lorimer Ilsley: a view which was eventually concurred in by the Alberta government, and I am sure properly so, the province decided that they would correct this condition and pay up the back interest from 1936. and they entered upon refunding operations and so on. So that the dominion felt they should then treat Alberta retroactively just as that province would have been treated if it had continued to pay the interest throughout, from 1936 on. That meant paying them $600,000 a year for 1937, 1938, 1939 and 1940, and paying them an amount I have not before me at the moment for the years following, 1941, 1942, 1943 and on up to the end of the tax agreement, which they would have been entitled to under the offer we made if they had been paying the full interest on their bonds. We agreed with them, last spring or early last summer, that if they would take the step they have taken and arrange to pay up the back interest to their bondholders, which they are substantially doing, we would introduce legislation retroactively treating that province the same as we treated other provinces and on the same principle as we treated other provinces, none of which cut their interest to their bondholders.
That is the principle of the resolution. It is all covered by an order in council which has been tabled and on the strength of which the province of Alberta has proceeded. They have conducted extensive and successful refunding operations in the United States. Today their credit appears to be excellent, and personally, as Minister of Finance of Canada, I think it is a great thing that now, when people have bonds which are signed either by the dominion government or by any of the provincial governments, they have every Teason to believe that the interest will be paid in full and that the principal will be paid in full on maturity. Everyone is now proceeding on that principle, and it is well worth this money we are now seeking authority to pay the province of Alberta. After all, it is only what they would have got if they had not taken the step they took in 1936.


Mr. SMITH (Calgary West):: As I understand the situation, what you are now doing is putting into statutory form an agreement already arrived at with the government of Alberta?


James Lorimer Ilsley: That is right.


Arthur Leroy Smith: As I understand it, the amount of money' being paid is a calculation arrived at on the basis that they had taken the other option at the time the tax agreement was made?


James Lorimer Ilsley: That is right.


Arthur Leroy Smith: And now,
all the provinces being on the same basis; taking care of their debts, let me say, on the same basis, and all their securities being really worth while, we in Alberta are now simply coming back into that line?


James Lorimer Ilsley: Yes.


Arthur Leroy Smith: And you are assisting us to the extent you would have, had we always maintained that position?


James Lorimer Ilsley: That is correct.


Arthur Leroy Smith: Then I can only compliment the minister on a job of work very well done.


George Hugh Castleden: Did I understand the
minister to say that two options were offered the province of Alberta?


James Lorimer Ilsley: Every province.


George Hugh Castleden: That they could either take the taxes of 1940 or the cost of funding their debt?


James Lorimer Ilsley: No; the interest payable on their funded debt; the interest payable on their bonds.


George Hugh Castleden: Alberta took the *
former option. I presume?


James Lorimer Ilsley: Yes.


George Hugh Castleden: And this payment you are going to make now is the difference between what you paid them under that option and what they would have received under the other option. Could the minister give us any idea of the amount of that?


James Lorimer Ilsley: I am sorry; I should have
that but I have not. I think the difference is $1,600,000 a year or something like that.


George Hugh Castleden: It is really the difference, then?


James Lorimer Ilsley: Yes.


George Hugh Castleden: And what is the
amount of this back interest which Alberta has not paid and is now paying?


James Lorimer Ilsley: That is a large sum, I think about $25 million.


Solon Earl Low: Yes, about Jhat.


James Lorimer Ilsley: I shall have the figures when the bill comes up, if the house would just take my word for them now.


Ernest George Hansell: I rise to say only a word, and I am not one of those who go so far as to say that because a government is of a certain political stripe it is opposed

Alberta Tax Agreement
to everything which is not of that stripe. Perhaps this is a good example of the contrary being the case. A responsible government, it makes no difference whether it be Liberal or Conservative, I am quite sure has the interests of Canada at heart, and I am very happy that a move has been made so that as p result of an agreement with the dominion government, no one will now be able to say that the credit of some particular province is not good.
I really rose to pay a little tribute to the leader of this group.- I think it should be mentioned here that at one time he was provincial treasurer of Alberta, and it fell to his responsibility to carry on a good deal of both the groundwork and the advanced work in these negotiations with this government, and with other people and institutions who were responsible in a measure for refunding. At the time the refunding was carried out the hon. member for Peace River (Mr. Low) was not provincial treasurer; he had become national leader of our social credit movement, but I think I can say without fear of contradiction that a great deal, and perhaps the bulk of the work which, led up to the successful refunding of Alberta's indebtedness was carried out because of the ability, foresight and good judgment of the leader of this group.
Mr. WILLIAM IRVINE (Cariboo).:	I
have no objection to the compliment paid to my hon. friend to my left; I think it is probably in place. But I noticed that the minister pointed out that the credit of Alberta was better now than }t was some years ago when the amounts which are now being made up were withheld. It seems to me that that is putting the cart before the horse. They needed credit badly then and it was withheld from them. Now they are in a much better position and we are donating to them. That is an extraordinary procedure. However, I have no objection to that if it is the way to do it.
But there is another point that ought to be made here as well as the compliment which has been paid to the leader of the Social Credit group. For a good many years the government of Alberta has taken a good deal of credit to itself for having saved to the people of that province $25,000,000 of interest, and now I understand it is getting this gift of money to which it was entitled before but which was withheld because it had deducted the $25,000,000. It is getting this returned because it has virtually paid back the $25,000,000 of interest. Is that clear?


James Lorimer Ilsley: This does not amount to the $25,000,000. I am sorry I have not the total, but I think it is $10,000,000, nr $12,000,000, or
something like that. The province is paying quite a lot more than that. But with regard to future refunding, it makes all the difference in the world. Now that their bonds fall due they can refund at much lower rates of interest than they would be able to if they did not do this, so that apart from the principle of the thing it is good business for the province.


William Irvine: I know it is always good business to follow the financial system in vogue and anyone that goes against it will suffer greatly for doing so; but the minister misunderstood my point. My understanding is, from the resolution and the minister's comments thereon, that the government of Alberta has virtually made up to the bondholders the $25,000,000 they had supposedly saved the people of that province during the past ten years or so. That is the point I understood him to make.


Solon Earl Low: I did not want to interject anything into this debate, but it seems to me that the hon. member for Cariboo is attempting a little bit of propaganda in this whole business. As a matter of fact, in all our negotiations there was one thing uppermost in our minds, from the time I started these negotiations six. years ago, and it was this. We feel that it was our obligation to the holders of Alberta bonds to see that the pricb of those bonds rose to or near par at the earliest possible date. That was our obligation, and we have taken whatever action was required to bring the market value back so that the holders of bonds might dispose of them and not take a severe loss.
Actually, this resolution, or the bill that may follow, is not for the purpose of making good the total of the unpaid interest on those bonds, and it is not a question of what the people of Alberta have saved or what they are saving. It is a question of carrying through an agreement between the federal government and the government of Alberta to make good a payment that would have been given to the province of Alberta since 1941 had that province selected the debt service option under the tax transfer agreement. If anyone wishes to make political capital of it this is rather a poor place to do so.
I compliment, the minister on a good job done. My only regret is that it was not done years ago.' It could have been accomplished had we got around the table a little more amicably and with a little more spirit of understanding. I am sure it could have been done. I wish to compliment the minister on having taken a fair attitude toward the whole matter and upon helping us to get the thing cleared away, because it has meant a great
Alberta Tax Agreement

deal not only to the people of Alberta and the government of that province but to the whole of Canada. I have felt that for some years.
I wish to thank my colleague for the kindly things he said about me. He did not have to say1 them because I have taken it in the line of my duty. I felt it was my responsibility.


Angus MacInnis: I simply rise to say that it hardly becomes the leader of the Social Credit group to take umbrage at anyone for raising a political point, because his own group is adept at that kind of thing. My colleague the hon. member for Cariboo asked a very proper question. Here the government of Canada has undertaken to pay certain sums of money to a provincial government, and he wanted to have it clear as to the particular reason for the Dominion of Canada paying these sums. I think he is entitled to an answer.


Mr. J. H. BLACKMORE (Lethbridge):: There is one thing else that ought to be said. When Premier Aberhart led the social credit movement to the successful victory of 1935, >
it was never his intention, nor was it the intention of the social credit movement, that anyone should lose as a result of Alberta's determined effort to obtain some sort of justice in the matter of financial arrangements. It ought to foe known, and for the sake of those who were not in the house at the time I am going to say, that the province of Alberta was owing a great deal of money at an interest rate which in the light of conditions was fantastic. Imagine owing millions of dollars at an interest rate of six and a half per cent! It was utterly impossible for that province to obtain an adjustment with regard to that interest rate without exactly the measures which they did take under Premier Aberhart.
It is due to Premier Aberhart, seeing that he has gone beyond the veil, that it be stated here that the very first thing he did after he became premier of Alberta was to come east with the objeqt of seeing the financial authorities of Canada at that time in order to obtain a system of refunding Alberta's debt. Had the president of the Bank of Canada and other financial authorities in the dominion had the vision-and it is impossible now to see why they did not have it-they would have sat round the council table with Premier Aberhart and allowed him to refund that great debt of Alberta at a lower interest rate, and all the unhappiness which has resulted from Alberta's defaulting would have been avoided. I feel it is only fair that this be said with respect to the late .Premier Aberhart. 
I look upon him as one of the greatest statesmen in the Dominion of Canada since confederation. Had't not been for the determined stand which that man took, with the province of Alberta behind him, we would not even yet be thinking in terms of interest rates as reasonable, as we now know them. Very shortly after the determined stand that Alberta took, we found a tendency toward lower interest rates in Ontario and in other parts of the dominion. Interest rates should be even lower than they are to-day.
Motion agreed to and the house went into committee, Mr. Golding in the chair.
Rdsolution reported, read the second time and concurred in. Mr. Ilsley thereupon moved for leave to introduce bill No. 218, to authorize the Minister of Finance, with the approval of the governor in council, to enter into an agreement with the province of Alberta -to amend the agreement entered into with that province under the authority of the Dominion-Provincial Taxation Agreement Act, 1942.
Motion agreed to and bill read the first time.

The house in committee of supply, Mr. Golding in the chair.
DEPARTMENT OF MINES AND RESOURCES 126. Departmental administration, $152,565. At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Hon. J. A. GLEN (Minister of Mines and Resources):: Mr. Chairman, in connection tvith this item I think it would be well if I were to make a statement to the committee with regard to Abasand Oils Limited. The Minister of Munitions and Supply in 1942 recommended that the bituminous sand of northern Alberta should come under immediate and detailed examination, in order to determine whether large oil production could be obtained from it. At that time all possible sources of Canadian production were being investigated with a view to offsetting the loss of oil supplies through the sinking of many oil-tankers by enemy action.
On April 14, 1943, the minister reported progress made, outlining the problem still to be solved, and stated that the government had arranged to take title to the plant of Abasand Oils Limited near Fort McMurray as the best method of implementing a recommendation of the Consolidated Mining and Smelting Com-

Supply-Mines and Resources
pany of Canada which had earned on an investigation for the government the previous year.
The arrangement was that the government did not pay compensation to the Aba-sand company for the plant and equipment but was to provide funds to the company for rehabilitating the plant and for carrying out pilot plant operations on mining and treatment of the sand.
The company for its part accepted responsibility for reconstructing of the plant, developing processes for the mining and treatment of the bituminous sands, and obtaining cost data for the various operations.
On May 25, 1944, the then minister of mines and resources reviewed in the House of Commons the progress made under the agreement with Abasand Oils Limited and pointed out the difficulties that had arisen in connection with construction, owing to the scarcity of materials and of satisfactory labour. He indicated that the separation plant was expected to be in operation during the summer, and that operation of the refinery would follow a few months later.
In June, 1944, the separation plant was sufficiently completed for test runs, but operations were on an intermittent or limited basis for several months owing to the need for further separation and refinery equipment and completion of the power house as well as to lack of storage space for production. In December, 1944, the refinery made an initial run and from then on operations were continued on a larger scale. The various handicaps itemized above had been almost entirely overcome by June 16, 1945, when unfortunately, the separation plant, workshops and warehouse were destroyed by fire. It is possible, however, as a result of operations up to that time to arrive at tentative conclusions with regard to the project.
Mining. Commercial utilization of the bituminous sands unquestionably involves year-round operation. Work carried out under the Abasand agreement has demonstrated that mining presents no serious difficulty; in the summer a powerful shovel can excavate the sands without blasting, and in the winter, provided that a reasonably large tonnage were continuously handled, only a' relatively thin surface layer of frozen material would require blasting.
Separation. Operation of theTMcClave hot-water process as it was carried out in the separation plant revealed several weaknesses. The amount of heat required to maintain the pulp at a temperature of 175 degrees Fahrenheit was costly, since thirty per cent to forty per cent of the products recovered from the bitumen were required for heating and power.
Further, the distillation of a small amount of the lighter fractions of the bitumen created unhealthy working conditions in the separation plant.	[DOT]
A new method of recovering the bitumen from the sand was therefore developed which appears to have definite advantages over the hot-water process inasmuch as separation is carried out at a temperature of approximately 75 degrees Fahrenheit. Results of operation on the basis of treatment of about 100 tons a day over a period of three months, as reported by the Abasand management, indicated lower costs, higher yields of bitumen, and greater recovery of the diluent oil used in the process. An enlarged unit of 600-ton capacity was being installed to verify these results when the separation plant was destroyed by fire.
Refinery. Operation of the refinery was limited by the comparatively small output of the separation plant. Test runs indicated that the refinery had a capacity of 1,300 barrels of diluted crude, equal to about 600 barrels of bitumen, a day. It is designed for thermal cracking of the bitumen, after recovery of the diluent used in the separation process, yielding a small amount of gasoline, some diesel oil, residual fuel oil, and asphalt. Production of higher grade products from, the bitumen demands a much more elaborate and more costly refining process, involving both thermal and catalytic cracking, isomerization and alkylation units, or, alternatively, hydrogenation.
Cost estimates. While the government has not yet received a final report from the company of the results obtained up to the time of the fire, from data collected in the intermittent operations of the plant, certain deductions and estimates have been made by the Abasand management on the cost of obtaining a barrel of bitumen from sands containing sixteen per cent bitumen, and on the cost of obtaining petroleum products from it on the basis of a production of 500 barrels of bitumen a day.
Assuming the removal of one ton of overburden to each ton of bituminous sand treated, the costs per barrel of bitumen according to these estimates, would be as follows:
Operation	Cost per barrel of Bitumen 	 $0 12
		 0 46
		 0 65
		 0 40
		 0 88
Total 			 $2 51
		 13
	$2,64
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Products derived from the crude are assumed to be. gasoline, 7 per cent; make-up diluent, 6 per cent; diesel oil, 10 per cent; fuel oil, 19-7 ]jer cent; asphalt, 56* 3 per cent; gas and loss, one per cent. The gasoline is not of the best grade as it contains two per cent of sulphur, removal of which would lead to a considerable reduction in yield and increased cost of production. The make-up diluent is delivered to the separation plant and is therefore saleable to the operation. The diesel oil is of reasonably good quality and is comparable to grades now being used commercially. The fuel oil is too heavy for domestic heating units but is suitable for central heating plant installations. The asphalt is of good quality but would require further processing for production of asphalts to specification.
The cost of producing jbilumen as feed stock for complete refining or hydrogenation has been estimated, on the basis of 500 barrels a day throughout at approximately 11.60 a barrel.
Marketing. The estimated total revenue from the -sale in Edmonton of such products as can be made by the refinery now installed at the Abasand plant has been estimated as equivalent to $2.85 a barrel of bitumen, showing an apparent return of $0.34 over and above the operating costs of the plant. However, the cost of rail transportation to Edmonton under current classifications and' rates has been calculated as equivalent to $1.78 a barrel, which transportation would result in a marketing loss of $1.44 a barrel of bitumen processed.
Since freight rates are large factors in marketing costs, a study was made in order, to estimate the effect of different rates on the revenue obtainable. Transportation costs were recalculated using alternative rates for heavy fuel oil and for asphalt. When a rate of 45 cents .per hundredweight was used for both heavy fuel oil and asphalt, the freight charges were reduced from $1.78 a barrel to $1.61, and when a rate of 26 cents was used, they were reduced still further to $1.11 a barrel. However, the net revenue still failed to equal operating costs by $1.27 and $0.77, respectively, per barrel of bitumen processed.
Therefore it does not appear to be possible to recover the operating costs of processing bitumen by marketing the products at Edmonton under existing freight rates when the operating cost is $2.51 per barrel of bitumen processed.
It is possible that development of the mining industry in the Northwest Territories within the comparatively near future would expand the market for petroleum products very

considerably. If development occurred around lake Athabaska the capacity of the McMurray-Waterways area to utilize pertoleum products would be correspondingly enlarged. In this connection the potential market at Yellowknife was investigated but the results were disappointing. Heavy fuel oil, such as could be produced at Abasand by combining the asphalt, fuel oil and diesel fuel oil fractions of the bitumen, sells at $0.19 a gallon laid down at Yellowknife, from Norman Wells; freight alone on the Abasand product from Waterways would amount to $0.16 a gallon, leaving a net return of approximately $0.03 a gallon to the company. This would make a total net revenue to the company of about $1.62 per barrel of bitumen processed.
With the decline in production of well petroleum in Alberta, imports of crude oil into the western provinces have increased. In the first seven months of 1945 these imports totalled 2,427,770 barrels, and in the same period a substantial subsidy was paid by the government in order to avoid the necessity of permitting increased prices for petroleum products in Canada. If it is found to be expedient to discontinue payment of the subsidy, then increased prices for crude oil and for petroleum products generally may be expected. If the price of crude increased by $0.70 a barrel, then a corresponding increase totalling two cents per gallon of products will follow. However, this increase will not likely be applied equally to all products, and it is practically certain that the lighter products such as gasoline and light fuel oils, which are in greater demand, will absorb practically all the increased cost. Therefore, it is believed that the competitive price of heavy fuel oil and asphalt will not likely be increased more than one cent a gallon for such increase of $0.70 a barrel in the price of crude oil. Such an increase would result in the net revenues of the company being increased by approximately $0.50 a barrel of bitumen.
_ The government entered into the present investigation of Athabaska bituminous sands under the stress of a war-time emergency and many factors combined to delay the completion of the programme. The objective was to obtain reliable data concerning treatment of the sand and the cost of extracting bitumen from it. A pilot plant of approximately 500 barrels a day capacity was used for the purpose, but it was not expected to be a revenue producing operation. Some results have been obtained which permit tentative conclusions to be drawn regarding the cost of obtaining petroleum products from the bituminous sands, but they are not as conclusive as is

Supply-Mines and Resources
desired. Under present conditions the cost would appear to approximate 81.60 per barrel of crude bitumen and $2.50 per barrel of refinery products therefrom. These figures, however, require to be verified' by steady operation of the plant before they could be accepted with complete assurance and before they could be used as basic cost figures for calculations under changed conditions that will arise inevitably in the future. It should be emphasized that the Abasand plant is a pilot plant for investigational work; it is not a commercial production plant, and the revenue obtained as a result of its operation was not expected to' exceed the cost by an amount sufficient to make it an economic operation unless a profitable market develops. Information as to this revenue is required for determining whether or not profitable operation of large-scale commercial plants is possible.
The expenditures made by the Abasand company in carrying out the investigation have clearly shown that the sands can be mined without any serious obstacles even under winter conditions, and with the more powerful equipment that would be used in large scale operations no mining difficulties should be encountered. Again, the investigation has resulted in the development of a new method of separating the bitumen from the sand. This process appears to have definite advantages over the hot-water process formerly used, indicating lower costs, increased recoveries of bitumen from the sands and lower loss of the diluent used in the process. It has been shown also that for high recovery of bitumen and low diluent loss, the feed to the separation plant should consist of freshly mined unoxidized sand.
A study of the markets for the products of the present plant show-s that under prevailing conditions as to freight rates these products cannot be sold at a profit where consumption exists, and that the only profitable market would be within a radius of a few hundred miles of the plant where consumption at present is limited to a fraction of the plant's productive capacity. Mining and natural resources developments in the lake Athabaska area and in the vicinity of Waterways might make the operation of such a plant profitable. A much more favourable freight rate and an increased selling price for asphalt would be required before the plant output could compete with asphalt produced from present refineries in the western provinces.
It is appreciated that the cost of producing bitumen could likely be considerably reduced if a large commercial plant were constructed. It is evident, however, that there would not
be a market for Lae quantities of asphalt produced from the large plant. Therefore it would appear that the commercial utilization depends not only on securing much lower costs for mining and separating, the sands, but upon processing the extracted bitumen so as to produce a large proportion of the high price petroleum products. This can be done practicably only in a large-scale refinery of the order of 10,000 barrels a day capacity, embodying thermal and catalytic cracking, isomerization and alkylation'units, or alternatively by hydrogenation. The investigation carried out by Universal Oil Product^ of Chicago into full cracking process indicated that the required products cannot be obtained profitably at the present time. Their estimate of the cost of a 5,000 barrel a day refinery in Canadian funds was $12,000,000. No reliable information is available as to the economics or as to the cost of building a commercial plant. From the information available it is not likely that a 10,000 barrel a day plant could be constructed for less than $25,000,000. When the cost of the same size separation plant, probably $10,000,000, is included it will be observed that substantial capital expenditures are necessary.
It will also be appreciated that the commercial utilization of the sands depends as well upon the costs of getting the products to the available markets. The present freight rate of $1.78 per barrel of products makes it impossible to compete with Turner valley crude oil. However, these costs would be substantially reduced if a pipeline were constructed to provide an outlet for the products of'a large commercial plant.
As has been mentioned, the government has n'ot yet received a final report from the board of management of the Abasand company. The report may change slightly the conclusions that have been reached as to the mining and separation costs.
This morning I received from the president of the company a letter containing a definite recommendation from the board of directors that the government should provide the necessary funds to enable the plant to be rebuilt and operated for one year. They estimate the cost will be $700,000, approximately one-half of which would be obtained from the insurance moneys. It is stated that this would permit operations with the improved process being carried through the- climatic conditions encountered in each of the four seasons.
It must be realized, however, that although more accurate information as to costs would be secured, once the information had been
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obtained there would probably be no further justification in keeping the experimental plant in operation.
It is now necessary for the government to decide what action should be taken and whether in the light of all the present known facts it would be justified in making this additional expenditure to obtain the further information suggested by the company. In reaching a decision, consideration will, of course, have to be given to the independent investigations being carried out by the prov- [DOT] incial government. It will be recalled that the legislature some time ago appropriated $250,000 for this purpose, and it is understood that a plant will soon be erected some fifty miles north of the Abasand plant. It would be unwise for the two governments to compete with one another in this matter. The dominion undertook the investigation only because of the war. Now' that the emergency is passed and the unfortunate fire has forced a reconsideration of our plans, perhaps it might be w'ise not to make any further expenditures in the Abasand plant until the province has completed its own investigation. Again, it might be the course of wisdom to postpone any further investigations at the Abasand plant until a thorough study has been made of the possibilities of hydrogenation. If we proceed with the proposed experimental hydrogenation plant at Ottawa, an opportunity would be afforded of obtaining reliable data as to the costs of this method of processing the bitumen. The cost ef building the test plant is not much more than the amount the company is now asking the government to provide. By the time this investigation was completed the province might possibly have obtained additional information as to the other costs w'hich would be helpful in reaching a definite and final conclusion as to the economics of developing the tar sands.
In the light of the letter received to-day from the president of the company, naturally the government will have to consider what is the best thing to do in the circumstances. The province, as I have said, is making its own investigations. They may have a viewpoint with regard to the development of those sands, and in view of that and the further reports.that we have received with regard to hydrogenation, it may be that the best plan would be to proceed with the hydrogenation plant and ascertain more accurately and definitely the feasibility and desirability of erecting again a separation plant. I thought it well that the committee should know the result of the investigations which have been made by various agencies and the data which has been collected, which, of course, will be at the disposal of 
the provincial government of Alberta in an endeavour to arrive at some conclusion with regard to the operation of the Abasand plant.
Mr. MaoNICOiL: I wish to thank the minister for his report. I must say that I am greatly disappointed at hearing it, but it was not more than I had expected from what I had heard both from Forth McMurray and. from those who had left Fort McMurray. I know very well that the minister is new in his department, but I hope that by the time next summer comes round he himself will go there and make his own investigation, as I have done five different times. I do not take much stock in the reports that I have heard, from the department about Abasand, I am sorry to say, because my own investigations have proved otherwise. Commencing where the minister has left off, I am looking for great results from what the Alberta government will be able to show. I know that last summer they did a fine job and their plant shipped out a great deal of material. They have in their employ a former employee of the Abasand company, a capable man, who has got fine results. But unfortunately,-and this is no reflection on the minister because these things all came before his time-the project has been more or less damned-I am using my own language, Mr. Chairman-by the department. At the very commeneemeht the department did engage a reliable and competent firm to make an investigation, the Consolidated Mining and Smelting company. That was, I believe, in 1943. I visited the plant while their engineers were there and talked with them and observed what they were doing, and when they submitted their report later it was a wholly different report from the one which has been submitted to this committee to-night. I want hon. members to realize that the present minister has nothing whatever to do with getting out this report, because I heard all of it on Adelaide street west in Toronto last January, when I was told the contents of such a report; it was very largely the same information, that the report would be damning against the production of oil at Fort McMurray. Here tonight we have the report presented, and it is very much along the lines that I was told it would be on Adelaide street west in Toronto.
The Consolidated Mining and Smelting company are a reputable Canadian company. No man can point a finger at them. Their report is wholly different from that which has been submitted here to-night and read by the minister, not prepared by the minister, because I know the minister has not been long enough in his department to prepare the report.
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The Consolidated Mining and Smelting, Company reported several things: first, that the sands can be commercially mined. I myself know they can, not from somebody telling me, but from having gone up there myself five times, and at a good deal of expense, but I love to contribute to anything that I am interested in getting to the bottom of. The Consolidated Mining and Smelting Company reported that the sands are easily mined and that the McClave process is a capital process, as I believe it is. Their report was very largely satisfactory so far as commercial production at Fort McMurray is concerned, and they recommended a pilot plant or that the then plant be used for a pilot plant. What happened? After I spoke on the matter in this house the government created a crown company; the principal men who were in the former company were in a very short time all out of the way and other men were sent in there to carry on. I would ask the minister to. ascertain from his department just how many men in his department have been to Fort McMurray, and not only that, but how long each one of them has been there, when they arrived at Fort McMurray by plane, and how soon they got out by plane. I make an exception of one who, I know, has been there ' for quite a long time, who was there when I was there last, and whose name, I think, is Mr. Rosewarne. Find out how many men who passing comments on Abasand were on , that job, and furthermore, how many know any mortal thing whatever about the taking of oil out of tar sands. I think the committee should have that information because, when the Consolidated Mining and Smelting Company made a report which cost this country at least half a million dollars, apparently that report was thrown to the winds and another lot of men were sent in to handle this work.
What are the facts? Even with the old original system of the Abasand company, in 1940, the first year I was there, they produced about 17,000 barrels of oil. That was something; the company must have had some success to do that. That was not a new plant and a very indifferent plant at that time. In late 1941 the plant was destroyed by fire some time in the fall, but it produced a considerable amount of oil during the summer. I again visited the plant that year, and I met there one of the chief geologists of the United States department of the interior. He was loud in his praise of the operation, and I will take his word in preference to that of others whom I have heard here, for there is no more eminent geologist in the United States than this gentleman. He went to the Fort McMurray plant and, as I say, he was loud
in his praise of the. system and of the capacity and possibilities of that area for the production of oil. I do not think a man of his high intelligence and ability, who was sent specially by the secretary of the interior on that same trip up to Norman Wells-I met him on his way back-would have been engaged in such work if he had not been thoroughly qualified to give his minister advice.
In 1942 the plant was rebuilt and in operation, and in that year, the plant and a system which is now condemned, produced about 10.000 barrels. Unfortunately, in 1943, the company operating that plant were displaced, and the government took over the plant. What has been produced since the government took it over? The minister will know that I am not criticizing him in any way. I should like to go with him up to Fort McMurray.


James Allison Glen: You will.


John Ritchie MacNicol: I shall be delighted to go with the minister to Fort McMurray. I know something about it, and I shall be glad to show him what went on and what has been going on. The minister will remember what the first intentions of the government were in this connection. I recall very well that the Minister of Munitions and Supply said, in taking the plant over-I believe it- was in 1943-44-that they would be producing enough bitumen that fall for the Alaska highway to return the government the money which was being advanced to take over the plant. Why was that not done? Who interfered with the production of bitumen for the Alaska highway? The American officials on the job told me that the United States would give an order for one million barrels and supplement it with orders up to five million barrels of bitumen for the Alaska highway, and if they could have got it they could have used it. Who- fell down? Who was responsible for the non-production of bitumen from the original plant that the government took over?
In 1943-44, instead of proceeding with a plant which the Consolidated Mining and Smelting Company said was a very good one, and quite capable of producing bitumen commercially up to the limit of its capacity, what happened? The plant was pulled down. Men were sent in there and pulled it down. I have said before and I say again that newcomers commenced to rebuild a plant in the wrong place. They deny it now, but I will stick to my statement, because that is what I was told at Fort McMurray. They started building it in the pit, but were advised that the river would overflow it in the spring, and they then proceeded to the highest ground to rebuild
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Supply-Mines and Resources

the plant. It should not have been pulled down. It was not the intention of the Department of Munitions and Supply that it should be pulled down. The intention of that department was that it should be used as a pilot plant, but that tvas not done. The whole business has been nothing, more or less than a comedy of errors from beginning to end since the government took it over. Up to now this country has invested between one and a half and two million dollars, and what has it got? The plant which the minister has referred to commenced about May of this year with a so-called new system of extraction. I am going to ask some questions about that in a minute. Now we are told that had it not been for the last fire it would have been a success. I can not swallow that. They do not know whether it would have been a success or not, because it had not been long enough in operation for anyone to decide. Why did the fire come along? That fire came along very fortunately, and not for the country, but it came along very fortunately.
The minister will perhaps remember that a year or two ago we were asked to vote an additional large sum of money, and upon my asking what the money was for we were told that it was to bring a w'ater line from the plant to the Athabaska river. The old estimates will show it. The next time I went there I made a thorough survey concerning that water line. I engaged a boat to take me down the Athabaska river to where the line was supposed to come to the Athabaska river, but never reached it. I want to know who was responsible for wasting the country's money in attempting to build a line the better part of a mile long. A hole was dug on the rock on the shore of the Athabaska river, but there is nothing in it. I followed it up. I do mot know how far back I went to where there was nothing in.the ditch at all. But who was responsible for that? I should like the minister to find out. I am not blaming his department, but every specification and every plan which were used at Fort McMurray should have passed through the department. I want to know if the director refused or o.k.-ed every plan which was used in the work up there, and if he did not-I do not mean the director personally, but the department-why did they not do it? Were contractors allowed to do anything, they liked in spending the country's money along that line-touch and go, guess and miss it? I asked why they did not take the water out of the Horse river. The reply was that the Horse river froze in>
the wintertime. So it did, but that is where they got water last summer- out of the Horse river. The line to the Atha-
baska river was never completed. The whole thing, as I have said, is a comedy of errors. I might say that I am very sorry I was one of those who advocated this work, but I should not be sorry, because I never did advocate that the government take it over, but that the government should support the company in charge of that plant in the development of the tar sands.
The minister referred to a new system of oil extraction. The system which is longest known in America, the system which is used in the various tar sand localities in the United States and in Brazil, is1 the McClave system. The'McClave system could not be any simpler than it is. and I am convinced that it is the right one and, from what the report says, much better than the present system. That system called for a water temperature of 180 degrees. There were two cylindrical tanks, one after the other, and the water had to be that temperature. When the sand came out of the mine it was taken into the first cylindrical tank, went through a revolving process, then out of that tank into the second cylindrical tank and from there it was conveyed into the McClave flotation tank. Now we are tpld that something new has been tried. Who took the responsibility for that? Did the department assume the responsibility for throwing out the McClave system and installing the new Geco system? Someone must be responsible for it and we ought to know to whom that responsibility attaches. Furthermore, we ought to know whether this other system has been in use and where, and whether it has given results.
Certainly this country cannot any longer allow a great possible resource such as this to be damned by what I was going to call monkey-doodling business-that is about the best name I can find for it-such as we have seen in connection with the attempted extraction, of oil out of the far sands of Fort McMurray.	.
Last summer the plant burned down, but there was no water in the water pipes on the day that happened. That is my information on the most reliable authority. The fire could easily have been put out if there had been water in the water pipes, but it was alleged there'was none. I have a picture of the fire. WThy was there no water in those pipes? We paid enough for a fire protection system, and I am sure that had there been water in the pipes, and had the pumps been in operation, such a fire could have been put out. As it was, it was not put out until all that part of the plant had been consumed.
I hope the minister, who is new to the department, will take no one's word for this

Supply-Mines and Resources
but will make his own investigation, and make a thorough investigation, calling in those who have worked at the plant at Fort McMurray. Do not let him call anyone who has not been there or anyone who might have been there only between planes. Let him make the trip to Fort McMurray himself and talk to the men who were in charge and the employees there.
I am sorry to say that the department has lost two fine men. I learned only yesterday that Doctor 8. C. Ells, than whom there is no more qualified or experienced man in this business, has retired from the department. Why was he allowed to go? For thirty years or more he has been the one man in Canada, or at all events in the department, who knew all about tar sands. He has made a thorough study of the subject and his advice had been used by the previous company. In fact, he was largely responsible for the success of that company. Yet he was allowed to go. Why was his resignation accepted?
I was a business man, and I do not care a fig whether a man is sixty-five years old so long as he knows his business. Indeed, it may be said that many men do not know very much until they are sixty-five. Certainly in business, in law, in mining or in any other profession requiring sound brains, the man who has applied himself to his subject will have acquired a very considerable knowledge of it by the time he is sixty-five, and there is no reason why such a man's services should be dispensed with.


An hon. MEMBER:: What about women?


John Ritchie MacNicol: The same applies to
women. I myself wrote to the department when I heard that Doctor Ells was to be retired, and I suggested that until this business was cleaned up he should remain in the department. Another man at Foi^ McMurray, in my opinion one of the most successful men. was Mr. Bergehold. I do not know whether he has retired or has been released from Fort McMurray, but I understand he is now going to Brazil into the same line of business.
I had great hopes from the development of the tar sands but I have little hope now. I regret to say that. I have no hopes until some other group is sent in there or some private company is willing to invest some of its own money, with the support of the government, and takes over the business.
As far as freight rates are concerned, the rate from Edmonton to Fort McMurray is an outrage. Why? Because the road is considered an unfinished road. Well, just fancy a railway from Edmonton, 305 miles, extending to Waterways, and having only three miles 47696-181
to go to Fort McMurray and only another half mile around to the famous salt company, being regarded as an unfinished road. Until another three and a half miles is completed it is called an unfinished road and therefore the freight rate is away higher than it should be. Any commercial company taking over that plant and proceeding to produce oil from the tar sands would naturally build a pipeline to Edmonton, which would not be more than 250 miles in a" more or less direct line.


John Horne Blackmore: Are there any particular difficulties in the construction of the remaining three miles of road?


John Ritchie MacNicol: Absolutely not. During the war the United States government ran another mile and a half to what are called the plains where they built their tugboats and scows and they could have gone around the bend to what would have been the salt plant.	[DOT]


John Horne Blackmore: Did anyone try to explain why it was not completed?


John Ritchie MacNicol: No more than the fact that as long as the road is not completed you get a higher freight rate. That is the reason I would give.


John Horne Blackmore: Perhaps another reason for sabotaging the whole situation.


John Ritchie MacNicol: The minister said something about sulphur. I went into that question very carefully and, while I am not an expert at investigations along that line, I am not a novice. The sulphur can be easily removed. I was glad to hear the minister say that it contained only 2 per cent, and that is a reduction of from 3 to 5 per cent as compared with what we were told previously. In any event, the sulphur is a small item and can be easily removed. Furthermore, the diesel oil was excellent. I followed the ship with the oil right down to Yellowknife on Great Slave lake and to Box on lake Athabaska and talked the matter over with the engineers in these mining camps, and I was told that it was excellent diesel oil. I asked the engineers if the sulphur affected their engines and they said no.
I am hoping that the Alberta government, for the sake of their own province, will make a success of the undertaking. They have taken over Fitzsimmons plant fifty miles down the river. I have been there too, and my information from the men on the job is that they are getting splendid results. They have on the job a man who formerly worked with the Abasand company, and as he knows about taking oil out of tar sands he should be able to operate successfully.

Supply-Mines and Resources

I want the minister to find out exactly how many men who went to Fort McMurray ever had a mortal thing to do with taking oil out of tar sands before that. That is a fair question. I wish the minister would communicate with the men there who are on the job so as to get the facts correctly.
I must confess that this report has me warmed up because I had heard about it last January and it has been, cooking since then. Now I find it is as bad as I was told it would be. What is to happen now I do not know. Are the sands to be given back to the original company, and will the government get out of the business? I would say that the government should get out of it in any event, no matter to whom it goes.
From what the minister said in conclusion I would judge that not much will be done with it until after we see whether the government of Alberta makes a success of its proposals. Of course the minister has been in the department for only a short time; but believe me, if I were minister I would produce oil at Fort McMurray and I would not wait to see what the Alberta government does. I would not want it to be demonstrated that the Alberta government can do better than the federal government.
We must have men with a really sincere desire to make this thing go and produce oil out of these sands. I must tell the minister that the department itself, through its staff, is responsible for the whole world believing that at Fort McMurray we have the greatest oil deposit in the world. For years I have read pamphlets issued by the department. Why were they issued if what they said was not [DOT]true? Why did the department issue pamphlets which stated that we had five times more oil there than all the rest of the world combined? If these statements were not true, why were they made? All hon. members have read, in all sorts of magazines, reports about the tar sands; and those reports are based upon statements made by the department. (Now we are told in so many words that there was little to those statements; that it is not a commercial proposition; that it costs too much to get the oil out of the sands; that it is too far away; that the oil has sulphur in it, which makes it unfit for commercial use, and so on. Personally I do not want that kind of report. I want a report along the lines of the report of the Consolidated Mining and Smelting Company, that the sands are commercial ; that the oil can be taken out of them; that they make good oil, and that the bitumen is number one also. That is the report we should have, but we get a report like this after an expenditure of $2,000,000.

Of course the minister is completely free of any criticism in this connection. Nothing I have said has anything whatever to do with him, but somebody is responsible. As I said a moment ago, I want to know whether all the plans and specifications that were used at Fort MoMurray were sent here and O.K.-ed before construction commenced, and, if not, why not? We had men who were supposed to be in charge of the construction at Abasand. If they permitted this construction to go on without O.K.-ing the plans, then somebody is responsible; and if the plans came down here and were OTC.-ed by them, then they are responsible. There is no other answer to it. If they O.K.-ed the plans they must have thought they were all right. Finally I want to know whether the officials of the department O.K.-ed the Geco system and condemned the McClave system; and if that system is in operation I want to know how much oil has been produced under it, the names of the companies, where the sands are, and all about it. IJp to the present we have been told that the McClave system is best for the development of the tar sands.
I want to ask one or two questions and then I am through. I want to know why the firefighting apparatus was not in readiness last June to fight that fire, because we put a lot of money into that plant. According to the reports I have right from the plant, the apparatus was not ready. Then I should like to know what is to happen now. Is the government going on to rebuild that plant and, if so, will it put in this so-called new system without a thorough test having been made? According to the reports I have, after the system was put in there was not time really to demonstrate anything before the fire occurred. I think I have pretty .well covered what I wanted to ask. I particularly wanted to know if the department did OJC the plans and, if they did not, why they did not. I also want to know why they abandoned the recommendation of the Consolidated Mining and Smelting Company.


James Allison Glen: I will take the last question first, as to why the firefighting apparatus was not in evidence when the fire took place last June. I have here the report of the insurance company with regard to the fire. In the statement of William Spete, who was a carpenter in that plant, he states that he iwas working along with another man, Henry Olsen, welding and cutting braces for the feeder. His statement goes on:
When we commenced to loosen the top log I saw fire in the centre of the logs and flames coming over the top of the logs. Gilbert Olsen shouted for the fire-extinguisher and attempted

Supply-Mines and Resources
to extinguish the fire. In the meantime I ran into the separation building and shouted "fire" to the workers outside.
I then returned to help fight the fire, running through the separation plant to the garage and helped remove the fire hose and trained the fire hose on the fire. But there was a high wind and within a few minutes the entire building was enveloped in flames, while fire also spread to the warehouse and machine shop. One of the workers within the separation building turned in the fire alarm, which consists of sounding the steam whistle from the power house.
In my opinion the fire started from a spark from the acetylene welding torch becoming lodged between the logs and end wall of 'the ramp.


Mr. ROWE:: Is it true that there was no water in the hose?
Mr. GLlilN: This man said he helped to remove the fire hose and train the hose on the fire, so that I presume there was water in the hose. The hon. member also spoke, not in a very complimentary way, of those who had charge of the plant.


John Horne Blackmore: Is there anything in the statement the minister just read to indicate there was water in the hose, even though the hose was trained on the fire?


James Allison Glen: The words are:
I then returned to help fight the fire, running through the separation plant to the garage and helped remove the fire hose and trained the fire hose on the fire.


John Horne Blackmore: But water is not mentioned.


James Allison Glen: I would assume there was water or he would not train the hose on the fire.


John Horne Blackmore: But water is not mentioned in the report.


James Allison Glen: The hon. member for Davenport also spoke, in a not very complimentary manner, of those who were in charge, and wanted to know if the plans for this plant had been submitted to the department and were OJC.-ed by the departmental officials. My information is that all major plans were submitted to the department and were O.K.-ed by the department. All the operations of the plant were under the charge of a body of directors. Those directors were in sole control not only of the erection of the plant but also of the cariying out of operations. It might be of interest if I were to give the names of the directors of the company:
John Irwin:
President, Abasand Oils Limited.
President, McArthur-Irwin Limited.
President, Canadian Oil Companies Limited.
President (formerly), MeColl-Frontenac Co.,
Ltd.
Vice-President, Commercial Alcohols Limited.
Director, Power Corporation of Canada Limited.
George B. Webster:
Vice-President and General Manager, Abasand Oils Ltd.
Vice-President, Giant Yellowknife Gold Mines Limited.
Director, Broulan Porcupine Mines Limited.
President (formerly), Kerr-Addison Gold Mines Ltd.
H. R. Milner, K.C.;
Director, Abasand Oils Limited.
President, Northwestern Utilities Limited.
President, The Canadian Western Natural Gas, Light, Heat and Power Co., Ltd.
President, Anglo-Canadian Oil Co., Ltd.
President, Dominion Gas and Electric Co., Ltd.
President, Canadian Utilities Ltd.
Director, Burns and Co., Ltd.
Director, Calgary and Edmonton Corporation.
Director, Home Oil Co., Ltd.
P. A. Thomson:
Director, Abasand Oils Limited
1st Vice-Pres., Nesbitt Thomson & Co., Ltd.
Director, Canadian Oil Companies Ltd.
Aubrey Davis:
Director, Abasand Oils Limited
President and Managing Director, Davis Leather Company Limited.
Chairman, Davis Canadian Leather Limited.


Arthur Leroy Smith: That name
could not have been Milner, could it?


James Allison Glen: Yes, H. R. Milner, K.C. I
think the hon. member knows him.


Arthur Leroy Smith: He never
put out a fire yet.


James Allison Glen: The engineering company
that built the plant was the General Engineering Company of Canada Limited, of Toronto. This is an engineering company with wide experience in the design, construction and operation of industrial plants in Canada and elsewhere. A few of the plants erected by this company are:
Lead-silver-zinc concentrator and smelter- Mount Isa, Australia.
Concentrator, Rio Tinto copper mine in Spain

(rebuilt).
Concentrator, Hudson's Bay Mining & Smelting Company.
Concentrator, Noranda Mines.
Milling plant, Howey Gold Mine.
Milling plant, Pickle Crow Gold Mine.
Milling plant, East Malartic Mines. Concentrator, Golden Manitou Mines.
_ Fuse-filling plant, Allied War Supplies, Project 24, at Scarborough, Ont.
That is the company which built the plant. These are the directors who were carrying on the work, and I submit with all deference

Supply-Mines and Resources
that men, with the experience they had were certainly competent to build the plant in the best way.
The hon. member has referred to a statement I made to the house, and to the fact that this had been known to him from January of this year.


John Ritchie MacNicol: The contents of it.


James Allison Glen: I hold in my hand the report of operations of the Abasand Oil Company. This is submitted by Mr. George B. Webster, vice-president and managing director, and it is dated October 10, 1945. The statement I read to the committee is based absolutely upon the contents of this report. It embodies only what they, as directors, in the fulfilment of their duty were reporting to the government in connection with operations. The statement I made is a condensed form of what is in the statement made by the president of the company. That statement was received only on October 10, 1945.
The position the company takes to-day is, as I have already said, set forth in a letter I received from the president this morning. During the course of the day I have had no opportunity to decide as to what the government's policy shall be. But I submit, as a business proposition, that with the position of the Alberta government to-day, with their interest to the extent that they are spending $250,000 on the plant to explore the possibilities of these sands, with the statement that has been made by myself, and the report of the directors, surely this is a subject for consideration, and one concerning which a decision as to policy should be made.
As I have said, the dominion government entered this project with a particular purpose in mind, namely, the supplying of oil which was badly needed during a certain period. That emergency has passed. If there is virtue in all that is said by the hon. member for Davenport, in the light of what he has said and in the light of the experience gained by the directors of the company, this is surely a matter for consideration and for decision later. That must necessarily be the position I shall take now-to view the whole matter again in the light of the statements that have been made in the house, and in the light of the report that has been submitted by the directors of the company, and also having in view very materially the attitude of the provincial government, which may desire to make representations to the dominion government in this matter.
If they are satisfied that these oils can be worked commercially, economically, then surely the province of Alberta might desire

to make some representations in the matter. They have a considerable interest in the development. It is a matter for future consideration. That is as far as I can go to-night.


William Irvine: I do not wish to take the attention of the committee from the very interesting subject that has been before us for some time. However, I understand that this is a general discussion on the estimates for this department, and that I would be in order if I were to bring up some other matters. Those who wish to revert to this matter later on, and to continue the discussion will, I presume, be permitted to do so.
I might state briefly that I believe the subject of the tar sands at MoMurray is one of great importance. I do not think the report is perhaps quite as satisfactory as many of us would like to see it. However, I hope the government will not abandon its interest in the matter. If the- Alberta government continues, so much the better. Perhaps it would receive some assistance from the federal government in connection with financing' its experiments in this project. I hope that they will see it gets the assistance, if it is required, and that the industry, if it proves to be an economical one, will be held for the use of the Canadian people.
The hon. member who has just criticized the proposal thought some private company could have made a great success of it. Then he proceeded to say that if he had been minister Of mines and resources he could have struck oil easily. This would seem to indicate that either the government or a private company, in his opinion, could be successful. That being so, I trust the minister will stick to his job, and see to it that either the Alberta government or this government develops that great resource in the interests of the Canadian people. However, I am not an oil man, and I do not know the details of such a project. For that reason I shall not discuss the matter further at this time.
I would ask the minister a question on another matter connected with mining. Was a grant of money made some years ago- I think since the war began, but I am not sure-for the building of a mining road in the vicinity of Finlay Forks? I do not believe that the amount of money granted reached Finlay Forks. I should like to know how large the grant was and, if it was expended, how many miles of road were built. If money has already been spent in the building of the mining road in that vicinity, why should the road be abandoned before it is completed?
There is great need for such a road. Indeed, not only is there need from the point of view
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Supply-Mines and Resources
of mining, but there is a very great need in connection with joining up the Cariboo highway with the Alcan highway. It is only about sixty miles from Finlay Forks to the end of the Fort St. John-Hudson Hope road. If that sixty miles were built it would tap the great coal resources of Hudson Hope, and would be of service to the other mining interests. At the same time it would join up the Cariboo highway, which goes right on to Vancouver and the Alcan highway.
Would the minister give me his views on the proposal, and tell the committee whether it is the intention of the government further to extend grants for the building of mining roads in that vicinity?


James Allison Glen: I am informed that a grant was given for the building of this road before the war, but that no money has been granted since the war. The hon. member will realize that that will be a post-war project, and his remarks will, of course, be considered in that light. We are hoping to have mining roads assisted now, as they were prior to the war. That is as far as I could go.


David Arnold Croll: I should like to deal for a few moments with the different aspects of the department, particularly immigration. I appreciate that the only immigration the people of Canada are interested in at the present time is the return of troops from overseas and then the return of wives and children.


James Allison Glen: I do not wish to limit the discussion, but there is a vote which deals with immigration. Would it be asking too much to ask the hon. member if he would withhold his remarks until that vote is before the committee?


David Arnold Croll: I have no objection. I understood that we were getting far afield and I was going even farther afield.


James Allison Glen: This is really a war item we are dealing with.


David Arnold Croll: I shall reserve all my rights.


James Allison Glen: I shall take care that the hon. member has an opportunity.


John Ritchie MacNicol: I listened with interest to what the minister said, and I should like to point out that the McClave system was in operation in that plant in 1944. In May, 1945, a supposedly new and improved system was put in operation, and the fire occurred on June 16, I believe. We are led to believe that in that short space of time this supposedly new and improved system, the Geco system, demonstrated its superiority.


James Allison Glen: I have a comparison of the operations when we experimented with the
McClave process and the Geco process. The comparative operations were from January 20 to February 4 and from February 21 to March 9; from March 10 to March 26; from April 24 to May 22; and from April 10 to April 12. There is another report which I received in October on the McClave and Geco operating efficiency. They were experimenting and testing as to the efficacy of either system, and one paragraph of the report states that in so far as is known the Geco flotation process is the simplest yet devised for the separation of bitumen from sand. Low temperatures are used. The high temperatures of other processes are offset by the rubbing action of sand particles in the agitation section of the Geco cells. It has been found that most of the middlings returned by the settlers were composed of sand particles from which the oil had not been removed. As the sand particles are under high heat during both separation and settling for many hours, it cannot be expected that the same treatment repeated will result in any further separation. On the other hand, middlings produced by the Geco process are composed of sand particles covered with oi! which have mechanically come with the froth. The additional rubbing in the Geco middling cells cleans off the last of the oil.


John Ritchie MacNicol: The McClave is as simple as anything could be. What could be more simple than water heated to 180 degrees and the agitation of the McClave quiet flotation tank in which sand goes to the bottom, oil comes to the top and then is taken off the same as is done in gold mining. I understood the minister to say that the Geco system operated at about 75 degrees. It- appears to me that the hotter you have the water, the easier it will work because that is all that is required to disintegrate the sand. I doubt very much if water heated to 75 degrees will disintegrate the sand as rapidly as water heated to 180 degrees. The McClave system is in operation in the plants in the United States, and I am sure, if there is any other system better than the McClave system, they would be glad to know about it. The McClave system I am told is used in Brazil in working their large deposits. I am sure they would be glad to know that the government working at Fort McMurray and limiting itself to a few tests carried on almost before the plant was completed had decided that some new system is better.
It is not for me to say that the Geco system is not a good one. I hope it is a good system. I am going to advise the minister to make inquiries and get in touch with the best available men. I understand that next week there will be passing through Ottawa a man who is
Supply-Mines and Resources



expert in the taking of oil from sands. If I happen to see him I am going to send him to the minister's office. I did not know that this matter was coming up to-night and I was not prepared to talk on it. However, I have some recollections of my past investigations and I was able to say something.
I remember when this came up in the house previously and the matter of hydrogenation was discussed. That is a simple system. Hydrogenation is simply the use of a catalyst to crack, to break up the molecules. It is applied to many different things. The Germans had it down to perfection and I suggested that we send someone to Germany to try to get one of the plants they had. If the minister is going to come into the house to ask for a vote of $750,000 to build a hydrogenation plant here, he should make a full investigation. I am going to send to the best engineers I can get in touch with in the United States, men who are qualified!, to see whether we are to have the proper type of hydrogenation plant.
We have good men here; I met some of them at the plant on Booth street. Some of these men could be sent to Germany, and perhaps the department has already done so; if so, they should have reports as to whether it would be profitable for us to bring over a German hydrogenation plant. I will support any vote to make use of these sands.


James Allison Glen: When rwe get to the vote I propose to discuss that matter.


John Ritchie MacNicol: That is about all I have to say. We were told in 1943-44 by the Minister of Munitions and Supply that by the fall of 1943-44 I believe this country would recover from those sands with the plant checked up by Consolidated Mining and Smelting Company enough bitumen to sell to the United States government for the Alaska highway to pay for our investment. I should like to know why that was not carried out and why we went through all this other business to try to get oil.


Mr. WEBB:: I should like to make a few general remarks on national parks, but if the minister would prefer that I hold them over until that item comes up and promises me a little leeway on it, I am perfectly satisfied to wait.


James Allison Glen: Yes, most certainly. When that item comes up the hon. gentleman will have every opportunity.


Mr. HARKNESS:: I am still not clear
about just what is intended in regard to the plant. I gathered from the minister's remarks that the government was undecided whether to continue with the Abasand oil operation;

yet in the war estimates there is an item of S400.000 for "remodelling and expansion of plant of Abasand Oils Limited." Would the minister explain whether that is part of the amount which is to be paid to the company along with the insurance money, in compensation for the plant burnt down, or is it to build another plant at government expense?


James Allison Glen: The amount of $400,000 was
for the payment of expenditures on the plant. All of it has not yet been expended. I think the hon. member was not in when I spoke before. I stated that in the light of the report which I had received from the company this morning and in view of the fact that the provincial government are now dealing themselves with the same project, it will be necessary for the government to decide what action shall be taken in regard to Abasand.


Douglas Scott Harkness: What is the $400,000
for?


James Allison Glen: That was for the continuance of experiments in the operation of the plant for the whole year.


Douglas Scott Harkness: If the plant is not to
be operated, will the $400,000 be appropriated?


James Allison Glen: Some of the money has not
yet been expended.


Arthur Leroy Smith: I read a
statement by the president of the Standard Oil Company in New Jersey that he knows that there is a tremendous amount of oil there, and I have also read evidence given before one of the committees of the house last session when officials of the department had some doubt of the ultimate picture. I wonder if the minister knows that the Imperial Oil Company during the last twelve months conducted a lot of experiments there in charge of a friend of mine, Pearce, the son of William Pearce whom the hon. member for Davenport knows so well.


John Ritchie MacNicol: I do not know the
gentleman at all.


Arthur Leroy Smith: Mr. William Pearce of the Canadian Pacific Railway, who is the father of your watering scheme from the Saskatchewan river.


John Ritchie MacNicol: At Banff park?


Arthur Leroy Smith: No.


John Ritchie MacNicol: Then I do not know
him.


Arthur Leroy Smith: Imperial
Oil have drilled over one hundred holes in the last twelve months, and this man has been in charge of the experimental diamond drilling done in that area. I am asking whether the

Supply-Mines and Resources
government, in deciding whether or not to continue with these operations at Abasand and therefore spending money there, are familiar with the results which have been achieved by the drilling of over one hundred holes in that area by the Imperial Oil Company. I know that has been done because I have talked with the people who did it. Has the department gained any information from that drilling, aside from expert advice from those persons who look from above the ground -and I can see as far into the ground as anyone else? It should be a factor in helping the government to decide whether to continue its operations.
May I say to my hon. friends to my left that I am very proud that the .provincial government of Alberta have abandoned faith in what the dominion government are doing and are trying on their own to find out what those sands contain. This may be said in all truth, that in the two years and more in which this government has been spending its money there it has found out exactly nothing; we are not a bit farther advanced than when we started. It does seem to me that the government, without being too proud, might consult other people who have done a bit of work there and whose information might help to determine government policy. Apparently the distinguished gentlemen whom the minister is now consulting have heard nothing of what I am telling them, but I know for a fact that over a hundred holes were drilled by the Imperial Oil Company in that area and they got a lot of information. Their difficulty is that you find there the oil-bearing sand and then a strata of mud. That is not the technical name for it, but it is mud. They are not far up the river from where the government was doing its work, and I am merely asking whether the government officials, being wise gentlemen, have taken into consideration the facets discovered by the Imperial Oil Company.


James Allison Glen: I am informed of the drilling that has been done by the Imperial Oil Company. They did quite a large amount of drilling, but the department has done very much more drilling. Any information that the Imperial Oil have with regard to their drilling is known to our officers. As a matter of fact, $200,000 has been spent by us in drilling alone.


Arthur Leroy Smith: I do not pretend to be an authority, but I am sure that Imperial Oil Company, no matter what the amount of money spent, have drilled a great many more holes than the government ever thought of doing. I believe that to be the simple fact because that is all they were
doing-just drilling these holes. I know what their difficulty was about six months ago. It was to determine whether in view of the unproductive sand that lies between the various oil-bearing strata which they struck admitted of commercially feasible operations. I am sorry even to seem to disagree with the minister. I am not saying that he is wrong, but I am much inclined to think there is some error in the information which he has innocently just given to the committee.


James Allison Glen: I am informed that the facts are as I have stated them. We spent about $200,000 in drilling this year and have proved up 258,000,000 tons of sand in one area.


Arthur Leroy Smith: It is very easy to say one has proven 258,000,000 tons, but have they found it in depth, without being interlarded with unproductive stuff, which means a great deal of course in the cost of operation? I am quite sure that the minister means to be correct, but did he say that they have proven 258,000,000 tons which are commercially feasible? That is the problem we have there. We know there is plenty of oil; there is no question about that. We know, for example, that there is plenty of gold in the world: you have it in the sea, you have it everywhere, but can you get it out commercially? Is the minister's statement to this committee this, that in this year they have proven 258,000,000 tons of commercially feasible oil sand in that area? I should be very much interested to know.


James Allison Glen: The information I have given is that we have spent this $200,000 and have proved up 258,000,000 tons of sand averaging about 12 per cent. But the problem is as to its commercial value after it is processed; and that is the burden of the statement which I made in connection with the report on the Abasand company.


Mr. JOHNSTON:: Just a word before this item passes. I do not intend to spend much time discussing this problem, because I have discussed it at great length on many other occasions.
Away back about 1912, I think, if I recall the history of it aright, the federal government first took a hand in investigating the feasibility of producing oil from the tar sands of Athabaska. Some $25,000 was spent at first in sending some of this tar sand over to England and having it analysed. The information which the federal government then got was negative. Since that time they have spent a good deal more money, the minister said about $200,000, and they have got to exactly the same place where they got about 1912; that is they have got nowhere.
Supply-Mines and Resources

As I said in the house a year ago, I was of the opinion that the federal government would not get very far in their experimentation with the Athabaska tar sand because, as my opinion was then and as it is now, they never took it seriously. That was a mistake. We should have gone ahead to develop it on a commercial basis. A year ago the urgency was great; the shortage of gasoline was extreme, and this country was in danger of defeat for lack of fuel oil. Yet this federal government did not see fit to go ahead and put forth the efforts which should have been put forth in developing the tar sands there. If an emergency such as the world war could not move them I am quite sure that a few speeches now will not move them.
The report which the minister has just given us is nothing more than I had expected. I am in hopes, though, that the provincial government will go ahead with their plans-of course they cannot do so on nearly the scale which is possible to the federal government- and will get somewhere. When I was in Edifionton last fall the provincial minister of public works, who wras in charge of this operation, gave me the assurance that they were progressing very satisfactorily. It was his opinion then that the federal government had by their method sabotaged the Athabaska tar sands. That statement, which he made over a year ago, I read into Hansard when I was speaking here on the subject. It seems that the federal government are endeavouring to wash their hands of the whole thing, to get rid of it as quickly as possible. At the end of the minister's statement a while ago he said that the federal government were undecided whether to go on with it or not; that especially in view of the fact that the provincial government had gone into the field of investigation it might be better to wait and see what progress the provincial government would make before the dominion government incurred any further expense. Of course that is a very nice way of, shall I say, passing the buck to the province and now withdrawing gracefully from that field. The opportunity seems to have presented itself at the right time. I think the minister said that it would take something like $25 million to build a properly equipped pilot plant; that they were hesitant whether they should spend that money now in view of the provincial government's activity there, and that they would wait and see what the developments were.


James Allison Glen: Not a pilot plant. A commercial plant.


Charles Edward Johnston: I would suggest to the minister that, the federal government having

spent a large amount of money without getting anywhere, it would be good business on their part, instead of spending $25 million there in the erection of a commercial plant, to give about $15 million of that amount to the government of Alberta to assist them in their research work. The provincial government of Alberta has an interest in that oil field and is determined to go ahead and see what can be done with it. My information is that satisfactory progress is being made, and I believe it would be a good financial investment and an important contribution for the federal government to give the provincial government $15 million to build a commercial plant. Added to the $250,000 which the province has already put into the operation it could make a worth-while investigation. It would not only help the federal government but aid this country in time of need. We need not bury our heads in the sand and think that all dangers of war have disappeared and that never again will there be a world war. Now is the time for us to begin to prepare ourselves to obtain those things which are necessary to the operation of the war and which were so scarce during that critical time a year ago. It would be both a gesture toward the safety of the country and a good business proposition from the point of view of the dominion if the federal government would give the province $15 million of that amount which they would otherwise have to spend for the erection of a commercial plant to carry on.


James Allison Glen: The hon. member for Bow River is not quite correct in stating that nothing has resulted from the expenditures of money by the dominion government. I stated, on the strength of a report given by the directors, that the expenditures made bj the Abasand company in carrying out the investigations have clearly shown that the sands can be mined without any serious obstacles even under winter conditions, and with the powerful equipment that we use in large-scale operations no mining difficulties should) be encountered. That was one of the problems they had to solve, and they did.
The investigation has resulted in the development of a new method of separating the bitumen from the sand.
That also had to be demonstrated in some way before the operations on these sands could be accomplished.
This process appears to have definite advantages over the hot water process formerly used, indicating lower costs, increased recoveries of bitumen from the sands and lower loss of the diluent used in the process. It has been shown also that for high recovery of bitumen and' low diluent loss, the feed to the separation plant should consist of freshly mined unoxidized sand.

__________ Supply-Mines and Resources
That may have cost a lot of money to obtain, but it was necessary information before anything could be done in the way of utilizing these sands, and it has been obtained
The non. member would be interested in the fact that the minister, Hon. Mr. Fallow, has made a statement himself with regard to their test operations. The Edmonton Bulletin of November 15 last reports him as follows:
That extraction of oil from the McMurray sands on a commercial scale will be proved by test runs by next summer, is the hope of the Minister of Public Works, Hon. W. A. Fallow, who said Thursday that separation equipment will be ready for shipment to the plant soon after the spring break-up.
If the machinery is received from the manufacturer during the winter it will be assembled at the waterways railhead and sent down the river with ready-cut building material as soon as ice conditions permit.
Because it has been manufactured to specifications, construction of this equipment is slow, Mr. Fallow explained, but if it can be got to the plant by summer the first test runs will be made some time before the fall.


John Ritchie MacNicol: Was that the summer of 1945?


James Allison Glen: No, next summer. This statement was made on the 15th of November last.


John Ritchie MacNicol: A year ago?


James Allison Glen: 1945, November 15 of this , year.


John Ritchie MacNicol: That will be for the new plant?


James Allison Glen: Yes. That is what Mr. Fallow, the minister, said on November 15 of this year. The hon. member therefore will note that all the experiments which have already been made in that plant by the dominion government, at that vast expenditure of money, are available to the government of Alberta. Probably in the light of the information obtained and the experience gained, it is what Mr. Fallow is building his hopes upon with regard to the separation plant. As\I said at the beginning, and I repeat it now, this is a matter that will have to be considered by the government, having in view what we have already heard from the directors of the company, and taking into account the project which the provincial government proposes to undertake.


Charles Edward Johnston: The minister mentioned three things which the federal government had discovered, one being that now, after this tremendous amount of money has been spent by the Dominion of Canada, it is found that these tar sands cannot be properly worked. A year ago I said that mining was one of the topics being discussed, and after 47696-182
several years of experimentation the federal government decided to employ a man from the United States. That man went there and in a matter of hours he was able to tell the operators how to mine it. The old process was to use machines with cups on them; when they ran against the bank and struck anything granite-like the cups were broken off and their technicians were so good that they did not know how to get around the obstacle. This man simply told them to use a stick of dynamite and blow it loose. That was one of the biggest factors in solving the problem. The other method of separating the liquids was to use either hot water or hydrogenation. It is my information that while the federal government was building its hopes on the hydrogenation process, that was not so practical as even the hot water, and all hon. members will remember that when the Abasand company had tie plant they were using the hot-water method.


John Ritchie MacNicol: One hundred and eighty degrees.


Charles Edward Johnston: Yes, and in using that method the Abasand company was able to produce 400 barrels a day; but since the federal government started the use of the new method they have not been producing anything, or at any rate a very small quantity. It is true that the plant burned down and that held up operations.


Arthur Leroy Smith: How many times did it burn down?


Charles Edward Johnston: Once. It was pulled
down once and burned down once. . These are the great discoveries that the federal government has made after the expenditure of over $200,000, or in fact more than that- a million and a half all told. That is rather expensive in view of the results obtained, and it would be much better and more satisfactory if the federal government would get out of the field, which I think they are gracefully trying to do after making such a failure of the venture, and give the provincial government at least half of that $25,000,000 which it would cost them to erect a new commercial plant. Give that half to the provincial government and let them erect a really worth-while pilot plant and produce the oil. It has been .proven by the Abasand company, under Mr. Ball's direction, that it can be done, and he was doing it on a small scale. All it needed was effort and ingenuity on the part of the federal government.


Angus MacInnis: If the federal government should give up the work they are doing there now, what is to happen to the investment in

Supply-Mines and Resources

the plant that we have there? If that is intended, would it not be better, as the hon. member for Bow River suggested, to turn all this equipment over to the provincial government, with whatever records there may be, together with the proven work that the government has done? That is one question. Another question is this. If I heard the minister rightly when he was reading his report, the commercial development of oil sands has been proven, but the difficulty appears to be transportation of the product to where it can be commercially used. If that is the case, has the Department of Mines and Resources considered improving transportation facilities either by means of more reasonable freight rates or by what the hon. member for Davenport referred to as a pipeline from the field to Edmonton?


James Allison Glen: The first question is, what will be done with the plant? Provision has been made that the company may purchase the plant for the amount of money the government has expended on it.


Mr JOHNSTON:: Taking depreciation into account?


James Allison Glen: The government of Canada will have the first option to take it over.


William Earl Rowe: 'Has the department had an offer from the company?


James Allison Glen: No. All we have had is the report from the company's president stating that with an expenditure of $700,000 construction of the plant could be proceeded with and operations continued. That is the offer made at the moment, which I received only to-day.


John Ritchie MacNicol: The report from the crown company?


James Allison Glen: Yes. What was the other question?


Angus MacInnis: The other question was with regard to overcoming transportation difficulties.


James Allison Glen: I did say that a pipeline would considerably reduce cost of production and make it much more profitable for any company to operate these sands, but there must be a large production in order to make it feasible. The hon. member spoke of its having been proven commercially. It has not been proved commercially possible. It has been proved physically possible but not commercially possible.


Mr. HERRIDGE:: There is one question which I should like to ask, but I am not sure under which item it should come. Since

the Prime Minister tabled the terms of reference to the international joint committee in March, 1943, in connection with the investigation of the possibilities of the Columbia river basin for the development of power, storage and conservation purposes, the people of my constituency of Kootenay West have been very much interested in this matter, which is of vital concern to them because they realize the possibilities in the future. I should like to ask the minister what work has been done and what progress has been made by the members of his staff in connection with the investigation into this question.


James Allison Glen: At the moment that is in the hands of the Department of External Affairs, but next year I expect it will be transferred to the Department of Mines and Resources to be dealt with.


Douglas Scott Harkness: I should like to ask the minister a simple question. After two years of experimentation and expert advice, obtained at considerable cost, does he, and do his advisers, consider that the development of the Fort McMurray tar sands is a feasible commercial propostion apart from transportation costs at the present time? In other words, do the results indicate that the undertaking is feasible? The minister said that at the present time, owing to transportation costs and various other factors, it probably was not.


James Allison Glen: The hon. member is asking a question which is not easy to answer, because I would not wish to say it was a commercially feasible proposition until I knew the result of the hydrogenation process. That is a matter which is being dealt with now. As a matter of fact, as was indicated by the hon. member for Davenport, investigations are being made with regard to hydrogenation; officers of the department have gone to Germany in order to find out what was done there. Doctor Boomer of Alberta, and Doctor Warren of the department went to Germany in order to study the latest methods applied in that country in connection with hydrogenation, since they used so much oil Muring the war, most of which was produced by this process. Unfortunately Doctor Boomer died shortly after his return and was able to make only a general report. Doctor Warren has made a report which now is being correlated. I hope that within a short time we shall have that report so that the officers will have an opportunity of studying it and coming to a conclusion as to the advisability of constructing the hydrogenation plant. As the hon. member knows, we have another vote for the building of a hydrogenation plant, and if it is con-
28S1

Supply-Mines and Resources
structed .the tar sands will be the subject of investigation by our officers to ascertain whether that process is the proper one to adopt. I believe that answers the hon. gentleman's question.


Percy Ellis Wright: Have the department any figures as to the volume of production that would be necpssary at Fort McMurray before a pipeline to Edmonton would be feasible? That is, a certain volume of production would be required before it would pay to have a pipeline. Then I want to ask the minister one other question, having to do not with this particular development but with the development at Norman Wells. One company has been doing a great deal of exploration work there to determine the amount of oil that may be available in that district. I should like to ask the minister what liaison there is between his department and the company carrying on that work, and what information has been gained so far in regard to the oil reserves at Norman Wells. I think the committee would be interested in learning just what developments there have been so far.


James Allison Glen: The reply to the first question, in regard to the volume of production necessary for a pipeline to Edmonton, is at least 10,000 barrels a day. As to the second question, we have had an engineer in the Noirnan Wells district all summer watching what Imperial Oil are doing, and we expect to have a complete report from him very shortly.


Percy Ellis Wright: You have not the report as yet?


James Allison Glen: No, we have not. The report we have now, if I can summarize it briefly, is that a good deal of wild-catting has been done and they have not found oil outside the proven field.
Mr. TOWNLEY-SMITH: If we turn to the break-down of item 126, which is at page 106 of the estimates, we find quite a few matters turning up there for the first time, and I should like a little information on them from the minister. I daresay there is a reason for them, but I wish to know that reason. For instance, why does this department require three solicitors? Apparently it is the only department to require these people. Why a postmaster? Why so many purchasing agents, five in all? Why so many editors, four of them? They seem to require only one in the office of the king's printer. Why a head chauffeur, a chauffeur and an auto mechanic? I suppose what the head chauffeur cannot do, the ordinary chauffeur does, and what he cannot do, the auto mechanic does. It is 47696-182J
interesting to see these things for the first time, and I should like to hear from the minister just what their purpose is.


James Allison Glen: When the Department of
Mines and Resources was constituted from the old department of the interior, four departments were joined together. Each of these departments had a solicitor, and they were taken over under the new set-up. With regard to the chauffeurs, we have twenty-three buildings in Ottawa. We have three trucks going all the time between these different buildings, on business of the department. We need them all, and we need the mechanic to keep the trucks in running order.
Mr. TOWNLEY-SMITH:	What do the
solicitors do?


James Allison Glen: There are multitudinous matters in the department for which solicitors are needed. These men are earning their * money, I can assure the hon. member.


[Stage Direction]
Item agreed to.
Mines and geology branch-
128.	Bureau of Mines-Bureau of Mines administration, $22,800.
George Hugh Castleden: Would the minister
give us an outline of what this particular branch has been doing in the past year?


James Allison Glen: There is a decrease of $933
in the war risk insurance. This is offset by an increase in salaries and cost of living bonus, and to provide for increased disbursements in items charged to the primary allotment of sundries.


[Stage Direction]
Item agreed to.
Mines and geology branch-
129.	Mineral resources investigations, $455,790.
Douglas Scott Harkness: I do not know whether this is the proper time to bring up this matter, but under the war appropriation there is an item for the investigation of petroliferous deposits and areas. Could the minister give us some explanation as to what the $200,000 to be spent under that heading is to be used for, and particularly if it has to do with the operation of Wartime Oils, to cover their losses?


James Allison Glen: The $200,000 was the drilling
expense of which I spoke in reply to the hon member for Calgary West, in connection with the tar sands. That was under the war appropriation.


Douglas Scott Harkness: That is $200,000 in
addition to the $400,000?


James Allison Glen: Yes.
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Douglas Scott Harkness: Then I wonder if the
minister could give us any information in regard to Wartime Oils, the crown company which was engaged in exploratory work in the Turner valle}' area.


James Allison Glen: No, I cannot, because that
is not in my department. That is under the Minister of Munitions and Supply.


John George Diefenbaker: I should like to
obtain from the minister a statement showing the various amounts it is anticipated will be expended in the different provinces under this item. I wish also to ascertain what has been done during the last year, particularly in Saskatchewan, in connection with the exploration or investigation of potential mineral areas. When this vote was up last year I asked this question and pointed out that an insignificant amount was being expended in Saskatchewan, which I think is one province in which something should be done toward providing some complementary industries alongside agriculture. The potential mineral resources are there. The private companies which during the past ten years pursued these investigations ceased those activities during the period of the war because of the demand for the development of areas and in consequence exploratory work was not undertaken by them, having regard to manpower shortages and the like.


James Allison Glen: If I may interrupt the hon, member, perhaps the information he requires could be given under the vote for geological surveys. This item is for mineral resources investigations, and consists really of laboratory work done here in Ottawa. All mining throughout Canada receives the benefit of what is done here in Ottawa. What the hon. member has been speaking about might come under geological surveys, and I would be able to tell him what was done.


John George Diefenbaker: What does come under this head of mineral, resources investigations?


James Allison Glen: Under this vote are carried on office, laboratory and field investigations relating to metallic minerals, industrial minerals, fuels and mineral economics.
Laboratories are maintained for investigations on small scale and on semi-commercial scale. They are housed in several up-to-date buildings on Booth street, at Lydia street, in the city of Ottawa. The investment in buildings and equipment to December 31, 1943. totalled more than $1,750,000. As a group the laboratories are probably not equalled anywhere. The services provided are in demand by industry to an extent that cannot be met with the existing staff


John George Diefenbaker: This has nothing to do with field exploration?


James Allison Glen: No, except from the general laboratory point of view. Industry gets the benefit of it.


Percy Ellis Wright: Is the work done by this branch for independent prospectors?


James Allison Glen: No.


Douglas Scott Harkness: About one-quarter of this item is for temporary assistance. Of what does that consist?


James Allison Glen: All the labouring staff in the mines laboratories.


George Hugh Castleden: Would the minister give us the details of the work which this branch has been doing in the past year? I went through the laboratory a couple of years ago, and I remember that at that time they were doing certain work in connection with coal. Gould we have an idea of the work now being done, or what has been done during 1945?


James Allison Glen: The anticipated activities for the year 1945-46 are as follows:
Physical metallurgy tests and investigations in reference to the production of war equipment, as required by the Department of National Defence (naval, army and air services), the Department of Munitions and Supply, and British missions in Canada and the United States; tests and investigational work on ores and industrial minerals, some of which are still classed as strategic and required for war use; studies and investigational work on fuels, including hydrogenation, for the coal controller and the royal commission on coal; and specialized economic studies pertaining to minerals and metals.
New premises for investigations in physical metallurgy (with a floor area of 32,345 square feet) were occupied in January, 1944, and to these there is to be an addition, now under construction, for the housing of metal forming equipment so necessary in investigations on the most efficient use of metals. Magnesium metal is likely to be the first one investigated.
Funds having been provided for a new hydrogenation laboratory, to produce about 200 gallons of gasoline a day, a considerable proportion of the time of the fuels division staff will necessarily be given to interior design of the building and the equipment to be housed therein.
It should be kept in mind that this "regular" vote, which now includes some $28,000 for cost of living bonus, will be supplemented

_____________ Supply-Mines and Resources
because of the demands from war services for work which can be done in the bureau of mines, by $340,000 from the war appropriation.


[Stage Direction]
Item agreed to.
Mines and geology branch-
131. To provide for the fabrication, erection and equippng of a hydrogenaton plant in the fuel research laboratories, $770,000.
Douglas Scott Harkness: Is this the same hydrogenation plant which was put up to deal with the McMurray tar sands, or is it another one?


James Allison Glen: This is the same one. The plant is not yet constructed.


[Stage Direction]
Item agreed to.
Mines and geology branch-
133. Geological surveys, $341,000.
John George Diefenbaker: Is this the item under which my question should have been asked?


James Allison Glen: Yes. The hon. member for Lake Centre asked a question, the answer to which would come under this vote. Vote 132 is to provide for the administration of the bureau of geology and topography. This is to provide for administration of the bureau of geology and topography; the maintenance of a national aerial photographic library, studies arising therefrom and interpretations from aerial photographs for industry; the operation of a photographic laboratory for the performance of work related to map making and other branch activities; and 'the maintenance , and operation of the geological survey library (upward of 80,000 volumes). In 1945-46 there is an increase of 83,000, in salaries and of $1,300 for purchase of air photographs to permit of purchase of photographs from companies engaged in exploration for oil. There is a decrease of 81,500 because of dropping of war risk insurance.
Then the hon. member for Lake Centre was asking as to the survey field parties in 1945-46. In the northwest territory there were five parties; in the Yukon and Northwest Territories, one; on the Yukon and Alaska highway, one; in British Columbia, seven; in Alberta, five; in Saskatchewan and Alberta, one; in Saskatchewan, two; in Manitoba, three; in Ontario, two; in Quebec, six; in New Brunswick, one; in Nova Scotia, two; various provinces, one. In all there were thirty-seven survey parties.


Arthur Leroy Smith: Do they still confine themselves to surface work?


James Allison Glen: Then, the topographical field survey, 1945-46: vote 134, number of parties in
Yukon and British Columbia, two; Northwest Territories, one; Alberta, four; Manitoba, one; Quebec, one; New Brunswick, one; Nova Scotia, two. This makes a total of twelve.


John George Diefenbaker: Is there to-day any activity in the minister's branch leading to exploratory work which is taking place with a view to ascertaining where minerals are located.
Under the report of the reconstruction council, one of the activities which the government intended to undertake, with a view to providing employment, was exploratory work to be carried on as part of the general scheme of rehabilitation.
Is any provision being made by the minister's department for the training of men returning from overseas as prospectors, and the sending out of these prospecting parties in order to improve the economy? I have in mind particularly the province of Saskatchewan, where preliminary investigations have shown tremendous mineral wealth, which must be developed as a result of leadership from the' federal government. It will not be developed provincially because the responsibility primarily must fall on the dominion government in any national scheme of rehabilitation. We in Saskatchewan have found ourselves in the position that during the war very little was spent in our province for industrial development. Only a few industries were opened.
With the coming of peace we are returning once again to an agricultural economy, although investigations show that our mineral wealth is such that with proper leadership from the department much could be done toward expanding our economy so as to include a mineral economy, with a consequent advantage to the province and to the dominion as a . whole. I make the plea to the minister, because in recent years Saskatchewan has been left out of the picture in regard to industrial development, not only by his department but generally. If the government would undertake the ascertainment of the areas and the general location of areas peculiarly fitted to potential mineral development, it might well improve the economy of the province and assure a greater measure of employment and self-sufficiency in that direction.


James Allison Glen: I have listened with interest to what the hon. member has said. As he may know, we have had great difficulty in getting geologists because, like other staffs, our staff has been depleted owing to the loss of men. Men are not being educated in this profession in sufficient numbers that we may hope in the immediate future to have many
Supply-Mines and Resources

additional geologists whom we can, send out into the field. This is a matter of great concern to the department and has been the subject of a good many conversations. What the hon. gentleman has said with regard to the post-war period is certainly ever present in the minds of the officers of my department.


Edmund Davie Fulton: I should like to refer briefly to the Merritt district in British Columbia. I have on my desk two publications of the department under the minister's jurisdiction, one dated 1905 and the other 1915. I requested the department to let me have the 'latest information about surveys made in that area and they sent me a number of publications. These are the only ones in which any reference is made to the district. The first quotation I should like to make is from a report by an official of the department at that time, Doctor R. W. Ells, who made a survey of the Nicola coal basin in British Columbia. I should like to quote from page 47A of this report of 1905 as follows:
The length of the main coal basin of the Nicola-Cold water area, from the foot of Nicola lake to the south limit on the Coldwater, in a southwest direction, is about ten miles, and the greatest breadth is about three miles. The western portion, from the forks of the Cold-water to the volcanics of Ten Mile creek or Lower Nicola, is about five miles, with an extension, north and south, along the creeks of about ten miles. The length of the eastern or Quil-chena basin is about seven miles from north to south and the maximum breadth apparently about two and a half miles.
We have it established there that there is a substantial potential coal field in that area. The point I intend to make by my further quotation is that the surveys made of the area were never completed. Discussing the lay of the land, Doctor Ells says, as reported on page 48A of the same report:
Unfortunately, of several borings made during the season of 1904, none succeeded in penetrating the drift, and as the underlying rock was hot reached, no light was afforded as to the structure of this part of the basin.
I quote only to show that there was established the presence of a coal field, but the report is not conclusive as to the economic value. In the report of 1915 Doctor Camsell is reported on page 281 as saying.
The importance of the district about Merritt depends primarily on the presence of oligocene rocks containing bituminous coals.
There were further reports on the coal seams which were found in that area, the thickness of one being reported as Toeing thirteen feet six inches. But again no sufficient

survey appears to have been made, and we find Doctor Ells reporting again on page 284 as follows:
In view of the widespread nature of the drift throughout the entire area the actual economic value of these areas can only be ascertained by a number of bore holes.
Further on in the same report he makes the statement that unfortunately none of those further surveys were made. From time to time a number of small mines have operated in that area, but none of them had sufficiently large financial resources behind them to make exhaustive surveys. While this was not the responsibility of the minister, during the war period certain directives were issued by the emergency coal production board. Admittedly that board was not concerned with the small operator; their main concern was to get the largest body of coal out as efficiently as they could. Nevertheless, owing in part to the directives issued by that board, one of the mines operating in that area was closed down.
This operator has undertakings that if he can show the presence of k large body of coal in that area he can interest other capital in the Merritt area and possibly start his mine again now that labour is becoming available. However, as I say, no complete survey has been made, and this man has not at his disposal sufficient capital to undertake the survey himself. I should like to make the same plea as was made by the hon. member for Lake Centre. At oie time this was a prosperous community. There is the established presence of a large body of coal in that area. At present the area is largely agricultural and it requires some other industry to produce a balanced economy. I should like the minister to allocate some of these moneys so that an exhaustive geological survey of that area can be made to find out the potential economic resources of the coal fields there.


James Allison Glen: I have listened to the hon. gentleman, but again may I say that our trouble is lack of expert men to cover the field. This is a large field, but I have noted what the hon. gentleman says and will give consideration to it.


George Hugh Castleden: 
James Allison Glen: Geological surveys?


George Hugh Castleden: I want data of the last geological survey, together with any revisions that have since been made.


James Allison Glen: There were two altogether,.one in Goldfields, a rare element investigation, and the other in Rotten Stone lake, in connection with metallic minerals.


George Hugh Castleden: What was the date?


James Allison Glen: This summer, 1945.


George Hugh Castleden: Has a general geological survey been made of the northern part of Saskatchewan and is the data completed? -


James Allison Glen: Just a portion of it.


George Hugh Castleden: Are maps available?


Mr. MOORE:: I should like to say one word in connection with the suggestion of the hon. member for Lake Centre, who asked if it was the intention of the government to train some of our returned men as prospectqrs in our northern regions. If that is to be done we should see that our returned men who act as prospectors receive better remuneration than prospectors have received in the past. It is very important that we should train men to act as mining prospectors; it will mean much to the development of the country, and I know of no class that have contributed more to the development of mining than the prospectors. It is doubtful if there is any other group that has received less remuneration for the work they have done. It is up to the department to lay early plans whereby our
prospectors will receive more remuneration than they have received in the important industry of mining.


[Stage Direction]
Item agreed to.
Lands, parks and forests branch-
IS7. Branch administration, $20,090.
Grote Stirling: Before the war there was a disposition on the part of the dominion government to put up dollar for dollar with the provinces for the purpose of building connecting roads from the international boundary to the provincial highways, largely for the purpose of enabling tourists to reach the parks. I should like the minister to tell the committee whether that is now in contemplation once more, because a good deal of interest is being taken in the tourist movement and a good deal of money has been spent in advertising the tourist business. It will certainly be of great assistance in British Columbia to get tourists from the various entry points on the international boundary up into the park.


James Allison Glen: Post-war work and projects will be duly considered, and one that will certainly come up for consideration will be the building of roads leading to our parks to invite and encourage the tourist traffic.


Grote Stirling: It is not covered by this item?


James Allison Glen: No.


George Robert Webb: I should like to say a few words about our national parks under this item. I am particularly interested in it, because for many years I have been in a business in which I have been closely in contact with people who visit our parks from year to year and I have been very much impressed with their reports. I am prompted to speak on this item particularly as it relates to the tourist traffic.
On November 7 of this year, a Mr. A. O. Seymour, of Montreal, speaking at a meeting of the members of the Canadian Association of Tourists and Publicity Bureaux, predicted that some 26,000,000 United States anglers and hunters with more than four billion dollars to spend annually on their hobbies will be in the North American tourist market within a few years. This figure may or may not be exaggerated; I hope it is true, and in support of that I was pleased indeed to see a statement made by the minister of health at the same meeting outlining a new programme of federal activity in the tourist field, including the further development of our national parks. That is a commendable project. I do not think we can go too far in the expansion of
Supply-Mines and Resources

our national parks across Canada, because they are so closely linked with the great tourist industry. I should like to bring before the members of the house some important facts which I believe will be of interest. Often we are tempted to become more or less complacent and sit back and think someone else will do the work. We do not regard our parks as important as they really are.
From a small beginning nearly sixty years ago Canada's national parks have expanded until to-day there are some twenty-six parks beckoning visitors to every province. They contain about 30,000 square miles, all under federal ownership and administration, and they are fairly well spread across Canada, with four in British Columbia, six in Alberta, one in Saskatchewan, two in Manitoba, five in Ontario, two in Quebec, one in New Brunswick, one in Prince Edward Island and four in Nova Scotia. In addition, I am told that recently gome 10,000 square miles have been set aside adjacent to the Alaska highway in the Yukon territory, as well as two sites offered by the province of Quebec and one by the province of New Brunswick. I believe that discussions are proceeding at the present time for a national park to be located partly in the province of Ontario in my own constituency of Leeds and partly in New York state. If it becomes a reality it will to a great extent be unique, and with its beautiful setting be another link in this great chain of show places across Canada. I hope to have more to say about that later on. Our present system of parks, even without these proposed extensions, is one of the finest and largest in the world. The parks include regions of outstanding beauty, natural phenomena, historic sites, wild bird and animal life. They conserve the country's wild creatures under natural conditions, and provide places for vacationing, no matter in what phase of outdoor life the visitor may be interested. There is, however, a great lack of accommodation in some of these parks for the casual visitor of moderate means, and also a shortage of small roadside parks with sanitary and cooking facilities.
I submit that more small parks should be established. If I may use for example my own constituency of Leeds, there is the famous chain of Itideau lakes. People travel thousands of miles to fish and hunt and enjoy the beautiful scenery, but absolutely no national park exists in the area where tourists can feel free to recuperate and receive the hospitality of our people. In the area there are several ideal spots suitable for small, well-equipped parks, and I am sure there are many such

places across Canada. I hope the government will give some consideration to these matters at the earliest opportunity.
To bring out my point, which is the importance of increasing the number of these parks across Canada, and especially the upkeep of those already in use, I am going again to refer to my own St. Lawrence islands national parks, principally located in my own constituency of Leeds. One of the most picturesque regions on the north American continent is the fifty-mile stretch of the St. Lawrence river between Kingston and Brockville. Along this section of great inland waterways its waters are studded with upwards of 1,700 beautiful islands varying in size from less than an acre to several square miles, and separated one from another by picturesque channels. These islands are clothed with groves of pine, oak, maple and birch, which rise above the bluffs of granite and limestone to cast shadows and deeper colour across the emerald waters. Nature has undoubtedly created here one of her masterpieces in river landscape.
For nearly three-quarters of a century the Thousand Islands, as they are called, have been a paradise for the summer visitor, so much so that most of the islands are now privately owned. However, as early as 1904 the* government of Canada in their wisdom set aside as national recreational areas a number of these islands which now form the St. Lawrence Islands national park. AJt the present time the park is composed of thirteen islands accessible from rivers and towns along the St. 'Lawrence river and mainland area at Mallorytown landing. On many of these islands improvements have been carried out and conveniences provided for visitors. Attractively designed pavilions and shelters have been erected, outdoor camp stoves, tables, benches, and, as a rule, firewood provided, and wharves and boat landings constructed to facilitate approach. Several of these islands have bathing beaches, and excellent fishing may be enjoyed in the surrounding waters. These parks have for many years supplied recreation for thousands of people from many countries. From my summer camp I am able to see three of the islands which form this group of parks, and therefore I have a first-hand impression of the activity about them. Hundreds of boats anchor at the wharves, some just overnight, some for days, some for weeks, and many times when they are caught in a storm. Believe me, I have a pretty fair idea of the value of such parks in the St. Lawrence.
Having said this, I wish to bring before this committee the deplorable condition of these

Supply-Mines and Resources
parks and docks at the present time. I believe the same condition applies to several of these parks across Canada. I do not offer this, to any great extent at least, in the way of criticism, because I am cognizant of the shortage of material and labour during the war years, also the high water which' has taken its toll in the way of heavy damage to wharves. However, now that hostilities have ceased, I submit that no time should be lost in restoring these parks and wharves to their original usefulness and beauty. I believe this is urgent for, as I see it, we must be ready to receive and provide recreation and entertainment for the vast numbers of visitors moving from one province to another, and the tremendous influx of people from other countries which we are bound to have very shortly, now that the condition of peace again exists.
We' must not look, at this great tourist industry purely from a monetary point of view; we must meet these people with a sense of genuine welcome, and treat them in a realistic manner while they are our guests. Our national parks were established, in the words of one of our great statesmen, "to recuperate our people and to recoup our treasury." Let there be no possibility of , misunderstandings, but let the greatest sense of friendship prevail with these people from all provinces and from all lands.
In conclusion, may I say that all across Canada nature has provided us with the most beautiful settings in the world for national parks and playgrounds-gifts that cannot be set by hands-and no government can or will sit idly by and allow any of these parks to deteriorate when a nominal expenditure will keep up and expand these beautiful show places that present a "welcome" to people of our own country, and particularly to people from other countries, which will leave with them a lasting remembrance of the greatest country on God's green earth-Canada!
Some time during the discussion I am sure the minister will be good enough to comment on the suggestions which I have made.


Mr. McCULLOUGH (Assiniboia):: Just
before we leave this item I should like to ask the minister a question. Does the federal government give any assistance for the development of our provincial parks, and, if not, is there any contemplated under dominion-provincial agreement?


James Allison Glen: The best answer I can give the hon. member who has just spoken and to the hon. member for Leeds is to read a paragraph from the reference book for the dominion-provincial conference on reconstruction with which I agree:
The matter of coordinating dominion and provincial activities in the development of interprovincial and international tourist travel, mainly by means of establishing adequate graded facilities for the use of tourists; the development of national and provincial parks to the highest point of attractiveness consistent with the principles of conservation upon which they are based; and the devising and financing of publicity campaigns representing the experience and interests not only of the dominion but of all the provincial units, surely presents a large and profitable field to be studied and explored by all the interests concerned.
I can assure hon. gentlemen and the committee that the department is keen on establishing parks wherever possible. There is nothing it will not do to encourage such an establishment of parks in any of the provinces of Canada, knowing of course that the land must be surrendered and be given to the dominion by the provinces, and the dominion will then have charge of it. I know from my experience of Riding Mountain park in my own constituency the benefits of a national park to the whole of Manitoba. In particular, I know what an attraction it is to United States tourists. We are getting more and more of them all the time, and I am hoping that in the post-war period we shall have further attempts to make our parks so attractive that our tourist trade will be one of the biggest industries in Canada.


Edward George McCullough: As to the first part of my question-?


James Allison Glen: No assistance is given to provincial parks.


Mr. BOUCHER:: Could the minister give information as to what national parks there are in Ontario, where they are, what the acreage is, and to what extent the parks department of the federal government cooperate with that of the provincial government?


James Allison Glen: There are three parks: Point Pelee, Ontario. Recreational area on lake Erie, with fine beaches and unique flora. Resting point for migratory birds. Established 1918; area, 6-04 square miles. Georgian Bay islands, Ontario. Thirty islands in Georgian bay. Unique formations on flowerpot island. Recreational area. Established 1929; area, 5-37 square miles. St. Lawrence islands, Ontario. Mainland area, and thirteen islands in "Thousand Islands" group with recreational facilities. Reserved 1904; established 1914; area, 185-6 acres. Then there are the historic sites, but that is not the question.
2s88
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James Arthur Ross: Can the minister give us the numbers that have gone through the national parks in the past year?


James Allison Glen: I shall have to get that information.


George Russell Boucher: While the deputy is getting that information, I would urge the minister, on behalf of Ontario, to give a little more eonsideration to the province so far as park sites are concerned. I do not believe that the parks described by the minister are anything like the extent that they should be in a province bordering on the United States, with the vast number of tourists passing through Ontario. I believe it would greatly benefit not only Ontario but the dominion as well if a much greater effort were made by the department at Ottawa to foster tourist trade and sports of various kinds in Ontario, by the establishment of -many more national parks than we have now and also by greater cooperation with the province in the direction of tourists to Ontario. We have a large area near to the United States, bordering on the great centres of that country, and it would be a profitable investment if the dominion were to do much more than it has done so far, because I do not believe that the dominion government has done its proper share in the establishment and maintenance of parks in Ontario in comparison with other provinces. If you calculate the acreage and the expenditures made in other provinces and compare those figures with similar figures in Ontario you will find that it has been pretty well left to the Ontario government to maintain our national parks. There are many places in the province where national parks could be established which would be a real source of revenue to the people of Canada as well as to the residents of Ontario. I should like the minister to give that point his consideration.


James Allison Glen: The hon. member knows that for any national park to be established in Ontario the land must be offered by the province to the dominion. I will consider what he has said in this regard. As regards the question asked by the hon. member for Souris, I have here a list of parks, with attendance. Would it be in order for me to put that list on Hansard, or do hon. members wish to have me read it?


James Arthur Ross: I would be willing to have it put on Hansard. It would give useful information.


James Allison Glen: The hon. gentleman is no doubt more interested in the fact that Riding
[Mr. Glen.)
Mountain, in which he is interested, was in 1945 the second largest in attendance in Canada. The list is as follows:



STATEMENT OF ATTENDANCE AT THE NATIONAL PARKS

[Stage Direction]
(For the Six Months ended September 30)
National Parks	1945	1944Banff 	118,444	99,001Cape Breton Highlands 	16,612	10,095Elk Island 	24,184	13,144Geo. Bay Islands 	3,787	4,283Glacier 	170	170Jasper 	12,820	8,864Kootenay 	25,286	15,588Mt. Revelstoke 	5,794	3,170Nemiskam 	17Point Pelee	50,873	32,312Prince Albert 	18,858	13,059Prince Edward Island 	47,088	32,571Riding Mountain 	102,287	84,554St. Lawrence Island 	10,323	10,165Waterton Lakes 	46,734	37,278-Yoho 	8,960	5,576National Historic Parks*	Fort Anne 	4,731	5,494Fort Beausejour 	4,829	2,975Fort Chambly 	14,047	13,206Fort Lennox	655	Fortress of Louisburg 	2,749	2,171Fort Malden 	10,164	9,178Fort Wellington 	2,391	2,349Port Royal 	2,863	2,196*Museum registrations only.	534,649	407,416
Arthur Leroy Smith: I have extensive notes, Mr. Chairman, and I wish to say something about national parks, but since I do not want to be accused of reading my speech I may say that my notes are: "Banff National park, Indians, fish." I gather that Indians come a little later, so that I will give my notes to the hon. member for Lake Centre and he will work on them tonight and do a good job on them to-morrow. What I intend to say is in a sense critical, but I begin by thanking the minister and his staff for meeting the hon. member for Calgary East and myself shortly after I came here and being very generous to us with the information which they had. I spent two hours very profitably with Mr. Smart yesterday, or perhaps Saturday, and I wish to say how much I appreciate the honest endeavour which was made to answer the questions that were given to me to ask by those persons who reside at Banff. Banff being in my constituency-and I hope they are all listening- I have to say something on their behalf.
I think it fair to make this criticism. I realize thoroughly that during the war period there was little opportunity for the dominion government to do anything for that park,.

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and I assume that had equal application elsewhere. I have looked through these estimates and have sought in vain, although perhaps I missed it, for some assistant* to tourist traffic; and that applies, I think, generally to all the parks we have.
It has been well said that tourists are becoming perhaps our second major industry. It may be that I have overlooked the vote; if so, we will cover it at the proper time. AVith respect to Banff, it is in close proximity to the place where I live and have lived for a long time. It is a place I have gone to often, and its transformation in recent years is something of which this parliament might well take .cognizance. I mean this. Years ago these places were summer resorts, but that day has gone. To-day it is impossible to get *even a room in which one may live in Banff, as a result of the introduction of this new art called in Norway "She-ing", but which,I prefer to describe by our own expression- skiing.


An hon. MEMBER:: Use a combination.


Mr. SMITH (Calgary AArest):: You do not use combinations in skis. The hon. gentleman has an old pair of spring skates. Standing by this hotel over here yesterday, Sunday-that of course will not be appreciated by Quebec and Ontario members because none of them are here then-I watched people disgorging from that place by hundreds-and you have not enough snow to fill a hollow tooth. Nevertheless they were enjoying themselves. So that winter and summer these parks of ours are an asset which the department- and I 'say this with great respect-has so far failed to appreciate fully.
I mention in these extensive notes which, as I said a moment ago. I gave to the hon. member for Lake Centre, the business of fish, and here I do criticize the administration of the parks. AA7e have a fish hatchery at Banff, the only one in that- park. They have endeavoured to cover a great deal of territory. It may be they were assisted by the government of-Alberta ; I do not know. However, I have been fishing for a long time, and I have no unkind remarks to make to you fellows who fish with live minnow's or frogs or worms or anything of that sort, but you do miss the most scientific thing in the world, next to golf or billiards; that is, to cast a proper fly in a proper spot. I have been in Kamloops, from which my young friend over here comes, though he has been here for months and has not even mentioned this, and there they have the greatest fly-fishing the world knows. AVe should have it on this side of the Rocky mountains. AVhy do wp not? Because in the
Banff national park sufficient attention has not been paid to it. One need only study the number of licences issued to fishermen in the United States to see what an immense attraction it would be; but as a federal department we have been using only that little hatchery.
It has been working hard, and is operated by splendid people, but we have been supplying fish to other portions of Alberta which should be looked after by the province.
Let us go along a step further. I hope no one will think I am talking nonsense while speaking of fish in the House of Commons, because I know how stupid and foolish fishermen are supposed to be, since I am one of them myself. AA7e will go miles and miles in order to drop a fly in a certain spot; then things happen, and who knows who shall succeed?


George Hugh Castleden: How long are they?
Mr, SMITH (Calgary West): Perhaps I had better answer that question. In Peter Hope lake, thirty-five miles north of Kamloops, you can take Kamloops trout just about the length my hon. friend indicated; they will weigh six pounds and. you can get them on the fly. In one afternoon my wife and I took six fish weighing thirty and a half pounds. That was the greatest afternoon of my life, not excepting the time I have spent in this parliament. But come over to our side of the mountains and it is different, with the exception of one lake where you pack forty-two miles-and that is a big t.w6 days' pack-and where you can catch three-pound cutthroats. Other than that I know of no place outside of the mountains where you can catch any fish, certainly no place that can be approached by people who drive a motor car and like to catch a fish or two. Just before coming here in September, my wife and I packed with the greatest guide in the world, a man by the name of Jim Boyce, into the Skoki country. We fished Baker lake and Red Deer lake. The fish in Baker lake were about the size indicated by my hon. friend a moment ago. We caught quite a number, but. nothing over two pounds. The answer is very simple; it is failure to have regard to feed conditions, and to stock according to them. The hon. member for Kamloops will know that about eight.y-fite miles south of his city-I almost called it a town- there is a lake called' Penask lake where a man by the name of Dole, the pineapple Dole, built a club. I was foolish enough to join at $50 a year, which meant that the fish 1 caught cost me about $50 a pound.
In that part of the country we have the greatest opportunity to attract tourists. It has been often figured out that tourists-and

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I do not care whether they come in a jalopy or in a big car-leave about 87 per day per person, and that goes to our people here engaged in feeding them, selling gasoline, bedding people down and all that sort of thing. I would wish that the department might get a new inspiration, might have vision to see this grand picture, this great thing that may be done. Some of you bait fishermen may say. well, once you make these places available, then you fish them out and there are no fish left. I can give an example to prove that statement completely wrong. Twelve miles north of Kamloops there is a little lake twelve miles long and not more that three-quarters of a mile wide a(t any point. It has been intensively fished for thirty odd years. The commission in British Columbia regard that lake and call it their test tube, for the reason that they know pretty well the approximate number of fish that come out, and the number of fish they put in. As I say, it has been intensively fished for thirty odd years; I have been there for fifteen years without a single break. You can catch fish on the fly there roughly from May 24 to the end of the second week in June and then again after September 15. I wish the hon. member for Davenport were here, because he would take you up one side of that lake and down the other without missing a single tree as he went along. I mention that particular lake, because the theory that lakes get fished out is quite true if you do not restock. That lake is restocked by the British Columbia authorities. Try to get a room there this summer; you will fail unless you have made reservations a long time ahead.
I am going back now to the town of Banff; and may I say that with a new minister I trust we shall have a new inspiration with respect to our national parks. These remarks are not made in criticism of Mr. Smart or any of those other gentlemen associated with him.
I know what their difficulties are. When a man sets up a business in Banff he goes to live in the cheapest place in the world. He does not pay very much for his lot, on which he gets a long lease. Now you have a town planner who is going to make it a city beautiful, or something like that. A building will be torn down there; a sign will be taken off over there, and I know it is going to be wonderful. But we have there what is called an advisory council, which was formed when the late Sir James Lougheed was minister of the interior and that place came under his department. I have spent some time with those people in Banff. My hon. friends to my left will be happy to know, I am sure, that 
more of the people of Banff voted for me than all the other candidates put together, and there were four against me there-so that I am very happy to tell you what wonderful people they are.
I hope that the minister, inspired as he will be with his new job and the great future that opens before him, will do something, though frankly I am unable to tell what to do, to end the dissatisfaction that exists as between the local council and the government officials. I am not criticizing Mr. P. J. Jennings, a very old friend who is the superintendent, but I am sure this thing has become so big that you cannot operate the Banff national park from two thousand miles away. There must be a little more delegation of authority and more active cooperation given those who have been elected by their people and who think they know something about the problems of Banff.
May I put it in this way. I am not suggesting that they are right; I do not know. I know they have grievances, although I am inclined to think thus will apply to other parts as well. They may be wrong. I am happy to learn that Mr. Smart is going out there in February. Yesterday I was able to write them and say, "You have put all this on my shoulders, but Mr. Smart will be there in February, so jump on his back and see how you get along with him." I told them what a delightful gentleman he was-and of course they already knew it. But I told him to take the matter up with them.
That is what I am trying to get at. I do think-well, I do not even think; I know that parks are a national problem, because of the tourist traffic. I know that the department wants to get United States dollars, and the department has done something. It has joined with the province of Alberta in building two highways leading to Banff national park. It seems to me a liaison could be arranged, through the hon. member who leads the Social Credit party. Let us have a lot more of that partnership, by which even now so much has been done. And yet it is so little, having regard to the main objective.
The complaint to-day in Banff is that you cannot get a lot, or lease one, under any circumstances. I appreciate the minister's difficulties. Water services and light services have to be laid on. I know that the minister is giving this sympathetic consideration, and that the veterans affairs committee-and the Minister of Veterans Affairs knows all about this-made a splendid recommendation the other day to the Minister of Mines and Re-

Privilege-Mr. Tucker
sources. Our returned chaps have not a chance there, because the assistance which is given in other places really has no application. However, I know that those are little difficulties which will be ironed out.
Now, having talked about fish-and I am not joking; I know how important it is; there is not any doubt about that-


An hon. MEMBER:: Eleven o'clock.


Arthur Leroy Smith: I heard someone say "eleven o'clock", and I am sure it was not the clock that said it.


An hon. MEMBER:: Go ahead.


Arthur Leroy Smith: I will be only a minute or two-but perhaps I had better stop there. I might get my second wind if I were permitted to go on.


An hon. MEMBER:: Eleven o'clock.


Arthur Leroy Smith: Very well; it is eleven o'clock. Perhaps to-morrow morning at eleven o'clock you will hear something, Mr. Chairman.
Item stands.
Progress reported.
It being five minutes after eleven o'clock, the house adjourned, without question put, pursuant to standing order.
Tuesday, December 4, 1945.