1946-08-02

[Stage Direction]
Mr. J. A. BRADETTE (Cochrane) moved that the second report of the standing committee on external affairs, presented to the house on July 31, be concurred in.
Mr. D. M. FLEMING (Eglinton):: The concurrence of the house in this report, I take it, will carry with it the adoption of the estimates in full of the Department of External Affairs?


Mr. BRADETTE:: No.


Donald Methuen Fleming: Because there was a recommendation in that report for approval of those estimates. If that is not so I think there should be a clear understanding in the matter, because it was the feeling of members of the external affairs committee that there should be an opportunity for general discussion of the items and general discussion of policy in reference to external affairs when the estimates of that department should come before the house.


Mr. MACKENZIE:: That is quite right.


Donald Methuen Fleming: Is it the assurance of the government-


Ian Alistair Mackenzie: Yes; definitely yes.


Donald Methuen Fleming: -that the estimates are not adopted?


Mr. MacINNIS:: No. It is part of the report. Read the report.


Mr. ABBOTT:: Read Hansard.


[Stage Direction]
Motion agreed to.

[Stage Direction]
HANDLING OF RATION COUPONS BY BANKS- BANQUE PROVINCIAL® DU CANADA
On the orders of the day:
Mr. J. G. DIEFENBAKER (Lake Centre):: Mr. Speaker, is the parliamentary assistant to the Minister of Finance now in a position to give an answer to a question I asked about the continuance of the right of the Banque Provinciale du Canada to handle ration coupons? Also I should like to know whether the Acting Minister of Finance is in a position to indicate what prosecutions, if any, have so far been instituted as a result of the ration coupon racket which was revealed, and whether prosecutions are contemplated under the criminal code.
Prices Board-Coupons

Mr. R. W. MAY'HEW (Parliamentary Assistant to the Minister of Finance): The answer to my hon. friend's question is no, because the bank has not yet provided satisfactory assurance that the coupon ration system will be operated in accordance with the board's regulations. So far as prosecutions are concerned, I am afraid I shall have to leave that to the Minister of Justice.
Right Hon. L. S. ST. LAURENT (Minister of Justice): The hon. member may be assured that these prosecutions are being dealt with as expeditiously as is compatible with proper care. Instructions have been issued for the prosecutions of twenty-seven persons in three groups, and of six in another group; and I have been trying by long distance telephone to find out what is the state of the proceedings. There have been some pleas of guilty, and some pleas of not guilty with remands for trials fixed at different dates. The matter is being handled by competent counsel who are giving it diligent attention with the idea of bringing it to results as quickly as possible. Certain investigations are still proceeding, one clue leading to another, and though there are others against whom sufficient information might be available to justify the institution of proceedings, on the advice of the investigators proceedings against them are being delayed until the other clues are followed up to see if further evidence will not be developed which will implicate additional persons.


Mr. COLDWELL:: May I ask a supplementary question? Does not the right hon. gentleman think that when banks are given permission to act in this capacity it should be seen to that the employees receive sufficient remuneration to remove them from temptation?
Mr. ST. LAURENT: Though the banks are chartered by the dominion parliament, the administration of their affairs is under the control of their respective boards of directors, and it would be difficult for any department of the federal government to undertake to see that all those employed by organizations which derive their charter powers from parliament are properly remunerated.


Major James William Coldwell: I did not quite mean that. I meant that before they are given the right to do this the government should be sure that the people who will handle it are not just subject to temptation. That was the point.
Mr. ST. LAURENT: Even Adam and Eve in their terrestrial paradise were subject to temptation.



PRIVILEGE


[Stage Direction]
On the orders of the day:
Mr. T. V. GRANT (Kings, P.E.I.):: Mr. Speaker, I rise to a question of privilege. The day before yesterday, while the hon. member for Lake Centre (Mr. Diefenbaker) was speaking, he was making light of the explanation which had just been made by the parliamentary assistant to the Minister of Finance to the effect that we had arranged to trade machinery with the United States-


Some hon. MEMBERS:: Order.


Thomas Vincent Grant: -and at that point-


Mr. SPEAKER:: Order. I would ask the hon.
member to be good enough to state the question of privilege.


Thomas Vincent Grant: I am coming to it now.


James Horace King: I would ask the hon. member to be as brief as possible.


Thomas Vincent Grant: I interjected, "No truck or trade with the Yankees". Everyone in the chamber heard my remarks, and the reporter looked over at me-


Some hon. MEMBERS:: Shame.


Thomas Vincent Grant: -while the member for Lake Centre blushed to the ears. But my interjection did not appear in Hansard of that date. It should have appeared at page 4121 of July 31.


John George Diefenbaker: Mr. Speaker, I rise only to say this. I have no objection to my hon. friend getting a place in Hansard, but when he says that I spoke lightly of trade, that statement is incorrect.


Ian Alistair Mackenzie: He said you blushed.


John George Diefenbaker: Mr. Speaker -


Some hon. MEMBERS:: Order.


John George Diefenbaker: On a question of privilege, if there is any suggestion that I had anything to do with removing it from Hansard-is there any such suggestion?


Thomas Vincent Grant: I will reply when you are through.


John George Diefenbaker: If there is any
suggestion that I had anything to do with removing it, I want that suggestion withdrawn, because I never noticed it in Hansard, and apparently the reporter has no better ears than I have, because I did not hear it either.

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Thomas Vincent Grant: I am not insinuating that my hon. friend used the blue pencil, but-


James Horace King: Order. The hon. member knows very well that I cannot permit a debate on a question of privilege.


Thomas Vincent Grant: You should not have allowed him to debate it.



WAYS AND MEANS

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

[Stage Direction]
31. That the deductions from tax allowed to a corporation whose principal business is the production, refining or marketing of petroleum or petroleum products in respect of drilling and exploration costs be extended to oil wells spudded in during the year 1947 and the deepening of oil wells which is commenced in 1947 but that in respect of such wells the deductions be reduced from 261 per cent and 40 per cent of the cost to 20 per cent and 30 per cent respectively.
Mr. HARKNESS:: The last time this matter was under discussion the minister intimated that he would make a statement in connection with the oil industry.


Douglas Charles Abbott: I thought I had made my usual brief preliminary statement, and I was under the impression that the hon. member was going to make a few observations on these sections. However, I am prepared to repeat what I stated. These five resolutions, 31, 32, 33, 34 and 35, in effect continue the tax credits granted petroleum, natural gas and mining industries in respect of exploration expenditures for another year with proper adjustment for reduction of the flat rate tax on corporation income from 40 to 30 per cent. Also, under 31, the existing tax credit granted for expenditures incurred in any new oil well is extended to include expenditures incurred in deepening an existing well.


Douglas Scott Harkness: Just before we adjourned the other night I had drawn to the minister's attention some five suggestions which I had made earlier in the speech on the budget in regard to changes in the tax structure which would aid the oil industry, and I understood that the minister would make some comment thereon.


Douglas Charles Abbott: I apologize to my hon. friend. He is quite right; I had intended to give some consideration to the five suggestions he made. I understood the first to relate to the deepening of existing wells. That is being taken care of under the ordinary tax concession and not under the special 50
per cent arrangement. He asked in the second place that the tax concessions be extended to the drilling of shallow wells. That cannot be done. Third he asked that the 33J per cent be increased to 50 per cent, and there again we felt the request could not be granted. Fourth he asked that tax credits be made permanent. Here once more it is felt that we cannot accede. It must be made on the annual basis. The fifth suggestion related to the removal of the subsidy on imported oil. As my hon. friend will appreciate, that is not a tax matter. I shall be glad to discuss it when we reach the estimates of the wartime prices and trade board, where these subsidy items are provided for.


Douglas Scott Harkness: In connection with the request for extension of the fifty per cent tax drawback to completing wells, will the minister say whether the resolution means that the drawback will now apply to abandoned exploratory wells on which redrilling is started?


Douglas Charles Abbott: I am advised that the
twenty per cent tax credit does, but not the fifty per cent.


Douglas Scott Harkness: Can the minister give any reason why this fifty per cent tax drawback will not apply to abandoned exploratory wells which people may now be willing to drill down to the oil-bearing strata? At the present time a considerable number of wells have been drilled in the foothills to considerable depths, but owing to the company's running out of money, or for other reasons, the wells were abandoned before they actually struck the oil-bearing lime. If this fifty per cent drawback were made available for these wells a considerable number of them would be completed.


Mr.   M A CD ON N ELL@Muskoka-Ontario: Before the minister answers may I ask what is in one sense a supplementary question and in another a broader question? In dealing with this question is it the policy of the government to consider it from the point of view of maximum development of the industry? Is that the government's aim? If it is, I would hesitate to argue that any exemption be made permanent; nevertheless in making it merely annual it would seem to me to work against what one would expect to be the full encouragement of the industry. I am not as familiar with this matter as the hon. member for Calgary East, but I should be enlightened if the minister would tell us in much broader terms what is the principle on which the government is acting.
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Douglas Charles Abbott: As my hon. friend is probably aware, this has been discussed at considerable length to my knowledge in at least three sessions of parliament. I have done a good deal of discussing of it myself. It is incentive legislation. It was introduced first during the war in order to encourage the production of oil in Canada. I must say that the concessions are appreciable, particularly the fifty per cent one which we are now discussing. It was felt that it should be granted on a year to year basis. In other words, a year in advance a prospective oil driller knows that if during the year he drills a certain type of well, conducts a certain type of exploration operations, he will be allowed a certain tax concession.
Answering my hon. friend's question as to what good reason there is for not making this apply to a well which has been abandoned and then started up again, may I say that subsection 10 of section 8, under which this concession is provided, sets out the conditions. In the first place the enterprise must be one which is approved by the governor in council. The concession is granted only if in the opinion of the governor in council-and I quote from the section:
(a)	Drilling the oil well is desirable in order to extend the patroluem resources of Canada; and
(b)	The taxpayer could not reasonably be expected to drill the oil well unless permitted to deduct at least fifty per centum of the expenditures in connection therewith from tax.
What that means, of course, is that if the well is successful, half the cost is paid by the people of Canada, and that is a substantial concession. The government felt that, offered once, it should not be extended to renewing operations in the same well. I should correct my statement and say that if the well is successful the taxpayer does bear the cost, but if it is a loss the taxpayers of Canada do bear half the cost of the drilling expenses.


Douglas Scott Harkness: In my opinion the reasons which the minister has just read are the very ones which should cause this tax concession to be extended to abandoned exploratory wells. As he said, the sole idea of the tax concession is to encourage drilling, and if possible to develop new fields. In many instances these abandoned exploratory wells are the very ones which we might expect to bring in new fields. I can see no reason in the world why these wells should be cut off from this concession.


Douglas Charles Abbott: Obviously it is a matter on which opinions may differ. The purpose is to encourage the drilling of new wells. The incentive should not be greater than what is believed to be necessary to accomplish that

purpose. It is felt that the cost of deepening an existing well is not as great as the cost of starting and drilling one down to a certain depth. These wells must be deep test wells, and not the ordinary shallow well. I speak on this with some diffidence in reply to my hon. friend, because I know he is much more familiar with the practical details of oil mining operations than I am, but he also knows that under the subsection the enterprise is one w'hich must be approved by the Minister of Mines and Resources. These are special cases.


Douglas Scott Harkness: So far as the Department of Finance is concerned the chief difficulty is that there is no real understanding of the oil business and what is necessary to encourage an increased oil production. The only way in which you can get people to put money in as risky a business as drilling for oil is to make it reasonably possible that they will get some sort of return. Unless some form of tax concession is made we are going to have the situation continue which prevails in Alberta at the present time, with the majority of the drilling rigs sitting idle and nothing going on. It is time that the Department of Finance realized that the present tax structure is stifling oil exploration.
I was particularly disappointed to hear the minister say that no further tax concessions were in prospect in view of the concessions which were made to the mining industry. The very least that might be done is to increase the depletion allowance from 33% per cent to 50 per cent, which would bring it in line with the depletion allowance allowed in the United States, and would bring it partly in line with the concessions now made to mining enterprises.
So far as the subsidies are concerned, there are one or two other things I should like to say-


Douglas Charles Abbott: If my hon. friend will permit me, I pointed out that subsidies do not come under this resolution. Under this resolution we are not granting subsidies. They come under another item in the estimates.


Douglas Scott Harkness: 
Douglas Charles Abbott: I really do not want to interrupt my hon. friend, but I am "not prepared to deal with the question of subsidies to the oil industry to-day. I have not the information with me; I am not in a position to answer my hon. friend now, and I do urge that he raise this matter at the proper time, when I shall be very glad to discuss it. Then I will have the necessary data either to agree with or to differ from him, but I have not the information and am not in a position to discuss it to-day. I have no doubt the statements he is making are correct, but I feel they should be made when I can answer them and give an explanation.


The CHAIRMAN:: Since the matter of subsidies comes under a different item I think it should be discussed when that item is reached.


Douglas Scott Harkness: While it may come under a different item, the point is that it is actually oil taxation, and it is so closely related to this item that it seemed to me this was the proper time to say something about it. However, that is the situation. It is a form of hidden taxation on the oil industry, and having made the point I shall leave it at that.
As far as section 31 itself is concerned, I wonder if the minister could state in simple words what the thing means, because as I read it, it appears that the oil industry is going to be worse off than before. My understanding having been in touch with the officials of the department, is that the industry is going to be in exactly the same position as in previous years. I should like a little clarification as to exactly what this section means and how it will work out in a specific case.


Douglas Charles Abbott: I shall do the best I can, Mr. Chairman. The only change from the law as it exists at present and as it has existed for several years is that the percentage rate is reduced from 26J per cent to 20 per cent and from 40 per cent to 30 per cent; and those changes are merely consequential upon the reduction in the rate of corporation income tax which is being made and which has to be made by reason of the undertaking to the provinces under the tax agreements. I am
advised the effect is a one hundred per cent write-off. I do not know whether that is clear to my hon. friend.


Douglas Scott Harkness: No; what the minister means by a one hundred per cent write-off is not clear at all. My understanding from what he has said and the information I obtained before is that the oil industry has had no tax relief, that it is in exactly the same position as before the budget was brought down. An ordinary corporation has had a reduction in the corporation tax.


Douglas Charles Abbott: It shares in the general tax reduction, along with everybody else.


Douglas Scott Harkness: 
Douglas Charles Abbott: They are reduced in the same proportion; he gets the same reduction he had before. As expressed in terms of percentages it is lower, but that is because the tax rates are lower; and, as I said a moment ago, this is equivalent to a one hundred per cent write-off. If my hon. friend will take my assurance on that point, I am relying upon the assurance of my officials, who I know are thoroughly familiar with the circumstances. The hon. member might care to study this when we have the bill before us. When he sees the specific terms of the amendment, if he is still in doubt I shall be glad to elaborate what I am saying now, but I do give him the assurance that the position is exactly the same, that the percentage rate of tax reduction is merely consequential upon the reduction in the tax rate, and that the effect is a one hundred per cent write-off.


Douglas Scott Harkness: Could I .put the thing in this way, then? Take an oil company which paid taxes of $50,000 last year. What tax are they going to pay this year, if their business is the same? What reduction is there, if any?


Douglas Charles Abbott: Well, from my hon. friend's hypothetical question I assume that the $50,000 represented 40 per cent of a certain taxable income. This year they will pay 30 per cent of that taxable income. I cannot make the calculation at once, but it is merely an arithmetical problem. They will pay 30 per cent of that same taxable income.


Mr.   M A CD ON N ELL@Muskoka-Ontario: I confess I am not quite clear yet as to what the minister meant by saying it was equivalent to a one hundred per cent write-off; and while
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I am on my feet I want to ask another question. The minister said plainly and categorically that this was incentive legislation. By that I understand that it is an inducement, that it is to induce people to take certain action, in this case to produce oil. Then I want to ask the minister if he accepts the statement made by the hon. member for Calgary East that the majority of the rigs are idle. If that is so, and the statement was not questioned, does it not make it appear that the incentive is not working, and does not that raise the question whether or not the government do in fact want these rigs to be operating? If they do, should they not consider whether, as I say, in fact the incentive is sufficient?


Douglas Charles Abbott: If I have understood my hon. friend's question correctly, he puts it on this basis, that because there are idle rigs the incentive perhaps is not adequate.


Mr.   M A CD ON N ELL@Muskoka-Ontario: The statement made by my hon. friend was that a majority of the rigs are idle. I speak in ignorance of the facts.


Douglas Charles Abbott: So do I; I do not know whether they are or not.


Mr.   M A CD ON N ELL@Muskoka-Ontario: Nevertheless we have here a witness who I submit for this purpose is an expert, whose evidence has not been challenged; and he says-


Douglas Charles Abbott: Let us call him an advocate as well as a witness.


Mr.   M A CD ON N ELL@Muskoka-Ontario: All right; I will not quarrel with that. At any rate this statement has not been questioned ; I accept it, and I imagine the minister accepts it also. If that is correct, and the majority of the rigs are idle, is it not fair to ask the minister whether his incentive is working, whether some explanation is not required to make this clause appear reasonable?


Douglas Charles Abbott: All I can say is that the government has no desire to go into the oil business. The rigs may be idle from a variety of causes. I do not know whether my hon. friend's statement is a complete picture or not, but I repeat what I have said previously. This is incentive legislation. These special concessions to the oil industry are matters which have been threshed out, worked out and discussed in this house year after year. There has been no change for the last two or three years. It may be that there should be greater incentive given, I do not know; that is a matter of opinion, but the government has come to the conclusion that this is not the
year to do so. My own view is that further incentive is not needed; that is my personal opinion.


Mr.   M A CD ON N ELL@Muskoka-Ontario: The reason we are taking up your time this morning is that we hope to convince you that you are wrong, however faint that hope may be. The minister said the government did not want to get into the oil business. I did not understand that remark at all, because it did not seem to me to be relevant to the very strong statement the minister made before, that this was incentive legislation. I still submit the minister -has left the question entirely unanswered, because if this is incentive legislation, I understand that to mean the government has decided that it does want oil produced in Alberta.


Douglas Charles Abbott: By the other fellow, and not at too great a price.


Mr.   M A CD ON N ELL@Muskoka-Ontario: Wait a moment. If I understand incentive legislation it is intended to produce certain results, and again I submit that we have the minister's statement that this legislation is intended to produce results; we have the statement of the hon. member for Calgary East that it is not producing results, so I submit with deference -that it is up to the government to reconsider the discussions which have taken place in the last few years, because after all some very important people were not present here during those discussions.


Douglas Charles Abbott: That is quite true.


Douglas Scott Harkness: I do not think there can be any question that wells are not being drilled to the extent that they might be. True, a certain number are being drilled, but there is no full drilling programme in operation, or a programme anything like there should be. As a matter of fact when I came to Ottawa to attend the sitting of parliament, twenty-eight out of thirty-two large drilling rigs in the Turner valley were sitting idle, and I am informed that condition still prevails. Most people who own probable drilling sites, and a large number -who have money enough to go ahead with the- drilling of wells, cannot see sufficient possibility of a return, under the present tax structure, and particularly in view of the subsidy which operates as an artificial depression of price to the extent of 75 cents a barrel, to go ahead with drilling.
This morning I was talking to a man who has an intimate knowledge of the oil business. The company with which he is connected has fifteen possible drilling sites. Those sites will at some time be drilled in t-he Turner valley, but they are not going to drill any of them

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until we get rid of the subsidy, or the tax situation is much improved so they can get a reasonable return from the oil for their shareholders. They believe it is much better to leave it in the ground than to take it out at the present time, because by taking it out they would simply be depleting their assets. It will be understood that once oil is taken from, the ground, the well is exhausted. Under the present circumstances they are much happier to leave the oil in the ground than to go into production. This is true of most of the oil companies.
Mr, ZAPLITNY: I admit at once that-I am no more an oil expert than is the minister, but I must say I am at a loss to understand what the hon. member for Calgary East is advocating. It seems to me he is admitting that no drilling is taking place, even though certain companies have sites, money and drilling equipment, simply because the return they believe they could expect will not be as great as they should like to have it. He also advocates removal of the subsidy and an increase in the price. I cannot see the logic in that, because it seems to me the whole reason for the subsidy has been to keep the price down in the west. We had an example of that earlier this year-


Douglas Charles Abbott: Mr. Chairman, I objected to the hon. member for Calgary East discussing subsidies, and I feel I must do the same when the hon. member for Dauphin proceeds to do so.


William Ross Macdonald: I would call the attention of the hon. member for Dauphin to the fact that an arrangement was made under which subsidies would not be discussed at this time. That comes under another item.


Mr. ZAPLITNY:: My only reason for bringing it up was that it had already been brought into the discussion. However, if it is the wish of the committee, I shall desist. I would say this, however, that a while ago the minister pointed out that the government did not wish to go into the oil business. If what the hon. member for Calgary East says is true-and I have no reason to doubt it-I am quite sure the government eventually will have to get into the oil business, to produce oil. It is admitted that certain of these companies have sites, money and equipment, but they will not drill for oil unless they are assured of a certain return. That is not private enterprise. Certainly it is not true private enterprise.


Douglas Scott Harkness: Apparently the hon.
member for Dauphin does not understand the situation at all.


Frederick Samuel Zaplitny: You explain it, then.


Douglas Scott Harkness: I do not believe he or anybody else would put money into an enterprise the resources of which were being exhausted, unless he could see some reasonable return on his capital, let alone to make any profit. That is essentially the situation. Under ordinary circumstances any enterprise is capable of operating at a loss for only a relatively short time before it goes broke. That is what has happened to many of the oil companies. Those which are still in operation and have drilling sites see no reason in the world why they should drill, spend a lot of money, and perhaps not even get a well, unless they have a reasonable return. But if they do get a well, they do not receive sufficient return to recoup themselves for the money they put into it.


Mr. JACKMAN:: I believe the hon. member for Calgary East has made a strong case for greater consideration of these companies which endeavour to bring more oil to the surface, so that we shall have a better supply of domestic oil for use in the west. The oil we buy from the United States requires payment of a 75-cent subsidy to get it here. One would conclude, therefore, that the Canadian price is 75 cents below the world or United States price, or the price which is considered necessary to get oil from the well-developed fields just across the border from our western provinces. It would therefore seem clear, even to one without great experience in this field, that the price in Canada is not sufficient to encourage drilling, or to encourage the supply of domestic oil. I should think that, with the government's other measures to protect our supply of United States exchange, it would do everything in its power to bring more Canadian oil to the surface, so that we should not have to buy in the United States, much less pay the 75-cent subsidy above the Canadian price in order to bring the oil here.
Undoubtedly the industry is a particularly hazardous one. I believe the present allowances do not go as far as they might to encourage production. Those allowances should be increased. While I do not wish to mention the subsidy again, yet it is so germane to the subject matter that it must be apparent to all hon. members that our oil producers are in a much more hazardous field than are the producers in the United States field across the border. Yet they do not get the price those producers get. At the same time we are not giving our producers as fair an increase in the depletion allowance as we should, in order to encourage them, especially
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when they have to work under a price level substantially lower than that which applies in the United States. Therefore I stand behind the suggestion made by the hon. member for Calgary East, in the hope that the government will give consideration to the fact that our price is so much lower than that of imported oil. If some relief can be given, through increased depletion allowance and tax drawback on the wells which are drilled, as well as the deep test wells, we shall greatly improve the Canadian economy and save United States exchange.


Mr.   M A CD ON N ELL@Muskoka-Ontario: I am sorry to -be so persistent when the minister is so gracious; nevertheless I still think we are in a very unsatisfactory position, and I hope the minister will have another look at it.
I wish to make one comment on what the hon. member for Dauphin has said. He pointed out that people who were in this business wanted to be assured of a return. I think we ought to try to speak accurately-and I think the hon. member does try. I believe if he will study the situation he will find that there is enough money lost to satisfy either him or anybody else who feels that those who are in private enterprise should make losses. I think he will find that there are plenty of losses.
Coming back to the minister, I repeat what has already been pointed out, that twenty-eight out of thirty-two rigs stand idle. It does not seem to me to add up if in one breath the minister says this is incentive legislation and in the next he takes no cognizance of the fact that apparently it is failing to act as an incentive. Either the government wishes to have oil produced, or it does not. Again I suggest to the minister that if that is a fair and full statement of the situation, that great numbers of developed rigs are being shut down, further consideration of the matter is called for.


Douglas Charles Abbott: The position with respect to tax concessions to the oil industry can be summarized in this way. In the first place, the treasury bears 50 per cent of the cost of drilling unsuccessful deep test wells. Second, every oil company is allowed to write off the capital cost against profit and loss.


Harry Rutherford Jackman: If it makes a profit.


Douglas Charles Abbott: There is a 100 per cent write-off of the capital cost against profit and loss account; if it makes a profit it can write off a hundred per cent of the capital cost against profit and loss account.


Mr.   M A CD ON N ELL@Muskoka-Ontario: If there is any profit.


Douglas Charles Abbott: The proposal of the government goes further than that, so far as incentive legislation is concerned. We will pay up to 50 per cent of the cost of drilling an unsuccessful deep test well. If the well is successful I assume that the operator would get back one hundred per cent of his cost. That is as far as the government felt it could properly go in the line of incentive legislation-. That judgment may be mistaken, but there are other reasons which result in failure to drill wells. The parliamentary assistant to the Minister of Finance has pointed out that he helped to finance the first successful oil well in the Turner valley. One of the greatest incentives to further drilling is the bringing in of a new well. The hon. member for Calgary East knows that as well as I. As I have said, the government feels that the present incentives are all that it can afford to offer under existing conditions.


Douglas Scott Harkness: I think the minister is under a misapprehension when he states that the treasury bears fifty per cent of the cost of an unsuccessful deep test well. If a new company starts out in the oil drilling business and drills a deep test well, it gets nothing whatever from the treasury. The only case in which the treasury bears fifty per cent of the cost is where a well is drilled by a company having sufficient revenue. I think I can make my point clear by a simple example. If it costs, say $400,000, to drill a deep test well, and it proves to be a dry hole, a small company with an income of $100,000 per year from producing wells would get a tax concession of $19,000 on their $400,000 loss. In other words, they would have a loss in connection with drilling that well of $381,000. If the well was drilled by a large company with an income of $1,000,000 from producing wells, the tax concession on that particular well would be $190,000. In other words it would, cost that company $210,000 to drill the well. As you can readily see, the effect of this will be to discourage new capital. There is no incentive in this resolution for new capital to go into the oil business. There are several small companies in Calgary which have drilling rigs and the necessary money, but they know that if they spend from $300,000 to $600,000 on a deep test well they will get no help from the government under this resolution. They would lose their money and would be out of business. Considering the return that they would get if they did bring in a producing well, they decide not to drill at all.

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The only people that this legislation really helps are the large companies. One of my objections to it is that it does not encourage the small operator who is chiefly responsible for bringing in new oil fields. Once a field has been discovered the large companies come in and buy up the various leases and drill wells, but in most cases the new wells which have been discovered on this continent were discovered by the wild-catter who puts down a well at times in places where the geologists say there would be no use in putting one down. That is how the great oil development has taken place throughout this country. This legislation does not help the small man.


Mr. IRVINE:: From the point of view of capitalism I think the hon. member who has just taken his seat- has made a good point. Undoubtedly the smaller men are at a disadvantage, but if the government is going to bonus this industry I suggest it should bonus itself and take either the loss or the gain, as the case may be, and not just go out to bonus every Tom, Dick, and Harry who may want to go into the oil business.


Douglas Scott Harkness: There is no question of the government bonusing the industry. What the industry is asking for is a fair deal in the matter of taxes. It is asking for an increase in the depletion allowance to bring it into line with its competitors in the United States, and to bring it into line with the concessions now made ito the mining industry. That is the only sort of concession that will help the small operator. Then it is asking for an extension of this fifty per cent provision on deep test wells to wells which are drilled in the plains area. I do not know why the government will not put that into effect, because an oil well that goes down two or three thousand feet is just as valuable to the country as one that goes down 40,000 feet. As far as present exploration goes it looks as though there might be a better chance, in the next two or three years, of developing oil wells in the plains than in the foothills area. They can drill three or four wells there in less time than it would take to drill one in the foothills area.


Mr.   M A CD ON N ELL@Muskoka-Ontario: We have had placed before us figures which I submit show the virtual failure of the present legislation as incentive legislation. I should like to ask whether the government in considering the adequacy of this legislation had before it those or similar figures. In other words, did the government consider the present situation as described by the hon. member for Calgary East in reaching this decision? If they did not, would it not be 63260-266
reasonable to ask the minister to allow this resolution to stand so that they could take another look at it? After all, we are trying- at least most of us, with the exception of the gentlemen immediately to my left-to arrive at a situation which would give a chance to the smaller man.


Douglas Charles Abbott: I cannot say that we
know the number of drilling rigs which were actually idle, but the whole situation with respect to oil exploration in western Canada has been thoroughly considered. The hon. member for Calgary East knows that there has not been a single successful deep test well as yet. This legislation has resulted in substantia] write-offs by I think seventeen concerns who have availed themselves of the fifty per cent privilege. As I said a moment ago, the government feels that this is as far as it can go to-day. Answering the hon. member for Muskoka-Ontario directly, I would say that the government has had under continuous review the position of the oil industry in western Canada and the exploration that is being carried on.


Mr. HACKETT:: The tendency of legislation arising from resolutions of this kind is to give legislative effect to the programme of the gentlemen who sit to our immediate left. Their enthusiasm for these resolutions and for the legislation which will follow is easily [DOT]understood.


Mr. CASTLEDEN:: One of your members alleges that we are helping the large companies.


John Thomas Hackett: This legislation discourages private initiative. Hon. gentlemen to my left talk about the government bearing this and that part of the cost of developing these natural resources, but there are other natural resources. The lumber and mining industries are suffering because of similar misconceived legislation. The result is that if we fail to develop, or permit private
corporations to develop, our natural resources_
coal, lumber, oil-	*


Mr. MacNICOL:: Minerals.


John Thomas Hackett: Minerals of all kinds-


William Ross Macdonald: I think the hon. gentleman should confine his remarks to the development of oil.


John Thomas Hackett: Perhaps the chairman would like me to read the resolution three or four times and consider that an argument. I am making an argument, and I submit with great deference that it is well within the compass of the resolution.

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William Ross Macdonald: I have read the resolution several times; it refers to oil, and I think that all discussion should be directly relevant to oil *wells. The house rules governing the procedure of committees definitely provide that when we are in committee all discussion must be directly relevant to the clause under consideration.
tMr. HACKETT: Mr. Chairman, I realize all the difficulties and annoyances pertaining to the very difficult post which you hold, and I must repress the inclination to question your desire to see some advance in the work; but I submit with great deference that as long as I am making a point which is relevant to the measure under consideration I am not to be circumscribed in the illustrations which I bring forth to elucidate the point at issue.


William Ross Macdonald: Let me assure my hon. friend that I do not want to circumscribe him, but I would ask him, if we are to make the progress we wish to make, to confine his remarks to the oil industry. I realize he may feel that he should mention other industries, but I do hope that he will stay close to oil.


John Thomas Hackett: The point I am endeavouring to make is that a resolution which discourages private enterprise from developing these mines and these oil wells, and which imposes heavy taxation upon exploitation of mines before there has been any chance to recover any substantial portion of that which has gone into their development, tends to throw the development of our national resources into the awaiting arms of the government.


John Ritchie MacNicol: The government, every time.


John Thomas Hackett: The government seems to 'be willing to undertake anything these days, forgetting its normal function. I point out to the minister-and I am not going far, Mr. Chairman-that there are several resolutions with which he has entertained the house during the last few days which point very clearly' to the adoption by the government of the programme of hon. gentlemen to the left.


Mr. ADAMSON:: I merely want to point out to the minister, and particularly to the officials in his department, that the bringing in of an oil field is no small matter. It takes extremely large sums of money. I have been told that the development of the Bahrein island oil fields by, I think, the Standard group, cost, before they had a successful field, about S50 million. I mention this to show that we have to think in round figures when we are going to develop an oil field, and
[Mr. Hackett.l
this legislation only goes half way. There should be complete exemption for all drillings. That is the rule elsewhere; it has proved a successful rule all over the world.
If we are to develop an oil field in Canada- and, with all due deference, we have not done so yet-we shall have to consider an expenditure of money in possibly the hundreds of millions, and unless constant and considerate encouragment is given, no oil field will be developed. We may not have an oil field: that we do not know, but if it is to be developed at all we have to raise our sights as to the amount of money which will have to be invested before we know definitely whether we have one or not. I want to bring that to the attention of the minister's helpers.


Douglas Charles Abbott: May I reply briefly to my hon. friend? In respect of the seventeen drillers, companies or otherwise, that have availed themselves of this fifty per cent concession, there has been a total payment from the treasury by way of tax credit of something over $2 million already, with no successful wells as yet.


Douglas Scott Harkness: The minister made a statement a minute ago on which I should like to comment briefly, that the oil situation had been fully canvassed and investigated by the government, and that in view of this investigation, or whatever you may call it, it was decided not to make any further tax concessions. I should be interested to know what sort of investigation or canvass of the situation was made. One of the chief complaints of oil men in *western Canada is that there is apparently no one in the Department of Finance or in the government who understands the oil business and its implications, and as a result any decisions which are made, are made, at any rate frequently, on false premises. If this question of the tax situation affecting oil wells is ever to be straightened out in a reasonable way and to the satisfaction of the people concerned, any investigation which is made should be made with them, and evidence should be heard from them. I do not believe the people in the government here understand the oil business or the oil situation, and they are therefore not in a position to make decisions in this matter.


Douglas Charles Abbott: I can only answer my hon. friend by saying that we have what I believe to be a very capable Department of Mines and Resources, and some capable geologists; while we have no oil industry experts in the Department of Finance we have some people

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who know a good deal about the oil industry, and we rely for our technical advice on officials in the Department of Mines and Resources. That, I suggest, is perfectly proper, normal government procedure. We cannot rely exclusively upon representations made to us by the oil industry. We are glad to hear them, we have heard lots of them, but we must also take other opinions.


Mr.   M A CD ON N ELL@Muskoka-Ontario: 
Douglas Charles Abbott: I should correct that. It was seventeen wells. I do not know how many companies there are.


Mr.   M A CD ON N ELL@Muskoka-Ontario: That is not exactly my point. The minister should make a complete statement, not only as to concessions the government has made in respect of those wells, but what other transactions have taken place, what taxes were received from those companies, and so on. We ought to have a full statement as to how the public came out of that, and not merely the statement that an allowance was made.


Douglas Charles Abbott: Let me take the case of one oil company in Canada which drilled a deep test well. I will not mention any names, but I know that company and so does the hon. member for York West. The company has spent a substantial amount of money in western Canada in deep test drilling, and it has not been successful in finding oil. The concession, if I may call it that, meant that fifty per cent of the costs expended in that deep test programme could be written off against the taxes which the company otherwise would have paid on its sales of gasoline. In other words it was a straight tax credit. It was just the same as if it had paid its taxes and the government had issued a cheque for half a million or whatever it might be.


Some hon. MEMBERS:: Oh, no.


Douglas Charles Abbott: It is exactly the same.


Mr.   M A CD ON N ELL@Muskoka-Ontario: I am, sure the minister meant it that way, but from the point of view of the ordinary member of the public reading this, it is a very different transaction indeed, and that is why I asked to have it restated.


Douglas Charles Abbott: If that is so, I am glad my hon. friend made the point. Perhaps I have been unable to bring it out. However, it has taken the form of a tax credit and that is what is intended. If the concern had no 63260-266J
tax bill, there would be no credit. We do not issue a cheque from the consolidated revenue fund to pay half the cost of unsuccessful deep test wells, but we relieve the taxpayer of the obligation to pay money to the treasury to the extent of fifty per cent of the cost.


Mr.   M A CD ON N ELL@Muskoka-Ontario: Provided he is in the fortunate position of having made enough money elsewhere, so that he owes you money of which you can forgive him half.


Douglas Charles Abbott: Precisely. But unless someone is in a position to pay taxes, the services, of the country cannot be carried on.


Mr.   M A CD ON N ELL@Muskoka-Ontario: Quite so, but that is a different picture, and in my opinion the moral of it is also very different. The moral still is that, as the minister has stated, the unsuccessful fellows are left to carry their own load, as they must. That is part of the game. Nevertheless, I submit, and I will not repeat this indefinitely, that we have had no evidence whatever-this is not particularly a criticism of anyone-that the present situation has been taken into consideration by the government in reaching its conclusion. I still wish the minister would allow this to stand so that he can have another look at it.


Douglas Charles Abbott: One cannot make tax concessions to people who pay no taxes, and this method of assistance has always taken the form of a tax concession and not a straight subsidy. It has never been suggested, so far as I know, that there should be a straight subsidy. I do not wish to allow the section to stand. It is the continuation of a policy which, as I said before, has been in force for several years.


Mr.   M A CD ON N ELL@Muskoka-Ontario: Unsuccessfully.


Douglas Charles Abbott: reasonable probability of there being any change this year. I really cannot say more than that.


Mr.   M A CD ON N ELL@Muskoka-Ontario: I will not ask that it stand unless the minister can say he thinks there may be factors which have not been taken into account. I will not ask to have it stand merely for the sake of holding it over.


Douglas Charles Abbott: I cannot honestly say what my hon. friend suggests.


Agar Rodney Adamson: While I realize that there is no likelihood of the change being made now, I suggest that consideration be given to allowing the entire cost of exploratory, deep test wells, or of any exploratory drilling in Canada by any company. I say this because in my opinion the economy of the country is desperately in need of an oil field.


John Thomas Hackett: You would save the bonus on imported oil.


Agar Rodney Adamson: Not only that, but we need it in order to round out our fuel economy, and, indeed, our whole national economy. If the government said that they actually would bonus people going into the oil business to drill for oil-and I am not interested in the oil business; I do not know much about it-I suggest that we could develop an oil field of decent size, comparable with the oil fields of Oklahoma, Texas, California, Peru, Colombia and Venezuela; and if we could do that, the entire national economy of Canada would be altered tremendously. The benefit would be such that not only the Canadian economy but the entire economy of the British commonwealth of nations would be vastly improved. A great deal would be done for our national defence if we had an oil field. There is enormous advantage in having an oil field and I suggest that next year this should be one hundred per cent. I would even go so far as to say that if the government could help in the way of geological surveys and other activities of the kind, even if it were out of pocket for a few years, to see whether we could develop an oil field, it would be an advantageous expenditure of public money.


William Irvine: Having received from the bon. member who has taken his seat a more clarified view of what hon. gentlemen to my right are trying to press upon the committee, I feel prepared to refer now to the charge made by the hon. member for Stanstead. His sense of humour is heavy, and when he suggests that the policy of the present government is the policy of the group to which I belong, his humour is at its highest and I appreciate it. But I see now that the point is this. The hon.

member would have no objection to taking money out of the public treasury for surveying, and even to assist in digging wells, in order that private corporations may get all the benefits that may accrue and the public sustain all the losses that may ensue. That is their policy, and I am opposed to it. If the government is going to do further investigating in connection with oil, and assist in any way in capital expenditures necessary to bring the oil to the surface, and if public money is to be expended and the public is to take the risk, then I suggest that the public should get the income. If my hon. friends to my right will go that far, they will be on our side.


Agar Rodney Adamson: But they get the income from the taxes.
Mr. HARKNES8: The hon. gentleman could not have stated our policy in a way more contrary to the truth than he has done. He does not appear to understand what we have been trying to get at, nor does he seem to understand anything about the oil business.


William Irvine: It is castor oil you are talking about.
Mr. HARIvNESS: The minister appears to think that a great deal has been done for the oil industry because $2,000,000 in tax drawbacks have been allowed for deep test drilling. As I have already pointed out, that benefited only a few large companies. They are the only ones that could take advantage of it.


Douglas Charles Abbott: They spent fifty per cent of their own money and did not get any back.


Douglas Scott Harkness: That is quite correct. I am not objecting to the fifty per cent drawback; I want it extended to other fields. The point I am making is that this so-called incentive legislation which the government has brought in is not operating as an incentive. I am requesting that changes be made in it so that it will act as an incentive, or a much greater incentive than it has done so far.
I should like to see the government increase the depletion allowance. They have improved the depletion allowance for the mines; why do they take such an adamant stand against improving the depletion allowance for oil wells? An increase in the depletion allowance from 33i to 50 per cent, and a provision similar to the one they have in the United States to enable it to be moved backward or forward as required, would do a great deal to help the small driller. That is one thing that the government could readily do, in view of what they have done for the mines. The

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minister owes an explanation to the country, and to the oil drilling people particularly, as to why the government is not prepared to extend the same tax concession on depletion allowance to the oil business as they have extended to the mining business.


Mr. JAQUES:: The policy of the three
groups other than this one is much the same in respect to the matter under discussion. But each group is trying to hide that fact from the other groups. There seems to be no lack of finance capital, if we look at the amount of deposits in the Canadian banks and the amount of bonds which are held by the Canadian people. If we are to maintain private industry, if we are to continue with the system of private initiative and private industry, then we have to block what I call funk holes for capital which are provided by government guaranteed bonds by which a man can be guaranteed safe and profitable investment for his money.


William Ross Macdonald: Order. I have asked other hon. members to confine their remarks strictly to the resolution under consideration, which is 31, production, refining and marketing of petroleum and deepening of oil wells.


Norman Jaques: The point I am trying to make, Mr. Chairman, is that apparently these different parties want the government to do what private enterprise should be willing to do for itself. Oil and mining are, and must be, most highly speculative enterprise. But, where there are great risks of loss, then there must be chances of great profits, otherwise people will not assume the risks. Capital seems now to prefer the safety of bonds, the safe usury of bonds, to the ventures of investment for profit or loss. It seems to me that if finance capital continues to go the way it is going, it can lead to only one thing, namely, the socialization of our economy. As I have said so often in this house, it is a proof of the partnership between Shylock and Marx.


Mr. BRACKEN:: Before w7e proceed
further, Mr. Chairman, I should like to raise one point. In the early discussions this morning I gathered from the minister's remarks that the Canadian people are making great-


William Ross Macdonald: If the hon. member for Wetaskiwin has any questions to ask, I know the other hon. member will be glad to answer them, but he must not ask questions without rising.


Norman Jaques: I beg your pardon, Mr. Chairman; perhaps I was a little excited.


William Ross Macdonald: Probably it was my mistake; doubtless I misunderstood.


Ian Alistair Mackenzie: Just a private fight.


John Bracken: In the earlier discussion this morning I gathered' from the minister's remarks that the oil industry is a considerable charge upon the Canadian people, that in some manner the Canadian people are being asked to aid this industry; in other words, that the industry is a burden upon the Canadian people.


Douglas Charles Abbott: I did not suggest that.


John Bracken: I did not say that the minister deliberately did it, but that is the impression I got. There was talk about subsidies, about aids, about incentives, about a hundred per cent write-off, and about $2,000,000 paid to the oil companies, and it was suggested that the government could not bear all the cost of certain of these projects. I rose only for one purpose. We all want the truth to be known. Aside from the cost of geological surveys and other basic development work which the government does in some of its departments, is the oil industry to-day, or has it been, a burden upon the Canadian people? Have other taxpayers in Canada contributed to the cost of this development, or is the government doing anything more than relieving it of some taxation in order to encourage its development? The impression which was left was that the industry was a burden upon other taxpayers. I gather the minister did' not mean to leave that impression.


Douglas Charles Abbott: No, I meant to leave no such impression, of course. In a general way I am fairly familiar with the oil industry as it operates in eastern Canada, and it certainly is no burden, on the Canadian people. All that the government legislation has done or attempts to do is to provide to this industry certain reasonable and proper incentives to explore for new oil fields in Canada. We believe they are reasonable. It has been suggested this morning that they are not adequate. That, of course, is a matter of opinion. All that we have said to the oil industry, as to the mining industry, is that we will not ask them to pay taxes and at the same time assume capital losses. Under certain circumstances we will allow them to get back their capital and a certain proportion of their capital losses out of moneys which they would otherwise pay in taxes. We believe that is reasonable and proper, but I do not want anyone in this house or elsewhere to get the impression that we believe the oil industry is any burden on the people of Canada.


John Ritchie MacNicol: I believe I can touch an aspect of this question which as yet has not been referred to. In my opinion every dollar
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the government puts into the development of oil, by relieving those engaged in the oil business of a certain proportion of their costs in drilling wells, is money well spent and in the long run does not cost the country a dollar. I want to congratulate this government and every other government, provincial .and otherwise, that has supported the development of the oil industry and the mining industry. My life has been spent in manufacturing, but in connection with oil I know that in huge plants in Hamilton, Toronto, Belleville, Stratford, Montreal, Sherbrooke and all across Canada, including your own fine city of Brantford, Mr. Chairman, thousands of men are engaged in manufacturing materials used by the oil companies. At Turner Valley, which presents a real object lesson as to the amount of money invested in getting oil out of the ground and processing it, one can envisage vast works, tanks, pipes and equipment made in plants all over the country. All that equipment, which enables oil men and mining men to take these materials out of the ground, gives a great return to the government through taxes of one kind and another-corporation taxes, sales taxes and so on all along the line. So instead of costing the country anything, this whole business returns great amounts of money to the country in addition to the employment it gives to thousands of men. I cannot understand the attitude of hon. members to my left. The more I think of their philosophy the less I understand how they can persistently oppose development.


Mr. KNOWLES:: It is the dark before the dawn.


John Ritchie MacNicol: I really get fed up with this talk about those who promote industry. There would be little employment in the country but for industry. I was in it for a long time, and I know. No wheels turn unless somebody puts up money to start them turning, and every wheel that turns means employment. I shall not get into that, or you will rule me out of order, Mr. Chairman, but some day I will get so fed up on this talk against industry that I shall explode. It takes the Scots a long time to get angry, and I do not want to get angry to-day.
Coming back to where I left off, I say I congratulate this and every other government on every dollar that has been invested in finding oil and minerals and having them brought out of the ground. They do no good in the ground; it is only when they come out of the ground that they give any return to the country. Instead of costing the country anything, these industries give vast returns by

way of employment, and that is the thing I am interested in more than anything else. Our people want jobs, and they cannot get jobs unless somebody employs them. No other industry creates more employment and provides the number of jobs provided by the oil and mining industries. That is what we want. I say to the government, go ahead; assist in every possible way in the opening up of new oil and mineral fields. You only have to go to the Yellowknife, where I was not so long ago-well, they do not produce oil there. Go to Norman Weills; perhaps the chairman will let me talk about that for a moment. That is possibly a thousand miles north of Edmonton. There you see tank after tank and works for perhaps a mile. Most of that steel was made in Hamilton, perhaps by some of these fine fellows who are here to-day. The equipment you see up in that great oil field was made in hundreds of towns and cities down through Ontario and Quebec and elsewhere in the east. I would say there were perhaps a thousand men and women engaged there; that is an arbitrary figure, but it does a person's heart good to see all these people employed at good salaries. Who would have put money into Norman Wells if it had not been for the oil people themselves and the prospectors who went ahead of them? The prospectors do not come under this item. I should like to say a word to compliment them, but that would be out of order. I say to the minister, go ahead; support the oil people in every way to find new wells. Support the mining people in every way to find new mines, because it is all for the good of Canada.


Mr. MAGDONNELL (Muskoka-Ontario):: I want to ask the minister a question. I almost promised the last time that it would be my last, but perhaps this really will be the last one. First I want to refer to something said by the hon. member for Davenport. He congratulated the government. I want to explain that away by just saying it shows the boundless generosity of a real Scotsman. I am only a partly genuine Scot; therefore you will get no generosity from me. I want to refer also to the hon. member for Cariboo. My first acquaintance with the hon. member came through reading a delightful book he had written, in which among other things he gave an account of the party system. I recommend it to all hon. members. Since then I have always regarded the hon. member for Cariboo as preeminently a humorist, among his other qualities. You know, they say of Stephen Leacock that he used to mix up his humour and his economics, and I should like to think that occasionally the hon. member for

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Cariboo does the same thing. However, he and I find ourselves in agreement on many subjects, such as the party system.


Mr. POULIOT:: You are both artists.


Mr.   M A CD ON N ELL@Muskoka-Ontario: But not in the same class with the hon. member for Temiscouata. I want to ask the minister this question. What is the rate of oil production at present, and how does it compare with what we have had in the past? I am still sticking, like the puppy to the rag, to my feeling that this incentive has been a bit of a dud.


Douglas Charles Abbott: I shall have to get that
information for my hon. friend, but as he probably knows, speaking generally oil production in Canada is dropping.


Mr.   M A CD ON N ELL@Muskoka-Ontario: Then may I again ask if that in itself may not be a warrant for having another look at this section?


Douglas Charles Abbott: Yes, I agree that it is
certainly a warrant for having another look.


Frederick Samuel Zaplitny: While the minister is
getting that information, perhaps he could also get figures to show the comparative prices for oil produced in the United States and oil produced at Turney Valley, say.


Douglas Charles Abbott: I think I shall have to
adhere to the stand I have taken. Which is that these matters should be discussed when we are discussing the subsidy on imported oil, when I shall have that information.


John Thomas Hackett: Why not keep the whole subject together and discuss these matters at the same time?


John Bracken: While the minister is
getting the data with respect to production, I wonder if he would try to get a little further information. I am concerned with seeing that the Canadian people have a correct view with respect to the oil industry in Canada, and not a wrong view. If other taxpayers in Canada are not bonusing this industry, it is time we knew it, and time we knew that any other impression is not correct. The minister has said-and we accept his statement-that the oil industry has not been a burden upon the people, except to the extent that general surveys and work of that type along basic lines has been done. In addition to its not being any burden on the taxpayers of Canada, this industry has been of some advantage in providing employment and revenue from taxation to carry on the ordinary activities of government. All hon. members
will have access to the ordinary statistics of employment, but perhaps the minister could give us some idea of what the oil industry has contributed by way of taxation to the Canadian people.


Douglas Charles Abbott: I think perhaps I can get information on that which would be of interest. Of course my hon. friend will appreciate that the oil industry, like a great many other industries, is divided into a number of compartments. There are marketing companies, companies which operate here in the east, some of which have nothing whatever to do with the production of oil. They have the crude oil refined and distributed as gasoline and lubricating oils. Others do not even do that; they simply buy gasoline and sell it. They are nothing more or less than retailers.
I take it my hon. friend's question relates principally to the industry so far as it engages in the production of oil in Canada. If that is correct I shall see what figures I can get and give them to the committee at another time. Perhaps the appropriate time would be when we are in committee on second reading of the bill. However I shall get what I can.


Douglas Scott Harkness: In order to keep the record straight, not only have the oil producers of Canada not been a burden on the taxpayers, but they have saved the taxpayers between $5 million and $10 million a year in the past several years in subsidies which would otherwise have been paid. I am not returning to the matter of subsidies, but I am simply pointing out the way in which that amount of money was saved to the Canadian taxpayer.


John Ritchie MacNicol: And on exchange in
respect of oil coming into Canada.


Douglas Scott Harkness: Yes, as the hon. member for Davenport says, on exchange. In addition, the oil producers for some time have bonused consumers of gasoline and oil products in western Canada to a greater extent than that. The bonus to consumers in western Canada last year was about $8 million. It is impossible for me to say definitely how much the oil producers saved the country, or how much they bonused the oil consumer, because the government has seen fit to withhold from me any information as to subsidies paid. However, through private sources I have found out that the subsidy was about 75 cents a barrel -indeed in some cases it amounted to 80 cents.


Douglas Charles Abbott: We are right back on subsidies again.


Douglas Scott Harkness: That would be a rough estimate of the amount of money the tax-
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payers have been saved by the oil producers, and the extent to which the oil producers have bonused the consumer.


Mr. WRIGHT:: If the minister is going to produce figures to show the position of producing oil companies, and if he wishes to paint a fair picture, he should also produce the figures for the closely allied handling companies. Their directorates in some instances are interlocking. To paint a fair picture of the oil industry he would have to show not only the profits made by the producing companies, but also those made by the handling, distributing and pipeline companies.


Douglas Charles Abbott: I pointed out to the leader of the opposition that he had given a fairly big order, but I promised to do the best I could. I shall consider the hon. member's request. It will be recognized, though, that to make a complete and analytical survey of the oil industry in all its ramifications-although a good' deal of the information may be available in the bureau of statistics-would be a large order, I might be able to get it before September or October when the house rises.


Mr. ROWE:: I have followed carefully the remarks of my leader, of the hon. member for Muskoka-Ontario and of other hon. members of this party. I believe the committee recognizes that there are few industries more indigenous to Canada than the oil industry. I observe with interest and some concern the fall of our oil production.
In reply to the hon. member for Muskoka-Ontario the minister said he thought this condition was worth another look. Before that he had indicated that there was very little probability of the government changing its mind.


Douglas Charles Abbott: This year.


William Earl Rowe: Yes, this year. Of course governments often change their minds, even when front-rank members of the cabinet are in doubt. Sometimes I have seen cabinet ministers change their minds when other cabinet ministers did not know they were changing. Recently the Prime Minister changed his mind when none of the cabinet knew he was changing it. So I still think there may be hope. I suggest the minister carry out his undertaking to the hon. member for Muskoka-Ontario and let the section stand in order that he may have another look at it.


Douglas Charles Abbott: If the committee insists that it stand I shall have to comply, but I do ask that it be permitted to pass. There will be another opportunity for discussion when the bill is presented. I hesitate to 
interject a personal note, but I have a heavy programme to place before the house. I indicated earlier that I thought there was no reasonable possibility of our making any substantial change in the oil tax programme this year. Of course if the committee insists I shall have to allow the resolution to stand. But there is no change this year, and I think I ought to ask the committee to permit it to pass. I could consider it between now and the time the bill is presented.


William Earl Rowe: I understood the minister to say he thought it was unfair that he should take another look at the situation, and I thought his answer indicated there might be a slight chance. However, in view of what the minister has said I shall not insist that any change be made. I do express my regret that the government has not seen fit to leave the incentive as it has been.


Douglas Charles Abbott: We are leaving it exactly as it it; there is no change.


William Earl Rowe: I mean that I regret there has been no increase in the incentive.


Douglas Charles Abbott: We are just continuing for another year provisions which have been in force for three years.


William Earl Rowe: The government could very well have given consideration to increasing the incentive, and I regret that the only incentive given is that which can be taken out of profits already earned. There is no incentive offered to companies which might not have any profit. The government would be well-advised in my opinion-if it is in power in another year-to increase the incentive, because I know of nothing more important at the present time than the oil industry. It is regrettable to think that production has fallen.


John Ritchie MacNicol: I shall give one brief example to encourage the minister to stick to any programme which would develop the oil industry. The development of that industry in the area around Norman Wells in the far north has resulted in a brand new business down here in this part of the country. It has been found that the burning of the fuel oil produced in that country encourages people in the far north to invest money in the building of houses which, because of the high price of coal up there, would not otherwise be built. There is no wood available for fuel purposes up there. The development of oil at Norman Wells has been a mighty fine thing, because it has brought about a new industry to manufacture stoves and furnaces to burn oil for use in the north country. This is just one small example of the benefits

Income War Tax
brought about in increased employment created by investments by this and other governments in promoting the production of oil. Still further examples might be created and more employment, created. I am told it is possible that thousands of these oil stoves will be required. I should like my hon. friends to my left, for whom I have a high regard, to try to get that point of view and realize the results that can be obtained by the country making these investments in prospecting. I am not making any comment upon whether it is or is not enough; I am simply grateful for anything the government can do to develop our resources and provide employment, not only in the west but in the plants of Ontario and Quebec.


[Stage Direction]
Resolution agreed to.
32.	That the deduction from tax allowed to a corporation, association, syndicate or exploration partnership formed for the purpose of exploring and drilling for oil in respect of exploration and drilling expenses be extended to expenditures incurred during the year 1947 but that in respect of expenditures in that year the deductions be reduced from 26jf per cent to 20 per cent thereof.
Douglas Scott Harkness: What is the essential difference between resolution 32 and1 resolution 31?


Douglas Charles Abbott: Resolution 32 is for the
benefit of new companies which do not have an income. It will enable them to carry axploration expenses forward and deduct them if and when they do have an income. It is the same as the law now stands.


Douglas Scott Harkness: I thought the clause was to apply to new companies, particularly syndicates and partnerships which might be set up for the purpose of drilling for oil. I would assume that this resolution 32 applies particularly to what you would term the small man; that it was meant to apply to him.


Douglas Charles Abbott: Not necessarily.


Douglas Scott Harkness: It applies more to him than to the large corporation.


Douglas Charles Abbott: I do not know that I
would agree with that.


Douglas Scott Harkness: Why is the clause which appears in 31 "the deepening of oil wells which is completed in 1947" left out of 32?


Douglas Charles Abbott: This is to cover an exploration enterprise, not a deep test well. The provisions covering deep test wells are to be found in another resolution. They must be approved by the Department of Mines and Resources and be authorized by the governor 63260-267
in council. This relates to the ordinary company exploring for oil, and it enables a new company which has no income to carry its expenses forward.


Douglas Scott Harkness: I am not suggesting that either of these resolutions has to do with deep test wells. I was simply asking the essential difference between 32 and 31. The minister told me that the only essential difference was that 32 was designed to look after new companies and things of that sort. I then asked why that did not contain the clause, "the deepening of oil wells which is completed in 1947" which is included in 31.


Douglas Charles Abbott: This and other resolutions are drafted in broad general terms, and when my hon. friend looks at the legislation I think he will find that it covers the point he has in mind.


Douglas Scott Harkness: Resolution 31 provides for a reduction in deductions from 26} per cent and 40 per cent to 20 per cent and 30 per cent respectively, whereas 32 only allows for a reduction from 26} per cent to 20 per cent. Why is not the 40 per cent and 30 per cent included in the resolution?


Douglas Charles Abbott: Presumably the new company which was formed would not be an oil marketing company. There are two types of companies, as my friend knows, the oil marketing company and the purely producing company. The rates are different, depending upon whether it is an oil marketing company or a producing company, or there might be a combination of both.
Mr. HARKNESS1: Is the minister suggesting that the oil marketing company should have a greater allowance than the straight oi'l producing or searching company? That would seem to be the effect of what he is saying.


Douglas Charles Abbott: I am advised that in both cases there is a complete one hundred per cent write-off provided under the present law. The only change as to bring the percentages into line with the reduced rates. These rates were reduced by an undertaking made under the dominion-provincial tax agreements.


John Thomas Hackett: What type of company would be affected if resolution 32 were dropped?


Douglas Charles Abbott: A new enterprise formed for the purpose of exploring for oil.


John Thomas Hackett: They would not be covered by 31?


Douglas Charles Abbott: They are not really covered by 31. Als I explained a moment ago, 32

Income War Tax

allows an accumulation of exploration expenses to be used in a subsequent year when there may be profits. Under 31 the already operating company has profits and can take its write-off in the year in which it incurs the expenses. There is no change except for the percentages. I thought the oil industry were quite familiar with what this is doing. Perhaps I am not the be9t person in the world to explain it, because it is rather complicated. I have the section of the act before me and I assure my hon. friend, as I have before, that there is no change in the existing law.
Resolution agreed to.
33.	That the deduction from tax allowed to a corporation, association, syndicate or exploration partnership formed for the purpose of exploring and drilling for natural gas be extended to expenses incurred in the year 1947 but that in respect of such expenditures the deduction be reduced from 30 per cent to 22J per cent.
Resolution agreed to.
35. That the deduction from tax allowed to a corporation, association, syndicate or exploration partnership whose principal business is production, refining, or marketing of petroleum or exploration or drilling for petroleum in respect of expenditures made in connection with a deep-test oil well, be extended to expenditures made in connection with deep-test oil wells spudded in during the year 1947.
Resolution agreed to.
At one o'clock the committee took recess.
The committee resumed at three o'clock.
34.	That the deduction from tax allowed to a corporation, whose chief business is that of mining or exploration of minerals in respect of prospecting, exploration and development expenses incurred in searching for minerals be extended to expenses incurred in the year 1947 but that in respect of the expenses incurred in that year the deduction be reduced from 261 per cent to 20 per cent.


Agar Rodney Adamson: This resolution is, I
take it, similar to the one passed last year, in effect, because it grades down the 261 per cent deduction last year to a 20 per cent deduction this year, but still grants complete exemption to the mines.


Douglas Charles Abbott: It is exactly the same,
because 261 is two-thirds of 40, and 20 is two-thirds of 30.


Agar Rodney Adamson: And in fact it will be
exactly the same as the resolution of last year.


Douglas Charles Abbott: My hon. friend is right.
[Mr. Abbott.!


Agar Rodney Adamson: The minister and I
have an assignation together in another place this afternoon, and I have a lengthy statement to make with respect to his statement the other evening, so I would ask if he would allow me to make it on resolution 10, or would he prefer that I make it on the bill itself?


Douglas Charles Abbott: It might facilitate progress, if it were equally convenient to my hon. friend, to make it on the bill. I do not want to be unduly optimistic, but I hope to press ahead with the resolutions this afternoon in order to get them advanced to the point where we can complete the preparation of the bill over the week-end. I would appreciate it, therefore, if my hon. friend could make his statement with equal effectiveness on the bill.


Agar Rodney Adamson: Then so far as I am
concerned I have no objection to item 34 carrying. Will the minister, after this is oarried, proceed with resolutions 10 and 11?


Douglas Charles Abbott: At once, yes.


Agar Rodney Adamson: I have an amendment.


[Stage Direction]
Resolution agreed to.
10. That for the 1947 and subsequent taxation years, a corporation other than a corporation whose income is primarily obtained from mining or logging operations shall not be allowed to deduct from income any corporation tax as defined in the existing wartime tax agreements paid to the government of a province.
Douglas Charles Abbott: Resolutions 10 and 11
arise out of the dominion offer to provincial governments regarding tax fields. Resolution 10 states generally that provincial corporation taxes will not be allowed as a deduction in computing profits for purposes of the dominion corporation income tax. The exception to this general rule is the taxes levied on corporations whose income is primarily obtained from mining or logging operations. Resolution 11 makes positive provision for the deduction of taxes on profits levied by provincial governments on income from mining or logging operations. As the committee is aware, taxes on profits are not ordinarily regarded as an expense of doing business, and accordingly in the absence of any specific provision such taxes would not be deductible. Under this provision however the effect will be that the dominion corporation income tax will apply to the profit remaining after provincial governments have levied their taxes on profits from mining and logging operations.
I should correct, I think, at this time a misunderstanding of the purpose of resolu-

Income War Tax
tions 10 and 11 which appears to have arisen. In the budget debate on July 8 the hon. member for Nanaimo implied that under the dominion-provincial proposals these industries were being singled out for double taxation. It should be clear now, I think, to the hon. member that the purpose of these resolutions is to * give relief from double taxation where it exists in the mining and logging fields. If special taxes are levied on these industries by provincial governments, as is the case in one province at least, relief will be obtainable under resolution 11 now to be proposed.


Mr. PEARKES:: But they still can be taxed both by the dominion government and by a provincial or municipal government if a provincial or municipal government so desires.


Douglas Charles Abbott: That is correct, but, contrary to the general rule, in the case of these companies the dominion government will allow as a deduction from income the tax, if any, paid to a provincial government-which has never been done in the past.


Agar Rodney Adamson: Are we on resolution 10?


Douglas Charles Abbott: We are on No. 10. I dealt with 10 and 11 together because they are closely allied.


[Stage Direction]
Resolution agreed to.
11. That there be allowed as a deduction from income earned after January 1, 1947, of a corporation whose income is primarily obtained from mining or logging operations taxes paid by it to the government of any province including income tax on income earned after January 1, 1947.
Agar Rodney Adamson: I have an amendment. I will read the amendment first.
That there be allowed as a deduction from income earned after January 1, 1947, of a corporation whose income or on that part of such income which is primarily obtained from mining or logging operations taxes paid by it to the government of any province including income tax on income earned after January il, 1947.
The new words are "or on that part of such income." I suggest that for this reason, that there are companies whose primary business may not be logging or mining but whose interests contain a mine-particularly I am thinking of a mine. We will take a steel company operating a mine: the primary business of that corporation would be the manufacture of steel-at least we hope it is going to be the manufacture of steel, shortly-but because its primary function is the manufacture of steel it would not come in under and get the benefit of this clause. Nevertheless it is operating a mine. There are one or two corporations in that class, and I have 63260-267i
suggested that the seven words be added to the resolution to cover such cases. It does not alter the resolution at all, but merely allows companies of the kind I have mentioned to come under the clause.


Douglas Charles Abbott: I would be ready to accept the amendment. The intention is that the tax on that particular kind of income will be treated as a deduction, regardless of what type of company it is, and that will be made clear in the legislation. But if my hon. friend feels that the words he has suggested in his amendment make it clearer in the resolution, I am quite prepared to accept the amendment.


William Ross Macdonald: The amendment would enlarge the class of those who would obtain benefits.


Douglas Charles Abbott: I think not, Mr. Chairman. I indicated that it was really our intention to include incomes such as my hon. friend has suggested'. I believe myself that the resolution is probably wide enough to cover what he has in mind, but to make it perfectly clear I am ready to allow those words to be inserted. I do not take the stand that it. enlarges the purpose of the resolution. I believe the resolution covers the point now. However, I accept the amendment in order to satisfy the oommit.tee. The legislation will unquestionably make the point perfectly clear, and if my hon. friend is prepared to take that assurance it will meet the situation. It is on the record now. The legislation will include the provision, but if he prefers to have the resolution in the form he has suggested I have no objection.


Agar Rodney Adamson: If it is all the same to the minister, I am speaking of matters such as royalties paid on a fee basis to the province.


Douglas Charles Abbott: I am satisfied that the amendment does not enlarge the purpose of the resolution, but is for the purpose of clarification, and therefore I accept it.


Agar Rodney Adamson: Thank you veTy much.


[Stage Direction]
Amendment agreed to.
Mr. BLACK (Yukon):: Before the clause as amended is carried I would like to read to the minister portions of a letter from a mining company in my constituency showing the seriousness of the loss incurred by mining companies as a result of putting the Canadian dollar on a parity with that of the United States. I quote:
The proposal of the government to allow a depletion of $2 an ounce as an alternative to the 33J per cent of profits is of no relief whatever to this company, along with most other established operators.
Income War Tax

The loss of $3.50 an ounce caused by bringing our dollar to parity with that of the States is a very serious one to us. Labour and other costs have gone up greatly, and are going higher. Unless some relief is found, either by way of an increase in the price of gold, reduced taxation, or increase of the depletion allowance on profits to a very substantial degree, our marginal operations such as that on Bonanza Creek will have to be shut down, and our proposed development programme will halt.
I hope the minister will find some way of remedying that situation, in regard to mining companies, gold mining companies particularly, which provide such a large amount of employment for men in Canada, and which spend so much in the purchase of supplies and equipment. Their plight is not a pleasant one.


Douglas Charles Abbott: My hon. friend was kind enough to send me a copy of the letter to which he has referred, and I appreciate that the change in the exchange value has had important consequences for every gold mining company. The statement I made in the house last Friday evening, I believe it was, sets out the utmost the government feels it can do under existing circumstances to help to correct that situation to some extent.
Resolution as amended agreed to.
17. That a farmer or fisherman be permitted for the 1948 and subsequent taxation years, at his option, to compute his liability to pay tax on the average of his income for the taxation year and the two preceding taxation years.


Douglas Charles Abbott: This resolution relates to the three-year averaging for farmers and fishermen. The resolution, after being considered by the committee on Thursday, July 25, was allowed to stand, and I undertook to give further consideration to the representations made by various hon. members in connection with it. The main point urged at that time was that for averaging on a five-year rather than on p, three-year basis. In the meantime I have considered carefully the arguments put forward by hon. members, and at the same time have considered other aspects of the proposal. I think the committee will agree that the proposal for a moving three-year average meets to a large extent the claims for a longer period of averaging. This aspect of the proposal was, I believe, emphasized fully the other day.
The second point, which I think was not perhaps fully appreciated in the previous discussion of the item, was that if a five-year rather than a three-year average is taken, farmers and fishermen would obtain no benefit from the provision until five years hence. This seems to be an important consideration in favour of the three-year rather than the five-year period. In the discussion of the item the

other afternoon it was pointed out several times that the administration of income tax with respect to farmers is not easy because of accounting difficulties and lack of adequate records. To those advocating the five-year averaging, I must point out the difficult requirements imposed on farmers in keeping adequate records. The introduction of this principle of averaging is a completely new departure in the income tax system, and is proposed here for one group of income taxpayers. I regard the three-year average as substantially meeting the requests of industry, and for the reasons stated above I have concluded that the original proposal for a three-year moving average is, on balance, a practicable method and represents a satisfactory alleviating measure.
'Resolution agreed to.
18. That for the 1946 and subsequent taxation years, the service pay and allowances, other than travelling allowances or separation allowances in place of travelling allowances, of a member of the permanent Canadian naval, military or air forces paid at the new rates of pay and allowances established for the said permanent forces be taxable income of a member irrespective of	...	.
(a)	whether he is serving within or outside of Canada; or
(b)	whether he receives the pay and allowances during the first six months after his return to Canada.


Douglas Charles Abbott: This is related to the question of service pay and allowances. I believe the main part of the discussion had reference to the income tax treatment of certain special income tax groups, including particularly the fire-fighters.


Mr. GREEN:: And auxiliary services.


Douglas Charles Abbott: Yes. I have given careful consideration to the representations which were made by various members in the course of the discussion. As I pointed out at the time, it was not a new subject to me, but one which I had been in fairly close touch with for at least three years. I stated the general principle on which, the government had proceeded1 in connection with income tax exemptions for these groups, namely that it had never been considered desirable or appropriate to grant complete income tax exemption to any civilian group. The question of certain special benefits for the fire fighters and auxiliary services, I believe, is the subject of legislation which was considered by the veterans affairs committee and which will be before the house in a few days. On the question of income tax exemption, the question so far as the auxiliary services is concerned was settled some time ago by order in council, and I believe the members of the committee are familiar with the basis on

Income War Tax
which that matter was disposed of. When I spoke the other day I indicated that I thought special provision had been made, or was being made, for the fire fighters. At the time I spoke I was not aware that an order in council had been passed dealing with that question as well. The position under the order in council is that the fire fighters are being treated substantially on the same basis as the auxiliary services. I am advised that remission of taxes payable for 1942 in respect of pay and allowances, including dependents' allowances, while serving outside the western hemisphere, has been granted on the ground that no deductions were made and that they were not aware that they were taxable. For subsequent years the basis of the remission of taxes is granted in respect of one-fifth of service pay and allowances, including dependents' allowances for 1943, 1944, and 1945 during which, they served outside the western hemisphere. There is also remission of the refundable portion of the tax calculated for all the years from 1942 to 1945 inclusive. I am informed that that is comparable to the bases on which the auxiliary services were treated. I do not know that there is anything more I can add, except to say that after consideration by myself and my colleagues we feel that complete exemption cannot be granted.
I am getting figures which were asked for by some hon. members as to how many are involved. Apparently 422 persons were involved in all, of whom twenty-nine were officers and 393 other ranks. I refer now to the fire fighters. The first of such personnel went overseas in May, 1942. The whole corps was overseas by December, 1942, and they returned to Canada in 1945. As to whether any have paid taxes, the information is not available, but it is anticipated that across Canada some may have done so. Since the T-4 information as a check was not available, it has not been possible to say as yet how many have been assessed. There was no deduction of taxes at the source for these individuals, the table of tax deductions not having been sent outside of Canada. It is probably fair to say that as a result of the remissions to which I have referred the vast majority of these persons would not come within the tax category.


Howard Charles Green: The fire fighters?


Douglas Charles Abbott: Yes. The deputy minister advises me that in effect the provision which has been made here will result in complete tax exemption for over ninety per cent of those involved. As to the auxiliary services, I have not any estimate as to that. I should think they might be on a somewhat different basis.


Howard Charles Green: The contention of those of us who pressed for the complete exemption was that all these men were in effect the same as men in the armed forces.


Douglas Charles Abbott: I appreciate that.


Howard Charles Green: And should be treated in the same way. I have no intention to-day of repeating the arguments, but that is what we believe, and we certainly are not satisfied with the statement the minister has just made.


Douglas Charles Abbott: I appreciate the fact that that was the position my hon. friend took. In the previous discussion he made that clear, including the reasons which led him to put forward that view. I say with regret that we have not been able to accept it.


Mr. PROBE:: What is the position of the civilian employees of the Canadian Legion Educational Services so far as tax remission for the war years is concerned?


Douglas Charles Abbott: If serving overseas they are considered as forming part of this auxiliary service to which I have referred, and they were granted a tax exemption with respect to one-fifth of their pay, dependents' allowances, subsistence allowances and the like, and the refundable portion of their tax was remitted along the same lines as I indicated a moment ago with respect to these fire fighters.


John Oliver Probe: That is now final.


Douglas Charles Abbott: It is final so far as anything is final in this world.


Mr. LENNARD:: The other evening I asked the minister why the fire fighters had not been taxed at the source. A few moments ago he indicated that the tables had not been sent out of Canada, or something to that effect. They were not taxed at the source, but I understood that the supervisors were; therefore the tax tables of the supervisors must have left Canada.


Douglas Charles Abbott: My hon. friend may be right. The supervisors were in a somewhat different position from the fire fighters. As my hon. friend knows, the joint service organization in Ottawa had headquarters here. They were in close touch with army headquarters all the time, and it may be that there was a little better liaison with that group than with some others, but I would not be prepared to say that the hon. member is not correct in what he has just said.


John Oliver Probe: In cases where the tax of these auxiliary groups was not paid while they were overseas, what steps are customarily taken to secure the tax in arrears? It is going
Income War Tax

to be a little bit of a blow on quite a few pocketbooks.


Douglas Charles Abbott: The procedure is the
ordinary collection of accounts method. As the hon. member for Regina City says, it may come as an expensive surprise. I do not know that I can elaborate on the answer.


John Oliver Probe: The department has the
collection machinery.


Douglas Charles Abbott: The deputy minister assures me that in the Department of National Revenue he has an efficient collection machine.


Frank Exton Lennard: I presume there will be no penalties because this tax has not been paid.


Douglas Charles Abbott: There will certainly be no penalties for late filing of the returns. I was about to say that I am sure the administration will treat these cases in a sympathetic way.


[Stage Direction]
Resolution agreed to.
19. That for the 1917 and subsequent taxation years the pay and allowances of a member of the non-permanent Canadian naval, military or air forces other than the pay and allowances received by a member serving outside of the western hemisphere or within six months of his return thereto ibe taxable income of the said member and that the provisions for
(a)	a tax credit in respect of pay and allowances exceeding $1,600 as provided by rule 2, of section 3 of paragraph A of the first schedule; and for
(b)	taxation of a member serving outside of Canada in the western hemisphere at one-half the effective rate of tax applicable to his total income
be repealed.
George Randolph Pearkes: Is the minister going to explain?


Douglas Charles Abbott: This resolution has already been discussed at length. It is one of the three resolutions which refer to the armed services and the merchant marine. The only questions we were discussing were in relation to the auxiliary sendees, the fire fighters and the like. I do not think there is anything further, unless my hon. friend has some point he should like to raise. I thought we had pretty well covered the general discussion and were concentrating on the question of these special groups.


George Randolph Pearkes: That is not my recollection of the discussion which took place.


Douglas Charles Abbott: That is all right.


George Randolph Pearkes: We had not got any farther than a discussion on resolution 18. There are still some points which I should like to raise in connection with resolution 19, which deals with an entirely different class of people, namely, citizens, soldiers, sailors

and airmen who gave up their spare time in order to prepare themselves for the defence of their country. I can understand the reasoning as applied to the regular soldier, sailor and airman, that the income which he derives from his pay and allowances is his main source of income. Soldiering or his work in the service is his life profession, but those gentlemen who are in the non-permanent militia are giving up their spare time. Any pay and allowances which they draw cannot be regarded as their regular source of income. These men of all ranks in the past have drawn on an average, I should say, about fifteen days' pay ini a year. I believe the law limits the amount they can draw to thirty days' pay. Out of that pay it has been the custom in the past, and I do not suppose there is any radical change now, for officers, non-commissioned officers and men to contribute varying amounts to their regimental funds. In fact I do not think it is an exaggeration to say that in the long years between the first world war and the second world war, if it had not been for the contributions which were made by the personnel of the non-permanent militia we never would have been able to mobilize in the time w"e did when the second war broke out. I think credit for that speedy mobilization must be given to those citizens who devoted their time to this cause. It was not only their time; they devoted a large proportion of their pay and allowances as well. It was customary for officers of many units to contribute the whole of their pay. I will not say that was the universal practice, but it was done in a great many units. Sergeants contributed a large share of their pay, and the men of almost every unit made some contribution as well. It might have been only one day's pay of the fifteen; in some units the whole pay was put into the regimental fund, and these regimental funds enabled the units concerned to maintain their existence during the years between the wars, and to mobilize in 1939. Now these men are to be taxed on the amount of pay and allowances they receive. I should think it would be possible to make some exceptions. You might say that personnel who spend the whole summer in camp, serving on the staff, thereby drawing pay for perhaps two or three months as some of them have done in the past; personnel who take extended cruises on board ship; personnel who take courses lasting for two or three months, might reasonably be expected to pay income tax upon the amounts they draw. I do say, however, it is stretching the point too far to tax the civilian personnel on that fifteen days' pay, when a large portion of it is handed back.

Income War Tax
In the first place I would ask the minister to reconsider this matter and see if he could not except the ordinary day's pay and allowances for the ordinary training. If he will not go that far, will he not allow as a deduction such pay and allowances as are contributed to the regimental funds?
I should like to mention one other point. It must be remembered that many of the personnel have to buy uniforms and part of their equipment. The men you are now trying to encourage to go into the three services are young men just starting out in life. Many of them have not a great deal of money; and if they find themselves raised to a higher bracket for this reason it might be a deterrent, because after all the service is none too popular. The wives do not like to see these young men spending all their holidays in camp and going out evening after evening to train. As an encouragement to them I would ask the minister to consider first of all whether he cannot relieve them of the tax entirely on pay and allowances for normal training or, if not, at least allow contributions made to regimental funds as a deduction.


Douglas Charles Abbott: First I thank my hon. and gallant friend for what he has said with respect to the work of the reserve army, with which I am in complete agreement. On this question of tax exemption, I think he was here the other night and probably heard my views in that regard. I am against tax exemptions. I do not think there should be any. If we were granting them to any civilian group under circumstances such as the hon. member has outlined', probably the members of our reserve army who serve, as he has said, for a portion of their spare time during the year and perhaps go to camp for two or three weeks, would be a deserving case; but I do not think we can grant complete exemption to any class.
On the other point, I am advised that contributions by members of the reserve army to regimental funds are properly deductible from income for tax purposes. That does not include contributions to the officers' mess, of course, or for special comforts for one group, but donations made by anyone to regimental funds, particularly in the case-as I know it is the case-of officers and men who turn their pay in to the regimental funds, can be claimed as a deduction from income for purposes of taxation, of course up to ten per cent of a man's income, which I think would be adequate in most cases.


George Randolph Pearkes: That would be ten per cent of his total income, not ten per cent of the pay and allowances?


Douglas Charles Abbott: Quite so. If a man had an income of $10,000 he could make donations up to $1,000.


Mr. BROOKS:: I do not feel that I can add anything to what has been said so eloquently and logically by the hon. member for Nanaimo, but I should like to just second his remarks. I have had some experience with the militia; the Acting Minister of Finance is also Minister of National Defence, and I have no doubt his sympathies are entirely with what the hon. member has just stated.


Douglas Charles Abbott: I tried to make that clear.


Alfred Johnson Brooks: I can assure the minister that he is going to have considerable trouble organizing the militia throughout this country if he puts handicaps such as this in the way. I know that before the war the officers did contribute practically all their pay either to the regimental fund or to the officers' mess. For many years they contributed part of their pay in order to help pay the men coming in. We were allowed only a skeleton company, and in order to increase the numbers the officers contributed part of their pay so that more men would be encouraged to go to camp. I must say I think it is a very short-sighted policy on the part of the government, when they are trying to build up the militia of this country, to impose upon themselves a handicap like this. I suggest that the minister carefully consider the recommendation which has been made by the hon. member for Nanaimo. I believe it would be beneficial indeed to the militia if it could be given favourable consideration.


Douglas Scott Harkness: I should like to support the suggestions advanced by the hon. member for Nanaimo and the hon. member for Royal. It is well understood by everyone who has had any experience with the nonpermanent militia that the money received in the form of pay and allowances is not real income. In most cases I believe the recipient of the pay and allowances is actually out of pocket at the end of the year as a result of his membership in the militia. In view of that fact I can hardly accept the minister's view that no exemptions or exceptions should be made. In many forms of business, money received which does not constitute real income, from the point of view of making the company any better off, is exempt; and it seems to me this is a proper case where an exemption should be made. As to the discouragement which the imposition of this tax causes among members of the militia and prospective members, I can give personal testimony. I know of two men in Calgary who served in the
Income War Tax

militia for many years, before the war and during the war, one of whom was overseas. Both were complaining bitterly about the fact that the pay and allowances they had received last year had worked in such a way as to bring their income a certain level, so they had a heavier tax imposed upon them. They not only spent the money which they had received as a result of being in the militia, but they were out the extra amount of money collected from them in taxes. I suggest that serious consideration be given the abolition of this tax.


[Stage Direction]
Resolution agreed to.
20. That the exemption of amounts received by members of the merchant marine as war risk bonuses in respect of service in a war risk zone and of the value of board and lodging received on shipboard, while performing service in respect of which such bonuses are payable be repealed for 1947 and subsequent taxation years.
Howard Charles Green: I should like to refer to
the manner in which merchant seamen who were interned have been treated. They have had to pay income tax for all the time they were interned. Apparently their money was held there by the government. A certain portion of it was used to help their dependents. The balance was retained, and some of it is still retained. Out of that balance these men are being assessed for income tax during the time they were in captivity. I suggest that is not a fair procedure. This matter was brought up in the veterans affairs committee, and the following unanimous recommendation was made in the report of that committee:
That income tax be remitted in respect of detention allowances payable to merchant seamen under the provisions of order in council P.C 12/4209 dated June 12, 1941, as amended by P.C. 87/5204 dated July 16. 1941.
It may be that resolution No. 20 is wide enough to enable the government to make the necessary provision in the bill. But if it is not, I would ask that the minister extend the terms of the resolution so that these men need not pay taxes for the time they were interned.


Douglas Charles Abbott: I am advised that the matter is under sympathetic consideration. I do not know that I can make the positive statement at this time that it is being given favourable consideration. I am informed it is the type of special case which may be handled by remission under the Consolidated Revenue and Audit Act, and I think that is the proper way to handle a special case of this kind on compassionate grounds. It is done in other eases, and I should think that this could be

handled in that way. I am glad my hon. friend has called my attention to it, and he can rest assured that it will receive sympathetic consideration.


Howard Charles Green: Will the minister make a statement on the point when the bills are brought in?


Douglas Charles Abbott: I should hope I would have a chance to discuss it with the departmental officials before that time.


Howard Charles Green: The discussion will be found at page 1472 of the proceedings of the veterans affairs committee.


[Stage Direction]
Resolution agreed to.

Douglas Charles Abbott: I suggest that we take at this time the resolutions respecting the Excise Act, and then all resolutions can be reported at one time. We could take resolutions 1 and 2 together.
Resolved, that it is expedient to introduce a measure to amend the Excise Act and to provide:-
1.	That the excise duty of $3 per thousand on cigars be reduced to $1 per thousand.
2.	That any enactment founded on this resolution shall be deemed to have come into force on the twenty-eighth day of June, one thousand nine hundred and forty-six.


Douglas Charles Abbott: Under resolution 1 there is a reduction in the excise duty on cigars from S3 to $1 per thousand. This reduction may be considered along with the proposed amendment under the Special War Revenue Act, which I hope will be considered in a few minutes, and which repeals the present graduated specific tax on cigars, replacing it with a straight 25 per cent ad valorem tax. It is believed' that the new arrangement will be regarded as a fairer system than that which has been in effect. It will remove one of the awkward features of the existing system which repeatedly caused trouble. Under the present graduated tax an increase in selling price above certain points resulted in bringing on an additional tax far in excess of the increase in gross receipts resulting from the price increase. Under the straight ad valorem tax this so-called "notch problem" is eliminated. On balance the new arrangement with respect to taxes on cigars will produce slightly more revenue, possibly $160,000 or more a year.
Since the announcement in the budget of this tax change, various cigar manufacturers have requested that the new rate be only twenty per cent instead of the twenty-five per cent proposed. I have carefully considered these representations, but having regard

Excise Act
to the relative level of the taxes on cigars as compared with other forms of tobacco I do not consider that the twenty-five per cent tax is unreasonable. Accordingly I am not recommending that any change be made in the budget resolution.
In the latest fiscal year the revenue from cigars under the Special War Revenue Act and the Excise Act combined amounted to



S2,240,000.

Mr. BENTLEY:: When these resolutions were prepared, was serious and sympathetic consideration given to the removal of the tax of two cents a bottle on soft drinks? It seems to me that this is important, because it would help to give the young people of the country a greater opportunity of having small social gatherings-more than by reducing the tax on cigars.


Douglas Charles Abbott: We hope that this will produce an additional revenue of $160,000 a year.


Mr. REID:: They are only drugs, anyway.


Douglas Charles Abbott: The tax to which my hon. friend refers comes under the Special War Revenue Act, which we will consider in a moment or two. He can ask his question at that time.


Frank Exton Lennard: I believe this has been the cause of the elimination of the five-cent cigar. We now have to pay from fifteen to eighteen cents for two, or something of the kind.


Harry Rutherford Jackman: How much does the minister expect to get in the way of revenue, as against the $2,240,000?


Douglas Charles Abbott: As I indicated, we expect to get slightly more revenue, possibly as much as
S160,000	a year.


Harry Rutherford Jackman: Although this question
may not fall directly under the resolutions before us, I would ask why it is that cigars went up in price. The six-eent cigar is now being sold at two for fifteen cents.


Douglas Charles Abbott: I am advised that cigar manufacturers' costs, along with some other costs, have increased, and that they have, coincidentally with the change in taxes, adjusted their prices. As the committee knows, there is no ceiling on cigar prices.


John Oliver Probe: Will the minister give a clearer explanation as to how much of the cost of a cigar is taken up in one or other of the two tax forms the minister has mentioned? With the tax being reduced from $3 to $1 per thousand I am confused when I am told that about $160,000 more will be received in revenue eaoh year, when it is combined with the ad valorem duty.


Douglas Charles Abbott: Because we are increasing the ad valorem tax.


John Oliver Probe: W'hat is the tax on a cigar which sells wholesale at ten cents or fifteen cents? Cigar prices seem to have gone up twenty per cent, and while I believe this is a good place for a tax-I am all for it-the tax will increase the revenue by only about eight per cent', according to the estimate given by the departmental officials. I should like to understand it a little better.


Douglas Charles Abbott: I do not know that I can give a definite answer. However, this is what it amounts to: the tax is $1 per thousand. My hon. friend is a better mathematician than I, and he can figure how much that would come to. Then there is 25 per cent of the selling price, which varies. I suppose the cigar manufacturer too pays his share of income tax.


John Oliver Probe: The tax is now 25 per cent?


Douglas Charles Abbott: Twenty-five per cent ad valorem and $1 per thousand excise.


[Stage Direction]
Resolution agreed to.

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend the Special War Revenue Act and to provide:
1. That the securities transfer tax be extended to apply to rights to receive shares of stock.
Douglas Charles Abbott: This resolution relates to the securities transfer tax. Under the present provisions of the stock transfer tax, transfers of rights to receive shares of stock have not been taxable. The present resolution is that they shall be taxable in future. Hon. members who are familiar with matters in financial markets will know at once what is meant by dealing in rights. In a company reorganization or rearrangement of the capital set-up existing shareholders are sometimes offered an opportunity to buy additional shares at a price below the market. Accordingly these rights are valuable. They are transferable, and it seems only reasonable that if there is a tax on the transfer of ownership of shares, the tax should likewise apply to transfers of rights to receive shares. This is what is proposed under resolution 1. Revenue from stock transfer tax for the latest fiscal year was about $1,000,000.


Harry Rutherford Jackman: The government is doing something which more or less takes away from what the shareholders had to begin with. The government says, "We will put a little extra tax on this." I see no reason why you should want to tax these rights. It is not a heavy tax, but it adds up to a substantial amount over
Special War Revenue

a period. Will the minister agree that giving rights cannot possibly give a shareholder more than he had before? It merely prejudices him if he does not take up his rights.


Douglas Charles Abbott: I want to answer my hon. friend by saying that I am not trying to argue that his statement is a completely accurate statement of law. The granting of rights to a shareholder does not give him any greater interest in the company than he had before. But if he does not take up his rights but sells them, in effect he is selling a portion of his proportionate part of that company's business.
Mr.-JACKMAN: I will concede the fairness of a tax on the selling of the rights, but not on the exercise of the rights.


Douglas Charles Abbott: There is no tax on the exercise of the rights; it is just a tax on the transfer or sale.


Harry Rutherford Jackman: All right; that is fair.


Howard Charles Green: These are the resolutions having to do with the Special War Revenue Act. Will the minister make a statement on the tax on soft drinks? There has been a good deal of concern about this tax; representations have been received from many young people, from church leaders, from leaders in the Boy Scout movement and other community leaders who have to do with our young people. They are all much concerned about this tax and I believe something should be done to reduce it. I should like to read a letter which I received from Reverend Joseph I. Monaghan, director of the Catholic youth organization, Immaculate Conception parish, Vancouver. It is as follows:
For almost twenty years I have had the high privilege of close association with and direct control of young people; and I believe my experience-in the classrooms of four provinces, as director of athletics at two colleges, and as moderator of young people's organizations- qualifies me to speak with authority on the attitude and tastes of youth.
Virtue has no more deadly enemy than strong drink. And plain, factual report should convince any honest citizen of our country that the "drink evil" is on the increase among our young people. Youth does not need any artificial stimulant for its social life and every effort should be made to have alcoholic drinks written off its beverage list. But we cannot ask our boys and girls to silence the natural clamour they all feel for the kind of beverage proper to their age. Whenever young people get together they drink. That is as common to them as eating potatoes. It is therefore the duty of every right-minded Canadian man and woman, and particularly of the Canadian government, to see that our boys and girls confine their drinking to beverages that give pleasure or quench thirst, without becoming habit forming as alcoholic stimulants do. Any step taken by the Canadian government to make soft drinks more easily available to young Canadians is a step in the right direction.

The special war excise tax levied on temperate beverages found our youth uncomplaining, and they gladly bore the expense and inconvenience of seven cents a bottle "pop." The war over, Canadian youth rightly believes this tax should be removed. In peace time it irritates them. They feel they should be granted again the right to buy their favourite beverage at the convenient pre-war price. Surely the government can meet the financial exigencies of the post-war period in some other way than by continuing a tax that young Canadians now strongly object to and which, if not removed immediately, will soon cause a loss of bountiful ood will that by no means can be compensated y the moneys acquired from a now unfair tax.
We leaders of youth in Canada have reason to believe that our government fully realizes and sincerely appreciates the contribution we are steadily making to our country by moulding the character of Canada's youthful citizens. That being so, may I respectfully beg you to assist us in our work by removing the cause of persistent annoyance felt by those under our charge.
I confidently assure you that compliance with this request will pay magnificent dividends.
Yours very truly,
(Rev.) Joseph I. Monaghan, S.J., Director, C.Y.O., Immaculate Conception Parish.
I do not pretend to be an expert on youth, although I have boys of my own, but I think Father Monaghan has placed his finger on the real significance of the effect of this tax. I suggest to the government that they would be wise to change it. I am not going to add to the submissions made in this letter, because they cover the case.


Thomas Reid: Like my hon. friend, I have received many letters of the kind, but I have taken exception to those letters. I have written back to priests and ministers and clubs pointing out that I was writing to the Minister of National Health and Welfare asking him to examine this whole soft drink question. To my mind it constitutes nothing more or less than a drug forming habit which is having its effect upon the lives of our people. I have had some experience in athletics, and I think any one who has had similar experience will agree that you would not ask an athlete to take soft drinks. There is nothing better than cold water when he is thirsty. I appeal to the minister of health to investigate this whole soft drink matter. I have not had an answer from any priest, minister or layman to my request that he make a statement in reply to my letter.


John Ritchie MacNicol: Does the hon. member consider that the drinking of cold water has made him the excellent bagpipe player that he is?


Howard Charles Green: It has added a great deal to the strength of the playing.

Special War Revenue


Mr. MUTCH:: 'I did not rise to discuss the merits of various beverages from the athletic point of view, because I am no athlete. Like other hon. members I have received the usual, or in this case the almost unusual, number of letters advocating the removal of this tax. I have answered in every case that as far as I am aware there is no financial argument to be advanced in favour of removing tax at this particular time. I have confessed to those who wrote to me, and I declare now in this house that I am impressed by the argument that there is a moral side to the question which in my opinion transcends the importance of the tax value at the present time. I can have no idea what the situation would be in- the way of increased distribution of these beverages without knowing the facts as to the future distribution of glucose and sugar, which are the primary ingredients used by the manufacturers. I am not impresged by the suggestion made in some letters of possible political repercussions on the younger generation to be created by the removal of this tax.
I am sorry if my good friend the hon. member for New Westminster thinks me a sentimentalist. Perhaps I have not become as hardened as he professes to be to sentimental appeals, having received them over a smaller number of years than he has, but I am impressed by the appeals. I have had some experience and have knowledge of the nature of the social gatherings of young people. While we may not be able to establish as a temperance argument that seven cents for a soft drink is too close to the ten cents -for a beer, still there is a social question involved in the taxation. I have seen the benefits of youths' organizations. A considerable part of their social activities is associated with the availability of these soft drinks, and I would urge, together with others who have succumbed to these appeals, that the minister, even at this time, be less statistical and less concerned with the economic side of this matter, and review it again seriously, bearing in mind its social implications.


Mr. BURTON:: When I tried to get the floor a moment ago I had hopes that I could take a middle course between the views of the hon. member for Vancouver South and those of the hon. member for New Westminster. I believe there is a good deal of truth in what both of them have said. Like other hon. members I have received quite a number of communications regarding this tax. While agreeing with what the -hon. member for New Westminster said, that some check-up should be made as to the ingredients in some of these soft drinks, I feel that it is not the duty of
the Minister of Finance to deal with that; no doubt it comes under another department.


Thomas Reid: I said so.


Joseph William Burton: I would say to the Acting Minister of Finance that I do not hesitate to tell those who write to me that in my opinion the two per cent tax is excessive.


Harry Rutherford Jackman: Forty per cent.


Joseph William Burton: It is altogether out of reason. During the time these letters have been arriving in the offices of members of parliament, the number in my mail dealing with this matter has run from twelve to fifteen or more per day. Many dozens of communications have been received by me from people in my constituency who are concerned about this tax. What I told my people back heme when I had an opportunity to speak to them on a number of occasions was this, that while I agreed that the tax was excessive, and that as the budget had not been brought down at that time we would have to wait and see what the Minister of Finance would do, I was disappointed in the attitude of our people when I got dozens of letters with regard to this tax on "pop" and did not get one single letter protesting the removal of the two cent subsidy on milk. It gives you some insight into the line of reasoning and thought in the minds of some people. When the two cent subsidy on milk was removed nobody was concerned, so far as my mail would indicate.


Harry Rutherford Jackman: Come down to Toronto.


Joseph William Burton: But when it came to "pop"-


William Irvine: "Pop goes the weasel."


Joseph William Burton: It wentl With the hon. member for Vancouver South and others who have brought it to his attention, I would urge upon the minister that something be done to remove or reduce this excessive taxation, and at the same time that he advise his colleague in whatever department is concerned that in the opinion of many of us there should be some check-up of the ingredients in these soft drinks.


Mr. McKAY:: I should like to say a word in support of what the hon. member for Vancouver South has just said. I am not in agreement with the hon. member for New Westminster when he says this whole matter needs investigation. As a matter of fact, medical authorities in the United States have investigated these drinks again and again, and I have yet to see a report which is derogatory.


Ian Alistair Mackenzie: Oh, yes; we had one, when I was minister of health.
Special War Revenue


Eric Bowness McKay: I have yet to see one. It seems to me ithat this is a matter of comparative values. Young people are drinking these soft drinks, and they are being sold at booths at every picnic throughout the country.


Howard Charles Green: And right here in the house.


Eric Bowness McKay: And right here in the house. People will drink these beverages. At the present time the tax on a bottle of pop amounts to 40 per cent. In the cafeteria we pay seven cents a bottle. So far as I am concerned I do not care if the use of these beverages is abolished entirely-I mean as far as the soft drinks are concerned.


Some hon. MEMBERS:: Hear, hear!


Eric Bowness McKay: But in these days, Mr. Chairman, when there is a considerable effort on the part of organizations throughout the country to combat juvenile delinquency occasioned by the consumption of hard liquor, I think we should at least pave the way to providing them with beverages which are not as harmful.


Thomas Reid: That may be the start of it.


Eric Bowness McKay: To meet the minister half way, I say "as harmful". I admit that the consumption of soft drinks has increased, but so has our population increased1, and it is natural that with the increase of population the demand will increase. Also there is more money for people to buy drinks which otherwise might be considered as luxuries. Young people are consuming too much hard liquor; that is freely admitted; and if we can get them off the desire to use hard liquor by drinking a beverage which is not quite as harmful-if you like to put it that way, and I will grant the argument of the Minister of Veterans Affairs that probably it is harmful where it is not bottled under proper health regulations.


Howard Charles Green: He does not know anything about it.


Eric Bowness McKay: But that is not the argument. Every effort should be made to provide young people with these beverages at as low a cost as possible.
I am not concerned entirely with that, Mr. Chairman. It seems to me that there is another tax which we should have removed, and that is the tax on chocolate bars.


Douglas Charles Abbott: May I interrupt my hon. friend a moment? I agreed a little earlier when a question was asked that it might be appropriate to have some discussion of the soft drink tax, because I know it is one concerning which hon. members have received a great many letters. There has been a very carefully organized campaign.


Howard Charles Green: Don't put it on that basis.


Douglas Charles Abbott: I do not suggest that the letters are not sincere, but I know something of the background of the thing. However, we have had a very fair discussion, and I must insist that we do not go beyond this soft drink tax. I have a few observations to make on it, which will be brief, when the various members who wish to express their views have done so. But I do ask you, Mr. Chairman, to restrict the discussion. We are on a section dealing rvit'h the stock transfer tax, and we are talking about the soft drinks tax.


John Ritchie MacNicol: Do not put a tax on the beverage of the hon. member for New Westminster-cold water.


William Ross Macdonald: I understood that there would be a limited discussion of the soft drinks tax. There has been quite a considerable discussion. Is it now the wish of the committee to hear the minister?


Frederick Samuel Zaplitny: As one of the younger members of the 'house I wish to lodge a protest against all this talk about juvenile delinquency and the drinking of hard liquor. Listening to the discussion to-day one would think it was only the young people who do the drinking in this country. I believe that the greater proportion of drinking is done after the age of twenty-one. I have no objection to removal of the tax-it might be an advantage- but I would ask the minister, who has probably had some representations from the various bottling companies, whether he has had any assurance that if the two-cent tax is taken off the drinks will be sold at five cents as before. In the correspondence that I have had I have not been able so far to get that assurance, and it is an important question. If it is only a matter of removing the tax and keeping the price where it is, or reducing it one cent, there is not a strong case, but if it means a nickel drink, that is a recommendation for it.


Douglas Charles Abbott: On the last point, the Coca Cola people would give such an assurance, but there are a great many other bottlers and I do not know whether it is possible or feasible to get an assurance from them. Even if the tax were removed this year, however, it would not result in an added supply of soft drinks, because that is something that is controlled by the amount of sugar, which is in short supply, and every soft drink manufactured on the sugar quota is snapped up as fast as it gets into the hands of the vendors. There will be no added supplies available for soft drinks. The second point is this. Representations were made by the bottling companies-strong representations, I may say-and

Special War Revenue
it was felt that the tax should not be removed this year. Consequently there is no resolution providing for it.


Mr. SHAW:: There is one matter to which I should like to call the attention of the minister, but first I may say that I have not received a * great many communications with respect to the tax on soft drinks. In the city of Red Deer we have an establishment owned by an individual and engaged in the manufacture of soft drinks. I have visited his establishment within recent months. I have looked into his books. I find he has an investment of approximately $20,000. At the outbreak of the war he employed nine persons, and during the early years of the war a number of his employees enlisted. To-day, primarily because of the sugar quota, three persons working part time are able to manufacture all that the sugar quota will permit. But the argument is this. He has a tremendous overhead as a consequence of capital invested in his establishment. Even at the present retail price he cannot secure sufficient from what he manufactures and sells to meet the cost of maintaining his establishment. I have checked his books with an accountant, and we find that there is a possibility of his having to close the establishment. He started from nothing, one might say. He built up his little enterprise, and goodness knows we have so few of these manufacturing establishments in the west that it is most unfair. I do not know whether the minister has considered the matter from this point of view, but even manufacturing all he can with his sugar quota, and paying the tax, there is a danger of another small industry having to close its doors.


Mr.   M A CD ON N ELL@Muskoka-Ontario: This has been a notable debate and I wish to make a short addition to it. It is a remarkable thing to have heard two Scotsmen united in praising the drinking of water.


Howard Charles Green: They didn't mean it.


Mr.   M A CD ON N ELL@Muskoka-Ontario: In the second place, without labouring the point, it seems to me that when the matter is being considered at another time, if the tax could be reduced from the present high level it might be a good thing.


Douglas Scott Harkness: The hon. member for New Westminster comes from a race that waxed great through the plentiful supply of Scotch whisky, and I can understand his contempt for the "pop" drinker, which I may say I share. The fact remains however that in this country drinking in one form or another is a social custom, whether it be tea
or coffee or soft or hard drinks. It is a confirmed habit which all sorts of people, people of all ages, take part in. This being so, the tax of two cents a bottle on soft drinks imposes an altogether undue hardship on the younger generation, who are the chief consumers of soft drinks. If it is in any way possible, I should like to see the government modify or remove the tax.


Douglas Charles Abbott: I can assure all members of the committee that I am conscious of the problem involved in this tax on soft drinks.


Percy Ellis Wright: I do not intend to pursue the question of soft drinks, but there is another matter I should like to discuss.


Douglas Charles Abbott: I allowed soft drinks to come under security transfer taxes, but surely we should stop there.


Percy Ellis Wright: The question I wish to raise is one in regard to which I have had a great many letters and objections. I refer to the two-cent tax on gasoline.


Douglas Charles Abbott: We cannot allow that.


Percy Ellis Wright: It is much more important from the point of view of the country's economy than the question of soft drinks.


Harry Rutherford Jackman: Getting back to the
subject matter of the resolution, does this tax also apply to American securities?


Douglas Charles Abbott: If transferred here. If the change of ownership takes place in Canada, yes.


Harry Rutherford Jackman: Is the minister sure it would not apply if the order were placed in Canada and executed in another country?


Douglas Charles Abbott: There would be a legal question involved there, and I do not know that I am prepared to answer offhand. The test is whether the change of ownership took place here. My hon. friend's solicitor would be able to advise him.


Harry Rutherford Jackman: It is cheaper sometimes to get an opinion for the taxpaying public here than elsewhere. However, may I ask the minister this question. I understand there are two sets of tax inspectors, one for the dominion and one for the province. Has any consideration been given to endeavouring to have an arrangement to simplify that procedure? Am I correct in my original premise that there are two sets?


Douglas Charles Abbott: I understand there is no definite arrangement worked out. There has been some difficulty getting cooperation with the province on some matters, and I cannot say definitely.
Special War Revenue


Harry Rutherford Jackman: There would be a substantial saving to some taxpayers.


Douglas Charles Abbott: The question has been discussed.


Harry Rutherford Jackman: I hope the minister will do all he can to bring about coordination and the saving of costs.


Douglas Charles Abbott: I will do that.


Percy Ellis Wright: I understand, Mr. Chairman, it is not your wish that I should pursue at this stage the question which I raised, but I would ask the minister to tell me at what stage in the budget resolutions, or under the bills, we may be permitted to discuss that matter. It is an important one.


Douglas Charles Abbott: I know of no opportunity under the budget resolutions which would be afforded the hon. gentleman. The appropriate time at which to discuss general matters is in the budget debate. When we get into committee we are supposed to consider the specific matters in the resolutions that are being discussed. There are two or three opportunities afforded in the course of the session to discuss matters of that kind-one on the address, one in the budget debate, and still another on one of the supply items. My hon. friend can discuss it on the estimates of the wartime prices and trade board, which I shall have the unfortunate duty of trying to guide through the house. At any rate, the question is not one that can be discussed on this resolution.


Percy Ellis Wright: So long as we have the assurance that we can discuss in on the estimates, I shall be satisfied.


Douglas Charles Abbott: The hon. member cannot discuss it here.


[Stage Direction]
Resolution agreed to.
2.	That the present graduated excise tax on cigars be changed to an ad valorem tax of 25 per cent;
Douglas Charles Abbott: This is a comparable tax. It deals with the tax on cigars, and was explained when I was dealing with the resolution under the Excise Act.


[Stage Direction]
Resolution agreed to.
3.	That any enactments founded in resolutions Nos. 1 and 2 shall be deemed to have come into force on June 28, 1946, and to have applied on all goods imported or taken out of warehouse for consumption on or after that day and to have applied to goods previously imported for which no entry for consumption was made before that day;
Resolution agreed to.
4.	That the rate of premium tax payable by mutual insurance companies other than life insurance companies and companies carrying on
[Mr. Abbott.!
business under the premium deposit plan be reduced from 3 per cent to 2 per cent, and in the case of exchanges from 4 per cent to 2 per cent in respect of premiums received after December 3:1, 1946;
5.	That the rate of premium tax payable by insurance companies carrying on business under the premium deposit plan be reduced from 4 per cent to 3 per cent in respect of premiums received after December 31, 1946; and
Douglas Charles Abbott: 
Mr. McCANN:: I so move.


William Ross Macdonald: The amendment is as follows:
Resolved that resolutions Nos. 4 and 5 be struck out and the following substituted therefor:
4. That the base to which premium taxes apply in respect of premiums received after December 31, 1946, shall be as follows:

Customs Tariff
(a)	In the case of a company transacting life insurance the gross premiums received by the company other than the consideration received for annuities, less premiums returned and less the cash value of dividends paid or credited to policyholders, and
(b)	In the case of any other insurer the gross premiums received or receivable by the insurer or paid or payable by the insured, less dividends, rebates and return premiums paid on the cancellation of policies;
5.	That the rate of premium tax payable by all insurers (other than an association of persons formed on the plan known as Lloyds and an exchange) shall be 2 per cent on premiums received after December 31, 1946; and in the case of an association of persons formed on the plan known as Lloyds and of an exchange the rate of premium tax shall be three per cent on premiums received after December 31, 1946.


[Stage Direction]
Amendments agreed to.
Resolutions as amended agreed to.
6.	That a deduction be allowed to insurance companies from the premium taxes payable under the Act of the taxes on premiums, paid to the Government of any province in respect of premiums received after December 31, 1946.
Resolution agreed to.

Douglas Charles Abbott: We shall now deal with
the tariff items. The budget resolutions contain thirty-five items amending schedule A to the customs tariff. Twelve of the thirty-five items permanently continue tariff reductions already established under order in council. Fourteen of the thirty-five items were in the budget resolutions of October 12, 1945, which were withdrawn on November 12,
1945.	The remaining nine consist of new items or amended existing items. These resolutions also delete from the Customs Tariff Amendment Act the sections which provide for additional duties on tea and coffee. Orders in council passed under the War Measures Act suspended the additional duty on tea on March 20, 1942, and on coffee on December 8, 1942. These additional duties were eliminated in order to reduce subsidy payments on imported tea and coffee. None of the items in these budget resolutions is of any worth-while bargaining value for trade agreement negotiation purposes, and a number of these changes facilitate administration and eliminate existing tariff anomalies.


Mr.   M A CD ON N ELL@Muskoka-Ontario: Will the minister make a further statement with regard to these items, which I understood him to say were in the proposed changes of last October, were then withdrawn and are now reintroduced? In particular will he inform the committee more fully with regard to these, and indicate whether they have been
reviewed by the tariff board and come here on their recommendation?


Douglas Charles Abbott: The items which were in
the budget resolutions of October 12, 1945, are as follows: Item 72e, bent grass seed; 90e, frozen vegetables, 197d, stencil paper; 208, boracic acid, et cetera; 219e, Chloropicrin, et cetera; 272b, paraffin wax; 326e, glass tops; 438b, motor vehicle parts; 438c, motor vehicle parts; 438d, motor vehicle parts; 462a, camera parts; 616, latex; 653, brushes; 703, travellers' baggage. I am advised that these all involve reductions or minor amendments to clarify for administrative purposes.


William Irvine: No increase?


Douglas Charles Abbott: No. These have not been
considered by the tariff board. As my hon. friend knows, it has not been functioning actively since the first year of the war.


Mr.   M A CD ON N ELL@Muskoka-Ontario: The minister has enumerated the ones which are reintroduced, but he has not told us what I should like him to tell us, namely, why they were taken off last autumn and why they are on now. What has affected the situation? I should also like him to tell us why the tariff board is not functioning. I had the idea that we had one of the most expert chairmen in existence, and I should like to know why we have not the benefit of his judgment on these items.


Douglas Charles Abbott: I am advised that regular
tariff changes are not referred to the tariff board, but only special cases. The other question my hon. friend asked was why the changes were withdrawn last October and brought in again now. He may recall the circumstances. The Minister of Finance had one item in his tariff proposals which aroused some controversy. He withdrew that, and at the same time withdrew all the items. That one, I think involved some tariff increase, so that at the time he thought he would look at the whole thing again and he withdrew the tariff increase as well as these adjustments and reductions.


Mr.   M A CD ON N ELL@Muskoka-Ontario: If I may say so, the minister has stated some facts, which I am sure are correct, but I still suggest he has not answered my question. I do remember that the facts were as he stated; but in respect to the one matter in doubt last autumn, as to which there was some disagreement, that is all we were allowed to know last autumn. I think it would be of interest if we could know why the tariff board has not been consulted, since apparently that was not done. This is such a world of experts now I thought
Customs Tariff

we did everything on. the advice of experts, but apparently this is where the amateurs have stepped in. Personally I believe in amateurs; I do not like to be wholly handed over to experts, though I like the experts too. I should like to know why they have been dispensed with in these important matters.


Douglas Charles Abbott: There are a number of experts; I have one tariff expert in front of me at the moment.


Mr.   M A CD ON N ELL@Muskoka-Ontario: I again suggest, with all the deference due from an ordinary member to a minister, that my question has not been answered.


Douglas Charles Abbott: Perhaps my hon. friend would repeat his question. I am at a loss as to just what it was.


Mr.   M A CD ON N ELL@Muskoka-Ontario: I think the reason the minister is lost-


Douglas Charles Abbott: The hon. gentleman wants to know why this was not submitted to the tariff board?


Mr.   M A CD ON N ELL@Muskoka-Ontario: Yes.


Douglas Charles Abbott: To answer shortly, because the tariff board has not been functioning since the first year of the war, except on appeals.


Mr.   M A CD ON N ELL@Muskoka-Ontario: But that is not an answer as to why these changes are made.


Douglas Charles Abbott: I answered that before by saying I am told that in any event only special cases were submitted to the tariff board. Ordinary tariff changes were not submitted.


Mr.   M A CD ON N ELL@Muskoka-Ontario: The minister did answer that part of my question, but he has not given as yet any explanation at all as to any of these items. I am not going to weary the committee by going through them in detail but 1 suggest the minister might take some spot items here and there.


Douglas Charles Abbott: I can do that. It is a lengthy list, but I have a book here containing complete explanations of all items. Take tariff item No. 4, which relates to horses. This happens to be a new item. This item formerly provided for "horses, over one year old, valued at $100 or less per head" and carried rates of $10 per head under the British preferential tariff, $12.50 per head under the intermediate tariff, and $25 per head under the general tariff. The new item eliminates the words "over one year old, valued at $100 or less per head" and substitutes therefor the abbreviation "n.o.p."

Item 1 provides for duty free entry from all countries of pure bred horses for the improvement of stock. Item 4 covered horses over one year old valued at $100 or less per head and all other horses were included under item 5(c), the item covering living animals, n.o.p., duty free under the British preferential tariff, with a rate of 20 per cent under the intermediate tariff and 25 per cent under the general tariff. Under the present amendment all horses, except pure bred horses for the improvement of stock, are dutiable at rates of $10-$1250-$25 each.
This amendment facilitates the administration of the revised warehousing regulations issued by the Department of National Revenue on April 1, 1946. Under the former regulations it had been the practice of the Department of National Revenue to grant a racing bond for a period of ninety days to United States horses racing in Canada. This bond could be renewed when the horse moved from one track to another. At the end of the racing season the horses could be transferred to a feed and pasture bond which was good for twelve months. When the next racing season came along they could be transferred back to a racing bond, and so on indefinitely. The new regulations which went into effect on April 1, 1946, reduce the privileges enjoyed by race horse owners. If a horse leaves Canada to take part in a race in the United States it has to remain out of this country for three months before it may be reentered and bonded. It is permissible under the new regulations to transfer a horse racing in Canada from a racing bond to a feed and pasture bond, but it is not permissible to transfer from a feed and pasture bond to a racing bond without an intervening period of three months. A horse may remain under a feed and pasture bond for a period of not longer than nine months. When a horse is on a racing bond it must be transferred to a feed and pasture bond or returned to the United States where it must remain for a period of three months before reentering Canada.
Many of the horses which were in Canada on April 1, 1946, were United States horses owned by Canadians and were on a racing bond or a feed and pasture bond. When the bond expired these horses had to leave Canada or the owners had to clear them through customs by paying a duty of twenty per cent ad valorem, as in practically all cases they were over one year old and valued at over $100 each. Under the new item they may become Canadian horses by the payment of a duty of $1250 each. It is probable that most

Customs Tariff
race horse owners will discontinue the bonding of horses and pay the customs duty at the time of their first entry into Canada.


Mr.   M A CD ON N ELL@Muskoka-Ontario: I thought that a very interesting explanation indeed, and I should be still more interested if the minister would say a further word as to just how much longer the tariff board is to be out of action, and when we are again going to have the services of the people we ordinarily consider to be our tariff experts.


Douglas Charles Abbott: I should like to answer that, Mr. Chairman, but I cannot do so at the moment.


Mr. HERRIDGE:: I do not know whether I am in order in asking this question, but the hon. member for Medicine Hat and I have been consulting this schedule and we are about as much in the dark now as when we started. I come from a constituency which produces large quantities of cedar and fir poles, and pit-props for use in mines, both of which are in great demand at the present time. A machine has been invented to peel these poles and props, which I believe costs between eight and ten thousand dollars. I understand it is not produced in Canada and has to be imported from the United States, and that involves the payment of considerable duty. This machine speeds up production tremendously, and I should like to ask the minister the reason for charging such duty on this type of machine, which can be procured only in the United States and which is of such great assistance in this industry. In my constituency I have a number of producers who would like to purchase these machines, but when you consider that they cost from eight to ten thousand dollars, plus the duty, that is a very heavy investment for a small operator to make; in my opinion they should be duty free. Could the minister give me any information on this matter?


Douglas Charles Abbott: There is no item in these resolutions, of course, which covers any article such as my hon. friend has referred to. Frankly I confess that I am a long way from being a tariff expert, and I do not know that I am in a position to answer his question very informatively. I am advised that no representations have been made to the department with respect to the particular case to which the hon. member refers.


Herbert Wilfred Herridge: I have made representations.


Douglas Charles Abbott: I appreciate that. I meant that prior to my hon. friend making this statement in the committee, no representations have been made to the department.


Herbert Wilfred Herridge: I made representations in writing to the Department of National Revenue some months ago.


Douglas Charles Abbott: Well, they have not been passed on to this department. However, my hon. friend has raised the matter and I will see that it is looked into at once. As I understand my hon. friend's question, he is suggesting that there should be no tariff on an item of that kind under the circumstances. I can only say in reply that as it stands at present the law is that on machinery of a class and kind not made in Canada there is a ten per cent duty.


John Ritchie MacNicol: May I suggest that these tariff items be called one at a time? Most of them require no discussion, and I think we will get through very much quicker.


Douglas Charles Abbott: I agree; I think that is about the only way we can hope to make headway. The first item is the one I have already discussed.
Customs tariff-i. Horses, n.o.p., each: British preferential tariff, $10; intermediate tariff, $12.50; general tariff, $25.


Harry Rutherford Jackman: When we have no representations from our constituents we sometimes do not give as careful attention as we might to these matters, because we believe no problems have arisen. In this connection, however, after what the minister said I was wondering whether or not it was the desire of the owners of race horses in Canada to keep them under United States registry, so that in due time they might perhaps sell them in the United States and thus avoid heavy import duties into that country, particularly if they were United States horses to begin with. Have any representations been made that the present change will not work satisfactorily?


Douglas Charles Abbott: I am advised that this does not affect their position in that respect. It simply permits them to move horses freely back and forth between Canada and the United States. There is really an optional procedure available to them. They can either go through this elaborate bonding procedure, or pay this $12.50 per head.


Douglas Scott Harkness: It gives the horses dual citizenship.


Douglas Charles Abbott: That is one way of putting it.


Mr. McLURE:: Does it affect standard bred racing horses? I understand that they come in from New York and Massachusetts to race in Canada. They can go back, without any payment of duty, within a week.
Customs Tariff


Douglas Charles Abbott: If they are bonded they can do that. They have been able to do so in the past; there is no change now.


[Stage Direction]
Item agreed to.
Customs tariff-72e. Bent grass seed, not to include red-top grass seed: British preferential tariff, 15 per cent; intermediate tariff, 30 per cent; general tariff, 30 per cent.
John Ritchie MacNicol: Where does bent grass come from?


Douglas Charles Abbott: I am advised that most of it comes from the west coast in the United States.


[Stage Direction]
Item agreed to.
Customs tariff-90e. Vegetables, frozen: British preferential tariff, 10 per cent; intermediate tariff, 25 per cent; general tariff, 30 per cent.
Harry Rutherford Jackman: Where the items show that the present rates are the same as the contemplated rates, after the change, what is the purpose of putting that in?


Douglas Charles Abbott: I would point out that in connection with item 72e, for instance, the words "not to include red-top grass seed" have been added to the item. In many instances the description of the item is changed, although there may be no changes in the rates of duty.


Harry Rutherford Jackman: In connection with this item, I am wondering why the minister would wish to lower the rates on frozen vegetables. The frozen vegetable business is now growing extensively in Canada. It runs into hundreds of millions of dollars in the United States, and is now beginning to take hold in this country. Despite that fact, we find a lowering in the tariff. It is not as though frozen vegetables consisted only of early varieties. Vegetables once frozen will keep indefinitely, and I am wondering why the tariff should be lowered.


Douglas Charles Abbott: My hon. friend will be relieved to know that this is a manufacturers' item, and that it is satisfactory both to importers of frozen vegetables and to freezers of vegetables in Canada. There are at least three firms engaged in freezing vegetables in Canada, and it is on their suggestion and with their approval that the item appears.


[Stage Direction]
Item agreed to.
Items 143, 168 and 168a agreed to.
Customs tariff-180e. Engineers' plans, drawings or blue-prints of machines and plant equipment, piant layouts, foundations for machinery and other plant equipment, structural supports and towers and similar outside structures, dams, spillways and other hydro construction, wiring, piping, platforms, ladders, stairs, etc., not to

include office or other buildings: British preferential tariff, free; intermediate tariff, free; general tariff, free.
John Ritchie MacNicol: Perhaps it would be wise in many instances to permit these blue-prints and drawings to come in free. But what safeguards have our own engineers and draughtsmen in connection with the drawing up of plans on plants, and the like? Our own universities and schools are turning out large numbers of draughtsmen.


Douglas Charles Abbott: I do not know that our engineers need protection in this respect. I believe it was really only an added cost on production, and it would seem that this would be a satisfactory item to have on the free list.


John Ritchie MacNicol: These items, according to this schedule, are to come in free.


Douglas Charles Abbott: They are to come in free under this schedule, although they were not before. The old rates were 125 per cent, 22J per cent and 22J per cent.


John Ritchie MacNicol: What protection do our own draughtsmen have?


Douglas Charles Abbott: They will have none, after this item is passed. It is felt they will not need protection for this type of article.


John Ritchie MacNicol: If I wish to build a plant in Canada, but fancy the lay-out of a plant in the United States I might inquire from the plant owner as to whom he had purchased his plans from. He would probably give me the name of the architect who had drawn up the plans for his factory. If I ask that architect to draw me a duplicate set of plans and specifications am I permitted to bring them in free.


Douglas Charles Abbott: This does not apply to architects' plans for buildings. It applies to engineers' plans, drawings or blue-prints of machines, and so on.


John Ritchie MacNicol: It refers to plant layouts.


Douglas Charles Abbott: They will be free.


John Ritchie MacNicol: I can bring in a plant layout free?


Douglas Charles Abbott: Yes, free.


John Ritchie MacNicol: Have the Canadian architects approved that?


Douglas Charles Abbott: It is not a matter for architects, but rather one for engineers.


John Ritchie MacNicol: Plant architects and engineers are often the same. Evidently they do not know about it, or they would be up in arms.


[Stage Direction]
Item agreed to.
Items 192f, 197d, 199i and 208 agreed to.

Customs Tariff
Customs tariff-219e. Chlofopicrin, ethylene oxide, methyl bromide, methyl formate, cyanides, carbon bisulphide, acrylonitrile, or mixtures containing any of these, for use in combating destructive insects and pests: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Mr.   M A CD ON N ELL@Muskoka-Ontario: I note that under the column showing the present rate there are two rates indicated. What does that mean?


Douglas Charles Abbott: I am told there have been some new items added in this general item, some of which had tariff rates under the tariff as it now stands. They are being included in this item respecting chloropicrin, and all are being put on the free list.


[Stage Direction]
Item agreed to.
Items 272b, 272c and 326e agreed to.
Customs tariff-326k. High thermal shock resisting glass parts when imported by manufacturers of high thermal shock resisting glassware, for use exclusively in the manufacture or in the repair of such articles, in their own factories:	British preferential tariff, free;
intermediate tariff, free; general tariff, 25 per cent.
Douglas Charles Abbott: I have an amendment which I shall ask my colleague to move.
Mr. ST. LAURENT: I move:
That schedule A to the Customs Tariff as amended by resolution No. 1 of June 27, 1946, be further amended by striking thereout tariff item 326k and by inserting in lieu thereof the following item, enumerations and rates of duty:
"High thermal shock resisting glass parts when imported by manufacturers of high thermal shock resisting glassware for use exclusively in the manufacture or in the repair of such articles: British preferential tariff, free; intermediate tariff, free; general tariff, 25 per cent."
The only change made by this amendment i3 the deletion of the words "in their own factories". -


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-434c. Trucks of welded design with tubular frame, cast steel cross members, rubber mountings and rubber inserted wheels, of a class or kind not made in Canada, and body shells of welded sheet steel, for use in the construction of street railway cars, not to include electric motors or magnetic truck brakes; complete parts of the foregoing: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 35 per cent.
Mr. CAMPBELL:: What is this thirty-five per cent for? Is it for protection or revenue? What revenue has the department obtained from this item?


Douglas Charles Abbott: This refers to trucks for street-cars. There is a reduction in the intermediate tariff from thirty per cent to ten per cent.


Alexander Maxwell (Max) Campbell: The minister has not answered the question. I wanted to know if this item was put in for the purpose of getting revenue or for protection. If it is put in for revenue purposes, how much was received last year?	[DOT]


Douglas Charles Abbott: To the extent that there will be a 10 per cent duty, I suppose there would be a protective feature, but at that low rate it is primarily for revenue purposes. I do not suppose we import them very often, so that there would not be much revenue.


John Ritchie MacNicol: It would only be city street-car companies that would buy them?


Douglas Charles Abbott: Yes.


[Stage Direction]
Item agreed to.
Customs tariff-438b. Bearings, clutch release; bearings, graphite; bearings, steel or bronze backed, with non-ferrous metal lining; bushings, grapliited or oil impregnated; ceramic insulator spark plug cores, not further manufactured than burned and glazed, printed or decorated or not, without fittings; compressors, air; commutator copper segments; commutator insulating and rings; tapered discs of hot rolled steel, with or without centre hole, for disc wheels; distributor rotors and cam assemblies; door bumper shoes; electric wiring terminals, sockets, fittings and connectors and parts thereof, not to include battery terminals; gaskets of any material except cork or felt, composite or not; ignition contact points, keys for shafting; auxiliary driving control kits, designed for attachment to motor vehicles to facilitate their operation by physically disabled persons, and parts thereof; lenses of glass for head, tail, dome, signal and cowl or parking lamps, and for light reflectors; lock washers; piston ring castings in the rough, with or without gates and fins removed; rails of lock seam section, corners, locks and catches, unplated ventilators and parts thereof, the foregoing being of metal other than aluminum, for the manufacture of window sashes for bus bodies; steel bolts, or studs, capped with stainless steel; switches for lamps, heaters and defrosters and parts thereof; vacuum control assemblies; vulcanized fibre in sheets, rods, strips and tubing; all of the foregoing when of a class or kind not made in Canada and for use in the manufacture or the repair of the goods enumerated in tariff items 424 and 438a, or for use in the manufacture of parts therefor: British preferential tariff, free; intermediate tariff, free; general tariff, 30 per cent.
Percy Ellis Wright: What is the dollar value of the imports under this item? I just want to know what this means to the companies.


Douglas Charles Abbott: This item adds certain items to the class covered. I am advised that there is no information as to the value of goods
Customs Tariff

that will be imported under the additions to 438b, but they probably would not exceed
850,000	annually.


[Stage Direction]
Item agreed to.
Customs tariff-438c. Ammeters; arm rests and wheel housing lining of indurated fibre, pressed to shape; axle housings, one piece welded, machined or not; carburetors and parts thereof; chassis frames and steel shapes for the manufacture thereof; cigar and cigarette lighters whether in combination with a cigarette holder or not, including base, and parts thereof; control ventilator gear box; cylinder lock barrels with or without sleeves and keys thereof; dash heat indicators and parts thereof; electric gear shift switches and parts thereof; engine speed governor units and parts thereof; fluid couplings, with or without drive plate assemblies, and parts thereof; front axle cross channel king pin support section assembly of steel, in the rough; fuel pumps, vacuum pumps and combinations thereof and parts therefor; gasoline gauges and parts thereof; hinges and parts thereof, finished or not, for bodies; horns and parts thereof; instrument bezel assemblies and parts thereof; instrument board lamps; locks, electric ignition, steering gear, transmission, or combinations of such locks, and parts thereof; mouldings of metal, with nails set in position, lead filled or not; oil filters and parts thereof; oil gauges and parts thereof; pipe lines of tubing, rigid or flexible, covered or not, with or without fittings, and tubing therefor, for oil, fuel, air or liquid for actuating hydraulic brakes; purifiers for air, and parts thereof; purifiers for oil or gasoline, parts thereof and brackets and fittings therefor; radiator, hood and other grills, assembled or not, and parts thereof, but not polished nor plated, and not to include finish or decorative moulding; radiator ornaments, and hood lift lock ornaments, unplated, and parts thereof; radiator shutter assemblies, automatic radiator water gauges; radiator shells and parts thereof, not plated nor metal finished in any degree; shackles, bearing spring, and parts thereof; speedometers and parts thereof; spring covers of metal and closing strips or shapes therefor; stampings, body, cowl, hood, fender and instrument board, of metal in the rough, trimmed or not, but not metal finished in any degree; starter switch assembly and parts thereof; steering wheels, rims and spiders therefor; sun visor blanks of gypsum weatherboard; thermostats and parts thereof; throttle, spark and choke assemblies, including buttons therefor, and parts thereof; tire clamping rings of steel, plated or not: universal joint ball assemblies; voltage control regulators; wind-shield wipers and parts thereof: all of the foregoing when of a class or kind not made in Canada and for use in the manufacture or the repair of the goods enumerated in tariff items 424 and 438a, or for use in the manufacture of parts therefor: British preferential tariff, free: intermediate tariff, 20 per cent: general tariff, 30 per cent.
(1) Provided, that if the above articles are imported for use as original equipment by a manufacturer of automobiles, motor vehicles, electric trackless trolley buses or chassis enumerated in tariff items 438a and 424 whose total factory output during the year in which importation is sought does not exceed ten thousand complete automobiles, motor vehicles, electric trackless trolley buses or chassis, and provided that not less than forty per centum of the factory cost of production of such automobiles, 
motor vehicles, electric trackless trolley buses or chassis, not to include duties and taxes, is incurred in the British empire, the rates of duty under this item shall be: British preferential tariff, free; intermediate tariff, free; general tariff, 25 per cent.
. (2) Provided, that if the above articles are imported for use as original equipment by a manufacturer of automobiles, motor vehicles, electric trackless trolley buses or chassis enumerated in tariff items 438a and 424 whose total factory output during the year in which importation is sought exceeds ten thousand automobiles, motor vehicles, electric trackless trolley buses or chassis, and provided that not less than sixty-five per centum of the factory cost of production of such automobiles, motor vehicles, electric trackless trolley buses or chassis, not to include duties and taxes, is incurred in the British empire, the rates of duty under this item shall be: British preferential tariff, free; intermediate tariff, free; general tariff, 25 per cent.
(3) Provided that the governor in council may make such regulations, if any, as are deemed necessary for carrying out the provisions of this item.
Percy Ellis Wright: Could I have the same
information on this item?


Douglas Charles Abbott: It is only an estimate, but the comparable figure would be not to exceed $30,000 annually.
Customs tariff-438d. Front and rear axles; brakes; clutches; internal combustion engines; steering gears; magnetos; rims for pneumatic tires larger than thirty inches by five inches: transmission assemblies; hydraulic or fluid couplings and torque converters; drive shafts; universal joints; steel road wheels; and parts of the foregoing, when of a class or kind not made in Canada, and imported by manufacturers of the goods enumerated in tariff items 424 and 438a for use only in the manufacture of motor trucks, motor buses and electric trackless trolley buses, or for the manufacture of chassis for the same: British preferential tariff, free; intermediate tariff, 174 per cent; general tariff, 274 per cent.
(1)	Provided that if the above articles are imported for use as original equipment for motor trucks, motor buses and electric trackless trolley buses, or for chassis for the same, by a manufacturer of the goods enumerated in tariff items 424 and 438a, and provided also that during the year during which importation is sought, not less than forty per centum of the factory cost of production of such motor vehicles and chassis therefor, not to include duties and taxes, is incurred in the British empire, the rates of duty under this item shall be: British preferential tariff, free: intermediate tariff, 74 per cent; general tariff, 274 per cent.
(2)	Provided that the governor general in council may make such regulations, if any, as are deemed necessary for carrying out the provisions of this item.


Percy Ellis Wright: Could I have the figure with respect to this item?


Douglas Charles Abbott: Perhaps I might give just a word of explanation here. The only change in regard to this item is the insertion of the words, "hydraulic or fluid couplings and

Customs Tariff
torque convertors" after the word "assemblies" in the fourth line. These hydraulic or fluid couplings and torque convertors are used on very large trucks and they cost almost 81,500 a unit. They were formerly dutiable under tariff item 43&e, which item was duty free under the British preferential tariff and carried a rate of twenty-five per cent under the intermediate tariff and forty per cent under the general tariff. It is almost impossible to form any estimate as to the value of annual imports of this special truck equipment.


[Stage Direction]
Item agreed to.
Items 438i and 442 agreed to.
Customs tariff-445j. Electric dry shaving machines for use in removing human hair, and parts thereof: British preferential tariff, free; intermediate tariff, free; general tariff, 10 per cent.
John Ritchie MacNicol: Are any of these made in Canada?


Douglas Charles Abbott: I am told that there is at least one company making them.


John Ritchie MacNicol: Have they made any
representations?


Douglas Charles Abbott: They have made no representations against the proposed item; in fact I understand that they asked for it.


[Stage Direction]
Item agreed to.
Customs tariff-446h. Bathtub stampings of metal: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 25 per cent.
Mr. MaeNICOL: Is this the ordinary bathtub stamping?
Douglas Charles Abbott: Yes.
Mr. MaeNICOL: Are they not made in Canada?


Douglas Charles Abbott: I am told not to any extent.


[Stage Direction]
Item agreed to.
Customs tariff-462a. Photographic cameras and equipment, and complete parts of the foregoing, for use by professional photographers and commercial photo-finishers in their own business, as follows:
Cameras for professional purposes, for making negatives 4j inches by 6J inches and larger, and the following accessories for use with such cameras:	lenses, shutters, exposure meters,
range finders, film and plate holders, lens hoods, lens boards, ground glass carriages, reducing backs, reversible adapter backs, lantern slide attachments, film sheaths, combination paper and plate holders, kits, carrying cases, camera stands, camera tripods, camera tripod tops, vignetters, diffusion disks, diffusion disk holders, colour filters, colour filter holders, polarizing screens, polarizing screen holders and backgrounds.
Printers, enlargers, heaters, dryers, mounting presses, print washers, automatic film processers printing frames and tanks for developing, fixing and washing:	British preferential tariff,
free; intermediate tariff, free; general tariff, free.
Howard Charles Green: Will the minister explain this item?


Douglas Charles Abbott: The only change in this item is the addition of the words "and complete parts of the foregoing" after the words "photographic cameras and equipment" in the first line. This was one of the items in the budget resolutions of October 12, 1945.


[Stage Direction]
Item agreed to.
Customs tariff-475e. Matrices of non-advertising news pictures for reproduction in newspapers and periodical publications enjoying second-class mailing privileges: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Frank Exton Lennard: Does this apply to actual photographs?


Douglas Charles Abbott: It does not apply to actual photographs, only what is described as the mat.


Frank Exton Lennard: Mats of photographs?


Douglas Charles Abbott: Yes.


Frank Exton Lennard: If this is some of the trash that comes in it should not be allowed at all.


[Stage Direction]
Item agreed to.
Customs tariff-569d. Woven fabrics, not exceeding two inches in width, made with unserrated selvages, generally known as single, double or four shot corded ribbon, imported by the manufacturers of mens' hats for use exclusively in their own factories in making the bands for, or in binding the edges of, men's hats only: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Mr. MaeNICOL:	Are these- made in
Canada?
Mr. -ABBOTT: No.
Mr. MaeNICOL: They are imported only by hat manufacturers?
Douglas Charles Abbott: Yes, for making bands or for banding the edges of men's hats.


[Stage Direction]
Item agreed to.
Customs tariff-616. (iii) Latex, being crude rubber in liquid form, not compounded beyond the addition of preservatives: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Mr. MaeNICOL: Shall we be able to ship latex into the United States free of duty?
Customs Tariff
Douglas Charles Abbott: I do not know the provisions of the United States tariff in connection with this item or whether we would ship rubber to the United States.


John Ritchie MacNicol: We are making it now at Sarnia.


Douglas Charles Abbott: I am told that this is one of those tariff anomalies. The imports during the calendar year 1945 amounted to 215,889 pounds valued at $71,467.


John Ritchie MacNicol: We are making it ourselves, but I want to know, if we find it necessary to export in order to keep this new factory at Sarnia in operation, shall we be able to ship into the United States free of duty?


Douglas Charles Abbott: If my hon. friend can tell me what the United States tariff policy is going to be, perhaps I could answer him. I do not think this item is on the United States free list now. Whether or not it will be in the future, I could not say.


[Stage Direction]
Item agreed to.
Customs tariff-653. Brushes of all kinds, n.o.p.: British preferential tariff, 15 per cent; intermediate tariff, 30 per cent; general tariff, 40 per cent.
Frank Exton Lennard: Why is this item included? There does not seem to be any change.


Douglas Charles Abbott: We have added "n.o.p."


[Stage Direction]
Item agreed to.
Customs tariff-703.	(a) Travellers' baggage,
under regulations, prescribed by the minister: British preferential tariff, free; intermediate tariff, free; general tariff, free.
(b) Goods valued at not more than one hundred dollars included in the baggage accompanying residents of Canada returning from abroad after an absence from Canada of not less than forty-eight hours and acquired by them for personal or household use or as souvenirs or gifts, but not bought on commission or as an accommodation for other persons or for sale, under regulations prescribed by the minister: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Provided that a resident of Canada shall not be entitled to the exemption herein granted within a period of four months from the date of the last exemption allowed, nor shall the exemption be allowed on alcoholic beverages in exeess of one quart, or on tobacco in excess of fifty cigars, two hundred cigarettes and two pounds of manufactured tobacco.
Provided further that goods entitled to entry under this item shall be exempt from all imposts. notwithstanding the provisions of this act. The Customs Tariff Amendment Act, 1939, or any other act.
Mr. STIRLING:: What is the change here?


Douglas Charles Abbott: This is the item under which residents of Canada returning from

abroad after an absence from Canada of not less than 48 hours may bring back duty free goods valued at not more than $100, which goods have been acquired by them for personal or household use or as souvenirs or gifts. The only change is the addition of the last proviso which reads:
Provided further that goods entitled to entry under this item shall be exempt from all imposts. notwithstanding the provisions of this act, the Customs Tariff Amendment Act, 1939, or any other act.
Since the $100 exemption proviso was inserted in the tariff to implement the Canada-United States trade agreement which went into effect on January 1, 1936, new duties and taxes have been imposed, the most important being the additional duties provided by the customs tariff amendments of 1939 on tea, coffee, tobacco and alcoholic beverages. This proviso definitely exempts goods entitled to entry under the $100 exemption from all customs duties and taxes.


Grote Stirling: Do I understand that it refers to the contents of a traveller's baggage but not to the baggage itself?


Douglas Charles Abbott: A traveller could bring in a piece of luggage, provided that he kept it within the permissible $100 exemption.


Grote Stirling: He could buy a suitcase?


Douglas Charles Abbott: Yes.


[Stage Direction]
Item agreed to.
Items 709 and 786 agreed to.
Customs tariff-826a. Dies in the rough, not being complete parts of machinery, for use in the manufacture of bolts, nuts, nails, screws, rivets and tacks: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 35 per cent.
John Ritchie MacNicol: Are these forging dies now being made in Canada?


Douglas Charles Abbott: I am told that in some cases there are, but I am also informed that this is what might be colloquially described as a manufacturer's item.


John Ritchie MacNicol: I thought as much. It should materially help our die manufacturers, of whom we have quite a number in this country.


Douglas Charles Abbott: That is correct.


John Ritchie MacNicol: The chairman is well versed in the qualities of good dies.


Douglas Charles Abbott: So I understand.


[Stage Direction]
Item agreed to.
Item 836 agreed to.

Customs Tariff
Customs tariff-847. Distillers' solubles obtained from the liquid residue remaining after the alcohol has been removed in the process of distilling grain or molasses mash, whether or not subjected to a fermentation process, when imported without admixture except that necessary for the said fermentation process, for use exclusively in the manufacture of feeds for livestock, poultry or fur-bearing animals, under such regulations as the minister may prescribe: British preferential tariff, free; intermediate tariff, free; general tariff, free.
James MacKerras Macdonnell: I notice that the words "under such regulations as the minister may prescribe" are introduced. Is there some special reason why this should be specially protected?


Douglas Charles Abbott: I am told that the minister is given power to make regulations in order to ensure that this material is pure and suitable for feed purposes. It is imported for feed purposes. It contains vitamins, or whatever this riboflavin contains, that are supposed to be very good for cattle.


[Stage Direction]
Item agreed to.
That Schedule A to the customs tariff be further amended by deleting from the Customs Tariff Amendment Act, 1939, as amended, the following enumerations of goods and rates of additional duties of customs:
Tea, when the value for duty thereof under the provisions of the Customs Act:
I a) is less than 22} cents per pound-5 cents per pound;
(b)	is 22} cents or more but less than 30 cents per pound-74 cents per pound;
(c)	is 30 cents or more per pound-10 cents per pound;
All goods specified in customs tariff item 25a-10 cents per pound;
All goods specified in customs tariff item 26, except coffee, roasted or ground-10 cents per pound;
Coffee, green, and coffee roasted or ground- 10 cents per jiound.
Howard Charles Green: Will the minister explain this resolution?


Douglas Charles Abbott: This amendment permanently deletes from the Customs Tariff Amendment Act, 1939, the provision therein providing for the imposition of additional duties on imported tea and coffee.


Howard Charles Green: Is that not a pretty good argument for removing the 'tax on soft drinks?


Douglas Charles Abbott: I do not know that there is necessarily any connection.


Howard Charles Green: What is the difference?


John Ritchie MacNicol: Everybody drinks tea.


Douglas Charles Abbott: I do not know. Speaking personally, I like tea and coffee; I do not care for soft drinks; but that is probably not a very good reason.


Howard Charles Green: I think that is just the trouble. We are a lot of old fogies who drink tea and coffee, and some take drinks a little stronger.


Douglas Charles Abbott: They do, eh?


Howard Charles Green: But these soft drinks are drunk by the youth of the country; and I suggest to the minister that he keep that in mind when he brings down the next budget.


Douglas Charles Abbott: As my hon. friend will appreciate, the purpose of this remission is to reduce the cost of certain imported articles which are in everyday use and form part of the cost of living, in an endeavour to maintain the price ceiling.


John Ritchie MacNicol: We cannot let off the
hon. member for Vancouver South with that. All of us are in favour of youth getting soft drinks cheaper. We are not old fogies just because we drink tea and coffee.


Frank Exton Lennard: I am not letting off
the hon. member for Vancouver South either. He is making an appeal to those who use soft drinks, but he did not include us who may at times enjoy something a bit stronger.


Howard Charles Green: Talk for yourself.


George Hugh Castleden: I want to know if this reduction will be reflected in the price of coffee to the consumer, and, if not, why not?


Douglas Charles Abbott: I would not think so.
This has actually been off for two years. It is merely putting in statutory form what was done by order in council under the War Measures Act, and if we do not include it in a tariff item now, with the lapse of the Emergency Transitional Powers Act, fthe remission would fall. There was no change in the price as a result of the order in council, but it prevented an increase in price.


[Stage Direction]
Resolution agreed to.
3. That any enactment founded upon the foregoing resolutions to amend the customs tariff or schedules thereto shall be deemed to have come into force on the twenty-eighth day of June, one thousand nine hundred and forty-six, and to have applied to all goods mentioned in the foregoing resolutions imported or taken out of warehouse for consumption on and after that date, and to have applied to goods previously imported for which no entry for consumption was made before that date.
Resolution agreed to.
Schedule agreed to.
Resolutions reported as amended, read the second time and concurred in.
Judges Act
[Stage Direction]
Judges Act

[Stage Direction]
The house resumed from Monday, July 29, consideration in committee of bill No. 250, respecting judges of dominion and provincial courts-Mr. St. Laurent-Mr. Golding in the chair.
Sections 4 and 5 agreed to.
On section 6-Salaries of district judges in admiralty of exchequer court.
Winfield Chester Scott McLure: There is an item of $800
for the district judge of the admiralty district of Prince Edward Island. Is that amount the same as before?
Right Hon. L. S. ST. LAURENT (Minister of Justice): Yes. There is no change being made in those additional payments to judges for special duties.


[Stage Direction]
Section agreed to.
On section 7-Salaries of judges of Supreme Court of Ontario.
Mr. ST. LAURENT: The legislature of Ontario adopted a bill providing for an increase of two in the number of judges of the Supreme Court of Ontario on the trial division, the amendment to come into force on proclamation. It has been represented to us, and we have found that the representations were justified by an examination of the facts, that in order to take care of the increasing volume of business in the trial division of the Ontario court it was necessary to increase the number of judges, because undue delays were occurring in the trial of cases in the high court. On the other hand, we represented to the authorities of Ontario that there might be some possibility of reducing below sixty-two the number of county court and district court judges in that province, and the attorney-general with his officials agreed to go carefully into an examination of that situation in an endeavour to bring down from sixty-two to fifty-two gradually, as vacancies would occur, the number of district and county court judges. I can assure the committee that the cooperation between the Department of Justice and the department of the attorney general in that regard has been harmonious, and that on both sides there has been an expressed and sincere desire to arrange the matter of the number of judges there so as to be of the greatest convenience to the public without increasing the expenditure to the country. It is felt that the work which has now to be handled by the county or district court judges could be handled by fewer judges if there were a better distribu-
tion of their time and services. Of course it will not be possible to remove judges for the purpose of decreasing the number; but, as vacancies occur, it is the hope that the number of judges of that court may ultimately be brought down from sixty-two to about fifty-two, and I undertook, in my negotiations with the attorney general of Ontario, to ask one of my colleagues to move an amendment to this section 7 which would allow, when the Ontario government has proclaimed its act, the appointment of two additional judges for the trial side of the supreme court of that province. Accordingly I would ask my colleague to move that paragraph (d) of clause 7 be amended by striking out the word "twelve" and substituting therefor, the word "fourteen".
Ian Alistair Mackenzie: I move accordingly.


[Stage Direction]
Amendment agreed to.
Eric Bowness McKay: Will the minister indicate the number of judges in both provincial and dominion courts that will be affected by the act?
Mr. ST. LAURENT: I have not counted, but my understanding is that there are about 275 judges who are appointed and paid by the federal government.


Eric Bowness McKay: Will the minister also indicate what the total cost to the treasury will be as a result of this increase in judges' salaries.
Mr. ST. LAURENT:	My estimate is
between $600,000 and $700,000.


John George Diefenbaker: I wish to ask the minister a question regarding a matter I brought up on a previous occasion. Now' that the salaries of judges are to be materially increased, what is the attitude of the government to be in regard to the whole question of judges serving on commissions, which in the past has meant in many cases substantial additions to the amounts received by judges.
I have raised the point before and I will not labour it on this occasion. I realize that the answer might very well be that they receive no salary in addition to their indemnity as judges. But amounts are paid of $15, $20 and even $25 a day while judges are serving on commissions. I consider it only proper for me to say at this time that the difficulties incident to royal commissions, in which there is any question of political considerations, however remotely they might be connected, have an effect on the judiciary which we, who serve before the judiciary, feel should be guarded against.

Judges Act
I am not going to go into the espionage commission at this moment, but it made a declaration in section 11, I believe, in regard to the powers of commissions, to which I will refer on a later occasion.
Mr. ST. LAURENT: Has the hon. member noticed that there is a special clause, 38, which deals with this? If there is to be a protracted discussion on the point, it might be better to have it on clause 38.


John George Diefenbaker: I agree absolutely with my right hon. friend, and I mention it again only because I feel that our purpose must be to secure the best men for the bench. While there are those who say that the best men can be obtained at present rates of indemnity, I join with the Minister of Justice in saying that I know men, leaders of the bar, who, within the last year or so in western Canada, never noted for great fees made by its counsel, have refused an offer to go to the bench, and in more than one instance have refused an offer to come to the Supreme Court of Canada.
I realize that we must secure the best men, and when the minister asks for an increase in Ontario to fourteen members on the bench, I would suggest that even then the members of the high court of justice in this province will be overworked. In large measure they are overworked to-day as a result of the tremendous volume of divorce litigation that is before the courts. Only the other day someone told me that in the city of Toronto alone there are 1,200 cases awaiting trial, and the same condition prevails everywhere across the dominion. I have no hesitation whatever in repeating what I said in this house two or three years ago, that some measure along this line ought to be introduced. I am sure I speak for the bar of this dominion when I say that the Minister of Justice has earned not only their gratitude but the gratitude of the people of Canada as a whole for introducing this measure. It may be subject to some criticism because other types of pension are not being raised at this time. I hear that argument advanced. For instance, there is the question of old age pensions. I should like to see old age pensions increased. But this measure is distinct and apart from that question.
This measure is one that strikes at the future of Canada, for, without a bench that is free from the suggestion of any possibility of taint, the administration of justice in this country cannot maintain in the minds of the people the high plane it now occupies. For years objections have 'been made by the bar association, and I say that one of the striking commendations of this bill is the fact that, without 63260-268
exception to my knowledge, the press of the dominion, realizing that there cannot be a free press unless the courts are untrammelled and are of the highest merit, have given unqualified support to this legislation.
Section as amended agreed to.
Sections 8 to 13 inclusive agreed to.
* On section 14-Salaries of judges of Supreme Court of Prince Edward Island.


Winfield Chester Scott McLure: The other day I asked the Minister of Justice a question with regard to the appeal court. I did not have all the information with reference to the matter. I have an item here which, with the Chairman's permission, I should like to read. It is from the Charlottetown Guardian of July 27, and reads as follows:
Under the provisions of the British North America Act, 1867, certain duties and obligations are imposed upon the province; others upon the dominion. It is the duty of the province, for instance, to declare what courts shall be constituted. This is done in the form of a provincial statute. It then becomes the duty of the dominion government to make appointments to the judiciary so constituted.
Such a statute was passed by the Prince Edward Island legislature in 1922. Chapter 6 of the statutes of that year enacted that "the bench of the said supreme court shall be composed of a chief justice and three other judges". That act was enacted in May, 1922, and was well within the legislative authority of the provincial legislature, under section 92 (14) of the British North America Act, 1867. Section 92 (14) declares that "in each province the legislature may exclusively make laws in relation to matters coming within the class of subjects next hereinafter enumerated, that is to say: (14) The administration of justice in the province, including the constitution, maintenance and organization of provincial courts."
The question I asked the Minister of Justice the other day was how could they constitute a real court of appeal there.
Mr. ST. LAURENT: When I joined the Canadian government I had the advantage of having as one of my colleagues, a brilliant lawyer representing one of the constituencies pf Prince Edward Island and one who was much better informed of the situation in that province and of the needs in respect to the administration of justice there than I could be. We made serious efforts over a long period to find some system which would be acceptable to Prince Edward Island in respect of its judiciaiy appointed by the federal government. It was not found possible to do that unless we added an additional high court judge to the judiciary of that province. It was not felt that, it would be proper to do that in view of the fact that there were already three high court judges and three county court

Judges Act

judges there, and that the population was of numbers that are sufficiently provided for elsewhere by at most two judges. As I said to the hon. gentleman the other day, not knowing Prince Edward Island, but knowing the situation which prevails elsewhere, it seems to me that it would1 be in the interest of the people of that province if they had, rather than three high court judges and three county court judges, four high court judges and two county court judges. I am still hopeful that something along these lines can be worked out, because I appreciate that it would be more satisfactory if a three-man court could sit in appeal from the judgment of a court presided over by one high court judge. On the other hand, I would hesitate to recommend that there be an additional judge appointed for the judicial business to be transacted in that province. I assure the hon. gentleman that the question was considered sympathetically, and that my colleague of those diays, Hon. Mr. Ralston, did give it serious consideration and did try to devise some system which would not unduly increase the expenditure and which would be satisfactory to the people of my hon. friend's province. I still hope that that will be arrived at. It may be that this increase in salary will be helpful in that regard. I would not hesitate to recommend that there be four judges paid the increased salaries, provided that there were only two paid at the rate which prevails for county court judges.


Winfield Chester Scott McLure: I want to thank the minister for that good explanation. While I am not a lawyer, I still think one judge of the county court should be able to sit with the two supreme court judges in the court of appeal, two of them having an increase in salary.
Mr. ST. LAURENT: If that were acceptable to the people of Prince Edward Island they could provide for it themselves by an amendment to their own provincial act. In my province judges of the trial division can be called upon by the chief justice of the court of appeal to sit with the members of the court of appeal to hear appeals. The legislature of Prince Edward Island could provide-if they so choose-that the chief justice of the court of appeal would be entitled to call upon one of the county court judges to sit in his court to hear appeals in the province.


Winfield Chester Scott McLure: That is the answer to their question, is it not? They ought to be satisfied with that. .


[Stage Direction]
Section agreed to.
Sections 16 and 17 agreed to.
[Mr. St. Laurent. 1
On section 18-Salaries of judges of county and district courts.
John Ritchie MacNicol: I should like to ask a question on this section. I rise not to oppose anything, because I am strongly in favour of the judges receiving more remuneration. I am convinced that we have the best judiciary, perhaps I should not say in the world, but as good as the best in the world, and there is no judiciary better than the one we have in Canada. Why has Ontario sixty-two judges and Nova Scotia only 7; New Brunswick only 6; British Columbia, only 14; Prince Edward Island, only 3; Saskatchewan, only 18; Alberta, only 12, and Manitoba, only 10? In Ontario, where so few people get into trouble, perhaps we do not require so many judges. Why is it that Ontario has so many in comparison with the other provinces?
Mr. ST. LAURENT: A few moments ago I explained that in increasing the number of judges of the high court from twelve to fourteen I had-I will not call it a definite commitment-negotiations with, the attorney general of Ontario and his department looking to a gradual reduction of about ten in the number of county court judges. The department of the attorney general feels that it will be possible so to arrange the distribution of the work of the county court judges gradually to bring the number down by about ten.


John Ritchie MacNicol: On a basis of population and in comparison with the other provinces he could go still lower, could he not?
Mr. ST. LAURENT: Well, it will be quite a substantial start. The old act provided salaries for seventy-five and we are now down to sixty-two. I hope that, before the act comes before parliament again, we shall be down to about fifty-two. There is a keen desire not to have the courts overmanned, because it is not good for a judge not to have enough to do.


John Ritchie MacNicol: The minister is absolutely right.


Eric Bowness McKay: The minister has suggested a reduction in the number of district or county judges, and I think that suggestion is very good; but is he taking into consideration certain territorial considerations? For instance, some of our provinces have a concentration of population; I have in mind Ontario and perhaps Quebec. It seems to me that when you have a province with a more scattered population it may take more judges to administer the area than where you have a concentrated population. Certainly it would require more

Judges Act
travelling on the part of district and county judges. Is the minister taking that into consideration?
Mr. ST. LAURENT: Yes. Of course we take no initiative in determining the number of judges. We merely discuss the matter with the provincial authorities, because we feel they know better than we do the requirements of their respective localities. I wish to pay tribute to the good will and earnest endeavours I have met with everywhere in discussing a proper set-up for the administration of justice.


[Stage Direction]
Section agreed to.
On section 19-Salaries of judges of circuit court of district of Montreal.
John George Diefenbaker: Apparently there is to be no increase in the amount allowed these two judges in the city of Montreal. My information is that the reason given is that the jurisdiction of the circuit court has been transferred to the superior court.
Mr. ST. LAURENT: To a magistrate's court set up and manned by the province.


John George Diefenbaker: Is it altogether fair *-and I ask this advisedly-that in regard to two judges in the whole dominion a different rule should apply from that which applies to all the others?
Mr. ST. LAURENT: It does conform to the view I have undertaken to place before the house. I felt I should come before the house and say that this was not something being done for persons, that it was something done because I felt it was necessary or advisable in the interests of the public. I could not say that with respect to these two honourable gentlemen, most of whose work has been taken away from them and attributed to magistrates. They still have some cases within their jurisdiction, but there is very little for them to do and at the present time they cannot retire. When they reach the stage where they can retire they will get an annuity equal to the full salary attributed to their office at the time they were appointed.


John George Diefenbaker: How long have they been on the bench?
Mr. ST. LAURENT: I think one of them has been there for about fourteen years and the other for about six or seven years. I felt, of course, that I could not ask parliament to take any right away from them, but that I would not be justified in asking parliament to give them, really as a retirement allowance, more than the salaries attributed to their offices at the time they were appointed, be-63260-268J
cause they have practically retired from the exercise of actual judicial functions, though they still conserve the judicial offices.


John George Diefenbaker: Has the minister given consideration to transferring these men to some position where, instead of waiting for the effluxion of time to bring them a pension, they would be able to give service for what they are receiving?
Mr. ST. LAURENT: I shall be glad to give consideration to that suggestion. I do not know of any office here which could be made attractive to them at this time.


[Stage Direction]
Section agreed to.
On section 20-Travelling allowances.
Mr. ST. LAURENT: I would ask my colleague to be good enough to move an amendment to this section. In drafting section 20 for the bill we did not give sufficient attention to the fact that certain county court judges are appointed for more than one county. The intention was not to deprive them of their allowance when they had to travel out of the county in which they reside. The intention of the clause was that they would1 not get travelling allowances for performing their judicial duties at the chief place of the county in which they reside, but it was not intended to deprive them of their right to travelling allowance when they had to go to another county where they had to perform judicial functions. I would, therefore, ask that subsection 4 of section 20 be deleted and the following substituted therefor:
(4) No judge of a county court is entitled to be paid travelling allowance for attending in court or chambers at the county town of the county within which he resides or at the judicial centre or district town of the judicial district for which he is appointed.
Ian Alistair Mackenzie: I move accordingly.


John George Diefenbaker: What is the meaning of that?
Mr. ST. LAURENT: The meaning is that there must be one town at which the judge has to perform his judicial duties without being entitled to travelling allowances to go to that town. If he has more than one town where he has judicial duties to perform he shall be entitled' to travelling allowances for the other towns within which his commission normally requires him to operate. As the section was drawn previously it might have meant that he would not get a travelling allowance for attending at any of the court towns where under his commission he was required to perform his judicial duties. We wish to make it clear that it is only with
Judges Act

respect to the court town of the county in which he resides that he is not entitled to charge travelling expenses.


Mr. HAZEN:: Will there have to be an amendment to subsection 5, or does this cover it?
Mr. ST. LAURENT: I do not think any amendment is required there. He is not allowed travelling allowance for travel that is not necessary. If it is travel that is necessary, of course he makes the charge and receives the travelling allowance.


[Stage Direction]
Amendment agreed to.
Eric Bowness McKay: May I ask the minister just how transportation expenses are calculated? I notice that later in the section there is an allowance for each day while away from home, we have just been discussing that. Does this transportation expense just cover his railway fare, or so much per mile for car operation if he uses an automobile? Does it include anything more?
Mr. ST. LAURENT: It does not include anything beyond transportation and the specified allowance fixed by the statute.


Douglas King Hazen: I have not followed this very cliosely, but might I ask whether, when a county court judge who has more than one county under his jurisdiction goes to anothei county, he is allowed travelling expenses.
Mr. ST. LAURENT: He is allowed travelling expenses.


Douglas King Hazen: But as I read subsection 5 it does not say so. It says:
No judge of a county court is entitled to be paid travelling allowance for attending in court or chambers at a place not within the county-
Mr. ST. LAURENT: That is to take care of cases, which are quite frequent, where a judge goes into a county or district not normally within his jurisdiction to assist a brother judge or to replace a brother judge. In those cases there must be a certificate of the attorney general that the holding of court at that place was approved. But subsection 4 as now amended provides that the judge does not receive travelling allowances for attending at the county town of the county in which he resides. When he is appointed for more than one county, he receives travelling allowances for going elsewhere than to the court town of the county in which he resides.


Douglas King Hazen: Where does it say that?
Mr. ST. LAURENT: In the subsection as amended.


Douglas King Hazen: Do we presume that he is to be paid if he goes to another town?
Mr. ST. LAURENT: Yes.


Douglas King Hazen: Is that only a presumption, or is it so stated?
Mr. ST. LAURENT: That is stated in section 20 (1), in these words:
Subject as in this section provided, a judge of a superior or county court or a district judge in admiralty of the exchequer court who attends as such judge in court or chambers at any place other than that at which or in the immediate vicinity of which he is by law obliged to reside is entitled to be paid as a travelling allowance-
And so on.


Eric Bowness McKay: It seems to me that this expense account of $10 a day is excessive. Officers of the armed services had to go into cities and towns, and all they were allowed was $6 a day. It seems to me that is enough?
I can see no reason for differentiation between a city and a town, because members of the armed services moved in and out of cities and towns, and they were allowed only S6.
I believe that is sufficient.
Mr. ST. LAURENT: I have seen accounts which indicate that it costs judges in Ottawa, Toronto, Quebec and Montreal more than the allowance provides. Representations were made that it should be increased. I said that I was not going to ask parliament to do more than to increase the salaries. It happens that they pay a little more than is allowed, but I did not want to ask parliament to make an increase in that allowance. However, I did see hotel bills, and I know that judges who travel almost every month from Montreal to Quebec and who stay at the Chateau Frontenac, and judges from Quebec who stay at the Windsor hotel in Montreal have expenses in excess of $10 a day.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 21 to 24 inclusive agreed to.
On section 25-Compulsory retirement of judges of county court and circuit court of district of Montreal.
George Hugh Castleden: I note that under section 22, which deals with annuity on resignation, such annuity is not to be less than two-thirds of the salary. Under that provision, what would be the largest annuity, on retirement?
Mr. ST. LAURENT: The largest annuity on retirement under this bill will be that to which the chief justice of the supreme court

Judges Act
will be entitled. No change is being made there. His retirement allowance will be equal to the salary of the office at the time he was appointed. That is because he was appointed prior to there being a retiring age fixed. It was felt that having a life tenure of office, and parliament having made the disposition that he could retire at the age of seventy-five, he should not be deprived of the emoluments of office. But in that respect no increase is being made. It was felt that that was a contractual right that it would not be proper to change, but that we were not required to extend it when an increase was being made in annual salaries.
County or district court judges are also required to retire at the age of seventy-five. Under the former act they retired with an annuity equal to full salary. That number of dollars is not being increased. We say we will increase their salaries, but we do not recognize any obligation to increase the retiring allowance to which they were entitled under the present act.
Then the hon. member asked what would be the largest retiring allowance in respect of the other judges. The next largest would be for the puisne judges of the supreme court, who would receive two-thirds of $16,000. All the other retiring allowances are two-thirds of the stated salary.


Eric Bowness McKay: Has a fund been set up to provide these annuities, and have the judges contributed to such fund, as do civil servants?
Mr. ST. LAURENT: No, there never has been any fund provided for retiring allowances. It has never been on a contributory basis. Our system was borrowed from the British system, and I think it antedates the establishment of superannuation funds for civil servants. It is something we inherited when we inherited the system, and it has been conserved since.


Thomas John Bentley: I hope it is in order to make the remark I am going to make. I was thinking that the non-pensionable war widows are going to love this.


George Hugh Castleden: When we suggest that annuities should be paid in other cases, the argument in advanced to us that it detracts from a person's self-respect to draw from an annuity to which he has not contributed. But apparently on this level it does not affect them in any way.


John George Diefenbaker: Recently Mr. Justice Plaxton retired because of illness. Would he come within the provisions of section 22? What would his retirement allowance be?
Mr. ST. LAURENT: His retirement allowance was $4,000, because he had exercised the option provided in the 1944 statute. As the hon. member has noted, there is no attempt here to increase the retiring allowance of those who retired hitherto.


John George Diefenbaker: I appreciate that.


Eric Bowness McKay: Is there any retroactive
measure with regard to pensions?
Mr. ST. LAURENT: No.


Eric Bowness McKay: Either for the wife or the judge?
Mr. ST. LAURENT: No. There is nothing being done with respect to judges who have retired hitherto, because it was felt that their annuities were not payable to them under the terms of the statute, but because they had received letters patent granting them stated annuities. The Judges Act, so far as they were concerned, had been exhausted. They had been given what the Judges Act empowered the government to give them, namely letters patent providing a stated annuity. But it was not felt that the process of amending the Judges Act could or should have any effect upon what had been done in the past.


Norman Jaques: If a judge retires before the retiring age would that affect his pension?
Mr. ST. LAURENT: I may have to qualify my answer. There is a retiring age only for federal court judges and district and county court judges. The federal court judge is required to retire at seventy-five years. There is no provision for these judges retiring before that time unless they become incapacitated. If they become incapacitated they can be retired and receive a pension equal to two-thirds of the salary attached to their office. A county court judge can retire with pension- this has not been changed-after thirty years of service, payable at the same rate as would be paid if he retired at the age of seventy-five years; that is, a pension of $5,000. After twenty-five years service he can retire, if the lieutenant governor states in the acceptance of the resignation that it is in the public interest that he should' retire, with a pension of two-thirds the salary.


[Stage Direction]
Section agreed to.
Section 26 agreed to.
On section 27-Annuity provision in respect to judge taking public office.
John George Diefenbaker: Perhaps the minister could answer the question which I asked a week or so ago with respect to Mr. Justice Davis, a judge of the court of appeals of Saskatchewan, who since his first appoint-
Judges Act

ment has served, first, on the board administering the Farmers' Creditors Arrangement Act; second, as deputy minister of national war services and, latterly, as minister to Australia. There have been a number of references in the press to the fact that he is to leave the bench to enter the diplomatic service, either in Washington or in London. I would appreciate if the minister would outline exactly what his position would be with regard to pension and the extent to which the period that he had been a judge although not actively serving as a judge would count in the payment of an annuity.
Mr. ST. LAURENT: With respect to Mr. Justice Davis this section will provide, as it has already been provided with respect to the chief commissioner of the Board of Railway Commissioners for Canada, that when he retires from the public service he will be in the same position as if he were retiring from the bench. If he were dismissed from the public service before serving fifteen years from the time of his first appointment to the bench, under the terms of the act he would not be entitled to receive a pension.


John George Diefenbaker: To be concrete in the matter, Mr. Justice Davis has been eight years as a member of the bench although not actually serving on the bench. If he retires in order to enter the diplomatic service, what will be his pension for the time he was actually appointed to the bench?
Mr. ST. LAURENT: No pension while in the public service and no pension if dismissed from the public service before fifteen years from the time of bis original appointment to the bench. But if he retires from the public service at a time when the governor in council might certify that his retirement from the bench was in the public interest he will then receive a pension equal to two-thirds of the salary attached to the office of judge.


John George Diefenbaker: I am trying to follow that. I presume that if he is appointed to a diplomatic post he will not continue as a member of the bench in Saskatchewan; I presume also that the governor in council will grant him permission to retire as judge. As my right hon. friend knows, if there is one thing more necessary than another it is that a judge serve on the bench to which he has been appointed. In Saskatchewan the court of appeal is made up of five members who necessarily have to deal with abstruse points of law, There should be an odd member on the bench in order to guard against dismissals of appeal because of an equal distribution of opinion on the bench. If Mr. Justice Davis receives a
rMr. Diefenbaker.]
diplomatic appointment, will he then be permitted to retire and what will be his pension? I am asking this question of the right hon. gentleman both in his capacity as Minister of Justice and as Acting Secretary of State for External Affairs.
Mr. ST. LAURENT: He would receive no pension upon being appointed to the service of external affairs and he would receive no pension while in office with external affairs. Upon retirement from external affairs he would be entitled to be granted the same pension as if at the moment he were retiring from the bench.


William Irvine: In other words, he gets a judge's pension?
Mr. ST. LAURENT: He would get his judge's pension when retiring from the public service if he served another seven years.


John George Diefenbaker: I think this is an unusual proceeding. It means that we are going to place our judges on the bench where, once appointed, one believes they will serve so long as they have the capacity. We are going to place our judges in the position where they will accept appointments to the bench as a temporary expedient and then, after a few - years on the bench, take some other appointment, possibly some semi-political appointment. Then, having served in that capacity for a period of years and finally terminating their services they are able to count not only the period they served as judges but also the period in the public service.
I should like to know the extent to which there has been a demand for this change in the law. I am fearful of the prospect that the separation of judiciary and executive will not be as complete as it should be should parliament give approval to a plan such as this. I would not object if a judge retired from the bench with the consent of the government and then received a pension at the conclusion of his public service for the period that he had actually served on the bench. That would be going a long way, but this is going a long way farther. I should like to know whether it is to cover an ad hoc case, or is it anticipated by the minister that there will be a number of cases such as this where judges retire from the bench after a few years to take up other types of public service where no pension is payable and then, having taken up that other type of public service, be rewarded with a pension as though they had already served on the bench?
At six o'clock the Speaker resumed the chair and the house took recess.

Private Bills
After Recess
The house resumed at eight o'clock. PRIVATE BILLS



JOSEPH ALPHONSE CHRISTEN

[Stage Direction]
Mr. D. A. CROLL (Spadina) (for Mr. Maybank) moved the second reading of bill No. 311, for the relief of Joseph Alphonse Christen.
Joseph William Burton: Mr. Speaker, since the Minister of Justice (Mr. St. Laurent) is in his seat at the present time I should like to ask him whether he has given any further consideration to the suggestion he himself made in this house some time ago as to providing other facilities for dealing with these bills.
Right Hon. L. S. ST. LAURENT (Minister of Justice): I should not like the hon. member to be under the impression that I had made a suggestion of another procedure for dealing with these bills. If I had any suggestion to make it would be that parliament refuse to consider them. But since I did not feel that after so many years it would be probable that parliament would take that course, I did say it appeared to me that an alternative course might be for parliament to say that it would not deal with applications for divorce unless there had been, before the application was launched, a judgment of a court of justice establishing, in proceedings for judicial separation as to bed and board, the fact that an offence of adultery had been committed. I did not intend to suggest that I was going to promote proceedings of that kind, but I had discussed that as being an alternative form, a method which would not involve any recognition that divorce was a thing to which one was entitled as a matter of right, but a convenient way of ridding parliament of the onerous duty of hearing witnesses and inquiring into facts.


Joseph William Burton: Who, then, should take the initiative in this?
Mr. ST. LAURENT: Well, so far the other place has been the place where divorce applications originated and where investigations into the facts are conducted. If the hon. members of the other place declined to investigate and declared that they would not do that themselves and would not give favourable consideration to petitions unless they were founded upon the judgment of a court of justice finding that, as a matter of fact, adultery had been committed, and that became known, it would be notice to applicants that it was useless to come there unless
they had a judicial finding to support the petition. It seems to me that if the hon. members of the other place were to make it known that was going to be their attitude, and then followed it up by in fact refusing to consider petitions unless there was that kind of documentary evidence to support them, this procedure of investigation would come to an end.


Thomas Reid: They have never complained.
Mr. ST. LAURENT: That was the suggestion I made, not as a procedure which I was going to promote, but as one which would appear to me to afford1 a method-


Joseph William Burton: It would seem very reasonable to me.
Mr. ST. LAURENT: -of ridding parliament of the onerous and disagreeable task of investigating facts in connection with these petitions.


William Irvine: May I ask the minister-


William Ross Macdonald: May I remind the house that it is not in committee and that it is unusual to ask questions at this stage. The usual procedure is to give these bills second reading and then refer them to the standing committee on miscellaneous private bills, after which they come back to the house and go to committee of the whole.


Stanley Howard Knowles: May I add a word or two. I think, in all fairness to the Minister of Justice (Mr. St. Laurent), it must be said that he has stated correctly the circumstances and the way in which he made the proposal for a change some time ago. To be perfectly fair, he did not make it as a proposal, but he discussed it with us in committee as a possible alternative to the present procedure. I think the reason the hon. member for Humboldt (Mr. Burton) and others of us rise to speak at such a time as this is that we were conscious of the fact that the minister's suggestion met with pretty general approval, if I am any judge at all, amongst members of the house. It is not a suggestion which goes to the root of the question; some of us might like to see a more complete overhauling of our divorce laws; but it is a suggestion which, without disturbing the general basis which is already accepted, at least would take away the farce that some of us now feel it to be, in this parliament.


Thomas Reid: It is no farce. All the cases are investigated. The idea of spreading abroad that this is a farce!
Private Bills


Stanley Howard Knowles: The word is on the record and it stands.


William Ross Macdonald: Order. It is improper to reflect on the proceedings of this house by calling any proceedings in the house a farce.


Stanley Howard Knowles: Well, Mr. Speaker, if
the way I used that word can be construed as a reflection on the proceedings of the house I should be glad to withdraw it; but, of course, I have heard hon. members when making a withdrawal sometimes have something else to say along the same line. And so I would say that most of us here, even those who are objecting to my use of that word, do not like the procedure we now have. Our purpose in taking a few moments to speak about it now is to express the hope that the suggestion made by the Minister of Justice, since it is at least some improvement on present procedure, will receive further consideration in the hope that something may be done about it without too much delay.
Motion agreed to on division and bill read the second time.



SECOND READINGS

[Stage Direction]
Bill No. 312, for the relief of Edmund Lionel Hurd.-Mr. Baker.
Bill No. 313, for the relief of Gladys Elsie Lariviere Doyle.-Mr. Baker.
Bill No. 314, for the relief of Ernestine Ann Lothrop MacNaughton.-Mr. Baker.
Bill No. 315, for the relief of Irving Vengroff.-Mr. Maybank.
Bill No. 316, for the relief of Robert Malcolm Dickenson.-Mr. May'bank.
Bill No. 317, for the relief of Gwendolyn Edith Edson.-Mr. Maybank.
Bill No. 318, for the relief of Bernice Mae Skidmore Weale.-Mr. MacLean.
Bill No. 319, for the relief of George Christie Henderson.-Mr. Maybank.
Bill No. 320, for the relief of Marie Lauretta Eliennette (Rita) Vallerand Barraclough.-Mr. Maybank.
Bill No. 321, for the relief of William Thomas Bennett.-Mr. Maybank.
Bill No. 322, for the relief of Edna Marjorie Pitts Wellington.-Mr. Maybank.
Bill No. 323, for the relief of Josephine Isabelle Nicholls Broglie Geoffrion.-Mr. Maybank.
Bill No. 324, for the relief of Rose Hannah C'olbeck Grant.-Mr. Maybank.
Bill No. 337, for the relief of Marie-Jeanne-Augusta Clement Lajeunesse.-Mr. Maybank.

Bill No. 338, for the relief of Jeanne D'Arc Guilmette Henchey.-Mr. MacLean.
Bill No. 339, for the relief of James Arthur Bellows.-Mr. Maybank.
Bill No. 340, for the relief of Charles Howard Alexander.-Mr. MacLean.
Bill No. 341, for the relief of Alfred Wade.- Mr. MacLean.
Bill No. 342, for the relief of Inga Mary Frances Kitching.-Mr. Boucher.
Bill No. 343, for the relief of Harold Clayton Webb Clout.-Mr. Maybank.
Bill No. 344, for the relief of Phyllis Thor-bum Rice Colby.-Mr. Maybank.
Second readings agreed to on division.


[Stage Direction]
The house resumed consideration in committee of bill No. 250, respecting judges of dominion and provincial courts-Mr. St. Laurent-Mr. Macdonald (Brantford City) in the chair.
William Ross Macdonald: The committee is considering section 27.


John George Diefenbaker: I return once more to this section to make a few observations. The reason the judiciary enjoys the high reputation it does lies in the fact that when a person is appointed to the bench it is generally conceived that in that situation he gives no further consideration to any question of participation in public affairs. If there is one thing more than another that should be kept in mind it is that, once a judge is appointed to the bench, unless he chooses to retire, to divest himself of the position and of any emoluments pertaining thereto, there should be no suggestion that he might be open to consider the acceptance of a position paying more than does the judiciary. And after he has had an opportunity of serving in a more highly paid position for a period of years, to suggest that at the conclusion of his term he should receive a pension such as a judge receives, is a dangerous principle.
I realize a somewhat similar principle was partly in effect previously to cover the position of chief commissioner or assistant chief commissioner of the board of railway commissioners, both those positions being pseudojudicial, or semi-judicial positions ordinarily to be filled by outstanding jurists or men learned in the law. But to extend this principle so that a judge, after serving a few years on the bench, may retire therefrom and then accept some position in the public service,

Judges Act
and at the end of his term in the public service reap the advantages that were his by reason of the sacrifice he made in his income in going on the bench, if he is a leading member of the bar, seems to me to be a dangerous principle to adopt.
I would ask the minister to inform the committee how many judges he has in mind who are about to retire, or is this an ad hoc proposition to meet one specific case? I should like to know what representations have been made to this end by the Canadian Bar association. I believe I speak with knowledge and certainty when I say that in Great Britain, where our entire judicial system was born and nurtured, there is no equivalent to this proposition.
I do not wish to raise smoke-screens, but I feel that when we place our judges in a posi-' tion of inviolability on the bench, when we guarantee them the increased salaries that they will now receive under this bill, when we guarantee them, after years of service, a substantial and reasonable retirement allowance and pension, there should not be admitted the principle of dangling before judges the opportunity of accepting positions in the public service paying more, accepting such positions for a period of years and then at the end of that term asking the country to give them a pension not only for the years they served on the bench but also for the period of years they served in the public service additionally.
The committee, I suggest, deserves a fuller and more complete explanation of the section. It is a novel departure, one that is easily passed and in which there may lie implications which at the moment we can only contemplate. If there is one thing more than another we must do, so far as the judiciary is concerned, it is to keep it above the suggestion of political considerations. If we place our judges in a position where, having once established the right to a pension on going on the bench, they may retire therefrom and accept positions in the public service, reaping the advantage of the pensions that are paid to those who enter the judiciary, then the door is open to situations which at the moment I do not care to suggest to the committee but which I believe everyone here can appreciate.
Has this section been submitted to the Canadian Bar association? Where is the demand for the change in the law which is proposed in this section, and what particular case or cases is it contemplated will come within the ambit of this provision at an early day?
Mr. ST. LAURENT: In Canadian history I know of only two cases which it was intended 63260-269
to have covered by this legislation and by its prototype which was adopted in 1931 under a former administration. At that time it was desired to have the services of a gentleman who, if I mistake not, was on the bench in tne province of Manitoba, become chief railway commissioner, because it was felt that he was the proper person to fill the office. It would appear that, having a life tenure on the bench, with the advantages that come from the pension provisions, he would not agree to the change without a provision such as this being made, and it was made by legislation in 1931.


John George Diefenbaker: Is that not a semijudicial appointment?
Mr. ST. LAURENT: I have described it. The hon. member knows as I do what functions are performed by the board of railway commissioners. It was found at that time by the former administration that legislation of this kind, to enable the country to obtain the services of that gentleman in that capacity, was desirable. Now, more recently, it was found that another justice who had performed valuable services to the country during the war period had shown special qualifications for the diplomatic service. It was also found that that gentleman felt, as did the judge of the Manitoba court in 1931, felt that it was not proper to ask him to abandon the life tenure which was his by virtue of his appointment, and since it was desired to have his services in a diplomatic capacity it was felt that the provision which had been made in 1931 might, by a slight change in phraseology, be made to apply in this case. That is the only reason this section was drawn in the form in which it is presented to the committee. I know of no other prospective case.


John George Diefenbaker: Who is the Manitoba judge?
Mr. ST. LAURENT: Judge Fullerton. I know of no other case, and I know of very few posts in the public service which would come under the description of "more lucrative" used by the hon. gentleman when this bill will have become law. I do not know of many posts in the public service which will prove to be more attractive in the w'ay of remuneration and security of tenure than what we are providing for the judges. I think that is as it should be. I think these high judicial posts should be among the things to which lawyers would aspire as being the best that they can achieve. I would not anticipate that there could be very many cases where this clause would operate. From 1931 to 1946 it operated only once, and from now on I have in mind1 this special case where I think the result would appear to be com-

Judges Act

patible with public interest. I think the gentleman in question has shown remarkable ability in the discharge of diplomatic duties, and I think it might be of advantage to the state if these exceptional qualities which he has displayed remained available to the state in that capacity; but at this time that will require that he resign from the bench.
During the war it was possible to ask brother judges to do more than under normal conditions, but I think it would be intolerable to leave, during normal times which I hope we are getting to or will get to pretty soon, actual vacancies that could not be filled in the judicial set-up which is required for the proper administration of justice. I think one must be one thing or the other, and that it is necessary now to have a solution of this situation which, could be tolerated during the war period, but should not be allowed to continue indefinitely.


Angus MacInnis: I am wondering whether there is any definite term during which a judge would have to be on the bench before this provision became operative. May a judge serve on the bench for a year and then be transferred to a public office, and when he leaves that public office become entitled to pension rights as if he remained on the bench for ten years or more, and in the event of his death his widow be entitled to her pension rights? It seems to me that this is an amazing provision, and if there is anything more amazing it is the arguments with which the Minister of Justice supported it.
A week ago when we last discussed this bill I was given to understand that there Was great difficulty in securing good men to take positions on the bench because the remuneration of the office was not adequate. But here we have a provision which was partly in the old act; at least it applied to one position at a time when the salaries were not as large as they will be when this bill becomes law, where it was not considered proper to ask a judge to leave the security of his position to take another position where the salary was a good one. Either the salaries and the other emoluments which go with the office of a judgeship are good or they are not. In my opinion, in relation to other salaries in Canada they are very good indeed. As I pointed out the other day, under the present provision the judges come in the highest ten per cent of income tax payers. I do not think this is a proper section. We should have pensions and retirement allowances, or whatever you may wish to call them, in other positions as we have for judges. Suppose a man who comes under this provision retires from the second office; he may take another public position; he may become active in political 
life; and just because he was one year a judge he will draw the pension which goes with a judgeship as if he had continued to serve for his full term or for the term which he has to serve in order to be eligible for a pension. As I understand it, it is not a very long time anyway. He may retire in ten years if he so wishes. I may be wrong but I should be glad to have the minister correct me.
Mr. ST. LAURENT: No; it is now provided that except on a certificate of physical or mental inability to fulfil the function he cannot retire with a pension before having served for fifteen years.


Angus MacInnis: It is not ten years now.
Mr. ST. LAURENT: Even then he cannot be allowed to retire unless the government takes the responsibility of saying that it is in the public interest that he should do so. There had been cases when a gentleman had served for a certain number of years on the bench and had retired while he was still capable of performing the same or other services, and in order to prevent that from continuing there was inserted in the act a provision that in future no resignations which would make way for a retirement with a pension could be accepted unless the governor in council certified that it was in the public interest that the retirement take place.


Mr. BOUCHER:: I am glad to support the point made by the hon. member for Lake Centre in opposition to section 27 of this bill. As I see it, it is important, in order that we may have an efficient judiciary, that judges be well indemnified so that they may be free of financial worries, to the extent that we may reasonably do so. I believe that is the fundamental principle behind the intention of the government to increase the salaries of judges. Under the salaries in effect up to the present time, I believe that men who otherwise might accept judicial appointments have not done so because of the much greater remuneration they would receive in private practice. This section, however, deals with a man who has held high public office, with great responsibility. It has been argued that the same reasons which support increasing the salaries of judges to give them greater security and immunity from worry would also support the same action in regard to those holding public office; but why should we confuse the two? Why should we say that a man who has held high office in the public service, with great responsibility and, of course, reasonably good remuneration, should have to rely upon the fact that previously he had been a member of the judiciary in order to get what is given to him under this section? In other words,

Judges Act
take two men, one accepting public office not having been a judge, the other accepting public office after having been on the bench. There may be a vast difference in what these men are entitled to under this provision. If high remuneration must be offered to encourage men to accept high political office, it should be put upon that basis only, and not on the basis that a man was a member of the bench prior to accepting public office.
There is another reason for providing pensions for judges and persons holding high public office, and for their widows and families; that is the reason of necessity. Surely a man wdio leaves the judiciary to accept high public office should not be considered as in such . necessitous circumstances as to require this provision. Surely it would be a disgrace and an indictment against our country if we should go to a member of the judiciary and say, "You are the only man who can do this job; come with us," and then say that after he has served the country with his high qualities we shall treat him as though he needed a pension, or his widow and family needed it. When the minister said in reply to the hon. member for Lake Centre that he knew of no appointments more lucrative or more secure than judgeships he uttered a strong indictment against the very principle of the bill which I approve. I believe it is a fact that the men who have accepted judgeships have not been given the highly lucrative positions and the security it is necessary to offer in order to get the right men in the right places, administering their duties in the right way. If that is the fundamental principle behind this bill 'the answer of the minister was a great disappointment to me and, I am sure, to- other hon. members, because I do not think that is a point which should be taken. I do not believe it is a matter of necessity. I believe it is a matter of wanting to get the best men available both for the judiciary and for high public office. I would not say which were needed most; but I should say that in appointments which carry with them the trust of the government, reliance should be placed upon the compensation, the security, the immunities and so on that the office itself merits, without having to rely upon the previous occupation of one who is appointed.
Therefore I think it would be a mistake to pass section 27 as it stands and create discrimination among those holding high public office, as between those who once were judges and those who were not. Then, too, in my opinion the qualities that should be possessed by those on the bench and those in high office should remove both from political partisanship. They should be able to hold and 63260-269J
express an independent, free, open, frank and sincere viewpoint without fear of necessitous circumstances; without fear of their master ill-treating them by not providing security both during and after their tenure of office. One of the things we in Canada are very proud of is the ability of Canadians who have assumed high public or judicial office to cast off any feelings of political, racial, religious or sectional partisanship that they may have held prior to appointment. I think we should be very proud of that. In my opinion the difficulty in the past has been that the low salaries did	not attract the right	men forthese jobs. Therefore I do not oppose section 27 because it gives a little more security to a man in high office; I say we should not need this section to provide the security required. I believe we shall experience difficulty if we pass it, because, after all, the minister has said he has only two cases in mind where this is required. Surely in this day of strain and stress this parliament has much more important	things	to	consider, affecting	a muchgreater section of the Canadian people, than a select and exclusive provision in a statute which will affect only two persons. To me the very fact that the minister has in mind only two	people	is	the greatest indictment of
section 27.
Mr. ST. LAURENT: It is unfortunate that hon. members on the opposite side did not profess those views in 1931, because I will state quite frankly that if I had not found this	section	in	the act it might	not have
occurred to me to draft one to take care of this other case. It is because it was there and had been put there, as everyone knows, for this kind of case that I thought it might be used in respect of the other one. Probably it is well known that a system of superannuation for those in external affairs, and for those appointed to various commissions and so on has been under consideration for quite a long time. As yet time has not been found to work out the kind of act it would be considered proper to recommend to parliament for consideration. This case is one that has to be dealt with now. I found that a similar case had been dealt with in the manner indicated by this language in 1931. I do not know if those sitting on that side of the house at that time raised the kind of objections that are being raised to-night; I was not here, and perhaps the hon. gentlemen who have spoken to-night were not here either, but I found it in the act. There was an urgent situation to be met, and though I do confess I would prefer a judges act that did not have a section of this kind, I felt it could be met in this way. The clause was there, and it had to be dealt
Judges Act

with, reenacted or modified. By being modified it did happen to fit an urgent present case at a time when we were not ready to recommend to parliament the kind of superannuation act which would take care of such cases.
Hon. gentlemen have read the report of the Gordon commission. They have found recommendations there which will have to be given consideration and which at some time will be brought to the attention of the house in the form of a bill to make such provisions as should be made. That is the explanation.
I am not submitting it as an argument. One hon. member said he was surprised at the argument I had made. I was not trying to make an argument, but was just trying to state frankly to the committee what were the facts, so that hon. members could draw their own conclusions.


George Russell Boucher: Surely the Minister of Justice would not attempt to justify a new wrong by saying that a previous wrong had been committed.
Mr. ST. LAURENT: No.


George Russell Boucher: Because obviously, as my right hon. friend knows, they are not parallel to the present case at all.
Mr. ST. LAURENT: No; one belonged to one party, and another belonged to the other before appointment.


George Russell Boucher: The right hon. gentleman may say that transferring from one judiciary appointment to another is the equivalent of transferring from a judicial appointment to a political appointment. If that is his case, then I am sure there are many hon. members who will not agree with it. I think it is a distinct wrong. But I can see his argument. He puts section 27 in and would lead us to believe that he did not approve it in 1931 when done by one government, but that he does approve it in 1936 when done by his government. I do not think the argument holds good, and I do not like to see the right hon. gentleman bringing in, under section 27, an argument to exalt high office, based upon political expediency, wherein he says one party did it and it was wrong when they did it. So when they did it, and it was wrong, he can commit another wrong.


Mr. NICHOLSON:: I have been impressed by the arguments advanced by my learned friends the hon. members for Lake Centre and Carleton. I think the minister has indicated that this is the type of section which should not appear in a bill. The people of Canada have set high standards for the Canadian judiciary, and I believe this sort of section

places the entire judiciary, and particularly Mr. Justice Davis, in a compromising position. Mr. Justice Davis was very active politically before his appointment to the bench. I believe everyone who knew him and who had been familiar with his work felt that he put his political past behind him when he took his appointment on the bench. He performed a service for his country during the war, and I believe most people felt that he was doing what was in the best interests of the people. For some time he has had a political post.
It would now appear that we are passing special legislation to guarantee him a pension of 88,000 a year for life-provided that the present government stays in office for another seven years. I understand that Mr. Justice Davis is slated for an important post, which is a political one. It has always been the tradition for governments to have in Washington and London commissioners and ambassadors who are in complete agreement with government policy. Once a judge accepts that sort of role, it appears to me that he is no longer in the category of an impartial citizen belonging to the judiciary.
It is a serious reflection upon our judicial system to 'have legislation at this stage which provides a pension of 88,000 a year for life for Mr. Justice Davis, on the assumption that he holds the post for another seven years. In view of the fact that he has not performed any service on the bench since his selection, I feel that the minister should not ask the committee to pass legislation of this sort to provide security for one person. I am sure Mr. Justice Davis would object to having legislation passed for his own personal accommodation-as this legislation apparently is.


Donald Methuen Fleming: I observed that when the Minister of Justice spoke he did not take issue with the principle laid down by the hon. member for Lake Centre. What the Minister of Justice said, if I followed his argument, was that he justified the section, first, because of the precedent of 1931 and, second, because of the merits of the particular case now in mind.
I should like to observe, in the first place, that the precedent of 1931 does not extend to anything like the length the Minister of Justice is proposing to stretch it in support of section 27. In 1931 apparently a particular case existed, and a measure in limited terms was introduced by way of amendment to the Judges Act to provide for that particular case only.
I submit that is not a precedent for a section in broad terms such as section 27 now before the committee. It is in unlimited

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terms. I say that what was done in 1931 in connection with the enactment of section 27 (2) is not a precedent for the type of section we are now asked to enact in the form of section 27 of the bill.
On the second point made by the Minister of Justice, namely that there is merit in the particular case he has in mind, I should say that, if there is, then -let us deal with that particular case. I do not believe it is doing any kindness to the person involved if we seek to cover up his individual case by a section in general language, as we find it in section 27 of the bill.
No particular case could ever justify language of the breadth of that in the section. If there is merit in the case the minister has in mind, then I say it ought to be dealt with on its merits, without having the matter confused by language as broad as this. I contend that no case has been made out for section 27 in the bill which we are now asked to approve.


Mr. LOW:: Is there a contributory pension fund for judges, or are the retirement allowances non-contributory?
Mr. ST. LAURENT: The hon. member was attending some other duties when that question was asked earlier today. There is no pension fund, and there are no contributions. We inherited from British institutions this system of providing retirement allowances. It had become anchored there before the superannuation fund for civil servants had been established.


Solon Earl Low: That brings me to what I want to say. I find myself substantially in agreement with the hon. members for Lake Centre and Carleton, and other hon. members who have spoken on this subject. The reason for my being in substantial agreement with them and for my being opposed to section 27 is that I believe it violates one of the most fundamental principles of retirement allowances. In the case of a contributory system where a person is given leave of absence for a specified period of time from his regular duty in the profession or occupation which would give him his retirement allowance upon retirement, the period for which he is granted leave of absence is based on his term of service. If he goes back to his original profession or service he then would be granted the pension upon reaching the age of retirement, just as if he had not been granted leave of absence. With that principle I am thoroughly in agreement. But in this case there is no desire or intention to adhere to that principle. If the principle is sound for contributory systems, then it must be more than sound for non-contributory systems.
Rather than to press for section 27 I would suggest to the minister that he give consideration to adopting the principle of a specific period leave of absence. After the termination of that specific period, the judge could return to his judicial duties and serve out his time. Then, when he was ready to retire under the regular term of judges' retirement, give him his pension. That procedure would he in strict conformity with the best practices of retirement allowances. I find myself quite opposed to the suggestion as it is to-day.
Mr. ST. LAURENT: I could not as Minister of Justice take the responsibility of following out the suggestion made by the hon. member. I think, if one retires from the bench, he should do so definitely and permanently. It would not be possible to have it in the form of a leave of absence, for two reasons. First, it would be unfair to the public of the province of which he is a judge and, second, I think it would imply the possibility of grave dangers. As has been pointed out, one who occupies a diplomatic post is exercising a function which may appear to participate of party politics. It would not be proper to allow a judge to go from the bench for a time to engage in something which could be regarded as political and then return to the bench. That is something which I as Minister of Justice could not take the responsibility of recommending to the house or to the governor in council.


John George Diefenbaker: I am in agreement with what the minister has said about diplomatic posts being matters of party politics, and I am also in agreement with, his view that it would be unreasonable to extend a judges leave of absence beyond eight years. Mr. Justice Davis was appointed in 1939. He then became chairman in Saskatchewan under the Farmers' Creditors Arrangement Act. Subsequently he was deputy minister of national war services and latterly he served in Australia. It is for the reason given by the minister, among other things, that I am opposed to a pension being paid in the indirect way that is being followed in this case.
The minister endeavoured to compare this case with what occurred in 1931, but there is a great difference. The chief commissioner or the assistant chief commissioner of the board of transport commissioners exercises no political function; they exercise judicial or semi-judicial functions. The minister has stated quite frankly that anyone going into the diplomatic service would be exercising a political function. How can there be any
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justification for granting to a person exercising a political function a pension under the terms of the Judges Act?
The minister has stated that there could not be many positions which would be lucrative enough to induce a judge to leave the bench. Possibly the best way to clear up that matter would be to ask the minister in his capacity of Acting Secretary of State for External Affairs what salary and allowances Mr. Justice Davis will get if he goes to Washington, and what salary and allowances he will get if he goes to London?


Alexander Malcolm Nicholson: How much in Australia?


John George Diefenbaker: He is not going to Australia. I do not want to be unfair, but this is one of the few cases where parliament is being asked to pass a specific section for the relief of a specific person. We have these relief bills that come down from the senate, but this is a relief section for an individual case. If there is to be a reward for diplomatic service, bring it in under the appropriate legislation and make available to men who go into the diplomatic service security and certainty after having given years of service to their country. With that I would have no disagreement, but what I do disagree with is the taking of a backdoor method by section 27 to do what the government apparently is not prepared to do for the vast body of men and women who serve in the diplomatic service and who should be assured of security after having given years of service to this country.
As the hon. member for Eglinton has pointed out, we have it on the word of the minister that this is to cover one case, and yet it provides that any person after this date who lias been a member of the bench and who is appointed to public office shall be able to take advantage of this section. I think the minister is doubtful as to the propriety of this section. He admitted frankly that he would have found it impossible to put in section 27 if it had not been that fifteen years ago a similar course was taken covering a semijudicial position. Even at this late stage I suggest to the minister that he withdraw this section. It has no place in the Judges Act. The Judges Act is to assure security for judges, not for those who may take temporary appointments to the bench and then, when a more lucrative position offers, leave the bench and, after a period of years, have all the advantages they would have if they had remained on the bench.
I do not want to repeat the arguments, but I think this should be considered having regard to the attitude that has been taken in this

house toward the whole question of judges' salaries. Some of my hon. friends spoke in opposition to increasing those salaries, although they did not vote against the increase. They must have become convinced of the necessity of increasing these salaries. They did not adopt the only way there is to show their opposition; that is by voting against the increase. High tributes have been paid to the bench, but I ask the minister if he will not consider withdrawing this one section that is objected to, a section which he admits himself has no place in the Judges Act.


George Hugh Castleden: According to the minister, section 27 has been included to cover a particular case or two, and I think therein lies the greatest danger. This will create a precedent and I am opposing this section because of its possible effect. It seems to me that the minister would be the first one to admit that respect for our courts and respect for the law is one of the foundations of democratic operations in any country. The present practice of making political appointments to the bench perhaps cannot be helped, and that is one of the weakest points in our present set-up. This cannot help but lower the respect of the Canadian people for law. I believe that appointments of this kind, moving a man to a position on the bench and then carrying over his pension benefits into another position, are apt to lead to a whole strata of personnel standing in specially privileged positions. That cannot be good, and that is why I am opposing it. If we want our courts to remain high above public reproach we must discourage, not encourage, this kind of thing, and I am astonished that the present Minister of Justice would bring in legislation which he must know cannot but have that effect in the end. The principle of carrying a pension for one position over into another and maintaining the benefits of one pension while the individual is operating in another position constitutes a privilege which cannot be applicable throughout our system to-day. In this case I agree with the hon. member for Lake Centre that the minister would be well advised to withdraw section 27 at this time. In doing that, he would have the support of this committee, and, would, I think, reflect credit on the position he holds.
Mr. ST. LAURENT: I cannot admit all that has been said. This is not an essential part of the Judges Act. I might suggest that it stand, that we deal with the other sections, and that we might take it up again later. If hon. gentlemen will reflect upon it I think they will come to the conclusion that more has been said to-night than the facts justify. This

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is not something which is being done for someone who has chosen this career, and I should not like my silence to mean that the Department of External Affairs was responsible for or agreed with these rumours of such and such a post being intended for the gentleman in question. There should not be taken from my attitude any affirmation or denial, because it is not a matter to which any degree of consideration has been given up to the present time. Further, I am not in a position to say more as to what are the allowances and remunerations of ambassadors than appears from the estimates which are before the house. The highest item there is $10,000, and there are certain living or entertainment allowances in addition, but I am not in a position to say what they are.
One non. gentleman has said 'that this carrying of pension rights from one position to another is something Which is most unusual. I must disagree. It is something that is most usual. There is being considered at the present time by the governments of the united nations certain provisions whereby those who were attracted from their national public services to the service of the united nations may have their acquired pension rights transferred; and we ourselves are considering with the provinces a system whereby a transfer of civil servants from a province to the federal field, or vice versa, can be done without prejudicing the pension rights that would then be in existence. Therefore I must disagree with much that has been said. But I concede at once that this is not an essential part of the bill; and if it were the pleasure of the committee to allow it to stand, proceed with the other sections, report progress, and then come back to it after I have had time to confer with my colleagues, that might be advisable.


Mr. ROSS (Souris):: Do I understand that the minister is going to let this section stand for consideration?
Mr. ST. LAURENT: I was going to ask permission to allow this section to stand, to go on with the rest of the bill, to report progress, giving me an opportunity to confer with my colleagues before we take the section up again.


James Arthur Ross: And it will be dealt with at a later stage?
Mr. ST. LAURENT: Yes.


James Arthur Ross: I think this section is a very bad precedent. I have not been impressed at all with the argument of the minister that this is like a case which happened in 1931, because the chairmanship of
the railway commission has always been a judicial appointment, one which has been recognized to require some legal training. It would seem that the government are not prepared to bring in legislation which will grant pensions to their diplomatic servants. As has been pointed out, this should not be done by back-door methods. It is not a matter of personalities; a principle is at stake; and I had in mind to move that the section be deleted, until the minister's suggestion to have it stand over and that he is going to discuss it with his colleagues. Upon that understanding, 1 will not move at this time that it be deleted. That is what I understood the * minister said would be done.
Air. ST. LAURENT: That is the suggestion I am putting before the committee if the committee will agree to it.
Section stands.
Sections 28 and 29 agreed to.
On section 30-Judge found incapacitated or disabled.


Alexander Malcolm Nicholson: Would the minister state what has been the experience regarding the retirement of pensioners, how many judges are now employed who are over seventy-five years of age, and how many have been removed for any reason in, say the past twenty years? Do judges on reaching seventy-five decide that they have served long enough and offer their resignations, or what procedure is followed when they arrive at that age in deciding whether or not they should continue for a longer period?
Mr. ST. LAURENT: The judges of the superior courts cannot be removed. The judges of the county or district courts retire at the age of seventy-five.


Alexander Malcolm Nicholson: Automatically?
Mr. ST. LAURENT: The judges of the federal courts have been, since 1927, retired at the age of seventy-five. As to the judges of the high courts of the provinces, the establishment of a retiring age provision would require an amendment to the constitution, and with respect to that I have been corresponding for a long time with the provincial attorneys general. The last attempt was a letter written on my behalf by the deputy minister just before I left for the London meeting of the united nations, asking the attorneys general to give the matter consideration and be prepared to discuss it when they came back for some meeting of the dominion-provincial conference. When they did come
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back, at least one of them told me not to raise the question, because he would oppose the proposal and the discussion we would have on it might prejudice other discussions we were having. So the position at the present time is that there is no immediate prospect of an amendment to the constitution being obtained under which judges could be retired on reaching a stated age.


John George Diefenbaker: .Where there is a judge of a superior court who deliberately, and in the face of a number of contrary decisions of the court of appeal or of other superior courts, continues to hand down judgments adverse to the decisions of the superior courts, what course does the minister follow with a view to bringing to that judge's attention his failures and his refusal to carry out the law?
Mr. ST. LAURENT: The Minister of Justice minds his own business. Since the administration of justice is within the exclusive jurisdiction of the province, and since he has only the recommendation of appointments, he takes it for granted that the judges who are appointed and paid by the federal authority are performing their duties in a manner which is satisfactory to the attorney general of the province until that attorney general makes some representations to him. In fact it has come to my notice that in fact certain judges were not fulfilling the duties for which they had been appointed. I have had correspondence asking to have that confirmed to me by proper authority and I have not had it confirmed. I have a section in this bill by which, if it is passed, parliament will make it my duty to take some action.


John George Diefenbaker: What is the section?
Mr. ST. LAURENT: Section 35. With respect to the quality of judgments rendered, the Minister of Justice can exercise no action beyond proposing an impeachment to the houses of parliament. That is the only way in which judges can be removed. If there is, in the remarks of the hon. gentleman, as I suspect there is, the implication that it is a judge of the province of Quebec who is not conforming with jurispudence set by higher courts, I would point out to him that the principle of stare decisis does not apply in the province of Quebec and that the judges are not bound in theory by the decisions of higher courts. It is no part of the judge's legal duty to comply with a decision of a higher court if he honestly believes it to be wrong. Decisions of higher courts do not make the law in the province of Quebec.


Grote Stirling: On how many occasions has action had to be taken by a minister of justice over the last few years under the powers contained in this clause? I see that the clause contains no change in substance from the act at present in existence.
Mr. ST. LAURENT: The only action I know of is that of pointing out to a judge that it might be necessary, if he did not ftgree that his condition was such that he should not continue on the bench, to have a commission appointed to inquire. I will not venture to say on how many occasions; there are not very many, but on a few occasions that has been done and has resulted in the judge saying that he did not contest the suggestion that it would be desirable for him to retire, and tendering his resignation.


[Stage Direction]
Section agreed to.
Section 30 agreed to.
On section 31-County court judge or circuit court judge removal for misbehaviour, incapacity or inability.
Eric Bowness McKay: This has to do with the removal of county or circuit court judges for misbehaviour or for inability and incapacity. Would the minister make a statement as to what he considers to be misbehaviour on the part of a judge of a county or circuit court?
Mr. ST. LAURENT: I would not. I think that is a matter upon which the good sense and judgment of individuals can differ, and I have not had called to my attention, in the years I have been in the office of Minister of Justice, conduct which would amount to misbehaviour requiring removal.


Eric Bowness McKay: In other words, the minister does not interpret misbehaviour here as we would in a normal court of law. I believe the suggestion was made that it is misbehaviour in so far as the administration of law is concerned.
Mr. ST. LAURENT: Yes, the kind of misbehaviour which would make it improper for the gentleman to continue in the exercise of judicial functions.


[Stage Direction]
Section agreed to.
Sections 32 to 34 inclusive agreed to.
On section 35-Leave of absence from judicial duties.
Howard Charles Green: I understood the minister to say that this section places some responsibility on the minister in certain cases. It does not appear to do so. What was the section to which the minister referred?

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Mr. ST. LAURENT: I would interpret it as placing a responsibility on the minister. Appointments are made by the federal authority. Payment is made for services that are supposed to be rendered, and cases have come to my notice, not officially but in fact as an individual, where judges, without obtaining leave of absence, have not been performing their judicial duties for a certain length of time and nevertheless have been in receipt of their judicial salaries. Representations have been made by lawyers to that effect, and I have told them that the representations should come to me through the attorneys general. At least in one instance I have transmitted to the attorney general the representations that have been made and asked him whether in his view the facts represented required any intervention by the Minister of Justice, and I have received no statement that they did. This clause is as follows:
No judge of a superior or county court shall he granted leave of absence from his judicial duties for a period in excess of thirty days except with the approval of the governor in council, and whenever such leave of absence is granted, the Minister of Justice shall forthwith notify the chief justice, if any, of the court and the attorney general of the province accordingly. If it appears to the chief justice of a superior court of a province that a judge of his court is absent from his judicial duties for a period in excess of thirty days, without leave of the governor in council, he shall report such absence to the Minister of Justice.
If there is leave he will receive notice from the Minister of Justice that leave has been granted. If he has not received notice and finds that one of his judges is in fact absent for more than thirty days, he shall notify the Minister of Justice; and whenever a judge of a superior or county court is absent for a period in excess of thirty days he shall report such absence and the reasons therefor to the Minister of Justice. If information of this kind comes in this way to the Minister of Justice, I shall feel while I am Minister of Justice, that it is my duty to notify the department which makes the monthly payments that the judge is absent without leave.


Howard Charles Green: 



A.W.O.L.

[Stage Direction]
Mr. ST. LAURENT: Well, I know of cases where for many months, without having obtained leave of absence, members of the bench have not been performing their judicial functions. I do not think it is proper that that should continue.
John Ritchie MacNicol: It certainly is not.
Mr. ST. LAURENT: I do not wish to be looked upon as meddlesome, but if there is
some kind of procedure whereby that becomes officially known to the Minister of Justice, I think he should take some action.


Howard Charles Green: I understood the minister to say a few moments ago that if a judge was not performing his duties properly the minister was given some power to intervene by this section 35. Obviously that is not correct, because this section refers only to absences.
Mr. ST. LAURENT: Yes.


Howard Charles Green: The heading is "Absence from judicial duties", and the marginal notes for each subsection refer also to absences; therefore the Minister of Justice has absolutely no power except in the case of absence from duty.
Mr. ST. LAURENT: I do not think it would be constitutional for this parliament to give the Minister of Justice authority over the administration of justice by the provincial judges. The administration of justice is exclusively within the jurisdiction of the provincial authorities, but because we appoint the judges and pay them we are certainly entitled to refuse to pay them if they are not on the job.


Howard Charles Green: The minister will remember that he made his statement in response to a question from the hon. member for Lake Centre who intimated that some judge had not been performing his duties in the manner in which they should have been performed. I take it now that the minister did not mean to go that far.
Mr. ST. LAURENT: No. With respect to that, I do not think this parliament could give me jurisdiction unless the situation became such that it was proper to propose an address to both houses of parliament praying for the removal of the judge from the bench.


Alfred Johnson Brooks: Does the minister know of any cases where judges' salaries have been refused for absence without leave?
Mr. ST. LAURENT: No, I do not, but I think that with this it will be my duty to notify the treasury officials that a gentleman is absent without having obtained leave of the governor in council.


Alfred Johnson Brooks: I entirely agree that the salary should not be paid if he is absent without leave.


Grote Stirling: This section does not include the statement that the minister's actions shall be that of referring that matter to the treasury. For instance, take the third section of the bill. The question occurs to me, what happens if the judge of a superior or a county court refrains from giving that notice, takes no notice of these sections?
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Mr. ST. LAURENT: If there is a chief justice we put a duty upon him. I do not think we can put a duty upon the attorney general of the province. I think all we can do is to provide the attorney general of a province with information, but I do not think this parliament could say that the attorney general of a province shall do such and so. He is not subject to our jurisdiction. If there is a chief justice I think we can say to him that he shall give us notice of things which come to his knowledge. All we can do with respect to the judges who have no chief justice is to impose that duty upon them. If they do not carry it out and flout the duty put upon them by parliament the thing may become grave enough to justify an address for removal or it may, in the case of a county or a district court judge, amount to the kind of misbehaviour which would call for the application of section 31.


Grote Stirling: What I mean is: if under subsection 3 the judge in question refrains from applying for permission to be absent, just goes away, does the minister expect that a common informer will inform him of the fact that the judge is absent, or does he wait until it is brought to his attention perhaps weeks, or a month after?
Mr. ST. LAURENT: I would not say it would be a common informer, but these things do become known. I tried to put something in here which would take care of what appeared to me to be an abuse. That was as far as I felt I could go at this time. I think the clause does indicate, if it is passed by parliament, that parliament wants the Minister of Justice to see to it that gentlemen who are absent without leave are not paid. If it is passed I am going to try and carry out that intention.


Stanley Howard Knowles: Does the section also give the minister power to do something about the pension rights of judges who are absent without leave?
Mr. ST. LAURENT: The pension is not a matter of right; under this act the pension is something which may be granted, but there is no obligation imposed upon the governor in council to grant it.


Stanley Howard Knowles: It may be denied in such cases.
Mr. ST. LAURENT: In a case which would be such that a minister of justice would feel that he would have the support of the House of Commons in so doing, he might recommend that the pension be denied. I think whoever is in the office of minister of justice will wish to carry out the responsibility of his

office in a manner which will satisfy the public that he is doing it. I have been concerned, and I did not feel that there was in the former act that which authorized me to do anything until I received a complaint from a provincial authority. If there is this section I can feel that parliament wants me to try to see if there are or are not any of the judges paid out of moneys appropriated under our statute who are absent without having obtained leave of absence.


Alfred Johnson Brooks: What official jurisdiction, if any, has the chief justice of a province over the county court judges?
Mr. ST. LAURENT: I do not think he has any.


Alfred Johnson Brooks: If he reported a county court judge for being absent without leave, would he not be considered as not minding his own business?
Mr. ST. LAURENT: It is only with respect to his court that he is required to report absences.


Alfred Johnson Brooks: I beg your pardon; I
thought section 35 included county court judges as well.
Mr. ST. LAURENT: No; it is only the judges of his court.


Howard Charles Green: Does this section mean that whenever a judge in Canada wants to be absent from his duties for over thirty days he must apply to the Minister of Justice for leave of absence?
Mr. ST. LAURENT: It does.


Howard Charles Green: This section does not make it clear that he must apply to the Minister of Justice.
Mr. ST. LAURENT:	No; but he must
obtain leave of absence from the governor in council. He may address his application through the Minister of Justice or address it to the clerk of the privy council. He may take whatever procedure he wishes, but he cannot be absent for more than thirty days without having obtained leave. These applications for leave usually come through the Department of Justice, and the Minister of Justice communicates with the attorney general of the province and usually also with the chief justice of the court of which the gentleman making the application is a judge if he belongs to a court of which there is a chief justice.


Howard Charles Green: Is it necessary that each application for leave of absence must come before the governor in council? Surely that is unnecessary. Could the Minister of Justice not make the decision himself? What about

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the summer vacations? The way this section is worded the judge might have to get leave of absence every summer. The courts are closed for two months in the summer?
Mr. ST. LAURENT: If he is going to be absent from judicial duties, which he has to perform, for a period of more than thirty days I think he should have leave of absence, and I think it is of sufficient importance to require the formality of an order in council. Where a judge has no judicial duties to perform during a period of thirty days I would not imagine that if he does not perform any he is absent from his judicial duties. I do not know the system in other provinces, but I know there are judges in attendance in my province every week during the long vacation and a list is drawn up by the chief justice of the court as to who shall attend on certain dates.


Howard Charles Green: What is the practice now with regard to obtaining leave of absence?
Mr. ST. LAURENT: The practice is that the judge writes the Department of Justice applying for leave, and stating for what reasons the application is made. The department communicates with the attorney general and the chief justice to ascertain if the application can be granted without interfering unduly with the administration of Justice. If it can be granted and there appear to be proper reasons, a recommendation is made to the governor in council; an order in council is passed, and the applicant is notified of its passage.


George Russell Boucher: Following the minister's explanation, I can see the point in connection with high court judges; but take the position of a county court judge who is not responsible to the chief justice, who sits alone in his county or has perhaps one or possibly two judges to assist him. I believe it is the custom for such judges, during long vacation, to set one certain day a week, or every two weeks as the case may be, when they will hear applications in chambers and that sort of thing. But I can see that it would be a departure from the present practice to require a county or district court judge to have an order in council passed granting him permission to stay away from his court for more than thirty days, because it may or may not be possible to make arrangements for a judge to take his place during that time. If he had a deputy, of course, particular circumstances may arise which would cause him to be away for more than thirty days, and he could make provision accordingly. I wonder if the minister feels that this section of the
act is practical in its application to county or district court judges as well as high court judges.
Mr. ST. LAURENT: I feel that it is; but if parliament will refuse to pass this section I shall be relieved, because then I shall feel that until I get some official complaint from a provincial authority, parliament does not intend me to have any responsibility. That is the situation. I think I should have some responsibility, but if parliament feels otherwise I shall be relieved.


John George Diefenbaker: I have not said anything about this section, but as a matter of fact I think it is necessary, and I do -not think it applies to any one province more than any other. Personally I think consideration should be given to the exception of the period of vacation, because as it is worded at the present time, I feel that as far as a county court judge is concerned, during the period of vacation-


Alexander Malcolm Nicholson: How long is the
vacation?


John George Diefenbaker: It begins around July 1. or July 6, normally, and ends about September 6.


Mr. BERTRAND (Laurier):: September 2 in Montreal.


John George Diefenbaker: Yes, about September 1. As the section is worded now, it would appear to prevent that sort of thing, but I am sure that even if the minister had power under this section, it would not be exercised during the period of vacation, because the judicial duties to be performed would be of such a nature as would not require the presence of the average county court judge.
Mr. ST. LAURENT: I discussed the matter of the judicial vacation with the law officers when the section was being drawn, and they told) me that with this language they were satisfied one was not absent from his judicial duties if no judicial duties were being left unfulfilled during the time of the absence; that in order to be absent from his judicial duties it had to be neglecting the accomplishment of things that arose for accomplishment.


Mr. SMITH (Calgary West):: There is nothing geographical in it; I agree entirely.
Mr. ST. LAURENT: No; it is being absent from his judicial duties, and I think that expression implies being away and neglecting things that should be done.


[Stage Direction]
Section agreed to.
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[Stage Direction]
On section 36-Judge to devote himself exclusively to judicial duties.
Arthur Leroy Smith: I wonder if in the drafting of this section some inquiry was made as to whether or not it barred a judge from being a shareholder in a company. You will notice these words:
No judge shall, either directly or indirectly, as director or manager of any corporation, company or firm, or in any other manner whatever . . .
I was wondering if consideration had been given to whether a man simply holding shares in a company might not be held to be engaged in business.
Mr. ST. LAURENT: It has never been so construed. There is a special provision with respect to members of parliament holding shares in the Canadian Pacific Railway Company. That does not disqualify one from being a member of parliament, though the C.P.R. may be contracting with the dominion government several times a day. I think this also is a clause the language of which has been fixed by the experience of a good many years and that the gentlemen who go on the bench realize what it means and what it prevents them from continuing to do.


Arthur Leroy Smith: It is active mgagement.
Mr. ST. LAURENT: Yes.


[Stage Direction]
Section agreed to.
On section 37-Not to act as commissioner or arbitrator without consent of governor in council.
John George Diefenbaker: I should like to say a few words with regard to sections 37 and 38. This has to do with judges acting on royal commissions. I am not going to repeat any of the contentions I have advanced on previous occasions with respect to this question. Over and over again I have stated that in my opinion one of the most necessary qualifications for members of the bench is that they be free from any suggestion, by reason of being on a royal commission, of participation in politics or anything connected therewith. Over and over again it has been emphasized, and in reading the evidence of the judges who appeared in 1928 before a committee of parliament with regard to salaries of judges I see the contention is advanced that there is no salary paid in connection with this work, and that is perfectly true. But in recent years royal commissions have been appointed in increasing numbers and at very considerable cost to this country. Let me mention a few of the royal commissions that have operated since the beginning of the war in 1939. There was the royal commission on cooperatives, 
which cost $137,659; the royal commission on the taxation of annuities, which cost $26,700; the Hong Kong inquiry, costing $27,400; the Halifax inquiry, costing $10,100; the Kellock-Taschereau commission, which up to June 12 had cost $5,011. Then other royal commissions in the Department of Labour cost some $85,000. The royal commission on coal up to June 15 cost $189,000, and besides these commissions there have been several others of lesser importance.
Some objection was taken on the last occasion I referred to this matter when I said that payments of large living allowances to judges is not in keeping with the maintenance of the independence of the bench. My other reason for opposing the appointment of judges to royal commissions into which political considerations enter are exemplified in the Hong Kong inquiry, which was presided over by the former chief justice of the Supreme Court of Canada, Sir Lyman Duff. As a result of his decisions in that matter, and the conclusions to which he came, strong criticisms were made in the house which, however great his reputation was, in the minds of certain people did detract from the great contribution he has made to this country.
Only within the last few months we have had in this country the Kellock-Taschereau commission. I am not going to go into any of the decisions made by that commission, or the report it presented. But I say that never before in the history of this country did a royal commission spend the time this royal commission did, as set forth in section XI, in answering criticisms made in and outside parliament regarding the methods adopted by this particular commission.
This, to me, is a most unusual report- and I am referring only to section XI. Because of that criticism, the eminent judges who composed the commission have set out in a matter of forty pages an explanation of the course they followed, enunciating the law on the subject, and more or less advancing their defence to the criticism raised. I say this places the judges in an impossible position.
Here we have two judges, eminent members of the supreme court, presiding over a commission. I am not at this time entering into the findings of the commission; but I must point out that these judges found it necessary, when reporting on what they ascertained as a result of their investigation, to include forty or fifty pages in which they set out what they did, upheld what they did, and in which they say to parliament and to the people as a whole that what they did they had a right to do, and were above anybody in this land.

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I point out only one page in that connection, where one finds a most striking phrase. This is a most striking page-I refer to page 6S3,- where it sets out the status of the commission. These are the words used:
In this section we have dealt with various matters with respect to which there would appear to have been misunderstanding on the part of some.
In other words, here we have our judges defending themselves for what they did as members of a royal commission, and thereby to that extent answering criticisms which have been made. I think that is a dangerous position for our judiciary to be placed in.
What do they finally conclude? Having regard to the criticism that has taken place in parliament, these judges as commissioners take it upon themselves to explain the law. They point out that they took hearsay evidence, and that they took secondary evidence in the investigation. They said that such things could not have been done in a court of law. but that they were supreme as a royal commission. They went on to say this:
In the first place such a commission is a primary institution, though of a temporary kind, and is upon a formal equality with the other institutions of the state, such as the courts, houses of parliament and privy council. Reference may be made to Clokie & Robinson "Royal Commissions of Inquiry" (1937) pp. 150, 151.
In other words, they set forth there the view that a royal commission is the equal of any other institution in this country. And if it is the equal, it is above criticism. In support of their stand they quote Clokie & Robinson, the book I have mentioned. If one accepts that authority, then it is interesting to turn over a few pages, to pages 171 and 172, where one finds support for the stand which we on this side of the house have taken regarding the whole matter of secrecy. It says this:
The most unusual procedure has been that of the "secret" commission. Only two of these were established in the nineteenth century, and both were concerned essentially with the same subject, the conduct of the Princess of Wales in the first years of the century. The reasons for secrecv can easily be understood, though it might' be admitted that this was a bad procedure.
Then it goes on to point out that secrecy in royal commissions and in the hearing of royal commissions is a dangerous proceeding, and has never been followed in the courts since the days of Princess Caroline between 1807 and 1820. I mention this in passing, because this book has been cited as an authority.
Now I point out this doctrine, as it is set out in the report:
While it is sitting, and until its existence terminates, it is not subordinate to any body. It is independent in every sense. It is not subject to, or under the control of the courts. Its function is to conduct the investigation committed to it and to make its report to the governor in council.
That comes dangerously close, to a commission of judges placing themselves in a position where, that doctrine not being accepted, their position as judges is inconsistent with their position as commissioners. Then it goes on to say this:
The commission's findings are as authoritative as those of any court, and, as it is the sole judge of its own procedure-
And so on.
In other words, "whoever would criticize has no right to criticize, whatever procedure we may have adopted." Then it says this:
-and may receive evidence of any kind in its discretion, it is sometimes in a better position than a court subject to strict rules as to the admissibility of evidence, to ascertain facts.
Then finally, because, in the Doctor Shugar case the courts of the land found that there was no evidence against 'him, the royal commission were prepared to accept that finding, and they end up their report in this way:
There is, however, one power a commission does not possess. That is the power to enforce its findings. If it makes findings upon which the proper authorities conclude that certain persons should be punished, those authorities must resort to the courts or tribunals which alone possess the power to punish. Whatever the view there taken-
In other words, whatever view is taken in the courts.

the findings of the commission arrived at under its own procedure, and on the evidence before it, are not affected and remain valid.
That is an unusual viewpoint for a royal commission to express. In other words, they go on to set out the Shugar case. After the courts had found that thi3 man had not committed any offence, the royal commission comes along and says that he did in fact commit the offence of which 'the courts said he was innocent.
Mr. ST. LAURENT: Oh, no.


John George Diefenbaker: I do not bring this up for the purpose of dealing with the findings of the commission because they will be dealt with before this session is over. I bring it up for the purpose of using these pages, and I could1 quote any number of them-they state that, while there has been criticism of the interrogations, they followed the system they had in mind to follow-to show that a royal commission will set up as its defence its
Judges Act

responsibility to no body, its equality with parliament and every other institution in the state. Such procedure is bound to bring the judiciary into a position where their conduct will be discussed in the press of this country and in parliament itself.
I know of no better example in support of my contention than to say that, except in regard to those matters which have no political import, judges ought not to sit on royal commissions. There have been examples in my own province where royal commissions have been set up for the purpose of investigating political charges; and before the commission had made its report some were saying that the commission was biased on one side, while others were saying that it was biased on the other. The result was an inference of the violability of the judiciary.
I plead with the minister to reconsider this matter, and I find myself quoting Clokie & Robinson which is resorted to as an authority. In that book it says that royal commissions in Britain have gradually been reduced to a minimum, the reason being the very fact I have endeavoured to place before the committee this evening.
All of us have regard for the integrity of the bench, for their inviolability, for their entire detachment from any considerations that separate us on one side or the other side of the house. But I suggest when, as in the case of the present commission report to which I have referred, judges find it necessary to devote forty pages to explaining what they did and then finally to avow their independence of all regular procedure, that very fact admits the possibility of attacks on the judiciary which should never be possible in our country.
I remember quite well when my right hon. friend was president of the Canadian Bar association. With his distinguished record as a lawyer, he came before the bar association and in one speech dealt with the question of the independence of the judiciary, the necessity of maintaining that independence and the necessity of maintaining the support of public opinion in the integrity and independence of the judiciary. I ask him to give consideration once more to removing any suggestion that the bench should participate in any way in royal commissions other than those dealing, with economic matters'not :n dispute and not subject to political considerations.
I am not going to refer to the amounts paid to various judges because I have referred to that on another occasion. We have now made the judges of this country independent financially. We have assured them of a fair and reasonable return in order to mobilize the 	.
best brains available for the bench, men of integrity and ability, men who have given leadership before the bar. We have assured them that, after their service to the state, they and their widows who survive them will be protected) and will be able to live in security.
I suggest that now is the time to do away with the continuance of a system that has not been restricted to any one political party; both parties have utilized the royal commission system and now is the time to take this step. The bench has been made financially independent, and I suggest that it should now be made independent in every way from any consideration other than a purely judicial function.
Mr. ST. LAURENT: I hope it may not often be necessary to resort to judges for royal commissions, but there are certain situations where unfortunately it is necessary to do so. When a situation such as that which developed at the beginning of this year overtakes a country I think it calls for a commission of exceptionally high repute. The only regret I have in connection with the Taschereau-Kellock commission is that the circumstances made it necessary.
I appreciate my hon. friend's viewpoint and I have said many of the things that he has said to-night. I think we are all in agreement that, when it can be avoided, it should be avoided. But this instance was one of grave consequence to the country. Opinions may differ as to whether the course adopted by the government was the wise one, but I remain of the opinion that it was the proper thing to do.
These honoured judges agreed reluctantly to assume this most onerous task. I say that they did that without any remuneration. They performed that task in Ottawa where they were both residing, and there has not been paid even five cents in expenses to them to perform a task which unfortunately had to be performed. But they did perform it and, I think, rendered a genuine service to the people of this country.
I think all lawyers share the views of the hon. member for Lake Centre as to the desirability of having judges do nothing but attend to their ordinary judicial duties. Because of special conditions during the war, it became necessary to ask them to take on duties which would not normally fall to their lot. There will still be occasions when commissions will be necessary, and this was one of the reasons I gave to the house when asking for an additional judge in the exchequer court. With four judges in that court, I hope that in more

Judges Act
cases than heretofore it will be possible to go to that court rather than to take from their ordinary duties judges of the provincial courts.
We have to face facts, and the fact is that we have not yet in this country another class of citizen which can be called upon to head these commissions and leave with the public the belief that they are being handled in the best possible manner in which they could be handled by anyone in the state. That may not always remain the situation. There are gentlemen now in universities and in other walks of life who are sufficiently known to their fellow citizens to have their situation in life give that guarantee, which is necessary when one of these important public duties has to be fulfilled, that it is being fulfilled by the best men available for the purpose. I hope we are getting away from the extraordinary conditions of that period and that it will become ever less necessary to ask judges to perform those tasks. I can assure hon. members that they do not seek them. It is with reluctance that they agree to take on those duties. But we have been going through extraordinary times, which call for measures that are not ordinary.
With respect to the things which have been said about the royal commission, I do not want to have a debate here. If there is responsibility it is the responsibility of the government. The government asked1 these gentlemen to do this, and to do it as a service to the state. If it was wrong for them to do it, we, the members of the government, are the ones who should be held responsible. As far as they individually are concerned, I think they are entitled to both respect and thanks for the service they rendered.


Angus MacInnis: Perhaps only men learned in the law should take part in this discussion. But I do not believe that it is altogether a matter of the government's wish when a judge is put on a royal commission or on any other kind of commission. I understand that when the hon. member for Lake Centre was speaking he mentioned only royal commissions: he dealt with section 38 instead of section 37. I think we are being a little unrealistic when we mentally raise judges to a level a little more than human. I believe judges try to be impartial and that in the main they succeed in being impartial. But to expect us to believe that a man, who was in the thick of the conflicts of life to-day and is made a judge to-morrow, is going to drop all his prejudices and biases and never think of them again, is asking too much of human nature. He will certainly have prejudices and biases no matter what he does. The point I
was going to make, however, is that a judge has a certain position in our society not only with lawyers and those Who have to do with the courts, but with the public; and when the public wants a royal commission, generally, I think, it feels more satisfied that an impartial report will be made if a judge is at the head of that commission. You can make your other appointments as you like, and those appointees will be supposed to represent different factions or sections or classes, as the case may be, but if you do not put a judge as chairman of such commission you may have very great difficulty in finding another person who will be satisfactory to all concerned.
The hon. member for Lake Centre said that we should appoint judges on commissions only when there were no political factors involved.
I do not know what my hon. friend means by "political factors". It would be pretty difficult, in my opinion, to think of any subject which has not political implications. A person's politics is the sum total of his ideas on life, and that takes in everything. He may express his politics 'by labelling himself a Progressive Conservative, a Liberal, a Social Creditor or a C.C.F.'er, but his political viewpoint expresses his attitude-if you will- toward life.


Ernest Bertrand: His way of thinking.


Angus MacInnis: Correct, his way of thinking, his whole way of thinking. I think we should leave this section as it is. The Minister of Justice says he hopes that judges will not be required for royal commissions; but if the people of the country demand that they be put in these positions I think they have the right to require such appointments.
As I said, I hesitated to take a part in this particular phase of the discussion, but I believe that the people have a confidence in the impartiality of judges which they would not readily place in anyone else.


[Stage Direction]
Section agreed to.
On section 38-No extra remuneration.
John Oliver Probe: I have been listening now
for time to various learned lawyers, including the hon. member for Vancouver East-


John Ritchie MacNicol: He would have made a good one.


John Oliver Probe: -discuss the various sections of this bill. As is fairly well known to the committee, the members of the C.C.F. are opposed to the increase of one-third in the judges' salaries at the present time, in view of the fact that we have these very same
Judges Act

learned gentlemen acting in a capacity giving them the authority to refuse comparable remuneration to people in lesser walks of life. Of course we are given to understand that in the case of those lesser persons, when salaries go up we have inflation, but when judges' salaries go up we have a necessary adjustment to get the best possible brains of the country to act in our behalf.
We now have before the committee a section headed "extra remuneration". The purpose of this section as I see it-I refer in particular to subsection 3-is to make it possible by order in council for a judge, when acting in other than his usual capacity, as for example when he is sitting on a commission or acting as an arbitrator, to get certain extra remuneration, allowances and expenses which are not normally contained in this bill. We find, for instance, in this bill that under certain conditions judges get S10 a day living allowance and in certain others they get $6 a day, and I am quite sure that is ample. But our judiciary, and I believe the government, have been a little bit careless of their high reputations, in accepting expense allowances in excess of those which are normal and legitimate. I wish to call the attention of the committee to the auditor general's report for 1945. It seems to me that the situation which is outlined on page 41 of that report in connection with the public accounts for 1945 is one that is not conducive to holding either the judiciary or the government in a very favourable light in the eyes of considered public opinion. I wish to refer to this famous, or infamous, situation that is mentioned by the auditor general. I quote from page 41:
Mr. Justice G. B O'Connor of Edmonton is chairman of the wartime labour relations board, and Mr. Justice M. B. Archibald of Halifax is chairman of the national war labour board. Ottawa is headquarters of the boards. Order m council P.C. 80/5000 of June 29, 1944, accepts the following submission by the Minister of Labour:
"The undersigned has the honour to refer to orders in council P.C. 1895 and 1896 of March 16, 1944, appointing Mr. Justice G. B. O'Connor, chairman of the wartime labour relations board and to P.C. 1986 and 1987 appointing Mr. Justice M. B. Archibald, chairman of the national war labour board; and to report that while authority has been granted to pay the travelling and living expenses of the chairmen above referred to while absent from their places of residence, the undersigned-
That is the Minister of Labour, who is involved in some of these industrial disputes.
arranged with Messrs. Justice O'Connor and Archibald that Mrs. O'Connor and Mrs. Archibalds necessary living and travelling expenses while absent from their places of residence, while accompanying their husbands in the discharge of their duties, would be paid by the 
department. The undersigned, therefore, begs to recommend that authority be granted to pay the necessary living and travelling expenses of Mrs. O'Connor and Mrs. Archibald while away from their homes accompanying their husbands while they are discharging their duties as chairmen of the boards to which they have been appointed."
That is the end of the submission by the Minister of Labour. The auditor general goes on:
The order in council is silent as to the authority relied on for the ipaking. Attention is drawn to the provision for payment of expenses of Mesdames O'Connor and Archibald, as it is an exception from practice. In the fiscal year- Listen to the amounts.
[DOT]-$8,658.33 was paid to Judge O'Connor $6,150.51 to Judge Archibaldand


An hon. MEMBER:: What is the one cent for?


John Oliver Probe: That is likely an excise stamp.
-by way of travelling and living expenses, these sums include claims paid with respect to travelling and living expenses of Mrs. O'Connor and Mrs. Archibald when travelling from home to Ottawa, at Ottawa, and when travelling with their husbands to various points in Canada.
That is the end of the auditor general's report. If there has ever been an instance in which the integrity of the judiciary of this land as well as the integrity of the government has been in question, I submit it is to be found right there in the auditor general's report, because in the first place it appears that the governor in council, by four separate orders in council, made provision for the living and travelling expenses of these two justices in connection with their duties, but that, following that arrangement, the Minister of Labour made private arrangements, for which he had to secure the sanction of the governor in council, in other words the cabinet, to guarantee the travelling and living expenses of the wives of the two judges named.
I am no lawyer, and sometimes I thank heaven that I do not know anything about legal phraseology; but I know what justice is, and I do not hesitate to say here that these justices compromised themselves by accepting pay on behalf of their wives while they were working during war time for the people of Canada. I have nothing further to say. I am utterly and totally opposed to this Judges Act coming into operation at the end of this year, or being passed by this House of Commons, and I have here given one sufficient reason why I am opposed to the measure.


[Stage Direction]
Section agreed to.
On Section 39-What salary deemed to be where judge becomes eligible for annuity prior to January 1, 1947.

Supply-Mounted Police
Douglas King Hazen: Do the words in line 29 refer to the act of 1937?
Mr. ST. LAURENT: No, 1927.


Douglas King Hazen: 1927, rather.
Section agreed' to.
Sections 40 and 41 agreed to.
Progress reported.

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



ROYAL CANADIAN MOUNTED POLICE

[Stage Direction]
Sb8. General administration, $266,379.
Howard Charles Green: There is one question I should like to ask the minister. Last year I asked him whether or not there was any provision for a retired member of the forces to receive treatment in the hospitals of the Department of Veterans Affairs. His answer was that no such arrangement had been made, but that he would look into the possibility of some provision of that sort being arranged.
Another question had to do with some form of recognition for the men who served in the security guards under the mounted police. Apparently they had no badge or other recognition of that kind. The minister also promised that he would see what could be done along that line. Will he tell the committee to-night just what the position is with regard to these matters?
Right Hon. L. S. ST. LAURENT (Minister of Justice): There has been nothing done about that. The retired members of the Royal Canadian Mounted Police have their pensions but no other provisions are made for them than the payment of the pensions under the Pension Act.
The matter of providing badges for those who served as special constables was put before the commissioner. I did not get any recommendation for action in that regard.


Howard Charles Green: Would the minister take the matter up again with the commissioner? He will find the questions on pages 3477 and 3478 of last year's Hansard. On December 13 he said:
They get a certificate of service, and consideration will be given to the suggestion that they be given some form of decoration which they can wear on their tunics or coats.
Subsequent to that, on February 20, 1946, the Royal Northwest Mounted Police Veterans' association passed a resolution in Calgary asking for the provision of a suitable badge or decoration for those men who
served as security guards during the war under the control of the Royal Canadian Mounted Police. I think the request is a reasonable one, and I hope that the minister can arrange to have steps taken to meet it.
Mr. ST. LAURENT: I shall bring it again to the attention of the commissioner.


Angus MacInnis: I wish to say a few words on a subject about which it may be too late to do anything this year. During the hot weather it seems to me that the dress of the policemen on duty around the parliament buildings is about the hottest thing that a person could wear. Not only is it about the hottest thing that a person could wear, but these men have to wear it in about the hottest place that I know of, namely, the pavements around the parliament buildings. Has the department ever given any consideration to providing summer uniforms of some lighter and cooler material than those which the men now wear? In the winter time we provide them with heavy coats to protect them from the rigours of winter weather, but we do not provide light uniforms for summer when it is uncomfortable in any dress. If any one of us had to stand around these buildings on June 29, 30 and July 1 we would surely ask that something be done about it. I suggest to the minister that he draw this to the attention of the commissioner of the mounted police and perhaps something can be done about it.
Mr. ST. LAURENT: I may say to the hon. member that I have discussed it with the commissioner of the mounted police. There are eight men who wear this traditional uniform of the mounties. The information I received was that they were on duty for only two hours at a time. I got the impression that it would be with keen regret that a decision to do away with this picturesque uniform of the mounted police would be arrived at. The answer that was given to me was that there were three shifts with eight men in each shift and that they were required to be on duty for only two hours at a time. I felt that there would be reluctance at doing away with that uniform which I believe is probably one of the most famous in the world. If it is not one of the most famous in the world it is certainly the most famous on this continent.


Agar Rodney Adamson: The Eastman Kodak company would certainly protest.


Douglas Scott Harkness: When this item was up for discussion some few weeks ago there was a certain amount of attention given to the rate of remuneration of the mounted police.
42SC
Supply-Mounted Police

I am sorry to say I was not here at the time, but there are a few questions which I should like to ask. I became interested in this matter as a result of representations which I received during the past year from a considerable number of people who are interested in the welfare of the mounted police and the reputation which it has gained in the past and in maintaining that reputation. Whether rightly or wrongly they were of the opinion that the rate of remuneration received by these men was not such as was likely to maintain the high standards which the force has set in the past. I looked into the matter and I found the rates provided are as follows. I am not going to bother with the rates paid to officers and non-commissioned officers. I am going to talk chiefly about constables. So far as the rate of pay the officers receive is concerned, the deputy commissioner receives 84,500; the assistant commissioners, 83,600 each, the superintendent, 82,720 on appointment, rising to $3,120, and inspectors, $2,140, rising to $2,540.


John Ritchie MacNicol: How much do the officers get?


Douglas Scott Harkness: These are officers. The sub-inspectors come below that at $2,000 a piece. It seems to me that the responsibilities of the officers of the mounted police are considerably greater and contribute a great deal more to the welfare of this country than the officers of a considerable number of crown companies which have been formed in recent years, who receive a great deal more money. The officers of the mounted police are underpaid in comparison with people who are working for the crown in crown companies. However, the people about whom I wish to speak are the constables. A constable receives from $2.50 to $2.75 a day; a second-class constable, $2.25 a day; a third-class constable, $2 a day.
Mr. ST. LAURENT: The hon. member said that he was not here when the matter came up before. He is referring to the basic pay which is about only half of what they actually get.


Douglas Scott Harkness: I have the whole thing here, and I shall presently put it on the record. Sub-constables and trumpeters receive $1.25 on probation and $1.75 thereafter. AH these constables of various grades receive seventy-five cents a day as war duties pay, which brings them up to $2 for sub-constables and trumpeters to $3.50 for constables. They receive an allowance in lieu of quarters and rations, fuel, light, et cetera of $1.50 a day, which brings them up to rate of pay ranging from $3.50 a day to $4.75 for the highest.

Mr. ST. LAURENT: Single men.


Douglas Scott Harkness: These are single men, yes. The return which I received on this matter did not say what married men receive, except a ration allowance when occupying government quarters, but not in receipt of rations in kind. However, the questions I had to ask in that connection were these. First, how many sub-constables and trumpeters are there who receive this pay, and approximately how many are still on probation and therefore receiving $1.25 a day?
Mr. ST. LAURENT: There are none.


Douglas Scott Harkness: When men are taken into the force, how long do they remain on probation?
Mr. ST. LAURENT: They are third-class constables the first year, second-class constables the second year and first-class constables the third year.


Douglas Scott Harkness: You mean that no one is taken in as a sub-constable now, that- this class does not actually exist?
Mr. ST. LAURENT: The deputy commissioner informs me that they do not take them in now in that class.


Douglas Scott Harkness: Then my next question is, how many constables are there in each class, and what is the average length of time a man remains in each grade? I understand the minister to say they stay in each grade for one year until they become first-class constables?
Mr. ST. LAURENT: Yes.


Douglas Scott Harkness: I wonder if we could get the information as to the number of constables in each of these grades.
Mr. ST. LAURENT: First-class constables, 1,299; second-class constables, 51; third-class constables, 134. That is as of May 31, 1946.


Douglas Scott Harkness: Are all personnel in receipt of war duties pay?
Mr. ST. LAURENT: The answer is yes.


Douglas Scott Harkness: How much longer is this to be continued? Is there any idea that it will come to an end with the end of the present extension of the War Measures Act; is it to be incorporated into the regular rates of pay, or is it to cease altogether?
Mr. ST. LAURENT: It has been extended to March 31, 1947, when some decision will have to be made as to the future.


Douglas Scott Harkness: I should like to suggest that the war duties pay, or a fairly large proportion of it, should be included in the basic

Supply-Mounted Police
rate of pay for the force, since that basic rate, at any rate for certain members of the force, is now less than the basic rate of pay for privates or the equivalent in the three services, taking into consideration that both are provided with quarters, uniforms and so on. As a result, I believe it is necessary to increase the basic rate of pay. I should like to make it clear that I am not finding any particular fault with the rate of pay received by first-class constables, when you include the war duties pay, the allowance in lieu of rations, and so forth. If that were not included; if there had been any large number of people in the grades of second and third-class constables, and particularly subconstables, I think a fair amount of criticism would have been justified.
Mr. ST. LAURENT: The numbers may, of [DOT] course, increase. Recruiting has been difficult during the whole war period and since the end of the war. After two years of satisfactory service, one automatically becomes a first-class constable, and that explains why practically all the constables at this time are in that grade. However, the hon. member is saying something I shall be glad to have on record, because it would be intolerable to remove the war duties supplement at the present time and go back to nothing better than the basic pay.


Douglas Scott Harkness: Yes.
Mr. ST. LAURENT: Just to complete the answer, the living allowance for a single constable is $1.50 a day, for a married constable, $2.25.


Douglas Scott Harkness: Since I understand from the minister that men are advanced fairly rapidly from third-class constables to second-class constable and on to first-class constable, I think it is fairly satisfactory.
There is another matter I should like to mention in connection with the mounted police, however, and that is the position of men who joined* the services but did not join the first Canadian provost corps. The situation is that a considerable number of men, several of whom I knew, had the expiration of their term of enlistment occur during the course of the war. Instead of rejoining the mounted police or joining the provost corps, they joined the army, the navy or the air force. In many cases they got commissions, and quite a number of them did very well. These men have now returned and in at least some instances they have not been taken back into the mounted police, or if they have been taken back the time they spent in the service is not counted toward their pension, nor is it counted as far as seniority is concerned.
As I say, some of these men were refused readmittance to the mounted police. In this country we have what is called a Reemployment in Civil Life Act, or something along that line, which requires a civilian employer whose employees joined the services to reengage those men on terms which do not place them at a disadvantage from the point of view of seniority or pay as compared with men who did not join the services. In this police force of the dominion government that rule is being flagrantly broken. Men are not being granted their pension rights or their seniority rights, and in some cases they are being refused reemployment. I think it is high time the government made an announcement that they would reemploy any man who served in the mounted* police, who is still fit and wishes to be reemployed. The minister has said they are experiencing difficulty in engaging men. I have some letters here from men who are in this position. They were refused reentry into the mounted police because they refused to reenlist but preferred to join the services, and did not join the provost corps. Only last night I was talking to a man who was my second in command overseas. His brother was a sergeant in the mounted police. He served in the artillery overseas and rose to be a major. He has come back and has reenlisted with the mounted police. At present he is a corporal, and does not really know-it has never been made plain to him- his situation in regard to pension, seniority rights or anything else. A little while ago I noticed the minister shake his head when I mentioned these things, but I know these cases exist. I have been in touch with men, and had communication with them. I think it is time that the whole matter was clarified and these men knew where they stood, and particularly that they should get as good a deal as our legislation provides that civilian employers must give men who left their service to join the armed* forces.
Mr. ST. LAURENT: These men to whom the hon. member refers are not men who left the Royal Canadian Mounted Police to join the armed forces. They are men who left the police force at the expiry of their term of engagement. Their connection with the police force was completely severed. When they come back, if it is possible to take them on, the officers of the force are always sympathetic. The force would not have the reputation it enjoys if its officers did not treat the men in a proper manner, or did not treat them in a manner which would win the men's confidence, devotion and affection. The same treatment is being afforded all those who were with the force and wish to return to it.
Supply-Mounted Police

There are some cases where men who left had not shown themselves to be the kind who would be apt to get promotion. It has been promotion in the service that has been its lifeblood. The commissioner and his officers want to have in the service the kind of men who will have reasonable hope of continually going up to a higher rank.
I have always been reluctant to say or to do anything to interfere with the administration of the force, because I have had the impression that it was being administered in a firm and kindly manner, and that the commissioner and his officers know how to handle it better than I did. From time to time I receive representations with respect to this person or that person who is a member of the force, and I bring it to the attention of the commissioner. But I always make it clear to him that I am not trying to run his force and that I still have confidence in the way that he is doing it. I think that attitude on the part of the responsible ministers has for a period of years proved to be a right one. I believe that if the hon. member will bring these individual cases to my attention so that I may pass them on to the commissioner, they will receive serious consideration by the officers, who try to do the right thing by all the members of the force.


Douglas Scott Harkness: I quite appreciate what the minister has said as to having confidence in the officers of the force. I should like to assure him that I, too, have the utmost confidence in them. The point, however, as it is stated in this letter from Commissioner Wood in answer to a query, is:
Up to the present, no amendment has been made to the Royal Canadian Mounted Police Act, authorizing all service in the second great war to count for pension, but members of the force who were granted leave of absence to serve with the first provost company overseas, are permitted to count their service in the second great war for pension purposes. The same is true of the Royal Canadian Mounted Police marine section, and of the former aviation section.
This letter is dated March 29, 1946, and, to my knowledge, there has been no change in the law since that time. In other words, the situation is that any mounted policeman who joined the service police force under the aegis, as it were, of the mounted police, may count his time in the' armed forces for pension. But any mounted policeman who did not join the police force of one of the services does not count his service for pension.
I should like to see an amendment to the mounted police pension act to correct what I consider to be an injustice in that regard, so that any mounted policeman who served

will be able to count his time for pension. It is manifestly unjust that a man who served in the provost corps should be permitted to count his time in the army for pension, whereas a man who served in the infantry and who probably, on the average, would experience ten times the amount of risk and ten times the hardship of the man in the provost corps, cannot count his time for pension. The whole thing to me is just ridiculous, and it is high time that an amendment was passed. It is not a matter of any distrust of officers, or anything of that kind. It is a matter of changing the law so that this injustice will be corrected.
Mr. ST. LAURENT: With respect to changing the law, had there not been the necessity this year of dealing with the militia pension act I would have had a bill of my own. But I preferred to let that one be * disposed of before bringing my bill along. There are reasons why there should be some differences, and I would prefer not to have the two before the house at the same time.


Douglas Scott Harkness: I take it that the minister is, practically speaking, giving the committee the assurance that this matter will be corrected in the near future.
Mr. ST. LAURENT: It will certainly be brought before the house for consideration. The hon. member knows that service in the last war does count for pension purposes.


Douglas Scott Harkness: Yes, which is another reason I suggest that service in this war should count.
Mr. ST. LAURENT: I cannot say what parliament will do, but it is my intention to have the matter before parliament for consideration. The hon. member knows what was done about it the last time it was up for consideration.


Douglas Scott Harkness: Thank you. There is only one other point: What about the case of a man who was a sergeant in the mounted police before the war and who, after some five years of service in the army, during which time he rose to a senior rank, now finds himself in the position of constable?
Mr. ST. LAURENT: There must be some special reason there, which I cannot describe in a general way. That is not what usually happens. If that has happened'-and I do not doubt it, if the hon. member says so-there must be some special reason which would require further examination.


Douglas Scott Harkness: That is not the general policy.

Supply-Mounted Police
Mr. ST. LAURENT: No, it is not.


Frederick Davis Shaw: Two of the matters I had
hoped to discuss have already been touched upon by the hon. member for Calgary East.
I agree with what he says, and I was extremely pleased to hear the minister say that they do not contemplate discontinuing the payment of the special allowance war bonus-at least in the near future. I would have regarded it as a tragedy, had they contemplated such action. I would' hope that when March of next year arrives the appropriate authorities may look with favour upon making this special bonus a part of the regular salaries.
I,	too, have become aware of a number of cases where members of the Royal Canadian Mounted Police joining the armed services were not permitted reinstatement in the force. In a number of cases they were offered the opportunity, so I am told, of joining the provost corps. But not desiring to do that, they waited until their long period of service had' expired and then joined the unit of their choice. Upon discharge, they endeavoured to get back into the force. Not only were they denied the privilege of rejoining the force, but I have been told that obstacles were placed in their way. I am told also that some sergeants and corporals were taken on as constables. I cannot see any justification for this treatment of these, men who had a number of years of excellent service.
There is a third matter to which I should like to refer and which is of a different nature. I agree fully with the observations which have been made this evening and which were made on July 5 about the great traditions of the Royal Canadian Mounted Police. I agree also with the minister when he refers to the picturesque uniforms which they wear. Members of the force are to be found in front of our parliament buildings. That is a fine thing and I do not complain about it at all. I look upon it as being a splendid tourist attraction. I realize also that having the Royal Canadian Mounted Police in their scarlet tunics around certain other buildings in Ottawa may be a fine thing, but I have a complaint to make.
There are a number of government buildings in. Ottawa where the Royal Canadian Mounted Police are, I cannot say guarding because I do not think that is what they are doing. I have heard the expression used that they are glorified janitors or glorified messenger boys for the civil service. Those expressions were actually used to me. These men are just about as far removed from police work as they possibly could be and they do not like the set-up at all. These men must run upstairs at midnight to make sure that all the windows are
closed or the taps turned off, and that is not the proper thing to ask men to do who have been associated with this great force. It does not enhance the prestige of the force.
We should have another body of persons doing this type of work. I want it understood that I am not complaining about having our mounted police in front of this building and in one or two other places, but I implore the minister to give consideration to the removal of these men from many of these government buildings where they are nothing but caretakers. If a man joined the force for the purpose of doing a job like that and knew he was going to have to do it, I would not complain, but I have been toldi that men who have had years of experience with detachments in western Canada and in other parts of the country have been brought to A division and been placed at the door of some building to tell people where John Jones, in charge of a certain branch of government, happens to have his office.
I do not think there could be anything more soul-destroying than for a mounted policeman to be taken off a detachment where he is performing police service and put into a position of that kind. Some may say that such a man may not be a good policeman. If he is not a good policeman, let him go. You would be doing him a justice rather than keeping him in that position. It has been said also, and I believe this is the case, that when a member of the force incurs the displeasure of some officer he is sent here for a period. If I may be pardoned for using the term, someone said one time that it is considered to be a sort of purgatory. They are kept here for a while and then they may be sent back to the point whence they came. I am told that a mounted policeman out on detachment, when jokingly told that he is going to be moved to A division, will develop an expression on his face something like that on the face of a front-seat patron of a theatre during the showing of a Boris Karloff film.
I cannot think of a worse thing happening than a>
man who has been on police work being sent here and being removed entirely from the type of work he has been doing. Has consideration been given to taking these men off these jobs where they give the appearance of being just glorified caretakers?
Mr. ST. LAURENT: I think most of those men to whom the hon. member refers as being glorified caretakers aTe special constables; that is, with the exception of the men on parliament hill and perhaps in one or two other places. Within the last three or four weeks negotiations have been carried on look-
Civil Aviation

mg to a contract with the corps commissionaires to have them take over the guarding of a large number of public buildings in Ottawa. I am not in a position to say whether a final agreement has been signed, but the recommendations to treasury board for the number of hours that will be involved has been passed. If the agreement has not yet been completed, it is about to be completed and the corps of commissionaires will take over that work. As the hon. member knows, that corps is made up of old soldiers who do the work under the direction of a welfare organization which contracts for a certain number of hours at a certain rate per hour.


Frederick Davis Shaw: I would not want it to be thought that I was calling these men glorified messengers or glorified caretakers. That expression was used by other people in discussing the matter with me. I am extremely happy to know that action is being taken to have the corps of commissionaires take over this work. I am sure that many members of the R.C.M.P. will smile when they hear that this action is contemplated.
Item stands.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Monday, August 5, 1946