1946-08-05

[Stage Direction]
Right Hon. L. S. ST. LAURENT (Acting Prime Minister): I wish to table copies of an agreement between Canada and Newfoundland, on air transport between Canada and Newfoundland, signed at St. John's on July 29,
1946.
Hitherto the air service between Canada and Newfoundland and the use of Newfoundland fields in transatlantic civil aviation have rested on temporary arrangements made during the wrar. The present agreement places air traffic rights for both services on a permanent basis subject to cancellation by either party on twelve months' notice. The agreement also provides for the use of Goose Bay as a regular field in transatlantic aviation by the designated Canadian airlines; for the use of Torbay as the terminus of the Canada-Newfoundland service ; for the use of Goose Bay, Buchans and
[Hr. St. Laurent.]
Torbay as bad-weather alternates in civil air operations over Newfoundland; and for the use by Canada on most-favoured-nations terms of other airfields in Newfoundland made available for civil use.
Mr. GRAYDON:: Does that include Gander? Mr. ST. LAURENT: No.



JAPANESE IN CANADA


Hon. HUMPHREY MITCHELL (Minister of Labour):: I should like to announce to the house that a group of voluntary repatriates to Japan, totalling 1,377 in number, left Vancouver on August 2 en route to the port of Yokohama, Japan. This is the third sailing of voluntary repatriate groups, the earlier sailings having taken place at the end of May. The numbers of persons so repatriated to date total 3,151. Steps are being taken to secure transportation for several hundred additional repatriates who wish to proceed to Japan as soon as possible.



QUESTIONS

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

Mr. ISNOR:: 1.	Has the Department of Defence discontinued the use of citadel hill, Halifax (a) as accommodations for troops; (b) as offices; (c) as storage space?
2.	Has it been declared surplus?
3.	Has the R.C.M.P. made application for use of same for (a) accommodation for members of the force; (b) for offices; (c) for storage?


Mr. LAPOINTE:: 1.	(a). No. (b) Yes. (c) No.
2.	One H-hut has been turned over to the city of Halifax. It is expected that the entire citadel hill, including the temporary buildings, will be evacuated by the end of August. The fortress in the citadel itself will then be returned to the Department of Mines and Resources and the temporary buildings declared surplus to War Assets.
3.	(a), (b) and (c). No application has been received by the Department of National Defence.


IMMIGRATION OFFICES IN CANADA
Mr. THATCHER:: 1.	At what points throughout Canada are immigration offices located?
2.	At what point throughout Canada are district offices maintained by the Department of Immigration?
3.	What is the relationship between the immigration offices and the district offices?

Questions
4.	Have any forms been issued for the making of applications under order in council No. 20711
5.	What guarantees of housing work, and wages are applicants under order in council No. 2071 required to lodge, and with whom, and fqr what period do such guarantees extend (a) in the case of married immigrants; (b) in the case of single immigrants; (c) in the case of child immigrants?
6.	What instructions have been issued to the immigration offices and the district offices (a) as to recording the worth of such guarantees; (b) as to disposing of the applications?


Mr. GLEN:: 1.	Immigration offices are located at ocean and international boundary ports of entry and at the following: Calgary, Edmonton, Regina. Saskatoon, Winnipeg, Hamilton, Toronto.
2.	Vancouver, Winnipeg and Ottawa.
3.	For immigration purposes Canada is divided into four districts with district headquarters located at points mentioned in answer to No. 2 above. All ports and offices in each district operate under the direction of district headquarters.
4.	Yes.
5.	Each application is investigated to establish:-
(a)	the status of the applicant,
(b)	the applicant's ability to receive, house and maintain the proposed immigrant until he is established in Canada.
Each applicant is required to file a written undertaking to provide such housing and maintenance, and guarantee that the immigrant will not become a public charge in Canada.
	Aluminium in	Aluminium in
	bars, blocks	rods, sheets,
	and ingots	circles and
		plates
Months	Cwt.	Cwt.January, 1946	... 48.981	597February 	... 14.911	296March 	... 5,660	93April 	... 89.016	79May 	... 224,067	-June 	... 167,624	126


PRICE OF FLAXSEED
Mr. MEN ARY:: 1.	Has the government set a price on flax seed for this year?
2.	If so, what is the price?
3.	Will this price apply to the province of Ontario?


Mr. MAYHEW:: 1.	Yes.
2.	$3.25 per bushel to the producer basis No. 1 C.W. flax seed in store Port Arthur/Fort William and Vancouver, effective August 1, 1946.
3.	Yes.


SALES OF BUTTER TO UNRRA
Mr. FRASER:: 1.	Has Canada sold butter to UNRRA during the period January 1, 1946 to July 1, 1946?
2.	If so, what quantity and to what ports have shipments been made?
3.	What quantity has been shipped to each port?


Mr. MacKINNON:: Canada has not sold butter to UNRRA during the period mentioned.
6.	(a) Answered by No. 5.
(b) Completed cases are held on file until travel and inspectional facilities are available.


EXPORTS OF ALUMINIUM
Mr. GARIEPY:: 1.	Is aluminium being exported to Great
Britain and Europe from plants in the province of Quebec?	.
2.	If so, from which plants and in what
quantity?	.	,
3.	Is it in the form of ingots or laminated sheets ?
4.	If so, what is the respective quantity of each that has been exported during each month of the current year?


Mr. MacKINNON:: 1.	Exports by province of origin not available.
2.	Information not available.
3 and 4. Exports from Canada to Great Britain and Europe.


EXPORTS OF BUTTER
Mr. FRASER:: 1.	Has butter been exported from Canada
during the period from January 1, 1946 to July 1. 1946?	.
2.	If so (a) to what countries? (b) what quantity to each country?


Mr. MacKINNON:: 1.	Yes.
2.	Country
Bermuda	
British Guiana	
British Honduras	
Barbados	
Jamaica	
Trinidad	
British West Indies, other
Newfoundland	
Colombia	
St. Pierre	
Alaska	
Total	 15,291
Cwt.
1,393
1,951
2,111
1,412
5,098
1,307
1,172
506
4286

Questions as Orders jor Returns



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. McCUAIG:: What is the number of persons in Canada receiving (a) civilian and service pensions of all classes; (b) family allowance?


NOVA SCOTIA FISHERIES-DESTRUCTION OF TRAWL GEAR ON QUERO BANK
[Stage Direction]
Mr. WINTERS;
1.	Has the Department of Fisheries, or any other government department, received sworn statements from captains of Nova Scotian fishing schooners to the effect that their trawl gear is being destroyed by draggers of foreign registry on Quero bank?
2.	If so, has the country of registry of the foreign trawlers been established?
3.	Is Quero bank being patrolled by Canadian craft in the interests of Nova Scotian fishermen?
4.	If not, what steps are being taken to establish adequate protection?

Mr. REID:: For a copy of all correspondence, telegrams and other documents forwarded to the hon. Minister of Fisheries and any of his officials, in regard to the enlarging or opening up of seine area No. 17, in the gulf of Georgia for the [DOT] operation of seine fishing during the fishing season of 1946?


DOCTOR DAVID SHUGAR
Mr. DIEFENBAKER:: For a copy of all letters written by Doctor David Shugar between February 28 and March 12, 1946, to the Minister of Justice and the Prime Minister of Canada, regarding any matter connected with his detention, and a copy of the replies thereto, if any.


SHIPMENTS TO ECUADOR-QUESTION OF RESTRICTIONS ON EXPORT
[Stage Direction]
On the orders of the day:
Mr. A. L. SMITH (Calgary West):: I should like to direct a question to the Minister of Trade and Commerce. I have not had an opportunity to give him notice but I am sure he will have the answer; if not, he may take it as notice. My question arises out of a recent dispatch in the Lethbridge Herald-, it is brief and therefore I think I may read it. The heading is: "Lethbridge Flour Goes South", and the body of the article is as follows:
Lethbridge-made flour in the post-war era is finding entirely new markets.
Ellison Milling and Elevator Company of Lethbridge on Wednesday shipped its first car of flour to Ecuador. It was a private deal with a South American firm.

Four more cars to the same firm will be loaded and dispatched this week.
But that's not all. Six cars of flour will be shipped immediately to the Dutch East Indies. This also is a privately arranged business deal.
Ellison flour has never before gone to these distant points.
In view of the fact that flour is now rationed to bakers in Canada who are anxious to feed United Kingdom and devastated countries, what restrictions are there on exports of flour to places like Ecuador where they are not in need of food?


James Angus MacKinnon: I should like to give some consideration to the hon. member's question and answer it later.


Arthur Leroy Smith: Very well. TORONTO HARBOUR COMMISSIONERS


POWER TO PURCHASE CERTAIN LANDS AND TO BORROW PURCHASE MONEYS
[Stage Direction]
On the orders of the day:	[DOT]
Hon. LIONEL CHEVRIER (Minister of
Transport) moved the second reading of bill No. 299, respecting the Toronto Harbour Commissioners.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Golding in the chair.
Mr. CHEVRIER:: Perhaps I should say a word or two in introducing this bill, which in effect is a simple matter. I have no doubt that it will commend itself to the committee, and particularly to the members representing Toronto constituencies. The Toronto harbour commissioners are the owners of land north of Fleet street in the city of Toronto. This land is bounded on the west by the Fort York armouries and on the east by lands leased to Rogers Majestic Limited. The lands owned by -the Toronto harbour commissioners comprise about six acres, but they have leased a portion of their lands at the eastern extremity to an important local firm, and have obtained demands from a United States industry interested in locating itself in Toronto for additional lands north of that which is already owned by them on the north side of Fleet street. The land they own has a frontage of approximately 1,321 feet along Fleet street, and there is a parcel north of theirs having an acreage of 3-4 acres. The Toronto harbour commissioners have negotiated with the owners thereof, namely, the Canadian Pacific Railway Company, for the purchase of these lands.
The commissioners are of the opinion that not only in its own interests but also in the interests of the city of Toronto it is a wise

Toronto Harbour Commissioners
thing to purchase these 3-4 acres of land from the Canadian Pacific Railway company. The powers of the commissioners as constituted at present under statute are not sufficient to enable them to purchase the land. The object of the bill is to give them these supplemental powers, which in the opinion of the solicitors of the Toronto harbour commissioners as well as the solicitor of the city of Toronto are required to warrant the purchase of this additional land and the use thereof for the purpose set out.
The bill is a simple one; it has but two clauses: one, authorizing the purchase, and two, authorizing the issue and raising of debentures for the purpose of purchasing these lands.


Mr. MacNICOL:: I rise to support the bill. I know the area well. The site mentioned by the minister has been described by him and therefore it is not necessary for me to make any extended reference to it. I merely wish to say that the Toronto harbour commission has done an excellent job for the city in that it has brought a large number of industries to the city in the area along the waterfront which has been under their control. These industries have given a great number of jobs, and have meant much to the industrial and commercial life of the city. Their proposal is to purchase 3-47 acres now belonging to the Canadian Pacific Railway company which that railway is anxious to sell. That parcel, together with the parcel which the Toronto harbour commissioners themselves own between the Rogers Majestic plant and the 14th Infantry brigade armouries, will permit them to sell the combined area to a large concern which will employ a large number of men. In my opinion it is all to the best interests of the city. The board is to be commended for bringing about the construction of this plant in that part of the city of Toronto. As the minister pointed out, probably they could do this without any opposition whatever, but the act does not seem to be clear enough to permit them to buy the land from the Canadian Pacific Railway company, and this bill is merely enabling legislation.


Lionel Chevrier: That is right.
Mr. MacNICOL; I desire to render what assistance I can in bringing this about.


Mr. HAZEN:: Has any price been agreed upon?


Lionel Chevrier: Yes. I am told it is

Section agreed to.
Sections 2 and 3 agreed to.
Schedule agreed to.
Title agreed to.
Mr. CHEVRIER moved the third reading of the bill.


Douglas King Hazen: Can the minister tell us the assessed value of the land which is being sold?


Lionel Chevrier: I am sorry I cannot give that information to the hon. gentleman.


[Stage Direction]
Motion agreed to, and bill read the third time and passed.

[Stage Direction]
Hon. LIONEL CHEVRIER (Minister of Transport) moved that the house go into committee to consider the following resolution:
That it is expedient to present a bill conferring authority upon the governor in council to authorize the Canadian National Railway Company to construct a line of railway from Bar-raute to Kiask falls on the Bell river, in the province of Quebec, a distance of approximately 55 miles at an estimated expenditure of $4,125,000 and an average expenditure of $75,000 per mile. The bill will make provision for the issue by the company of securities, which may be guaranteed by the government in respect of the cost of construction. To enable the company to proceed with construction forthwith temporary loans may be made to the company out of the consolidated revenue fund, upon terms and conditions prescribed by the governor in council and secured by company securities.
Motion agreed to and the house went into committee, Mr. Golding in the chair.
Mr. MACDONNELL (Muskoka-Ontario):: Is the minister going to make a statement?


Lionel Chevrier: Mr. Speaker, the purpose of this resolution is to obtain authority from parliament to construct a branch line from Barraute, a point on the National Transcontinental railway, to Kiask falls on the Bell river. The projected line would be 55 miles in length, and it is situated in the Abitibi country about 400 miles north and west of the city of Quebec.
When branch lines of this kind are built the Canadian National Railways have a practice of considering the economic factors. In this, as in other cases, it looks first at the natural resources which exist in the territory to be served or to be tapped; second, at the cost of construction of the line, and third, at the traffic likely to be derived from the projected line. The railway has done that in this case, and has come to the conclusion

C.N.R.-Barraute to Kiask Falls

that the construction of this line would be profitable from the three angles I have just mentioned. I should like to deal with the three in a general way, but before doing so I want to make the statement that the cost of this line will be $4,125,000, which figure is arrived at taking the rate of $75,000 per mile.
Dealing with the development of natural resources in the area, the Canadian National Railways have obtained a survey, which was projected from an aerial photograph using the modern method of stereoptic vision, which enables the country to be seen in relief. This survey disclosed a number of very important features. It disclosed, first of all, the agricultural possibilities of that area. The territory to be traversed by this line lies in the clay belt area, and there is a very substantial area north of the Transcontinental railway in the valley of the Bell river suitable for agricultural purposes. The area west of the Bell river slopes gently to the north, and is heavily wooded; later I shall deal with the question of timber. The area to the east of the Bell river is rugged and rough, and is not suitable for agricultural purposes. The line would be capable of developing some
275.000	acres of arable land, and it would support an agricultural population of approximately 15,000 people, who would be engaged in farming and lumbering. In addition some 600 people would be engaged in other activities. According to the survey made at the request of the Canadian National Railways it would take some ten years before the full agricultural development would be completed.
This area has great colonization potentialities. The province of Quebec is planning an extensive colonization programme for the district, and a study has been prepared at the request of the minister of colonization of the province of Quebec by a committee set up by him, which has issued a report entitled "La Colonisation dans la Province de Quebec." This study was made by Mr. E. Min-ville, director of the school of higher commercial studies, Montreal, and contains some interesting conclusions which I do not want to go into fully, but perhaps I could summarize them by saying that the area to be served by this projected line has a double feature. First of all, it is the only one properly agricultural which has a bright future in the province of Quebec. Next, it is the only one which, even already partly populated, may be treated as a country to be built up.
Dealing next with the forest products of the area to be served, the line would tap huge pulpwood resources. In fact there are 700 square miles west of Bell river which
{Mr. Chevrier.]
contain some 4,700,000 cords of timber, and 240 square miles east of the Bell river which contain 1,500,000 cords of timber, in terms of pulpwood. Seven hundred square miles of this timber has been granted by the Quebec government to the Canada Paper Company, and it has been granted to the company because of the fact that the timber resources in the eastern townships of Quebec have become practically exhausted. Unless the Canada Paper Company is able to obtain resources elsewhere there is a strong possibility of its mills at Windsor Mills and elsewhere having to close down.
The total estimated timber in the 700 square miles which have been granted by the province to the Canada Paper Company is 4,480,000 cords, and the timber within the economic reach of the 43-7 miles of the line is 6,200,000 cords. The area to be traversed has, as well, mineral possibilities. The line traverses the main mineralized belt between Noranda on the west and the Chibougamau country on the east. The possibilities there are for gold, copper and zinc. In fact in that area are mines which have been prospected, which in the opinion of those who have prepared the survey have possibilities.


John Ritchie MacNicol: What kind of minerals?


Mr. ADAMSON:: Who prepared the survey?


Lionel Chevrier: 
James MacKerras Macdonnell: What did the minister say about gross operating income?


Lionel Chevrier: 
James MacKerras Macdonnell: For what period?


Lionel Chevrier: For the first six years.
Mr. MACDONNELL (Muskoka-Ontario;: Is there a breakdown of that?


Lionel Chevrier: If necessary I can place one on Hansard, although I have not a breakdown with me. I can get it for the hon. member.
Dealing with possible extensions, I would point out that the line at the present time is projected to the southeast corner of Laas township, a distance of 43.7 miles. The bill seeks authority for an additional 11.3 miles in order to bring it to Kiask falls. It is not the intention of the Canadian National Railways to project the line to Kiask falls at the present time, but it is hoped that with the timber and pulpwood development it would be possible to establish a pulp mill at Kiask falls. Therefore the railway officials seek to obtain authority from parliament for an additional 11.3 miles


John Ritchie MacNicol: Has the minister any estimate of the possible amount of power which might later be developed at Kiask falls?


Lionel Chevrier: No, I have not, The survey I have before me deals only with the three matters I mentioned a moment ago, namely costs, natural resources and traffic. I know there is extensive potential power development at Kiask falls, but I am not in a position to tell the hon. member what the horse-power would be.
63260-270i


Mr. BROOKS:: Has the minister or the Canadian National Railways any guarantee that the pulp and paper people will build a mill at Kiask falls?


Lionel Chevrier: No, there is no such guarantee.


Alfred Johnson Brooks: Does not the minister think there should be a guarantee before the railway is constructed?


Lionel Chevrier: 
Alfred Johnson Brooks: My point is that we have seen areas of that kind stripped of pulpwood and lumber, the railway becoming just a national expense. I should think that as a guarantee of good faith the pulp and paper company should at least guarantee to build a pulp mill at that point. This would be a guarantee that the place would not be stripped and all the paying facilities of the area taken away.


Lionel Chevrier: Referring to further
extensions, there would of course be a poss-bility of extension to the east, around the Chibougamau country. This would depend a great deal upon development in the area. The Canadian National Railways will build now the 43.7 miles only, if it is authorized by parliament to do so. This is nothing more or less than an industrial spur, and could be compared to a spur running from the main line of a railway in to an industry. The costs of this line in the earlier years are guaranteed. The line is being built in an agricultural area, in a mineralized area, and also in a timber area. Further, it will be built with second-hand material, material obtained from line abandonments or from replacements of main line rails; no new material or no new rolling stock will be required.


Alfred Johnson Brooks: It will still cost $75,000 a
mile?


Lionel Chevrier: Yes. The policy of the railway, as I outlined in the beginning, is one which thoroughly investigates each branch line project. It investigates it as to the natural resources which will be opened up, as to the cost of the construction of the
C.N.R.-Banaule to Kiosk Falls

line, and as to the probable traffic which will result. Inasmuch as the total costs arising from the line are charged to the Canadian National Railways, including interest on the cost of construction as well as maintenance and operating expenses, the amount of new traffic which will be created from the development of additional natural resources has to reach a considerable figure to meet those costs. It has been the experience of the railway that when it can obtain a guarantee for the construction of the line in the earlier years, then the line is likely to be a paying project.
The Canadian National Railways has studied this project very carefully. It has prepared a survey, and it has obtained also from the records of the federal government, of the provincial government and from consultation of data in the hands of the Canada Paper, details of the natural resources in the country. It has convinced itself that this branch line would be in the interests of the railway as well as in the interests of the country. The board of directors have considered it carefully and after having given it the consideration which they give to all these lines have recommended in favour of it. The government seeks the approval of parliament for the construction of the branch line.


James MacKerras Macdonnell: I should like to make a few observations and ask one or two questions. In the first place let me say, although it is not necessary to say, that I have the very greatest respect for the operations of the Canadian National Railways. I think what the minister has said as to the care with which they enter into obligations is perfectly warranted, but 'I do feel that it is our duty in this house to try to understand fully anything that is put before us. I feel also that it is our duty to be careful and critical about things which come from the Canadian National Railways, because there is always a chance that a government owned enterprise may be subject to certain pressures which I think realistic people will always recognize and, therefore, it is I believe in friendship to the Canadian National Railways to try to understand and perhaps even to be a little persistent in making inquiry.
With that introduction I should like to make one or two observations. I was disappointed in one or two of the figures given by the minister. I was disappointed, first of all, at the very small amount of population which he indicated as likely to be the result of this line. I suppose we are all used to the idea of pioneering lines, that is lines really built in advance of population, and we must

to some extent expect that, but I was surprised at the smallness of the line. I was also surprised, although I was not quite sure that I caught the minister correctly, when he said, according to my understanding, that this was the only new colonization project area in Quebec which had a bright future. If I understood him correctly, it strikes me that that is covering a lot of territory.


Lionel Chevrier: It is the only properly agricultural area which has a bright future according to the report made by the committee set up by the minister of colonization of the province of Quebec.


James MacKerras Macdonnell: What he said about working with the colonization department of the province of Quebec seemed to me an argument which is very fair and permissible and worthy and one which we should receive sympathetically; nevertheless we should seek to understand it fully. That brings me again to the very small population he indicated, and it was a surprise to me to know that that population, even with the assistance of the power company, would be sufficient to give what the minister called a guarantee of the operating cost and a return over the first few years.
That brings me to ask this particular question. I did not understand fully Vhat the minister said as to the obligations of the paper company. If I understood him correctly he said that in the event of the minimum cordage which was indicated, and which I think was about 50,000 cords a year-


Lionel Chevrier: 330,000 cords over the six year period.


James MacKerras Macdonnell: That is about 50,000 cords a year. He said again, if I understood him correctly, that in the event of the shipment of a cordage less than that, the company would make up or would guarantee $3 per cord for the cords not shipped. I did not hear the minister say what would be the total income to the railway from the cords actually shipped. In other words, suppose 50,000 cords are shipped, what would be the gross revenue to the railway? If no cords were shipped at all I take it the railway would get paid only at the rate of $3 per cord. In other words, its total income from the paper company in the event of cords not being shipped in any year would be in the neighbourhood of $150,000.


Lionel Chevrier: I do not think there is any danger of no cords being shipped.

C.N.R.-Barraute to Kiask Falls


James MacKerras Macdonnell: I do not think so either. Can the minister give us the total figure if the cords are shipped?


Lionel Chevrier: I told the hon. gentleman that I would try to get that and put it on the record for him.


James MacKerras Macdonnell: The minister gave us the gross receipts, I think at the rate of about $500,000 a year- I think he said $3,000,000 over the six years. I regard it as of considerable importance in understanding this to know just where that operating revenue comes from. I do not know what is paid to ship a cord of wood fifty or seventy-five miles, but it would seem to me that the cost of that shipment would have to be quite high. I take it it will be practically the only revenue in the first year.


Lionel Chevrier: There would be other revenue.


James MacKerras Macdonnell: It would be trivial, I should think, at the outset.


Lionel Chevrier: Yes.


Mr. McMASTER:: The suggestion is that there would be a revenue of $10 per cord from the pulpwood. Is that the cost of drawing it over this line, or is that the total cost of making the longer haul to the paper mills of the Canada Paper Company, wherever they are located?


Lionel Chevrier: The paper mills are located in several areas in the province of Quebec. The timber would be hauled from an area east and west of Bell river down the branch line to Barraute, and from there into Quebec, and from 'Quebec into Windsor Mills or any other area where Canada Paper had mills.


Douglas King Hazen: I think a matter of this kind involving an expenditure of well over $4,000,000 might very well be referred to the railways and shipping committee for consideration and investigation. The minister tells us that the Canadian National Railways have studied the project carefully, but it seems to me that the committee should also study it carefully and call the officials of the Canadian National Railways to find out what their studies have been and to question them on the different aspects of the road dealt with in the report referred to by the minister. What strikes me about building this railway, or any other railway, is that at the present time they have to compete with motor vehicle transportation, and I think the committee should know how
many roads there are in this area at the present time and what motor vehicle competition this railway will have. The minister says that the railway will support an agricultural population of 15,000 people, but most of those people are going to use motor vehicles, and not the railway, for transportation purposes. To-day all through the country, as you go about, you see that motor trucks, not branch railways, are hauling pulp to the main line, sometimes a distance of a good many miles, and it has not been found necessary to build a railway to take the place of the trucks.
So far as mining is concerned, I think that should be looked into also, because the reports we have received from mine owners and people interested in mining in Quebec is that since the Canadian dollar has been put on a par with the United States dollar a great many of these Quebec mines will go out of production. These questions should be looked into before this expenditure is made.


Lionel Chevrier: I do not think the house would wish to approve this expenditure without the bill being considered by a committee. It has been the practice in the past to refer proposed branch lines of railway, not to the committee on railways and shipping, but to the committee on railways, canals and telegraph lines, and when this bill has been given its second reading I intend to move that it be referred to that committee for thorough study. The officials of the Canadian National Railways will be on hand, together with others, to give the committee all relevant information with respect not only to the financial aspect of this line but to the natural resources of the area.


James MacKerras Macdonnell: I am happy to hear the minister say that, because I was under a complete misapprehension; I thought this had already been before the committee. I am thoroughly in accord with what the hon. member for St. John-Albert has said, and if the minister is going to move to refer the bill to the committee I think the questions we are asking now might well be asked before that committee.


Lionel Chevrier: I did not want to interrupt the hon. member for Muskoka-Ontario. This is not the bill stage, only the resolution stage, and I think the time for questions is at the bill stage or in committee.


Gordon Graydon: Any time is the time for questions, I suppose.


Lionel Chevrier: I suppose.
Resolution reported, read the second time and concurred in. Mr. Chevrier thereupon moved for leave to introduce bill No. 345,
Merchant Seamen

respecting the construction of a line of railway by Canadian National Railway company from Barraute to Kiask falls on the Bell river, in the province of Quebec.
Motion agreed to and bill read the first time.
Mr. CHEVRIER moved second reading of the bill.


John Ritchie MacNicol: Mr. Speaker, the bill is not before us. How can it be read a second time now?


Lionel Chevrier: I am informed that the bill is on the members' files, but if there is any objection I shall not insist. I had hoped we might be able to give the bill second reading and refer it to the committee to-day.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on railways, canals and telegraph lines.

[Stage Direction]
Hon. LIONEL CHEVRIER (Minister of Transport) moved the second reading of bill No. 302, respecting compensation for merchant seamen.
Mr. GREEN:: Is the minister going to make a statement?


Lionel Chevrier: The principle contained in this bill is the same as that which has been recognized in the Government Employees Compensation Act. The Government Employees Compensation Act, as the house knows, provides compensation for employees of the government who are killed or injured in the course of their employment, and that principle is one which has been recognized over the years and to which some extensions have been granted. During the war years there was granted an extension of that principle which provided compensation in the case of death or injuries to munition workers, and by extending the same principle to merchant seamen compensation is now being granted to those men where compensation is not already granted under the provincial statute.
The principle of workmen's compensation, which protects workmen and their dependents from loss of earning power due to accidents in their employment, is now generally recognized as the cornerstone of industrial welfare. During the war it was considered advisable by the government to bring in a measure providing for payment of workmen's compensation to seamen on Canadian ships who were not covered under the different provincial compensation acts. This was done
[M. Chevrier.l
under the merchant seamen compensation regulations, 1945, which were made under the War Measures Act and became effective on August 1, 1945.
The government, by virtue of this bill, now proposes to give statutory authority to these regulations. The bill provides, among a number of things, for the establishment of a workmen's compensation board consisting of three members,, and it covers first of all seamen engaged on ships registered in Canada or chartered by demise to persons registered in Canada when the ships are engaged on foreign or home-trade voyages. Second, if ordered by the governor in council, coverage may be extended to seamen engaged in Canada and employed in ships registered outside Canada and operated by persons resident in Canada or having their principal place of business in Canada, when the ships are engaged on foreign or home-trade voyages. Third, "seamen" includes all members of the crew but does not include pilots, apprenticed pilots or fishermen; and fourth, the bill does not cover seamen who are entitled to claim compensation under the Government Employees Compensation Act or any provincial act, nor does it cover seamen entitled1 to claim compensation under order in council P.C. 104/3546 of April 30, 1942, which provides protection for seamen suffering disability or death as a result of enemy action or counteraction taken against the same.


Howard Charles Green: That is, pension.


Lionel Chevrier: Yes. Compensation is payable where there is personal injury. I am sorry I told the hon. gentleman "yes". I think this order in council has to do with enemy action only and does not cover the point he mentioned.


Howard Charles Green: I meant pension similar to pension given men in the armed forces.


Lionel Chevrier: Yes. I believe it would cover that. Compensation is payable where there is personal injury by accident arising out of and in the course of employment. The only exceptions are: (1) Where the disability lasts less than seven days, and (2) Where the accident is attributable solely to the serious and wilful misconduct of the seaman and does not result in death or serious disability.
The question of negligence or absence of negligence of employer or seaman does not affect the matter, and the old legal defence of common employment and voluntary assumption of risk are no longer applicable. No agreement to forgo benefits of the act is valid and no contribution towards the benefits provided is to be collected from seamen. Compensation

Merchant Seamen
cannot be assigned, charged or attached without the approval of the board. The benefits provided are in lieu of right of action for damages against the employer.
Where the accident results in death, the widow or invalid husband is entitled to receive payment of $45 a month during widowhood, and if the seaman leaves children, she is also entitled to receive S10 a month for each child under eighteen, the children's allowance, in case of the death of the widow, being increased to $20. but the total monthly payment is not to exceed two-thirds of the seaman's average earnings, except that minimum compensation for the widow and one or more children is S55 a month. The widow is also to receive a lump sum of $100.
Where there is no widow or invalid husband, each child is entitled to $20 a month while under eighteen, but 'the total monthly payment is not in any case to exceed two-thirds of the seaman's average earnings. Where there is no widow or invalid husband or child, but there are other dependents, they are to be entitled to a sum reasonably proportionate to the pecuniary loss occasioned them by the seaman's death, but not in any case to exceed two-thirds of the seaman's average earnings. Where there are children but no widow and it seems desirable to continue the existing household, and an aunt, sister or other suitable person acts as foster mother in keeping up the household, the same payments may be made as if she were the widow.
There is special provision for invalid children over eighteen and for adopted children. Where the widow marries again, her own monthly payments cease on marriage, but she is entitled to a lump sum equal to two years' payments, and the children's payments continue as before. Necessary burial expenses not exceeding $125 are to be paid by the employer, and in addition transportation expenses of the body, from place of death to place of interment. not exceeding $125, are payable.
Credit is given for any payments made under the relative provisions of the Canada Shipping Act, 1934. In case of non-fatal accidents, a seaman who is totally disabled is entitled to receive two-thirds of his average earnings, disregarding any excess above $2,500 a year, but he is not in any case to receive less than $12.50 a week unless his average earnings are less than this amount, in which case he is to receive the full amount of his earnings. Compensation dates from the commencement of disability, but there is no compensation if the disability lasts less than seven days.
If the seaman is only partly disabled he is entitled to receive the same fraction of total disability allowance as his impairment is of
his full earning capacity. The awards for all permanent disability, partial as well as total, are in the form of monthly pension for life, except where impairment does not exceed ten per cent of total earning capacity, in which case payment may be ordered by the board in a lump sum.


John George Diefenbaker: How many seamen in 1946, to date, have received compensation under the order in council?


Lionel Chevrier: I think I can give that figure as we go along. The compensation is on the basis of the seaman's average earnings but not including war service bonus paid under P.C. 149/2705.
The settling of the compensation is done in the following manner: All questions as to right to compensation and the amount of it are determined by the board and its officers, the procedure and methods adopted being as simple, speedy and inexpensive as possible. The board deals directly with the parties, and legal assistance is not necessary. The forms are furnished by the board.
With regard to medical aid, every seaman entitled to compensation is also entitled to medical, surgical and dental aid, and hospital and skilled nursing services, and is also entitled to prosthetic applicances. Any seaman receiving medical aid under the Canada Shipping Act, 1934, is not entitled to medical aid under the Merchant Seaman Compensation Act during the period and to the extent that he is receiving medical aid under the Canada Shipping Act.
Insurance provision: The scheme of the act is to require compulsory insurance to be taken out by employers to afford the necessary coverage. The cost to employers is thereby reduced to fixed amounts payable as insurance premiums. In the operation of the regulations the board has found that ship owners, with few exceptions, have been most cooperative and anxious to comply with the insurance requirements. The cost of administration will be charged to the employers on a basis to be determined by the board. The expenses of the board, which now consists of government officials serving without additional remuneration, are small.
The outstanding features of the bill are the simplicity of its provisions and procedure, the elimination of litigation and expense, wide protection for seamen and their dependents, immunity of the employer from individual liability, and the liberality of the benefits provided. I think the house will find generally that the regulations as covered by this bill are pretty much the same as those existing
Merchant Seamen

in the various provincial enactments. We have attempted to put in this bill the best that could be found in the provincial enactments. I am sure the bill will commend itself to the house.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Golding in the chair.
On section 1-Short title.
John George Diefenbaker: I am sure there will be no disagreement with the general purposes of the bill. During the war we freely paid tribute to the services of the armed service personnel, but the men of the merchant seamen who served on the seven seas also deserve high commendation from the parliament and the people of Canada. In 1945 an order in council was passed providing for compensation for seamen who had been injured and for the dependents of the seamen who had lost their lives. As a matter of fact this party -would naturally give support to legislation such as this, because in 1942-and it was the first occasion on which the matter had received support from any political party-we went on record at the Winnipeg convention as follows:
The hazardous occupation of those serving in the merchant navy should be fully recognized and their interests protected by extending to them and their dependents protection in accordance with the principles expressed in these resolutions. The benefits of the Pensions Act as now applied to seafaring men by order in council should be confirmed by statute.
There are some provisions of the bill with respect to which I wish to ask the minister for further information. The first is the matter of transportation on the great lakes. Will this legislation be within the power of the dominion parliament? I express no opinion on it; I simply ask whether or not the question has been submitted to the law officers of the crown for determination.
The second point I wish to raise has to do with the multiplication of boards which parliament is asked to set up. During the war, when under the regulations and under order in council claims must have been much larger than they will be in the days of peace, it was not found necessary to set up another administrative body. It has not become necessary to set up an administrative body to administer the act providing for compensation to government employees. At a time when the people want us to reduce taxation, again and again provision is being made for the setting up of boards and the appointment of persons at large salaries- at least it generally turns out that large salaries are paid. Having regard to the small number of cases to which this act will apply,

I suggest there is no necessity of providing for a merchant seaman compensation board to consist of three members to be appointed by the governor in council. The number of cases to be dealt with will be so relatively small that within the department itself a temporary board could be set up to deal with them.
I now come to the sections dealing with the powers of the board. It is true that under the workmen's compensation acts of the various provinces the decisions of the board is final, but there has been a body of jurisprudence built up. I take strong exception to sections 17 and 18 which give to an administrative board, without regard to the justice of the case, the finality of deciding whether or not justice has or has not been done. Consideration should be given to the establishment of principles to govern the board. Until these principles are established there should be the right of appeal to the courts. This would not apply to every case, but the principle should be followed in the building of a jurisprudence or a set of principles to guide the board so that arbitrary and tyrannical rules once made may not become the basis of future decisions.
Finally, sir, I take strenuous objection to section 41, which is what I call snooper legislation. It provides that where it is found by the board, and mind you its decision is final- -that the widow to whom compensation has been awarded is a common prostitute or is openly living with any man in the relation of man and wite without being married to him, the compensation to such widow may be discontinued or suspended . . .
That type of paternalistic legislation indicates what I would term the snooper mentality. We had examples of it frequently during the period of the war when the recipients of allowances had investigations made from time to time with regard to alleged wrongdoing. I think this is the first time this sort of thing has been incorporated in a statute, however.


Lionel Chevrier: No, it is not. I would remind the hon. gentleman that it is in the Ontario act.


John George Diefenbaker: The Ontario compensation act?


Lionel Chevrier: Yes.


John George Diefenbaker: Well, that is the first time hon. gentlemen opposite have ever quoted with approval anything that has been done in Ontario.


Lionel Chevrier: It is certainly not the first time I have quoted with approval things done in Ontario. I am quite satisfied with the Ontario act as it is now.

Merchant Seamen


John George Diefenbaker: My hon. friend has been a distinguished exception to the rule usually followed in that regard on the other side of the house; but whether or not it is the Ontario act, I submit that this sort of provision together with the power given the board in another section to determine these matters, finally are the sort of thing to which we should not give approval.
As to the general provisions, I and others on this side will deal with some of the specific sections as we come to them. Generally speaking our attitude is this. We approve the principle; we disapprove the necessity of setting up another board, establishing positions to be filled by the governor in council, at a time when the greatest economy should be practised. There is no need for a special board, having in mind the limited degree to which compensation will be claimed, and having regard to the experience of the war years. Finally, as far as the board is concerned, if set up, until a jurisprudence or general principles have been established, there should be a right of appeal.


Douglas King Hazen: I did not see this bill until this morning


Lionel Chevrier: It has been on the order paper for at least two weeks.


Douglas King Hazen: I acknowledge that it is my own fault; -but I might point out to the committee that the governing words of this bill, following the acts we have in the statute books of the various provinces, are that the employee, the seaman injured by accident, may obtain compensation, if it is an injury by accident.


Lionel Chevrier: To what section is my hon. friend referring?


Douglas King Hazen: Section 7. It is injury by accident that entitled a man to compensation; those are the words you find in every act having . to do with workmen's compensation. There has been a tremendous amount of litigation as to the meaning of the words "injury by accident." In all the courts of our provinces and in the English courts, right up to the privy council and the House of Lords, there are decisions as to the meaning of that expression, and as to when a workman is entitled to compensation under the wording of the act. We have this vast amount of legal precedent, if I might call it that, defining these words; and it is of the greatest value. But in this bill, as the hon. member for Lake Centre has pointed out, section 17 provides that the decision of the board shall be upon the real merits and justice of the case, and it is not bound to follow strict legal precedent. There 63260-271
is a vast body of legal precedent in the different provinces and in the British courts, and it seems to me that should be followed. For that reason section 17 is most objectionable. Then section 18 states:
The decisions and findings of the board upon all questions of law or fact are final and conclusive.
In other words there is no appeal from the finding of the board if a seaman thinks he has suffered injustice. If any man thinks he has not received the compensation to which he is entitled, this section prevents him from appealing to anyone, and I say that is wrong. I want to give an instance of how this legislation has been carried out in some of our courts, how those words have been interpreted when there is not a section allowing an appeal from the board.


The ACTING CHAIRMAN (Mr. Golding):: I wonder if we should deal with these sections as we come to them.


Douglas King Hazen: I am dealing with the principle of the bill, Mr. Chairman. I want to give an illustration of the arbitrary way in which boards have acted when they were not governed by legal principles; and I am going to refer to the workmen's compensation board of New Brunswick. In that province the words in the act are, "injury by accident". If a man receives an injury by accident he is entitled to compensation; but what does the board say? The board has ruled that for a man to obtain compensation he must suffer an accident, in the first place, and by reason of that accident he must suffer an injury. Let us say a longshoreman is lifting heavy boxes, or doing other heavy work, and suffers a rupture. He has suffered an injury, but the board says he is not entitled to compensation because there was no accident. There was not an accident, though he did have an injury. So for a longshoreman or any other workman to obtain compensation in such a case, he has to lie about the whole thing and say he turned his ankle, or fell; that he had an accident, and as a result suffered an injury. When they come before the board, in order to get the compensation to which they are entitled they have to lie about it; and they all understand that. This board may place a similar interpretation upon those words, and there is no opportunity for a seaman, as there is no opportunity for a workman in New Brunswick, to appeal. That opportunity did exist previously in New Brunswick, where the act provided that a man could appeal on a question of law but not on a question of fact. When the courts of the land, following the English decisions, held that the words

Merchant Seamen

"injury by accident" should be interpreted as they were in the English courts, the board had the act amended to provide that it should be the sole judge of questions of law as well as questions of fact. I submit that is altogether wrong, that a seaman as well as a workman should have the right to appeal if he feels the board is not treating him justly, and that right is taken away from him by this provision. It is my submission that a seaman, if he believes that the board has not treated him justly, should have the right of appeal. These boards are not infallible. I would ask the minister to give further consideration to amending that section.
I wish to refer also to section 29, which deals with insurance, subsection 1 of which states:
Every employer shall cover by insurance or other means satisfactory to the board, the risks of compensation arising under this act.
Does the board propose to insure these men, or do the ship owners insure their seamen with a private company?


Lionel Chevrier: It is the latter. They insure with a private company.


Douglas King Hazen: If they fail to do so, where is the penal provision?


Lionel Chevrier: Subsection 2 of section 29, where it states:
The board may give notice in writing to a collector or other chief officer of customs that the provisions of this section have not been complied with to the satisfaction of the board in respect of seamen employed on any ship, and thereupon the collector or other chief officer of customs shall detain that ship until he receives notice from the board that he may release the ship.


Douglas King Hazen: But suppose notice is not received in time, with the result that the ship sails and an injury follows: Where does the seaman come in?


Lionel Chevrier: The employer is none the less liable.


Douglas King Hazen: Under the act?


Lionel Chevrier: Yes, section 7. The hon. member for Lake Centre asked what number of seamen had received compensation. The total is 177, in 1945. The 1946 figures are not yet compiled.


John George Diefenbaker: What is the figure from September to December, 1945, after the war?


Lionel Chevrier: These figures are from August, the time the regulations came into force under the War Measures Act, until July 23.


John George Diefenbaker: August of 1945 to July of this year.
[Hr. Hazen.]


Lionel Chevrier: That is right. Then the hon. member asked about transportation on the great lakes, and whether parliament had power to pass legislation of this kind, or whether the Department of Justice had ruled in the matter. This has been submitted to the Department of Justice, and that department is of the opinion that the federal parliament has authority to enact legislation of this kind.


John George Diefenbaker: Would the minister read the opinion into the record?


Lionel Chevrier: I have not the opinion with me, but I shall be glad to get it. Then although the hon. member does not object to the principle contained in the bill, he objects to a multiplicity of boards being set up by parliament. All I can say in answer is that this board, as it has administered regulations under the War Measures Act, is composed of employees of the Department of Transport who get no additional remuneration. The members of the board are the chief counsel of the Department of Transport, Mr. Matthews; the director of merchant seamen, Captain Johnson, and one of the members of the national harbours board, Mr. Roberts. None of these men gets any additional remuneration. It is the intention that the board shall be composed of these men, who are familiar with the regulations and who, I believe, will have no difficulty in coming to decisions in cases as they arise.
The hon. member also objects to sections 17 and 18, and suggests that this gives the board altogether too much power. My answer is that those sections are to a great extent taken from provincial enactments. Unless there is authority of this kind there would be a large amount of litigation which, as my hon. friend knows, means additional costs to the seamen. I believe it was Sir William Meredith who laid down the principle in the Ontario act., which was followed many years later in the Quebec act, that it was far better to give to a board this power to determine and to decide cases at issue rather than to allow them to go to courts .where, very often, huge costs accumulate.
The hon. member for St. John-Albert has referred to a case in New Brunswick which has been drawm to his attention, and in that connection complains about section 7 which deals with injury by accident. An accident, as defined-


Douglas King Hazen: I do not complain about section 7, but rather about the interpretation of that section by the board.

Merchant Seamen


Lionel Chevrier: I believe the hon. member was dealing with section 7 in conjunction with sections 17 and 18. He referred particularly to the case of a rupture resulting from an accident to a stevedore who had lifted some heavy piece of equipment. Section 2(a) defines an "accident" as a wilful and an intentional act, not being the act of the seaman, and a fortuitous event occasioned by a physical or natural cause. I can only say to the hon. member, as I said to the hon. member for Lake Centre in connection with sections 17 and 18, that I am informed, by one of the board members, who is here, that now and again cases of rupture arise from accidents, and in those cases which thus far have come before the board under the regulations the claims have been paid.


Douglas King Hazen: It would be well if we had a definition of "injury by accident" in the definition section, following the interpretation placed upon those words by the English courts.


Lionel Chevrier: We already have it in section 2(a).


Douglas King Hazen: That is an interpretation of "accident", not "injury by accident".


Lionel Chevrier: The hon. member for Lake Centre takes strong objection to section 41. I can only point out to him that that section is taken from the Ontario act. I am informed by those who are responsible for administration of the regulations that it has worked out well and has caused hardship to no one. I have the section before me; it is section 47 of the Ontario workmen's compensation act, which is chapter 204 of the Ontario statutes. I need not read it, but it is substantially the same wording as section 41 of our act.


John George Diefenbaker: How many cases have been turned down under that section since July, 1945?


Lionel Chevrier: There have been none.


Mr. IRVINE:: Section 2 (i) defines seamen as excluding fishermen-


William Henry Golding: I believe we shall make better progress if we deal with each section as we come to it. We are now on section 1, and it would be in order to deal with the principle and terms of the bill itself. I hope hon. members will cooperate in this regard.


Howard Charles Green: This bill is of great importance to the coastal portions of Canada. I refer particularly to the maritime provinces, to the ports of Quebec and Montreal and to 63260-271J
the Pacific coast. I think it meets a great need. In past years Canadian seamen have sailed on deep sea ships, as distinct from coastal ships, but they have not then been covered by any type of compensation, and I take it that the main purpose of this bill is to meet that need. The minister will correct me if I am wrong in that statement. Canada is trying to become a maritime nation and build up a merchant navy. I suggest it would be well for the minister to have this bill referred to one of the committees for careful consideration section by section. Probably it could go to the marine and fisheries committee, in view of the fact that the industrial relations committee is busy trying to settle strikes. For the first time in their lives thousands of young Canadians have become interested in our merchant navy, and many of them want to make following the sea their career. Young men from the prairies particularly took an interest in the sea during the last war. We should try to get away to a good start, and this is the time to put this bill in proper form. It cannot be considered carefully in this house. We are in the dying days of the session, there are not very many members here to-day and we shall have no opportunity to scrutinize the bill carefully. I suggest to the minister that he refer the bill to one of the committees. He could get a report back in the course of a few days and we would then be sure that the bill is in the best possible form. I am not saj-ing that it is not in the right form now, but we are not in position to be sure of that. The bill is of such importance that it should be carefully scrutinized before being placed on the statute book.


William Irvine: Perhaps, Mr. Chairman, you will permit me to say by way of general observation what you would not permit me to say a moment ago because I referred to a particular part of the bill. I want to know if fishermen have 'been excluded- from the bill because they are taken care of -by the provincial compensation acts, or was it done for some other reason?


Lionel Chevrier: All I can tell the hon. gentleman is that fishermen are excluded. I do not know what the position is with reference to fishermen in the provinces, but I am informed that some, although not all, are covered by provincial legislation.


Mr. MATTHEWS (Kootenay East):: Will the provisions of this bill apply to seamen who operate between provincial ports, say between Vancouver and Prince Rupert? They seem to refer only to men engaged in iruterprovineial trade. We are anxious to see them extended
Merchant Seamen

to cover seamen sailing from one port in a province to another port in the same province.


Lionel Chevrier: British Columbia has a provincial statute covering the case referred to by the hon. gentleman.


Howard Charles Green: This is meant primarily to cover deep sea shipping?


Lionel Chevrier: Yes, and also for those who are not covered by provincial statutes.


Howard Charles Green: Who are they?


Lionel Chevrier: Home trade and foreign-going vessels are not all covered.


William Irvine: I think we should make sure that all fishermen are covered by the laws of the various provinces where deep sea fishing takes place. There are large fishing concerns who operate drifters, and accidents occur on those ships just as they do on merchant ships.


Lionel Chevrier: The bill now covers only merchant seamen. If fishermen were to be covered I should think that that would be a matter for the provinces, because they leave a port in the province to fish and they come back to that port with their produce. That is clearly a matter for provincial jurisdiction.


John Ritchie MacNicol: Are there any diseases from which seamen might suffer and which [DOT]eventually might take their lives that are not covered by the act? Generally speaking our compensation acts have given excellent results. Years ago I had some small part in helping to promote the Ontario workmen's compensation act, and I think in the main it has been found to give fair protection and compensation to the ordinary workman. However, in some cases a workman contracted a disease, possibly tuberculosis due to poor ventilation in a factory, for which he has been unable to obtain compensation. I must say in all fairness to the boards with which I have had dealings that their decisions have been based upon the advice of their medical advisers and they have always maintained that they carry out the full intent of the act.
I do not know whether tuberculosis is contracted at sea, but there may be some peculiar diseases from which seamen might suffer. I hope when the act is put into operation and a seaman cannot prove that his disability is caused by service on a ship the board will consider the question whether or not the disease might have had some connection with the service on the ship. Otherwise I presume

the act takes care of all such cases as broken legs, broken arms, loss of eyesight, and other injuries that are obvious.


Lionel Chevrier: Yes.


John Ritchie MacNicol: I have found from long experience with workmen that often they have not been given fair compensation because they have not been able to prove to the satisfaction of the board that their trouble arose through their employment. Of course the board could see at once if a man's leg was off, or his arm, or if he had lost an eye.


Lionel Chevrier: Under the provincial acts they have to prove that the industrial disease is directly related to their employment. But I have this to say to my hon. friend, that industrial diseases are not covered by this act. There are few if any cases of industrial diseases arising in ships. The only one that has come to the attention of the officers of the department is pneumonia, and that of course is not covered by the act.


John Ritchie MacNicol: Would it not be possible for them to contract some illness from working in the hold of a ship, or from coming in contact with bales from all sorts of places where there might have been disease?


Lionel Chevrier: I think that is a matter which might well be explored as experience is gained in the operation of the act, but thus far I am informed by my officers that few cases of industrial disease have arisen.


John Ritchie MacNicol: I hope the board will be a little generous with seamen who have contracted diseases in such a manner as I have mentioned. A blind man can almost tell whether a man's leg or arm is off, but from long experience with workmen I have found that the workman does not always get the compensation he is entitled to. I have been unable to prove in various cases that the injury or illness arose through the man's employment.


Douglas King Hazen: Is pneumonia not "a fortuitous event occasioned by a natural cause"? If you will examine the cases that have come before the courts in Great Britain which have to do with compensation and which have had to interpret the words "injury by accident", you will find that in their decisions they include all kinds of diseases as injuries by accident, and you will find that one decision has led to another and that the interpretation of those words has been broadened to an extraordinary extent. Certainly you would call pneumonia a fortuitous event due to a natural cause, would you not?

Merchant Seamen
If the minister will examine section 2, paragraph (a), he will find those words in it. The trouble with these boards is that they have set themselves up as judges of law and of fact, and there is no appeal from their decisions. If they make a ruling that pneumonia is not an injury due to an accident and that the man is entitled to no compensation there is no appeal from that decision to any court in which the man could get justice if they have interpreted the act wrongly. That is what I object to about section 18.


Lionel Chevrier: I am afraid I cannot agree with my hon. friend's opinion, if it is an opinion. By no stretch of the imagination can pneumonia be considered an accident, and for that reason, while a person suffering from pneumonia could put in a claim, the claim would not be accepted under section 2(a) because pneumonia is not an accident.


Douglas King Hazen: Unfortunately I have not the British decisions here, but I could refer the minister to case after case decided by the British courts which would make him change his opinion.


William Irvine: I think the hon. member for St. John-Albert has made a very good point. A man who is working in the hold of a ship may get overheated and then step out into the open air and get chilled and catch pneumonia. That is just as much an accident as breaking a leg.


Lionel Chevrier: May I point out that there is a misprint in section 2(a). The word "seamen" should be "seaman".


Howard Charles Green: AVill the minister explain the last part of the definition of seaman? Apparently the act is intended to cover a seaman who is engaged on a ship that is registered in Canada or that is under charter to a Canadian. But there is also this further provision that "seaman" includes:
a seaman engaged in Canada and employed on a ship that is registered outside of Canada and operated by a person resident in Canada.
Just what type of case is that meant to cover?


Lionel Chevrier: Is my hon. friend reading from (i)(ii).
"Mr. GREEN: I was reading from the end of paragraph (ii).


Lionel Chevrier: That is to enable the governor in council to include a seaman engaged in Canada and employed on a ship registered outside of Canada but operated by a person resident in Canada or having his principal place of business here when the ship
is so engaged. The Minister of Justice brings to my mind, for instance, a C.P.R. boat operating out of Liverpool. This would enable the governor in council to cover such a case as that.


Mr. BENTLEY:: Following up the question raised by two other hon. gentlemen, I wonder if the Minister of Justice would care to give an opinion of the words in the definition section 2(a), which says "and a fortuitous event occasioned by a physical or natural cause".
Mr. ST. LAURENT: I have not given special consideration to the terms of the definition. But so far workmen's compensation acts have not provided for health insurance. They have provided for insurance against accidents, but not health insurance. That is a matter to be determined not by boards or by courts but by the lawmaker. Before 1908 there was no workmen's compensation in my own province unless there was negligence attributable to the employer. The legislature thought that there were risks incidental to industry which should be borne by industry, whether there was negligence or not, and enacted legislation to that effect. It may be that we shall come to the point where the employer will insure the health of his employees or be made to insure their health, but the legislature has not gone that far yet.


Howard Charles Green: They do with respect to certain industrial diseases, such as silicosis.
Mr. ST. LAURENT: There are industrial diseases which are classified as being an incidence of the industry and in consequence as being a proper cost of the industry. The ordinary ailments, to which a man employed in industry is no more exposed than his fellow man -who for instance is a member of parliament. have not yet been covered by employer's liability, and that is something which will require to be dealt with by the law maker, if it is to be done.


[Stage Direction]
Section agreed to.
At one o'clock the committee took recess.
The committee resumed at three o'clock..
On section 2-Interpretation.
Lionel Chevrier: There is a misprint in line 9, section 2, subsection (i) of the bill. The word "trace" should read "trade".


Douglas King Hazen: Before the committee rose for lunch there was some discussion as to whether or not a seaman who suffered from
Merchant Seamen

a disease could claim compensation under this bill. If I understood him correctly, the Minister of Transport said that a seaman who developed pneumonia could not obtain compensation; that under the bill it was not an injury by accident. He said that the board had taken that view of it when they ruled under the order in council. The Minister of Justice said-I think he used the words "industrial disease"-that if a seaman suffered from a disease he could not claim compensation under this bill because it was not injury by accident. I submit that the British courts have given a broad interpretation to the words "injury by accident"; and if under all circumstances the board which has been set up has ruled in the past that a seaman who contracts pneumonia is not entitled to compensation, the board is wrong. I say that the cases have gone far in that regard. I have not had time to go through the indices and examine all the cases, but I shall refer to one which was decided by one of the British courts which defined injury by accident. It is the case of Raeburn v. Lochgelly Iron and Coal Company Limited, which was decided in the year 1926. I propose to read first the headlines.


Lionel Chevrier: What is the citation?


Douglas King Hazen: I am reading from volume 20, Butterworths' Workmen's Compensation Cases, at page 637. I do not wish to take up too much of the time of the committee, but I am citing this case for the benefit of the board which will be set up, because it seems to me that the board may have misdirected itself if in the past it has held in all cases pneumonia cannot be an injury by accident. The head note of the case reads as follows:
A workman was employed for some years before his death as a fireman in a particular section of a pit in his employer's colliery. He became ill on March 3, 1925, while in charge of men removing plant from that section, and died on March 12 following. The cause of death was a form of infective jaundice, known as spirochaetosis icterohaemorrhagica.
Mr. ST. LAURENT: It certainly would be a horrible acoident to became afflicted with all that.


Douglas King Hazen: I continue:
It was proved in evidence, on a claim by his widow for compensation, that this form of infection is hardly known to occur in this country except in coal-workings, that it is then due to infected rats in the workings, and that microorganisms causing the disease were found in rats caught after the workman's death in the section in which he had been working. From these facts the SheriiLSubstitute drew the inference that, although the manner in which the micro-organisms were transferred was not capable of proof, they were transferred to the workman from in-
[Mr. Hazen.l
fected rats in the colliery'. He therefore held that the "workman died as a result of injury by accident arising out of and in the course of his employment, the infection not being incidental to his employment, and awarded compensation.
The employers appealed from that decision, but it was held that the arbitrator was entitled to hold that the infection which produced the disease was an accident and that the disease itself was an injury by accident, within the meaning of the act. I cite that case to show how far the courts have gone in interpreting the words "injury by accident". In dealing with the facts in his judgment on appeal the Lord President said:
The real difficulty lies behind:	Was the infectious disease which culminated in the workman's death an "injury by accident" within the meaning of the act? It is no longer possible to dispose of this question in the negative on the ground (in itself unanswerable) that, in the ordinary use of language, nobody would describe a fatal disease-whether infectious or not-as an "injury by accident," or even as an "accident" at all. The situation must be accepted that, by a series of decisions, in which the turning-point was definitely reached by the decision of the House of Lords in Brintons, Ltd. v. Turvey (.1905) A.C. 230: 7 W.C.C.I., an infectious disease (not classed as an "industrial disease") may be "an injury by accident" within the meaning of the act.
If in the past under the order in council constituting the board it has ruled that a seaman who suffers from pneumonia cannot get compensation under the order in council which is now embodied in the bill, they may have made a wrong ruling. It must all depend on the facts of the case. Hon. members will find other decisions in the English courts; I have not had time to look them all up. When a man working in a pit, for instance, gets overheated and afterwards contracts a disease and dies from it, I think he is entitled to compensation, because that disease was injury by7" accident. I could go on and cite other cases but I do not propose to do so. I cite this one merely because I believe that the board may have misdirected itself if it held that in the case of pneumonia a seaman was not entitled to compensation. If it has misdirected itself I hope it will not do so in the future.
That raises another point. The board is supposed to get all the facts and decide the question on the facts, but when it comes to a question of law what experience have they to decide questions of law? They may decide them rightly or wrongly. In the case of a question of law I say that a seaman should have the right to appeal from the board's decision; if he feels that he is aggrieved he should have the right of appeal to one of the courts of the land.

Merchant Seamen


Mr. MacINNIS:: I was not here this morning because I was engaged in other work and therefore I have not had an opportunity to say anything on this important bill. Merchant seamen for too long have been unprotected against injury. Some little time ago I had occasion to call to the attention of the minister the case of a young man of perfect physique who was injured in an accident upon a ship, in which he completely lost the use of his lower limbs. Though both the department of pensions and national health, as it was at that time, and the Department of Transport were very sympathetic in considering the representations I made, they were unable to obtain any permanent compensation in this case. So if only it will provide for cases of that kind I welcome this bill.
The point raised by the hon. member for St. John-Albert is important, but I doubt if it would be of any great value to the seamen if the employer has the same opportunity of taking the case to court when he is not satisfied. Then it would become a question, as I think it was before we had compensation acts, as to who has the longest purse. I believe representatives of labour and trade unionists generally have over the years, to my own knowledge as far as British Columbia is concerned, objected to having compensation cases reviewed by the courts. Even though they might be dissatisfied with board decisions, they would much rather have the cases dealt with by a board than have the act provide that, they might be referred to the courts. But of course a great deal will depend upon how the board is constituted. In the provinces I believe one member represents the employers, another represents labour and the third member is the chairman, who is supposed to be impartial. We have not yet reached the section setting up the board-it is the next section-but as I read it no provision is made for setting up a board of that kind. Of course what I am saying now is being said under the handicap of not having been here when the Minister of Transport spoke on the bill, but I would much rather have a board constituted as provincial boards are than have the seamen making appeals to the courts. I think what we should aim to do in this matter is to get a square deal for those concerned by keeping these cases out of court, and we should give that very serious consideration.
Section as amended agreed to.
On section 3-Merchant seamen compensation board.


John George Diefenbaker: This is the section to which I made reference, which provides for the setting up of a compensation board. The
total number of cases in the year 1945-46 was some 177, and the minister pointed out that up to date the board had not been an expensive body 'because it was composed of officials of the various departments, together with a representative of the seamen. But that does not answer this question at all. This is a comprehensive section. Looking over the order in council I see that parliament is being asked to copy it almost in its entirety. I say "almost in its entirety"; the bill is a photographic copy, with the exception of section 3. At present the board which has been looking after these duties under this order in council is set up in this way:
-shall be a board to be known as the merchant seamen compensation board consisting of three members, namely, a chairman, a vice-chairman and a third member who shall be appointed by the minister, and who shall hold office during pleasure and serve without remuneration.
That is the wording of the order in council now. My hon. friend endeavoured to answer my objection to the setting up of another board by saying: Well, we are going to follow the same method that we have followed heretofore under the order in council. That is not what parliament is being asked to do. Parliament is being asked to pass section 3, subsection 4 of which reads:
A member of the board holds office during pleasure and shall be paid such salary as the governor in council may fix.
Now that is has been pointed out to the minister I am sure he will see the force of the argument, because here we are being asked to give the governor in council power to set up just another board. The governor in council can fix the salary at whatever they wish, and the person appointed holds office during pleasure. As a matter of fact, in regard to the setting up of boards and making the crown all powerful in this way I was reading something not long ago that makes it seem that history does repeat itself. I find that in the first thirty years of the reign of George III a resolution was introduced into the British House of Commons reading:
The power of the crown has increased, is increasing, and ought to be diminished.
That was about 1790. It was the famous resolution introduced by Dunning, of which I am sure the minister has heard. The only change necessary now would be to substitute "the executive" for "the crown" and that resolution could be introduced in this house; and with the support it would receive on the other side, being assured of the support of this side of the house, certainly that resolution would be passed to-day by this parliament. In view of the fact that it is not intended
Merchant Seamen

to set up a board to provide cushy jobs paying handsome salaries; since it is the intention to follow the procedure now being followed under the order in council, I suggest that subsection 4 of section 3 might be changed. I do not see why there should be this departure from an otherwise photographic copy of the order in council. It might be made to read: "A member of the board holds office during pleasure and shall serve without remuneration." Having regard to the fact that these three men were willing to serve last year, and that apparently they have expressed their willingness for the future, so there is no possibility of this act being used to bring about the appointment of a full board, I hope the minister will accept my suggestion. If he does not, I intend to have something more to say on it.


Lionel Chevrier: I am sorry I cannot accept the suggestion made by the hon. member for Lake Centre, and that for more than one reason. In the first place, while it is true that the board has been functioning without remuneration since the order in council has been in effect, and while I feel the board will operate for some time without remuneration, there may come a time when it will be necessary' to expand the operations of the board, and appoint as members persons outside the government service. When that time should come-if it comes-I do not believe the house would expect anyone outside the government service to act as a member of the board without remuneration. That is the reason why subsection 3(4) as it stands to-day is inserted. Again, if my hon. friend's suggestion were accepted, his amendment would restrict membership on the board to government officials only.


John George Diefenbaker: The minister has certainly answered the arguments he used in answer to me this morning. I am emphasizing what I said this morning, that we are being asked to give the governor in council power to appoint another board, with the payment of high salaries. The minister said this morning that it was intended this board should be composed of officials, together with a member from the seamen's organization, and that it was not intended that large salaries would be paid. The minister now says that is the intention for the time being, but within a year or so the government may decide that two or three persons need a job. By this measure we shall have created the machinery permitting their appointment, at whatever salary the governor in council may determine. In view of the fact that it handles no more than one case every other day I 
see no reason why we should make the provision here suggested. I have no desire to prevent the calling in of anyone under an arrangement whereby he shall receive a fair allowance for his time. But there is a great difference between that and the payment of a salary. I can see no reason why there should not be a per diem allowance to cover the operations of this board. I therefore move:
That all the words after the word "shall" in line 27 be deleted, and the words "serve without salary" be substituted therefor.


William Alexander McMaster: It seems to me that in view of the small number of cases involved, this is merely a departmental matter and could be done by one or two stenographers who would write letters to Vancouver, Halifax or some other point. It will be simply a matter of carrying out the terms of the act, and I suggest that those terms should be so clear that anyone might become entitled to the benefits simply by proving an injury in the course of his duties. Only rarely would anyone's time be taken up in deciding intricate points of law or fact. The act might be better administered regionally. Sailors living in British Columbia and sailing from British Columbia ports could deal through a provincial board at Vancouver, and those operating from Ontario, on the great lakes, could come under the Ontario compensation act. I believe that under that act sailors from Ontario who travel on steamships are covered, although I do not know to what extent it has been used. In Quebec and the maritime provinces, the same procedure could be followed, utilizing the compensation acts of each of the provinces. I believe that at the most one departmental head would be sufficient, and that three are unnecessary. If there are three, they should serve without remuneration.


Lionel Chevrier: I should like to deal with the objections raised by the hon. member for Lake Centre, and with his amendment. If his amendment were accepted, section 3 (4) would read:
A member of the board holds office during pleasure and shall serve without salary.
The effect of the amendment, if accepted, would be the very thing I am sure my hon. friend would not wish to have. It would restrict membership on the board to men already in the government service, and would prevent the government or the department from giving representation to labour or to other groups of society if at some time in the future it should' be decided to extend the operations of the board. I believe I must give

Merchant Seamen
my hon. friend the benefit of the doubt by stating that I do not think he had that in mind when he offered his amendment.
My hon. friend has complained about expenditures by the government, but if he will look at section 49 of the bill he will see that all necessary costs of administration of the act, including salaries, expenses, fees and commissions, are chargeable against the various employers, apportioned on a basis to be determined by the board. If in future the government decides to pay salaries to the members of this board, that cost will be apportioned among the employers in the same way as other costs are. It strikes me that for this reason it would not be advisable to accept the hon. member's amendment.


Angus MacInnis: I am not greatly concerned with saving the country the expense that would be involved in the payment of salaries to the members of this board, because I have come to the conclusion, from my experience in this house, that it is a matter of no concern. I could tell the hon. member for Lake Centre how the salaries of the members of this board could be paid without any additional expense to the country, but I do not think he would agree with my proposal.


John George Diefenbaker: What is it, if I may ask?
Mr. MacLN'NIS: The other night my hon. friend supported a substantial increase in the remuneration of persons who are already getting quite high salaries, and I cannot believe that in that, matter he was concerned with saving expenditures to the country-


John George Diefenbaker: Did my hon. friend or any member of his group vote against those increases?
Mr. MaoINNIS: That is all right; the bill has not passed1 yet. I spoke against it, and when I speak against a measure I have the courage to vote against it. I do not know whether my hon. friend does that or not. I understand that the board) as contemplated does not include a representative of the seamen.


Lionel Chevrier: The director of merchant seamen is already a member of this board.


Angus MacInnis: The director of merchant seamen is not a seaman.


Lionel Chevrier: Oh, yes; Captain Johnson is a seaman.	.


Angus MacInnis: Captain Johnson is the man who orders the seamen around. I know Captain Johnson, and I do not think any seaman would say that he necessarily can represent the seamen. If they had an opportunity of saying that they were satisfied to have Captain Johnson represent them, it would be all right. Subsection 1 reads:
There shall be a board to be known as the merchant seamen compensation board-
I understand that there is not to be a merchant seaman on that board. I submit that there should be a representative of the merchant seamen, a representative of the employers and then a third representative to be appointed by the government, although the government really makes all the appointments. I do not believe the administration of this act will be satisfactory to those who are to receive compensation under it unless they feel assured that each case will be considered sympathetically in view of all the factors involved. If the proposal of the hon. member for High Park were feasible it might be a better way of administering the act, but I doubt if it can be done in that way and I am not advocating it. In order to give satisfaction to the merchant seamen they should be represented on the board.


John Ritchie MacNicol: I agree with the hon. member for Vancouver East, because if this board which is to be set up to deal with injuries or accidents to merchant seamen is to work properly there should be a practical merchant seaman on the board. One of the members of the provincial workmen's compensation board is a practical working man, and that lias been the case since the board was first set up.
Amendment (Mr. Diefenbaker) negatived.


Douglas King Hazen: How many people are employed by the present board?


Lionel Chevrier: Apart from members of the government employees compensation division of the Department of Transport there is one man employed now in connection with the seamen's regulations.


John Ritchie MacNicol: If a board is set up later will it have the right to select its own personnel?


Lionel Chevrier: Yes.


John Ritchie MacNicol: I am not in favour of that at all. I do not believe in allowing boards to name their employees and fix the remuneration.


Lionel Chevrier: That is covered by subsection 9.


John Ritchie MacNicol: I know this is going to
pass, but I am opposed to it.


[Stage Direction]
Section agreed to.
Merchant Seamen
[Stage Direction]
On section 4-When compensation not payable.
Lionel Chevrier: I have a slight amendment to propose to section 4, as follows:
Amend clause 4, paragraph (b), page 3, by striking out the words ''or any other order in council that provides similar benefits" in lines 9 and 10, and substituting therefor the following "or any statute or law that provides similar benefits."
I will ask the Secretary of State to move this amendment.


Mr. MARTIN:: I move accordingly.


[Stage Direction]
Amendment agreed to.
John Ritchie MacNicol: Paragraph (a) reads:
(a) where a seaman or his dependents are entitled to claim compensation under the Government Employees Compensation Act or under any provincial workmen's compensation law;
I should like to know where this dual control comes in under the provincial and federal laws.


Lionel Chevrier: There is no dual control. If a seaman is entitled to claim compensation under the laws of, say, British Columbia, Nova Scotia or Quebec, for an accident happening in a province, he could not claim under this act. If an accident happened within the province, he must claim under provincial enactments, but he cannot claim under both.


John Ritchie MacNicol: I understand that, but where would the accident have to occur to give him .the right to claim under the provincial or the dominion act?


Lionel Chevrier: It might occur on a ship sailing from Vancouver to Victoria, or from Halifax to Saint John.


John Ritchie MacNicol: If a seaman met with an accident on a ship going from Vancouver to Victoria I should think that the federal law would, apply; but if the accident occurred ashore, say on the dock in the performance of his duties, the provincial law would apply.


Lionel Chevrier: It is the other way round. The seaman would be entitled to compensation under the British Columbia Act if the injury occurred while on the ship going from Vancouver to Victoria.


Alfred Johnson Brooks: Suppose there were a difference between the provincial rates and the rates under this act?


Lionel Chevrier: If the accident occurs under provincial jurisdiction he comes under the provincial act. He has no choice.


Douglas King Hazen: Would a ship owner have to contribute to the provincial board and also

take out insurance to cover himself under .this act? Are there any provinces which already provide workmen's compensation for seamen?


Lionel Chevrier: The answer to the first question is yes, there may be cases where an employer would have to take out insurance under both acts. In reply to the second question, there are provinces which already' provide under workmen's compensation acts for compensation in case of accidents to seamen. British Columbia is one, Nova Scotia is another, Ontario and Quebec are still others.


Douglas King Hazen: What seamen are entitled to claim compensation under the government employees compensation act?


Lionel Chevrier: Those are employees of various departments, such as the departments of Transport and Public Works.


William Alexander McMaster: I do not think the seaman has the choice of which act he comes under. The Ontario act, as I recall it, does not provide for contributions from the steamship companies, but the compensation board fixes the amount which the steamship company has to pay. If the seaman had the right of choice, he would not know which jurisdiction would treat him best. My experience with the Ontario workmen's compensation board is that a workman does not know just what he is going to get. He may get so much a month, or he may be given a lump sum. Under this clause he has to come under the Ontario workmen's compensation board.


Lionel Chevrier: My hon. friend is right. If the accident occurs withm the jurisdiction of the province he has no choice. The application must be made to the workmen's compensation board of the province. But when the accident occurs in foreign waters or in jurisdiction outside that of the province, application is made to the board sought to be set up under this act.


Gordon Graydon: Extra-provincial jurisdiction.


Lionel Chevrier: Right,


Mr. ZAPLITNY:: How many seamen will come under the provisions of this act?


Lionel Chevrier: At the peak of war operations the number of seamen amounted to about 10,000. I should think that number is down considerably now. If my memory serves me, the last figure I saw was in the neighbourhood of 6,500.


[Stage Direction]
Section agreed to.

Merchant Seamen
On section 5-If compensation may be claimed under law of foreign country.
Thomas Reid: In line 16 should not "if such election is not made and notice given" read "if such election is not made and no notice given"?


William Alexander McMaster: Can the minister conceive of any set of circumstances in which an election would have to be made?


Lionel Chevrier: Yes, if the seaman is working on a ship where compensation is payable under the laws of any foreign country.


William Alexander McMaster: Would he be entitled to come under this act if working for a foreign employer?


Lionel Chevrier: Yes, and he would have to give notice of election. In reply to the hon. member for New Westminster, perhaps he is right. I cannot say offhand. I shall have to look into it.


[Stage Direction]
Section agreed to.
On section 6-Application of act.
John George Diefenbaker: A moment ago the minister said that this act would not apply in any case in which the workmen's compensation act of the province applied. But this section says:
This act applies to accidents happening within or without Canada.
The hon. member for High Park referred to the fact that steamship companies do in fact come under the provisions of the workmen's compensation act of the province. There may be an explanation of the apparent overlapping of two jurisdictions. Perhaps the minister will also say whether he is in a position now to give the committee the opinion of the solicitors of the Department of Justice as to whether it is within the power of the dominion parliament to pass this measure.


Lionel Chevrier: I am getting the opinion from the justice department and hope to table it, with the consent of the house, before the bill is read a second time. With reference to the exact meaning of section 6, which says:
This act applies to accidents happening within or without Canada-
-we cover cases under this act which the province does not cover. In other words if they are not covered by provincial jurisdiction, we cover them under this act.


[Stage Direction]
Section agreed to.
On section 7-Compensation, how paid.
John Ritchie MacNicol: Paragraph (a) reads:
(a) does not disable the seaman for a period of at least seven days-[DOT]
I have known of accidents that disabled a workman for four or five days, and then the workman would return to work so that his employer would not have an opportunity to complain. Some time later the disability would return and disable him. In a case of the kind what redress would the seaman have if he had returned to work within five or six days after the accident? Would he be debarred from applying for compensation because he had returned to work after five or six days?


Lionel Chevrier: I believe there is a section covering the point and I will try to find it.


William Alexander McMaster: I was impressed by what was said by the hon. member for St. John-Albert with reference to the use of the word "accident". Cases have come before the courts in which two automobiles have been in collision, and the courts have decided that neither party is liable because it was an accident. "Accident" has two meanings. If the word "injury" were used instead of "accident", or if you used the two words, it would overcome any objection taken by any body constituted under this act, or by anyone else, that it is only an injury and not an accident. I realize that if this section is amended, many other sections will have to be amended also. An accident is something that no one can help, and perhaps we are insuring everyone regardless of whether injury is sustained through the individual's fault or otherwise. I have often thought that the word "accident" is a dangerous one. I suggest it should be injury. The question should be whether the man suffered injury. If that were the provision, the question of a man being injured by something that was not in the nature of external force would leave the matter open to be decided by the board. If he could prove conclusively that although he had not been struck by an external force he had acquired some disease as a direct result of his work, the position would be made clear. I can understand it would open the door to a man maintaining that any disease had been caused by his work when in point of fact it might not have been. I suggest that injury would be a better word, even if it has to be used in conjunction with the word accident.


[Stage Direction]
Section agreed to.
Sections 8 to 17 inclusive agreed to.
Merchant Seamen
[Stage Direction]
On section 18-Decisions final.
Douglas King Hazen: I feel strongly that under this act if a seaman has not the right to appeal to a court on a question of law there will be cases in which he will not get justice. I have in mind certain cases under the workmen's compensation aot. I 'am thinking particularly of a girl who worked a machine by means of a lever. In the course of her work she injured her back. Perhaps some other girl working that lever would not have been injured, but this girl was, and it was necessary for her to have a surgical operation. The board said: "Yes; it is true she injured her back, but she is not entitled to compensation because there was no accident". Under the wording of the act there must be injury by accident. These people said: "We admit you had an injury and hurt your back, but you did not suffer an accident and therefore you are not entitled to compensation". If there were no appeal under this act-there Happened to be an appeal in the case I referred to

so far as any question of law vas concerned, the person who suffered might not have obtained justice. In the case I have mentioned, that girl could have obtained no compensation, and undoubtedly there will be cases under this act in which the board may make wrong legal decisions. This morning it was suggested that if a seaman got pneumonia he could not be entitled to compensation under this act. I submit there are cases under certain circumstances in which, if the word "injury" were used, the person affected would be entitled to compensation; and yet, if the board holds that he is not entitled to compensation, he can obtain none and he has no appeal. I feel strongly that he should have an appeal on questions of law, and therefore I am going to move that the words "law or" in the second line of section 18 be deleted, so that the section will read:
The decisions and findings of the board upon all questions of fact are final and conclusive.


John Ritchie MacNicol: I concur in what the hon. member for St. John-Albert has said. I have had experience of quite a number of oases that would come under section 18. Not so long ago someone came to see me, as many workmen do in Toronto. This person was working in a shell factory which was turning out small shells, perhaps a foot long and three inches in diameter. I do not know how much they would weigh, but one of these shells fell on the worker's foot from the height of the lathe. The chairman knows how high that would be. It injured the foot and the worker was incapacitated for a long time. The doctors of the board, after the

board had given this workman compensation for two or three months, turned the claim down flat. I have had in mind for some time bringing this matter to the attention of the public through some action that I propose through the medium of the Department of Labour. I have been seriously thinking of proposing that an act be passed enabling a workman to appeal from a decision of the board. There is no appeal to-day, so that when the board issues an order it is final and the workman has no more chance. I have come across several cases which have caused me to feel strongly on this point, because I feel that the workman should be given an opportunity to appeal from the decision of the board. I do not know to what body he would appeal-I am not a lawyer- but I suggest that, not the board, but a court should have the final say in case of a dispute, I want to back up what the hon. member for 8t. John-Albert has said.


Frederick Samuel Zaplitny: If the amendment is adopted does it leave it open to the employer as well as the employee to appeal?


Lionel Chevrier: Of course it does, and that is why I object to the amendment proposed by the member for St. John-Albert.


Mr. HERRIDGE:: I am opposed to this amendment. I was in the legislature of British Columbia and had occasion to deal with hundreds of compensation cases in the lumbering industry, and I have heard a similar proposal discussed by labour organizations and by many individuals, some even who had received unfavourable decisions from boards. I must say, Mr. Chairman, my experience has shown me that there is general opposition from organized labour and from working people themselves to the principles enunciated in the amendment. In my opinion we would be wise to follow the practice of provincial boards.


William Alexander McMaster: I believe that wherever possible there should be one appeal, and that appeal should be to a court which would be reasonably accessible in each province. In Ontario in many cases the workmen's compensation board have given inadequate compensation. I shall give one example. Some years ago a man who had come from Nova Scotia and was working in a mine lost the partial use of one hand. The compensation board paid him $800, and he had to return to Nova Scotia. He could no longer be a miner; he had to return to the place whence he had come, with the opportunity of earning the money which he had previously earned absolutely gone. The sum of $800 would not go

Merchant Seamen
very far in repaying him for the loss of the use of his hand, as he had to make his living out of labour.
I should like to mention something which I overlooked. Suppose a man who is working on a ship which fishes for tuna in the southern Pacific leaves Vancouver on the ship, would he be a fisherman or a sailor? If he was a fisherman and was injured-and he would have good opportunity of getting injured on one of these ships-he would be entirely outside the act. I overlooked that example when the proper section was under discussion. I believe there should be one appeal, and I am quite willing to admit that it should be the appeal of the workman.
In Ontario the workmen's compensation board have a large fund. I would hate to tell how much has been gathered together. It is true that the employers are interested only in keeping down the claims so that they will not have a bigger assessment made against them. It is a sort of indirect way of protecting themselves. For some reason or other the board has not been particularly liberal with the workers. For that reason there should be one appeal.


Lionel Chevrier: A moment ago the hon. member for Davenport asked a question arising out of a portion of section 7, the disability section. The answer to that question is to be found in subsection 4 of section 24. I believe the hon. member for High Park is in favour of an appeal to a higher court, as is the hon. member for St. John-Albert, who moved the amendment.	The
answer to the questions can well be found in those who have had experience over the years in handling compensation cases. Both hon. gentlemen, who are lawyers, will agree with me that Ontario, more particularly, has gained a wide field of experience in that regard. The legislature of that province has seen fit not to include in the act a section giving the workmen, or for that matter the employer, the right of appeal. I have the workmen's compensation act of Ontario before me, and the language is as strong as, if not stronger than, the language used in the bill now before the committee. I think we would be well advised to take advantage of the experience gained by that province. In British Columbia there is no appeal from the findings of the board; there is no appeal in Quebec. So far as the question of fact is concerned there is no appeal in New Brunswick. I am not too sure whether I understood my hon. friend aright this morning, but perhaps he did say that that had been amended and that there was now no appeal in his own province of New Brunswick,
either on a question of law or on a question of fact. I think we would be well advised to follow the practice in these provinces, because in some instances, at least under the Government Employees' Compensation Act, we have to work through the provinces. I can think of some cases in which under that act the applications are made directly to the provincial boards and through the Department of Transport, handled by us but using the provincial board as an agency for the adjudication of these cases. I think we would be ill advised to change the section, particularly in view of the experience and practice over the years as I have indicated.


Douglas King Hazen: No people have had greater experience in workmen's compensation matters . than the people of the United Kingdom, and there they have the right to appeal. I should like to cite another British ease. A man who was working sorting wool in a factory contracted a disease in the eye which blinded him. The wording of the act is "injury by accident." The board held that he was blinded while he was working in the plant, but they said that it was not injury by accident. The argument was that a bacillus which is found in wool had entered his eye and blinded him. The board said that that might be so, but it was not an injury by accident, and they so ruled. Under the British laws the workman had an opportunity to appeal and he did so. The case went to the House of Lords, they found that the man had suffered an injury by accident and was entitled to compensation. When you s'et up boards of this kind you gave them arbitrary powers and you take away from the people the right to appeal to the courts where justice is administered. If you do that you are doing a great disservice to them, and it does not make any difference to me whether the recommendation comes from a labour union or anybody else. The courts are set up to do justice, and if a man feels that he has not had justice done to him he should have the right to appeal to the courts.


John Ritchie MacNicol: I am well aware that labour unions are opposed to an appeal in the case of an injury to a workman. The same is true of industry, but I am thinking of the man who gets nothing. Where is he to get his chance? I have a case in mind, but I will not state in which province it happened because I am not in conflict with any workmen's compensation board. The man of whom I am thinking worked in a foundry, under pitched windows with nothing between him and the windows. It was a very cold room, and he caught what turned out to be
430S
Merchant Seamen

the cause of his death. He could not prove it. I went to see him just before he died. The board turned him down flat. In my judgment his death was the direct result of the conditions under which he had to work. He had no appeal. I am not finding any fault with any board. I quite agree that it would never do to allow workmen to have to face high-priced lawyers interested in the employers. If there was some place else to which they could go I do believe the workmen should have the right to go there. If this man of whom I speak had had a chance he might have obtained redress because the workmen's compensation board turned him down flat. When that is done a w'orkman has no further chance.


William Alexander McMaster: I should like the minister to believe that what I am giving is the experience in Ontario. The people of whom I am thinking are the workmen, not the employers. This matter has not been lying dormant, by any means. It has been brought up in the legislature of Ontario, and very strong protests have been made in regard to it. It just happens they have not got around to amending the act, though I do not know why. There are many acts which need amendment, and this is one of them. 1 suggest that for the benefit of ,the worker one appeal should be allowed, and that to some judge, because I suggest that a judge would have a greater sense of his responsibilities than would most of the men who might be appointed to workmen's compensation boards, and we can trust a judge to do the right thing. There may not be many appeals, but there would be enough to satisfy the people, and perhaps redress some of the injustices.


Mr. WARREN:: Who is going to pay the costs of the appeal?


William Alexander McMaster: That would be left to the judge. If the workman should win, the compensation board would pay the costs. If the w'orkman lost, he would pay them. I would not suggest that every case should be appealed, but only the bad ones. If an appellant had a good case and was willing to risk the money it would cost him,, he should be allowed to go to a high court judge.


Ralph Melville Warren: I suggest that many
labourers would lose a large part of their benefits if they were in a position to appeal their cases. I have no doubt it would be beneficial to the legal profession, but I doubt whether in the long run it would be of much benefit to the labouring man. I think in 
perhaps ninety-nine per cent of the cases the judgments of the compensation board are fair and just, and I do not think a labouring man would benefit by being permitted to appeal to the courts.


Douglas King Hazen: May I say just a word on the question of costs? It may cost something, though I have never found that a lawyer who had a workman as a client charged him a great deal.


Some hon. MEMBERS:: Oh, oh.


Douglas King Hazen: But that is not the point I am making, whether it would cost much or little. I w'ant to refer to the case of Brintons Limited v. Turvey, which was decided in the British House of Lords in 1905. It must have cost something to take that case to the House of Lords, but it entirely changed the law as to the rights of workmen under the compensation act. If it had not been ftor that case and the decision of the House of Lords at that time, the workmen never would have obtained what they now receive under the workmen's compensation acts in Great Britain, and many other parts of the empire. That was the governing case, decided in 1905, and as a result for the last forty years workmen have been getting what they never got before. I should like to read the brief note on that case, to give hon. members a better idea of what it was about. It is taken from The English and Empire Digest, and reads:
While a workman was employed sorting wool m a factory a bacillus, according to the medical evidence, passed from the wool to the eye of the workman, and infected him with anthrax of which he died:	Held: this was a case of "injury
by accident" within the meaning of Workmen's Compensation Act, 1897.
That changed the whole law. From that time on a workman was able to get compensation if in the course of his employment he contracted a disease through a bacillus. Surely if it did cost something to establish that principle, it was well worth it. If it had not been for that particular case; if there had. not been the right of appeal, that board would be still holding that if a workman contracted a disease while at work he would not be entitled to any compensation at all.


John Ritchie MacNicol: I quite agree w'ith the statement that in the very great majority of cases the workmen's compensation boards give complete satisfaction. I do not agree with the suggestion of the hon. member for Renfrew North that satisfaction is given in ninety-nine per cent of the cases. I have come in contact with the odd one, like the case I mentioned of the workman who had the misfortune to have a shell fall on his foot, and he

Merchant Seamen
did not get satisfaction. I am no't finding fault with the boards; in the main they have done an eminently satisfactory job, but I cannot get clear in my mind where the poor fellow who is entitled to compensation and is turned down can appeal in order to get satisfaction. I think that is a matter worthy of consideration.


Frederick Samuel Zaplitny: This section provides that decisions and findings are to be conclusive as well as final. Does that mean any case which has been turned down by the board cannot be resubmitted and new evidence given, and is there any limit to the number of times that may be done?


Lionel Chevrier: No, there is not. I intended to say something on that when I replied to one other hon. gentleman. While the bill as now framed does not cover the question of an appeal, still the case can be reviewed many times. I know that in Ontario I personally have had cases reviewed as often as four and five times, when I was able to show additional circumstances surrounding a case.


Mr. GRANT:: Did you charge them much?


Lionel Chevrier: Too little. I believe this board will take the same view.
Mr. McMlASTER: Did the workmen's compensation board hear you as a solicitor?


Lionel Chevrier: Oh, no; the workmen's compensation board did not hear me as a solicitor, but I made representations in writing, by affidavit and using medical evidence that I was able to submit, and I was always accorded a hearing.


William Alexander McMaster: You did not put your name on the documents as a solicitor, did you? That used to be considered a detriment to a claimant's chances.


Douglas King Hazen: How could you put in a claim other than as a solicitor? Not as a politician!


Ralph Melville Warren: I think that answers the hon. member for Davenport; there is a form of appeal. If a man feels he has not obtained justice he can go to his minister or his doctor or a friendly lawyer acting outside of his professional capacity, and have the case reviewed. I have no doubt the hon. member for Davenport has often had these matters reviewed and adjusted. I know I have, both as a member of the Ontario legislature and as a member of this parliament. I believe the workmen's compensation board is always ready to give consideration to any letter written on behalf of any client, when it is written in a
friendly spirit, giving them all .particulars. They are always ready to review a matter and see that justice is done.
Amendment (Mr. Hazen) negatived on division.


[Stage Direction]
Section agreed to.
Section 19 agreed to.
On section 20-Order enforced as a judgment of the court.
William Alexander McMaster: As I see it, this section is one of the weaknesses of the bill. I understand this board will have no funds of its own, but will merely make an order that the employer pay the money.


Lionel Chevrier: Yes.


William Alexander McMaster: I should think that substantial numbers of workers covered by the Ontario compensation act would be working for the railwa3r companies and possibly the steamship companies, and there would be certain numbers of seamen working either with small companies or for individuals with no great financial backing. The only protection for a seaman who was injured while working for one of these smaller employers would be through the bond, to which the minister has referred. If a bond were not given and a seaman were injured I assume that he would have a valid claim for the protection this measure affords. Since no funds are in the hands of the board, where would a workman receive his protection if he were working for a financially unstable employer? We must face the fact that the widow of a disabled seaman might live for some considerable time, and under conditions which would not disentitle her because of the conditions set out in the bill.


Lionel Chevrier: If the employer refuses to insure, then under one of the sections mentioned a minute ago the ship is stopped by the customs officer.


William Alexander McMaster: Let us suppose it is not stopped. Could it not easily happen that a ship would sail without the bond being given, and an employee suffer injury in the course of his duties.


Lionel Chevrier: I suppose it could happen.


William Alexander McMaster: It is more likely to happen in that event than in the other cases where insurance has been placed.


Lionel Chevrier: I should not think so, because the experience of the board thus far has been that there are few if any cases of that kind. The moment these regulations were put into force by order in council,
Merchant Seamen

employers were advised and were referred particularly to the clauses which stated that insurance had to be taken out. I know of no case in which an employer has refused to take out insurance.


William Alexander McMaster: If it happens, what will be the protection for the seaman who has been injured?


Lionel Chevrier: He may still take action against the employer, the owner of the ship.


William Alexander McMaster: Can he come under this measure as it is framed? I thought that the protection of taking action by the employer was taken away a minute ago by a previous section of the bill.


Lionel Chevrier: I am informed the board would issue a judgment under the act. It would be registered and then executed against the employer.


[Stage Direction]
Section agreed to.
Sections 21, 22 and 23 agreed to.
On section 24-When compensation not payable.
Frederick Samuel Zaplitny: In paragraph (a) it is stated that notice of the accident is given as soon as practicable. How would that be construed?


Lionel Chevrier: I think the hon. member need have no worry about the construction which might be placed upon the word "practicable", because of what is contained in subsection 4, where it is set out that failure to give the prescribed notice or to make such claim or any defect or inaccuracy in a notice shall not bar the right to compensation.


Frederick Samuel Zaplitny: Then the same paragraph states it must be given before the seaman has voluntarily left the employment in which he was injured. If an employee were seriously injured to-day, and if to-morrow his organization went on strike, would it be construed that he had voluntarily left employment, with the result that his case would be prejudiced?


Lionel Chevrier: I do not think it would be construed in that way.


[Stage Direction]
Section agreed to.
On section 25-Employer to give notice.
John Ritchie MacNicol: This section provides that:
Every employer shall, unless relieved by order of the board, within sixty days after the happening of an accident to a seaman in his employ-men^ by which the seaman is disabled from performing his duties or which necessitates medical aid, notify the board in writing-
And so on. In a case of the kind I mentioned a minute ago, where the workman

would be off for only about six days, would not the employer have to notify the board? I think the employer should give notification of all accidents, whether or not compensation is claimed.


Lionel Chevrier: I am informed that under the board's order the employer would not be required to notify the board if there has been injury necessitating a lay-off for anything less than seven days.


John Ritchie MacNicol: There is no point in moving an amendment, but I believe every employer should be compelled to give notice, even if the employee is laid off for only three or four days.


Lionel Chevrier: The hon. member realizes of course that if the employee is out of work because of injury or accident for more than seven days, even though that lay-off is for only eighit days, the employee would recover for the full eight days.


[Stage Direction]
Section agreed to.
Sections 26 to 43 inclusive agreed to.
On section 44-Seaman entitled to medical aid, etc.
Mr. FRASER:: Would this include dentures?


Lionel Chevrier: Yes, that is stipulated.


[Stage Direction]
Section agreed to.
Sections 45 and 46 agreed to.
On section 47-Board may make rules, orders and by-laws.
Howard Charles Green: Should there not be a provision in this section for laying regulations before parliament?


Lionel Chevrier: I am informed it is not done in other cases, although I would have no objection to doing so. I do not think however that any hon. member has ever had difficulty in obtaining them from time to time. There is also involved the question of placing on the table of the house orders for payments of compensation.


Howard Charles Green: Why?


Lionel Chevrier: Because it is done by virtue of the section. That is a matter of personal or private nature, and I do not think the hon. member would want that information.


Howard Charles Green: No one would want that. But the board is given power to make rules which, I presume, are the same as the regulations to which most acts refer. All I am suggesting is that rules made by the board which

Merchant Seamen
would be of general interest to those of us who have seamen in our constituencies should be made available by having them laid on the table. Otherwise one would not know what the rules are. It seems to me that is a safe plan to follow in measures of this type. Regulations should be laid on the table of the house.


Lionel Chevrier: The hon. member would have no difficulty in getting them from us. There might be a time when parliament would not be sitting and when regulations would be passed, in which case the hon. member would get them more quickly than he would if they were laid on the table of the house.


Howard Charles Green: If the minister will check the other acts, such as the veterans allowances act and the Veterans Land Act, he will find that provision is made for laying the regulations on the table within a certain time after the house sits, if it does not happen to be sitting at the time the regulations are passed.


Lionel Chevrier: I shall be glad to do that.


[Stage Direction]
Section agreed to.
Section 48 agreed to.
On section 49-Costs chargeable against employers.
John Ritchie MacNicol: These costs might be very heavy on an individual employer, but if he were insured the insurance company would have to pay them?


Lionel Chevrier: Yes.


John Ritchie MacNicol: Will they all be insured?


Lionel Chevrier: Yes.


[Stage Direction]
Section agreed to.
On the title.
Lionel Chevrier: I told the hon. member for Lake Centre that I would put on Hansard the opinion of the Department of Justice with reference to the jurisdiction of the federal parliament to enact legislation of this kind. It is a fairly lengthy document, and if the house will consent I 'will put it on Hansard without reading it.


Some hon. MEMBERS:: Agreed.
(The opinion follows.)
I have to refer to your letter of March 18 enclosing for my opinion a copy of the merchant seamen compensation regulations. Your questions together with my answers thereto are as follows:
1.	Question:	Whether it is within the competence of the parliament of Canada to enact legislation incorporating the provisions of the merchant seamen compensation regulations, 1945?
Answer:	Yes.
2.	Question:	If your answer to question 1 is
in the affirmative, whether it is within the competence of parliament to enact legislation extending the provisions of the said regulations to cover the whole field of workmen's compensation for seamen employed on ships registered in Canada or operated by persons resident or having their principal place of business in Canada?
Answer: Yes.
3.	Question:	Whether it is within the competence of parliament to enact legislation extending the provisions of the said regulations to cover seamen employed on ships registered in Canada or operated by persons resident or having their principal place of business in Canada when such ships are engaged in voyages between any of the provinces of Canada or extending beyond the limits of any such province?
Answer: Yes.
4.	Question: Whether the legislatures of the provinces have power to enact legislation covering the subject matter of the said regulations in whole or in respect of seamen who are residents of the province and are engaged within the province to serve on a ship registered in Canada or operated by persons resident in Canada or having their principal place of business in Canada when such ship is employed in voyages between any of the provinces or extending beyond the limits of any such province?
Answer:	The privy council has held that
provincial legislation relating to workmen's compensation and applicable to seamen who are residents of the province is valid. As I read the decision, it was not restricted to operations within the province, nor to ships operated by persons resident or carrying on business in Canada. The legislation, however, was general in character applicable in the case of workmen generally.
5.	Question: In the event of a conflict between dominion legislation and provincial legislation covering the same subject matter as outlined in the above questions, which legislation would be inoperatitve?
Answer:	Dominion legislation would prevail.
The Deputy Minister, F. P. Yarcoe. Department of Transport Deputy Minister Ottawa.


Lionel Chevrier: I should like to revert to the question raised by the hon. member for New Westminster in connection with section 5. I think he was in order in making the suggestion which he did, and I shall ask the Minister of Justice to move:
That clause 5, [DOT] subsection (1), line 16, be amended by inserting the word "not" after the word "notice."
Mr. ST. LAURENT: I so move.


[Stage Direction]
Amendment agreed to.
William Alexander McMaster: What about these tuna fishermen? Are they considered as fishermen or as seamen?


Lionel Chevrier: I thought I had answered that by saying that they are not covered by this bill.
Merchant Seamen


William Alexander McMaster: I did not know this matter had been raised before. Why would they not be covered?


Lionel Chevrier: They would come under the class of fishermen and not seamen.


William Alexander McMaster: How are the fishermen
covered?


Lionel Chevrier: I answered that this morning at some length in reply to the hon. member for Cariboo. It is a matter for provincial legislation.


William Alexander McMaster: Suppose a man who lived in Alberta joined a ship in Vancouver and sailed to the tuna fishing ground, what would be his status?


Lionel Chevrier: He would be covered by the British Columbia act, if it includes fishermen.


Howard Charles Green: What is the present position with regard to setting up a maritime commission in Canada? There was some discussion in the house last year about this matter, and it was intimated that a maritime commission would probably be set up. I believe this has been requested both by the seamen and by the ship owners. What is the position at the present time?


Lionel Chevrier: That is hardly a matter for discussion on a bill to provide compensation for seamen. The matter of a maritime commission is a broad question and it could not be decided without very careful study. The matter has been and is being given careful consideration.


Howard Charles Green: Has the minister any idea when a decision will be reached?


Lionel Chevrier: I am sorry I have not.


[Stage Direction]
Title agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
Mr. R. W. MAYHEW (Parliamentary Assistant to the Minister of Finance) moved that the house go into committee to consider the following resolution:
That it is expedient to bring in a measure to authorize the Canadian National Railway Company to issue securities not exceeding $22,550,000 in principal amount to provide the moneys necessary to meet capital expenditures made or capital indebtedness incurred during the calendar year 1946; to authorize the governor in council to guarantee the principal, and interest

of securities issued by the company for the purpose aforesaid; to authorize the making of temporary loans to the said company secured by such securities and not exceeding $22,550,000 in principal amount to enable the said company to meet such expenditures and indebtedness; with authority to give financial aid and assistance to other companies of the said national system.
Motion agreed to, and tihe house went into committee, Mr. Golding in the chair.
Mr. MAYHEW:: 
Gordon Graydon: May I ask the parliamentary assistant to clarify one point? I think he indicated that the budget of the railway had been approved by the appropriate standing committee; is that so?


Robert Wellington Mayhew: That is right.


Gordon Graydon: Since I was not a member of that committee, perhaps I may be allowed to deal with some elementary matters. Were all the details of the expenditures which the

C.N.R.-Guarantee oj Securities
railway proposes to make in connection with the resolution now before us gone into by the committee?


Lionel Chevrier: As the hon. member knows, the committee deals with the budget in detail and hears the evidence of officers of the Canadian National Railways such as the president, the executive vice-president, the comptroller and others, some five or six in all. A report was made to the house by the committee approving the budget as it now stands.


Gordon Graydon: According to the parliamentary assistant's statement, some of this money is to provide new equipment, I believe something like S9,000,000.


Robert Wellington Mayhew: That is right.


Gordon Graydon: I should like to make one observation and it is not to be taken as necessarily approving the terms of this resolution. I think one of the things that has struck the ordinary layman who has observed the work of the railways during the war was how the railways were able to carry on throughout the entire war period with so few accidents as actually occurred with the equipment they had. I was very much struck by the report which was made by the department not so long ago and which was in the hands of all hon. members, indicating that during the war period the ratio of accidents on the Canadian railways was actually less per person travelling than in the years prior to the war. That is a clear indication of what a grand job the railways did while the war was on, and that is no reflection, of course, on their work in time of peace.
On a previous occasion in this house I and other members have paid some tribute, as best we could in our humble way, to the work of the railway employees on the civilian front during the war. There was a great expansion in railway business during the war. That is on the records of this parliament in two or three sessions and I need not reiterate the details. I mention it only to point out that additional precautions must have been observed by the railways to do what, they did with so few accidents. Indeed, on the civilian front there were not many, if any better jobs done that that done by the railway workers in Canada, particularly when we bear in mind that there was not the time or the opportunity or the materials for them to repair and overhaul their rolling stock as they would have done in the more leisurely peacetime period. I am not surprised that both the major railway companies in Canada
are now taking steps to put their rolling stock in shape and pick up the slack which inevitably occurred during the war.
I take it that this $9,000,000 is required not only for new equipment but for the repair and overhauling of the old equipment.
I am told also that some of the roadbed throughout the country is badly in need of ballast to bring it up to its normal peacetime condition. It was not possible to do that during the war because of the shortage of manpower and materials. In making these observations, I believe that I am expressing the reaction which most laymen feel to the railway situation as they understand it. I do not. pose as an expert on railway matters; far from it, but I did wish to pay this tribute to the railway companies and to the railway workers who made it possible for the railways to carry such a tremendous load during the war with such speed and dispatch and with so few accidents. I do not suppose any of our railway workers, had you asked them in 1938 or 1939 if the railways could carry the increased number of passengers and increased freight tonnage which they did carry during the war, would have thought that it would be possible for the railways to do it, with such efficiency and with so few accidents.


Alfred Johnson Brooks: I agree with what the hon. member for Peel has said, that the railways did a splendid job during the war. We all know that they had very little man-power to keep up their roadbeds during the war, and we observe that considerable work along that line is now being done. I would ask the minister if during good years the railway sets aside a reserve for repairs and maintenance. The war years were good years for the railway because they had surpluses instead of deficits, and I am wondering if such a reserve was set aside.


Robert Wellington Mayhew: Yes, there is a reserve for deferred maintenance. I can give the figures when the bill is before us.


Alfred Johnson Brooks: If the railway had such a reserve fund, why are they asking now for this amount from consolidated revenue?


Robert Wellington Mayhew: This amount is not for repairs and renewals but for additions, with the exception of the amount for the purchasing of the Manitoba railway and the $410,000 for the retirement of certain securities. Everything else is for new equipment. The item of
817,500,000	has already been spent in road maintenance. In addition, there is a deferred amount.

C.AT.R.-Guarantee of Securities


Alfred Johnson Brooks: I was basing my remarks on the supposition that new equipment was being bought to replace the worn-out equipment.


Robert Wellington Mayhew: A lot of this is for new equipment. The repair of old equipment would come out of ordinary repairs and renewals currently carried on by the railway company, the details of which will be given when we come to the bill. The expenditure can only be given by regions. We will also give the type of equipment that is being purchased.
I am sure that every member of the committee will agree with the statement made by the hon. member for Peel that this country as a whole is most grateful to both the railways for the service they have given to Canada during the war, grateful not only to the management but to the men in all branches of both railways. They have carried on and given this country a service the like of which we have never known and never thought was possible. Probably no one had a better opportunity of realizing the handicaps under which they carried on this work than one who has spent the greater part of a month each year in travelling between Victoria and Ottarva and finding out what the men have to do. When you see a workman on his back under a car fixing up the steamline when the temperature is 40 degrees below zero, and he finally gets you away on time in such weather, you have an appreciation of what the men on the Canadian railways have done for the people of Canada during the past six years, and I am sure they will appreciate very much the references that have been made to them by the hon. member for Peel.


Mr. FULTON:: I should like to ask the minister some questions, and if the information is not now available, perhaps it might be given when the bill is before us. What prompts me to ask these questions is that in normal times the Canadian National Railways shows a deficit. It has been suggested that one of the reasons for that is its heavy capitalization and its large bonded indebtedness. It carries such a load in that respect that never except in war years can it show figures in the black; they are generally in the red. I wondered whether it would be feasible to write down the indebtedness of the Canadian National Railways in so far as it is held by the government, because it seems to me that we are fooling ourselves. If the Canadian National pays all its surplus into the government anyway, so that the country gets the benefit of any surplus earnings, simply because those earnings do not cover the amount of the bonded indebtfMr. Maj'hew.]
edness we show the system in the red. If that is the case a change could easily be effected and it would not do us any harm, whereas it would have a salutary effect on the morale of the railway, both employees and management. That was what I had in mind and what prompts me to put certain questions, the answers to which I shall be glad to get if it is at all possible for the minister to give them to-day. If he cannot let me have them now he can do so at a later time. The questions are these. How much of the outstanding liability of the Canadian National is held by the government, and how much in the hands of individual bondholders? The second question is this:	How much did the Canadian
National Railways actually pay into the government during the war years, in the form of surplus earnings as profit? What profit did it show and pay to the government or into the consolidated revenue fund in the years of the war? Third, was any of those profits used to pay off bonded indebtedness or was it all absorbed in reducing previous deficits which had been charged up, or what was the final disposition of it?


Lionel Chevrier: The hon. gentleman has referred to the question of fixed charges of the Canadian National Railways. That matter has received the attention of the committee on railways and shipping, but the report has not yet been completed. It will be tabled, I presume, in the ordinary course of the business of the house. I would not care to comment on that aspect of the matter until I myself have seen the report, but I can tell the hon. gentleman that the question of fixed charges is being given careful consideration by the Canadian National itself, by the committee which was set up to study the subject, and also by the government. With reference to the other questions which he has asked, if he will look at the annual report of the Canadian National Railways he will find there most of the answers to his questions, in fact all. If he has not already got the report I shall be glad to see that it is sent to him.


Edmund Davie Fulton: Does that cover the question of the holding of bonded indebtedness- those who hold it?


Lionel Chevrier: Yes.
Resolution reported, read the second time and concurred in. Mr. Chevrier thereupon moved for leave to introduce bill No. 346, to authorize the provision of moneys to meet certain capital expenditures made and capital indebtedness incurred by the Canadian National railways system during the calendar

Export Credits Insurance
year 1946, and to authorize the guarantee by His Majesty of certain securities to be issued by the Canadian National Railway Company.
Motion agreed to and bill read the first time.



EXPORT CREDITS INSURANCE ACT


[Stage Direction]
Hon. J. A. MacKINNON (Minister of Trade and Commerce) moved the second reading of and concurrence in amendment made by the senate to bill No. 126, to amend the Export Credits Insurance Act.
Gordon Knapman Fraser: Will the .minister explain the amendments?,


James Angus MacKinnon: The only amendment suggested is in section 11, amending section 22A, paragraph (a). The words in the bill as it passed the house were "to pay or guarantee the payment." The amendment is "to pay its guarantee of payment." That is the only change and we are prepared to accept it.


Gordon Knapman Fraser: Why is the change being made?


James Angus MacKinnon: I believe it was the opinion of those who suggested the amendment that, as the act read, the government might guarantee the guarantee of the other government; but they wish to go farther and make the government actually responsible for the payment of the guarantee of the other government.


Gordon Knapman Fraser: So that this government will absolutely guarantee the payment of it.


James Angus MacKinnon: That is correct.


Gordon Knapman Fraser: What exports have been covered by this act in the last year? In the monthly review it says $12-9 million. Has there been more than that?


James Angus MacKinnon: I have no information in addition to what I gave when the bill was before the house. I could get it.


Gordon Knapman Fraser: Members would like to know, because this legislation set up $750,000,000. At the time they thought they would use all that, but evidently they are using only a few millions.


James Angus MacKinnon: I am sure I am right in saying that no additional moneys have been used since the bill was before the house.


Gordon Knapman Fraser: What procedure does the exporter follow in coming to the department for the guarantee?


James Angus MacKinnon: The exporter comes in the same way as he would go to any insurance company to take out a policy on his goods.


Gordon Knapman Fraser: And after that the department issues an export permit for him?


James Angus MacKinnon: We issue a policy.


Gordon Knapman Fraser: Yes, I know; but you might not issue him an export permit. That, too, is up to the department?


James Angus MacKinnon: Yes. We satisfy ourselves that he has an export permit.


[Stage Direction]
Motion agreed to, amendment read the second time and concurred in.


[Stage Direction]
Hon. J. A. MacKINNON (Minister of Trade and Commerce) moved the second reading of bill No. 251, to establish the Canadian Commercial corporation.
Gordon Knapman Fraser: Will the minister make a statement on this?


James Angus MacKinnon: I gave a complete statement and I did not anticipate the necessity of going over the same material again.
Mr. DAVID A. CROLL (Spadina): Mr. Speaker, I intend to take the opportunity of saying a few words on this particular bill because it deals with the matter of trade, and particularly foreign trade. To-day Canada is faced with the greatest opportunity for obtaining foreign trade that it ever had. Hon. members know that there is a world-wide hunger for all kinds of goods, manufactured as well as raw materials, and that two important exporting nations, Japan and Germany, have been put out of business, probably for our generation. In addition to that, all the European countries, once the source of much of the world's low-cost consumer goods, have had their manufacturing plants either impaired or dislocated by the war. Not only have we the traditional consumer countries like South America starving for goods, but even producer countries which have not been able to get their war-stalled industries running are crying as never before for goods, and looking to the remaining industrial countries such as Canada to provide them. At the same time I point a note of warning that already some of the (European countries are in the export market. Holland is already in the market in the West Indies. Some of them are recovering even
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more quickly than we expected. Belgium is having a quick recovery. At the present time Canada stands in a unique position. Here we have an industrial plant untouched by the ravages of war and expanded to the point where we are one of the foremost industrial nations of the world. We have not only prewar industries; but we have stepped up tremendously our new industries, new processes, and we have increased our productivity more than the most optimistic person would imagine possible. Added to this, we have the good will of the entire world. The world knows that it can trust us and do business with us.
I think I understand Canada's present foreign trade policy. It is as follows, and I think I can best bring it to the attention of the house under four points. The first is to meet our commitments abroad; the second, to police exports of certain goods, for example, aeroplanes and uranium; third, in the case of goods which have a bearing on our internal economy, for example, those on which there are domestic subsidies, to see to it that the subsidies are repaid before the goods are sent overseas; and fourth, to maintain adequate civilian supplies for Canadians. I do not think I go too far when I say that the policies of this department will determine to a large extent whether we prosper or stagnate economically during the years immediately ahead. It is a department with enormous responsibilities, but also one which is indeed very well run. For a number of reasons it is a department which must find it difficult to plot its actions too far ahead. It has to find markets for Canadian goods, and if conditions in those markets change suddenly because of foreign competition, it must be in a position to meet that competition and secure the markets for Canada. What we can agree on is that we, as a nation, must export more goods than we ever did before or else we stagnate economically. We have just experienced a period of full employment because of the war. We know that Canada's industrial capacity has been tremendously expanded. None of us suggests that our present population can consume the products of our enlarged industry. There are those of us who advocate increased immigration, but we who favour that policy are not so naive as to believe that the results we seek can be immediately achieved. In the interim we have to sell abroad the products and the surplus that we have in our domestic market; and I suggest, in addition to the goods which are surplus to our domestic consumption, some of the products which are in domestic demand at the present time.
We have always relied in this country upon exports to give our people jobs and profits

and a reasonably good sort of living. In the past twenty years exports have meant S10 a month to every man, woman and child in the country; or to put it another way, $650 to every farm in Canada. These figures come from the current letter of the Royal Bank of Canada, which I commend to the attention of hon. members. This is an approach to the problem from the long-range, or twenty-year aspect. That was not so serious a problem so long as our economy was based on the production of foodstuffs which the world must have in order to eat and to live. But the war has brought a fundamental change to Canada and I doubt whether we can regard ourselves any longer as primarily an agricultural country. In making ourselves what we like to boast of as the arsenal of democracy, we built up a problem for the future, the problem of distributing the output of our greatly expanded industrial plant. The same factories which built the vehicles, the weapons and all sorts of military incidentals for half a dozen nations besides our own obviously were too big in peace time for merely domestic production. Therefore we cannot accept as our present needs either the quantity or the composition of our pre-war exports. We have to become major suppliers of manufactured goods as well as of foodstuffs and minerals. We have to do so if we are to maintain production and employment and satisfied stomachs and well clothed backs. We can no longer simply strive to continue that $10 per person a month that the Royal bank reports as the twenty-year average; we can no longer accept the one-third of our dollar which the department advertises as the surprising fraction of our individual income which derives from export trade. At least one of our best known economists sets the figures at 40 per cent rather than at 33% per cent. That it has to be high is unquestioned except by those of the most unconventional economic views. Most of my C.C.F. friends will agree, I imagine, with their British socialist colleagues who have given the expansion of exports No. 1 place on their economy programme. Admitting then, as most of us do, that exports must be increased we can surely proceed to the further admission that it must be done in a hurry. International competition is not such that it will wait a gradual and painless adjustment of the Canadian economy to the drastically new set of conditions. Rather the adjustment must not only be abrupt but may be even a little painful if it is to achieve its purpose.
What must we do then to get our share of the world's markets which we so urgently require? I think the house will -agree when I say we must first produce. Then I call atten-

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tion to the fact that there is no production from an idle factory; there is no production for export in the midst of an industrial struggle as bitter as Canada has ever known. There is no production for export when labour and management are locked in the throes of a long-term battle for and against upward revisions of wages and consolidation of contractual agreements and working conditions. There is no production for any purpose when a plant is closed tight by a strike, and we may as well face the fact that the strikes we have to-day are perhaps but preliminary to a wave of walk-outs, against which neither the government nor management has advanced any effective, constructive policy.
There are three parties to production: management, labour and the investor. I find myself unable to criticize those who provide the funds for industry. The banks and trust companies, .to say nothing of the well-heeled private investor, are eager to give their support to ventures in foreign trade. The institutions I have just mentioned have devoted a great deal of their advertising and publicity to an endeavour to create export-mindedness among Canadian manufacturers, but as far as the other parties to industry are concerned there is an attitude which I may be permitted to call unenlightened self-interest. They are shutting their eyes to the fact that by suspending production to-day they are eliminating opportunities for export to-morrow. Management has not been too greatly concerned with strikes in its plants when, in that appallingly significant phrase it likes to use, "it has been working for Ilsley". You hear this often, and I challenge anjmne to suggest a more complete confession of the absence of social responsibility.
Labour, on the other hand, has failed to appreciate that the picket line at the closed plant to-day may well be the forerunner of a jobless to-morrowr. Anj'one who has looked objectively at the industrial picture in Canada over the past six years would know that of necessity there would be an adjustment of wages, hours and working conditions after the war. Grievances piled up during the period when most unions were being faithful to their no-strike pledge. Living costs have risen in spite of the government's commendable effort; and there is reason in the personal experience of all of us to believe that advance has been greater than the percentage indicated by the indices maintained by the Department of Labour. Wages have to be increased; improved working conditions have to formalized by contract. Surely, with an appreciation of this fact, so apparent to anyone
who is not a party to either side of industry, the transition should have been achieved without the serious stoppages we have undergone in the past year and which we have not yet settled. Management started out by offering nothing in response to the workers' demands, by obeying only the letter of our improved labour laws, or by skirting those laws entirely. They challenged labour to do its work and, labour having done so, they capitulated but passed on none of their new-found wisdom to their colleagues in industry. So strike has followed strike; defeat has followed defeat for management. Nevertheless each industry faced, with the problem continues to act as though its own were the very first strike to be faced by any member of the Canadian Manufacturers Association. The thinking of management in reference to labour has been in a vacuum. If management approached business deals with as little know-how as it approaches labour problems, management would soon be retailing the apples which the hon. member for Fraser Valley (Mr. Cruick-shank) so actively promotes in this house. On the labour side the picture is also disheartening.


Mr. WRIGHT:: On a point of order, Mr. Speaker, while the hon. gentleman is delivering a very good speech, certainly it is not on the Canadian Commercial corporation. The hon. gentleman is dealing with labour problems. I should like your ruling as to whether we are all to be permitted to speak on labour problems while discussing this bill.


Mr. CROLL:: I am dealing with the matter of the production of goods for export, and that is what this bill deals with.


Percy Ellis Wright: I am not objecting, just as long as we are all going to be allowed the same privilege,


Mr. SPEAKER:: I would direct the attention of the hon. member to the fact that on second reading of a bill it is the practice to discuss only the principle. The debate of course should be relevant to the bill and to the principle of the bill.


David Arnold Croll: May I point out that under section 5 of the bill the corporation may be importing goods or commodities into Canada or exporting goods and commodities from Canada. I am talking about the production of goods, and I am getting on to the policy. I started out by dealing with the policy of the Department of Trade and Commerce under four points, and I am dealing with them. The first was production, and I am going on to deal with the other points in detail. This
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is the only opportunity I have to do so. On third reading I would not be able to go over the various sections, so that I submit I am quite in order.


James Horace King: It is always disagreeable to have to interrupt any hon. member, but it is a well known practice that an hon. gentleman should not discuss particular sections of a bill during the debate on second reading. So that I would ask the hon. member to confine his remarks to the principle of the bill.


David Arnold Croll: I am not discussing a section of the bill; I am dealing with the Canadian Commercial corporation, which has to do with matters of export and import, and I think my remarks are in order.
On the labour side the picture is also disheartening. There is no question but that the majority of our strikes have been justified, but today we have what we might call the strike bug nibbling at the intelligence of some of our labour leaders, and in some cases a strike for a strike's sake. Returning to the point from which I started out, that we either step up our production and put an end to strikes or God help us, I would hazard the guess-


James Horace King: I am very sorry to interrupt the hon. member, but I had to intervene in the past and I feel obliged tc intervene again. The hon. gentleman is discussing labour conditions and production. The bill before the house is to establish the Canadian Commercial corporation to deal with exportation and importation. I believe the discussion should be relevant to the bill under consideration, and I am afraid the hon. member goes a little too far afield.


David Arnold Croll: Very well, Mr. Speaker. I started out by speaking about production. My suggestion is that a greater proportion of production be earmarked for export. In Great Britain one-third of all production is earmarked for export.


Mr. JAQUES:: That is why they are starving.


David Arnold Croll: My hon. friend says they are starving.


Norman Jaques: I suppose we shall starve too.


David Arnold Croll: I doubt that very much. I was over there for four years, under pretty difficult conditions. They were not starving, and they put up a pretty good show in the end. We know markets are waiting for us, but at the present time not only are exports being hampered by the policy-and more [Mr. Croll.l
power to it-of supplying necessities to the war-torn countries of Europe, but our efforts are being nullified by a deep concern for the demands of the domestic consumer. This is stated to be one of the major considerations for dictating a continuance of the law requiring that any man who exports must, in the majority of cases, obtain an export permit from the government. My suggestion is that we earmark a certain percentage of all our productivity for export, so that when permits are withheld the suggestion will not be well founded that they are unreasonably withheld.
We still in this country, a land of plenty, respond with outraged screams to any suggestion that we might do with the second best for a while, if we have to sacrifice at the present time. I merely point to some of the newspaper comment, even in to-day's newspaper, where people in this country become extremely hot under the collar when they find out that some of our shirts are in both Jamaica and Trinidad. To many of us a natural contrast occurs. We might think of the well-to-do Englishman in his shabby suit, and perhaps in his frayed collar. We think of his satisfaction at the news that the best materials in the world, goods that he manufactures, are selling well overseas, although, of course, he is unable to obtain them. To him austerity has become a temporary way of life from which he expects to get dividends in better living at some time in the future, whereas to us austerity is just another word to look up in the dictionary.
We think of how pleased the ordinary Englishman must be to know that his ruined country was able to lift those exports from 33 per cent of the 1938 average last year to 95 per cent by quantity of that average in the first quarter of 1946. The goal is 75 per cent above the 1938 average. And, having trebled the total of exports in one year, he is well on his way to trebling them again in the next twelve months. He can do that only by forgoing the thing he would like to eat, that he would like to drink, that he would like to wear. My guess is that he will do it. I point out to the house that it is much easier to buy an English-made suit on King street in Toronto than it is on Saville row in London; and it is several times easier to buy a drink of "Scotch" on St. Catherines street, Montreal than on Princess street, Edinburgh. So I suggest that in our present crisis our government might well demand greater sacrifice from the people of Canada by way of a willingness to forgo luxuries in favour of future prosperity. If it is adequately

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explained to them I do not think we would any longer find Canadians outraged when the minister reports that shirts they have a hard time in buying can be bought in Jamaica or Trinidad.
Our government might well lift export restrictions on goods urgently desired in countries willing to embark upon long-range trade agreements with Canada. Inevitably they will enter into such agreements with our competitors, if we cannot immediately undertake delivery.
I believe the house will agree that we must take our markets where we find them. While before the war three-quarters of Canada's exports went to Great Britain and the United States, only about ten per cent found their way to the far east. By confining ourselves to those two countries, we neglected Australia, New Zealand, India and China with a combined population of well over half a billion people, a most fertile field for trade development. As a result, this area, much of which comes within the scope of empire preference, was left to others to exploit. For example, the United States was able to secure much of the foreign trade which otherwise would have been diverted easily to Canada. With the disappearance of Japan from this field, a great share of the foreign trade becomes vacant, so to speak, and our goal in post-war trade. expansion must be to fill that vacancy with Canadian goods.
The LatinnAmerican market, about which much has been said lately, has many characteristics such as are typical of present-day conditions. There are great opportunities for trade in those countries. Yet we must not deceive ourselves into thinking that huge profits are there for the taking, or firm markets a certainty. To consider LatimAmeriea as an export field, the position is that almost every country, in marked contrast to the prewar condition, has a good deal of spare cash on hand. With the closing of the German and Japanese sources, there is a great demand for almost every type of goods. But many South American countries are controlling this demand by restricting rigidly the volume and type of imports. There is no intention of squandering on luxuries their wartime accumulation of foreign exchange. In view of the very low standard of living in South America, many standard articles in Canada are considered luxuries to nine-tenths of the people in South America.
I began by saying that, first of all, we need production. Then, as suggested, we need a diversion of a larger share of that production to export trade. The third recommendation 63260-272
is that, as Canadians, we learn a little more about world trading. We have not been very good at it in the past. We still labour under the delusion that if a line of goods is not saleable at home, it might as well be dumped on the world market and be sold there.


Howard Charles Green: That is not true of many types of business.


David Arnold Croll: I am told it has been a general rule, although those on the west coast, and also on the east, are possibly somewhat more foreign trademinded than are those of us in the rest of Canada.
Over the week-end I had a discussion with a few important manufacturers in Toronto, and discussed exports with them. Their view was that they were in no hurry about making any excursion into foreign markets, that in due time Canadian producers, having met domestic demands, would step in, cut prices a few cents, and capture whatever market appealed to them. I am sure the house agrees with me that that is a childish view. Does anyone think that without a knowledge of the taste, opinions, prejudices, and a thousand-and-one local factors in any given overseas market, anyone can step in and snatch it away from world traders who have been studying that market in detail for perhaps a hundred years?
It is a matter of record in the department that not long ago a Canadian manufacturer, taking advantage of a new entree into a west Indian market, took a chance on ignoring detailed instructions and shipped a cargo of materials in styles and colours which, from what he had read, he was sure would appeal to the negro inhabitants of the island. It so happened that these negroes traditionally abhorred the colours and styles of that shipment. Naturally it did not sell.
I ask the house this question: Where does Canada stand in respect of future sales on that island? Canadian firms have lost overseas business because they refused to appreciate that their treasured trade mark was a bad-luck symbol in the countries to which they were shipping goods. One exporter from Canada insisted upon having on his carton a tiger with a short moustache, when he had been told that a tiger must have long whiskers. As it turns out, a tiger with a short moustache in many parts of the east is considered a bad-luck omen. The result was that his goods did not sell until he met the specifications.
It is also a matter of record that another Canadian manufacturer allowed $2 million of business to go to British and Swedish companies because he could not understand why

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people of that particular country preferred his product with a hole for a handle rather than with a fitted handle. Of course the answer was that they liked it that way. It is our business to meet their wishes.
The real basis of foreign trade, in addition to meeting style and other requirements, is to deliver the goods. Before we can do that we must produce. The world has to be told what kind of goods we manufacture and what kind we can deliver. At the moment they do not know, and perhaps there are even some hon. members who are not fully acquainted with the goods we are able to manufacture and export. Many countries are unable to think of Canada except in terms of bacon, cheese and wheat. The world generally does not know that we can sell anything from tooth brushes to aeroplanes, that we have to offer a large range of commodities which includes such diversified products as oilcloth, machinery, chemicals, earthenware, sporting goods, whisky and locomotives. The world must be told of these things, not only through booklets which at best have a limited appeal, but through extensive advertising in newspapers and magazines. Here I should like to commend the department upon the able advertising that they have carried out, not only in Canada but in other countries. I think that advertising should be extended. When the estimates come up we should take the opportunity to give the minister all the money he needs in order that he may sell Canadian products abroad and let people in other countries know that we can produce goods and deliver them.
I said a few minutes ago-one hon. member did not agree with me-that education is required at home about the importance of foreign trade and the possibilities of venturing in futurities. Most people are paying attention to domestic markets. It is natural to want to do business with people whom you know and with whom you live. A great demand exists in the domestic markets; there are profits to be made here, so they say, "What is the use of looking elsewhere?" But the domestic market, as we have seen, cannot absorb more than two-thirds of our production. If we mean to maintain peak production- and that is the only way our standard of living will remain as it is or go higher-then we must sell our surplus products. As the present time this may be difficult because some commodities are badly needed right here at home. However, we can fill these home needs little by little without losing any business in the long run, whereas foreign markets which lie open to us to-day will be gone in a year unless we are prepared to make a strong bid [Mr. Croll.j
for them now. If some goods are in short supply in this country, a token shipment will at least keep our foot in the door, but we must act quickly.
We owe our present standard of living to the fact that our exports in 1945 were valued at S3,125 million, or more than a third of our national income for that year. Unless we maintain peak production and peak distribution of goods we cannot hope to go on improving our standard of living. I know that people in Canada are hungry for goods, but there must be some sense of proportion in the matter. The policy of all for us and nothing for other countries will give us a very shortlived prosperity indeed. In a year or two our domestic needs will be met and then, when we look abroad in order to sell our surpluses-by the simple arithmetic of population we can see that there will be surpluses before long-we shall find the markets of the world spoken for by others and we shall be frozen out.
In dealing with this particular bill our course is clear. We have to produce as we have never produced before. We have to go short on some things for a while and, most important of all, we have to stop bickering and get down to producing. Canada to-day has a tremendous opportunity, the opportunity of a lifetime, an opportunity which will never be here again, and we must seize that opportunity now.


Gordon Knapman Fraser: Mr. Speaker, the hon. member for Spadina (Mr. Croll) said that our industries were untouched by the ravages of war. That may be true; but during the war, because of shortages and a lack of labour, our industries lost many of their foreign markets. I am afraid that in some cases they have lost them forever. Many of those foreign countries, when they found that they could not secure the goods that we had been exporting, subsidized their own industries to manufacture what we used to export to them in peace time. Therefore it is necessary that the Department of Trade and Commerce find new markets for those exports which we have lost. I know the minister is quite familiar with the situation, and I am hoping that he will take the proper steps to try to find markets for these goods. In checking over this bill, I find that it has not a time limit and I think it should have one of not more than two years.
When the Minister of National Health and Welfare (Mr. Claxton) was speaking on one of the items standing in his name he mentioned that one of the branches of his department, the Canadian information service, would

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advertise Canadian goods overseas. The hon. member for Spadina referred to advertising and said that the Minister of Trade and Commerce (Mr. MacKinnon) should be given all the money he wanted for the purpose of advertising Canadian goods. I do not know about giving the minister all the money he wants, but I think he should be given sufficient to do this advertising, and the Department of Trade and Commerce should do the advertising, not the Canadian information service. I have absolutely no faith in the Canadian information service and very few people in Canada have.
Not long ago the minister paid a visit to the South and Central American countries. During these last few months, we have reaped the benefits of his trip. By going to those South and Central American countries he created a better feeling among the people there. I believe, if the minister would visit other countries from which he thinks we could get trade, it would create prestige for this country and help Canadian manufacturers to increase their exports. I noticed an item in the Commercial Intelligence Journal of August 3, 1946, under the title "Foreign trade service", which reads:
The foreign trade service, whose function is the maintenance and promotion of trade between Canada and other countries, consists of seven divisions as follows:
And further down:
Export division: Consists of a group of commodity specialists, in direct contact with Canadian industry, who supply information and render assistance with respect to the particular commodities or groups of commodities for which they are responsible. It includes the export permit branch in order to ensure the coordination of its work with the issuance of export permits so long as these wartime controls remain.
When we are in committee I should like the minister to tell us how that division will fit in with the Canadian Commercial Corporation; also how the import division functions. Personally I feel that the Canadian Commercial Corporation should emphasize exports and forget imports for the time being, because the wartime prices and trade board lifted prices on exports and the exports that are going into other countries from Canada are often not goods needed by them but are luxury goods. What we need now is what the people want to wear and what they need to carry on their everyday business. I have a lot of questions to ask when we get into committee.


Norman Jaques: Mr. Speaker, we have heard a lot about exports from the hon member for Spadina (Mr. 63260-272J
Croll). I should like to have heard something about imports at the same time, because surely foreign trade means trading, not merely exports. If we are not going to receive imports in exchange for our exports we are simply giving our goods away. I never could see the point in trying to force our goods into a country which can very well make those same goods for themselves. Unless we are prepared to receive back goods for the goods we export, it seems to me that we cannot raise our standard of living. We may work harder, but at the same time we shall have to tighten our belts. I do not think there can be any argument against that.
The case for Great Britain is different. In the first place, they are dependent very largely on foreign countries for the raw materials they need. In the second place, Great Britain has incurred tremendous debt owing to the war, and she needs credits in order to obtain the raw materials which she can process and export as finished goods. But those conditions are not Canadian at all. Ours are the reverse. We have plenty of raw materials, and we have no external debt to speak of.	[DOT]
It seemed to me, as I listened to the hon. member for Spadina, that what he really has in mind, the real export he was thinking of, is unemployment. Let me say this, that no country wants to import unemployment, and that is why tariffs are raised against imports. We say that it is fundamental to the social credit way of thinking that a country should export only what it cannot consume, in exchange for those things which it cannot produce. That is trade in the real sense of the word.
We do have certain things in Canada that we produce largely in excess of our needs, and of course wheat is one. On the other hand, there are things which we cannot produce and never will be able to produce commercially-all tropical fruits, for instance. These things we never can produce in Canada, by commercial means anyway. But we do have plenty of basic products which we produce in excess of our needs and which we can export in exchange for the articles which we can neither grow nor produce for ourselves.
There is one point with regard to our trade relations with South America. I understand that the attitude adopted ait the San Francisco conference, where the people of the Argentine were told bluntly that they were not wanted, has not improved their relations with either the United States or with us. I understand that that was done to please Soviet Russia. In the meantime, as one might have supposed,
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Soviet Russia has slipped in and established a full-time ambassador in the Argentine and has largely gained the trade which was formerly enjoyed by those countries which told the Argentine that she was not wanted. It is just another example that we would do well, with, regard to all countries, to mind our own business and let other countries mind theirs. That works well in any community. As long as people mind their own business there is peace, but 'as soon as they start to mind other people's business there is likely to be trouble and it is pretty soon coming.
I should like to hear some of the speakers who follow me say a few words about imports in exchange for our exports, because the idea that we can raise our standard of living in Canada by exporting our goods on long-term credits is not true. One reason for that is that if the goods are exported and are not traded for a corresponding amount of imports, and the wages stay in this country, then there is inflation, and that has to be taken care of by increased taxation. So, as Major Douglas said years ago, Ithe only thing that the working man will get out of a favourable balance of foreign trade is a longer work day. We shall have to work harder, tighten our belts, and pay higher taxes for the privilege of doing it.


Mr. J. W. BURTON (Humboldt):: Mr. Speaker, I shall take only a few moments. In fact, I had not intended to say anything on this bill until the hon. member for Spadina (Mr. Ctoll) opened up in the way he did. I have always considered that a country like Canada, with the nature of our production, should have a vigorous export policy, but I have always contended thalt the first charge upon the production of any country is a decent standard1 of living for those who make that production possible. The first charge on the production of any nation is the opportunity for the people who make that production possible to use that production to give them a decent Standard of living. As the- hon. member for Wetaskiwin- (Mr. Jaques) has pointed out, very little if anything was said about import business. My associates and I have at all times contended that, while we must have export markets for surplus products, we should in turn have a policy of vigorous import business in exchange for those surpluses, so that our people can round out a full standard of living by having the use of things they cannot economically produce or manufacture in this country. In other words, you can have a vigorous export market, and continue to have it and have your people happy at home only, if you make your inter-

national 'trade a two-way street. The hon. member for Spadina spent altogether too much time on the edge of that street, going one way and not giving any thought to the other side of the street.
When the hon. member suggested that a certain portion of our production should be earmarked for export I was absolutely astounded. I was astounded to hear it coming from that part of the house. I could have understood it if he had put it a little differently. I am- prepared, and I am- sure the majority of the Canadian people are prepared, to have belts tightened, to do without some of the things we ordinarily have and should have, so long as they go to those parts of the world that are urgently in need of them. But that is, we hope, only a temporary condition. That is a matter which needs to be dealt with only on some occasions. But when you are speaking of international trade and suggest that we should earmark a certain proportion of our production for export, regardless of whether or not our own people have enough of the things so produced-well, simply to be polite and to have my words remain parliamentary, I will say it is just so much hooey.
When I first looked over the bill I thought it was a fairly good one. I thought it was making some provision whereby we could foster both our export and our import business. But after listening to the hon. member for Spadina I am beginning to have my doubts. I am wondering whether his speech this afternoon is an indication of what the government intends to do with this bill, and I suggest that during the dinner recess we consider that question seriously before supporting the bill. If that is Liberal policy; if it is what the Liberal government intends to do with this piece of legislation, I for one will give it serious thought during the dinner recess.
Before I sit down, may I say this. Let no one go from this chamber and say that I am opposed, or that my associates are opposed, to sending as much as possible of our goods to countries that are at present in dire need of them. Let me, however, also say this. I simply cannot understand the attitude of a government which at one time throws out the call for the people of this country to give all they can in order to prevent starvation in some countries, and then at the same time allows machines to be shipped to other countries, which possibly cannot use those machines at the present time, in order to help relieve the situation in Europe, while in our own country we have a crop standing there in need of machines to take it off. Even when they turn some of these machines over

The Argentine Nation
to UNRRA, I would point out that the people in need of food cannot eat agricultural implements. They need the food that we could harvest with those implements, and that food would tide them over their present plight. This export business can be something that is absolutely idiotic at times, something that is beyond all reason when carried to extremes.
So far as Latin America is concerned, I have no love for the Argentine, any more than for others, and as the hon. member for Wetaskiwin suggested, possibly they have thrown their business somewhere else. But I would say to him and to other hon. members that there was a time, not so very long ago, when the Argentine was found wanting, when much more was at stake than a little bit of export business. In spite of what the hon. member for Spadina said, I still do not think his speech was an indication of Liberal policy.



THE ARGENTINE NATION &quot;


James Horace King: I have received a telegram from the president of the Chamber of Deputies of the Argentine nation and, since it is in Spanish, I will read translations in English and French:
The Hon. the Speaker of the House of Commons
of Canada, Ottawa.
Upon the resumption of its sittings, the Chamber of Deputies of the Argentine nation transmits to the House of Commons of Canada its wishes for peace and reciprocal friendship, with cordial greetings to every member and, through your intermediary, to the people of Canada, for whose prosperity we express our most sincere wishes. Pleace accept, Mr. Speaker, the assurance of my highest consideration.
Ricardo C. Guardo, President of the Chamber of Deputies of the Argentine Nation.
L. Zavalla Carbo, Clerk.
Monsieur le President de la
Chambre des communes du Canada,
Ottawa.
A Toccasion de la reprise de ses deliberations, la Chambre des Deputes de la Nation Argentine prie la Chambre des communes du Canada d'aecepter ses meilleurs voeux de paix et d'ami-tie reciproque et transmet ses salutions cor-diales a ses membres, et, par votre intermediate, au peuple canadien, pour la prosperity duquel nous formulons les vceux les plus sinceres. Je vous prie, monsieur le President, d'agreer l'expression de ma plus haute consideration.
Ricardo C. Guardo, President de la Chambre des Deputes de la Nation Argentine,
L. Zavalla Carbo, Greffier.
I have prepared the following answer, which I hope will meet with the approval of the house:
The members of the Canadian House of Commons wish to express their sincere thanks to the Chamber of Deputies of the Argentine nation for their wishes for peace, reciprocal friendship and prosperity extended to them and through them to the Canadian people, in a message addressed on the second day of August bv Mr. Ricardo C. Guardo, President of the Chamber of Deputies.
The Canadian House of Commons, in return beg to convey to the parliament of the Argentine and its people most sincere wishes for peace, security and prosperity.
Please accept, Mr. President, the assurance of my best sentiments.
Gaspard Fauteux,
Speaker of the House of Commons, Canada.
Ottawa, August 5, 1946.
Les membres de la Chambre des communes du Canada desirent transmettre leurs remercie-ments a la Chambre des Deputes de la Nation Argentine pour les bons voeux de paix, d'ami-tie reciproque et de prosperite, et pour les salutations cordiales exprimes a ses membres et, par leur intermediaire, au peuple canadien, dans un massage adresse le 2 aout par monsieur Ricardo C. Guardo, President de la Chambre des Deputes.
La Chambre des communes du Canada, en retour, par mon entremise, desire assurer le parlement et la population de l'Argentine de ses vceux les plus sinceres pour la paix, la security et la prosperite de leur pays.
Veuillez agreer, monsieur le President, 1'ex-pression de mes sentiments les meilleurs.
Gaspard Fauteux,
President de la Chambre des communes du Canada.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



CANADIAN COMMERCIAL CORPORATION


[Stage Direction]
The house resumed consideration of the motion of Hon. J. A. MacKinnon (Minister of Trade and Commerce) for the second reading of bill No. 251, to establish the Canadian Commercial corporation.
Angus MacInnis: Mr. Speaker, it is not my intention to delay the house for more than a few minutes. We want, however, to put our reasons for supporting the principle of the bill on record as clearly as we can. We supported the principle of the bill when it was before us in the resolution stage, and although I have not had an opportunity of checking it over section by
Commercial Corporation

section as carefully as I should like, from the study that I have given it I see no reason why we should withdraw our support now.
We support the bill, first, because in our opinion it is an attempt not only to expand our trade but also to bring about orderly marketing. No matter how reluctantly we may approach this question, I am convinced that circumstances will push us forward and that this may well be the first step toward setting up export and import boards. We should not be afraid of that because it has been done before.
When I spoke on the budget I said in reply to the statement made by the Minister of Finance (Mr. Ilsley) that the government was basing its hope for a return to prosperity on export trade. At that time I pointed out that the only necessity for a country to export was in order to import, and I am glad to note that the hon. member for Wetaskiwin (Mr. Jaques) has read my speech, as was indicated in what he said just before recess. I say that, not boastfully but because I had never heard the case put in this house in the way in which I put it in my budget speech and in the way the hon. member for Wetaskiwin put it this afternoon.
This country, of course, is interested in exports. But if we are to export for long we must also be interested in imports. There are many things which our people need which we cannot produce here. Some of the commodities that we produce here are better produced in other places. I like to look at good workmanship and good materials because it is pleasing to the eye. I think a good piece of workmanship is akin to art, even when it is a useful article such as clothing, china and things of that kind. I am quite satisfied that there are many people in Canada who would like to buy some of the beautiful woollen goods produced in Great Britain, perhaps better than in any other country in the world. Unfortunately they cannot often purchase them, but they would like them just because almost every' one likes good quality. I know that people in Canada w'ould like to buy some of the beautiful china which Britain also makes. There are many things which are beautiful to look at, a joy to handle, and pleasing to have about. There is no reason why we should not have more of these things. I believe men and women are better men and women if they have beautiful things about them to look at. These are some of the reasons why we should be interested in trade, in buying and selling, exchanging the things we have in abundance for the things that we have not at all. If we can do that, our standard of living will be raised.

This afternoon some hon. member mentioned the matter of the loans we have made since the end of the war. I am not disturbed about these loans even if we never get value for them, because we came through the war in good shape, and most of the people, or perhaps all of the people, to whom we made these loans suffered greatly. But there is another reason, namely, that the quicker we restore the economy of these countries, the better off we shall be ourselves. Therefore, so far as I am concerned I shall support measures of this kind for some time to come. I hope we shall get a return some day, and I hope we shall be able to accept that return in goods which our people can use. We should not ask for it until the people to whom we lent the money or perhaps our goods can pay for them without hurting themselves.
I am quite aware of the fact that in the sort of economy in which we live, a capitalist economy, export trade is a necessity even at times when the masses of the people who produce the goods are in need of them. In such instances goods must be exported because of the maldistribution of the income which went into circulation in the production of those goods. That, however, will have to be taken care of in some other way, so that our own people will not be in want, while the things they could use must be exported because the people who could buy them can not consume them. For these reasons, wdiile the house may be as critical as it likes of sections of the bill, in its general principle I think we can support it as a measure that helps to meet the needs of to-day. Perhaps a few years from now conditions will have changed and wye shall require something else; but at the moment, if this is as far as the government feels it can go, I see no reason why the bill should not have our support.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Golding in the chair.
On section 1-Short title.
Gordon Knapman Fraser: I asked the minister a few questions before recess. I wonder if he would answer them now.


James Angus MacKinnon: To begin with, I want to thank the hon. member for Peterborough West for his comment on the bill and on the work of the department generally. One specific question the hon. member asked was the relationship of the Canadian Commercial corporation to our foreign trade service. In asking that question, I believe the hon. member was particularly anxious that there should be no overlapping or conflict in the

Commercial Corporation
work of the two organizations. The foreign trade service of the department continues its promotional activities, continues its search for new markets, making connections and so on. It has, however, no capacity to consummate actual transactions which are desirable but which cannot be handled by private traders. The normal follow-through on its promotional activities is and should be carried on by private traders. The Canadian Commercial corporation will not initiate new trade, but is available as a necessary piece of machinery to carry out certain types of transactions. It is purely of assistance to private trade, not in any wTay a competitor.
'Mr. FRASER: Will the minister comment on the suggestion I made with regard to a time limit?


James Angus MacKinnon: The corporation is
being established to fill a definite need created by war conditions and tire special problem of transition to more normal trading relations. That need exists to-day -and will probably continue for some time. The future of the corporation will depend in large part upon the degree of freedom in private trade accorded to the nationals of ex-enemy countries. The corporation will be continued' in existence as long as necessary to assist private traders.


Gordon Knapman Fraser: Has the minister any idea how long thait will be?


James Angus MacKinnon: It depends on so many things. For instance, it depends on how long Japan might be occupied by the victorious allies, or how long Germany might be occupied. It is impossible to state any actual time limit, bult this organization is being set up as an aid to business and will be continued just as long as, and not longer than, it will continue to be a necessary aid to business.


Gordon Knapman Fraser: As long as it is useful?


James Angus MacKinnon: As long as its usefulness lasts. It has not been established to subsidize exports or imports, or to replace private traders in any way.


Gordon Knapman Fraser: Will the minister say what extra staff he has to take on to handle this work, and also whether this new corporation is taking on men or women for advertising or publicity work?


James Angus MacKinnon: The Canadian Commercial corporation has taken over the staff of the Canadian export board, the organization that carried on this work during the war. It has taken over that staff in its entirety, as I understand it, and in addition it has engaged four men who have had unusual experience in work of this kind. The staff has all been
recruited through the civil service commission, according to my information, with the exception of these senior officials. The intention is to continue that practice. The four experts I just mentioned, the senior officers of the organization, were recruited through the Canadian export board. They are men who had formerly been with munitions and supply, the wartime prices and trade board and possibly other departments.


Gordon Knapman Fraser: What is t'he total staff at the present time? What is the staff in Canada and what will it be in foreign countries? I imagine you will have agents in foreign countries, or do the trade commissioners act in that capacity?


James Angus MacKinnon: At the present time there is a staff of approximately 115. At the moment it is not intended to appoint any agents in foreign countries. In some cases use is being made of existing trade commissioner services in those countries.


Gordon Knapman Fraser: They should1 be able to handle this work in those foreign countries, should they not? You should not need to send any extra help there for that purpose.


James Angus MacKinnon: It depends entirely upon the nature and volume of work that may arise, but it is not our intention to set up any organization in addition to what we now have unless we find it necessary to do so. In reply to the question concerning advertising, I may say there are no arrangements or plans at all for any advertising in connection with this corporation.


Howard Charles Green: What part does the Canadian Commercial Corporation take in deciding what goods are to be exported from Canada? For exiample, we learn that Canadian shirts are being exported to the United States. Is the Canadian Commercial Corporation involved in that offence, or just what is its position?


James Angus MacKinnon: The Canadian Commercial Corporation will clear with the appropriate administrator or controller as to whether or not merchandise can be properly exported.


Howard Charles Green: Which one of these governmental bodies decides at the present time whether shirts are to be exported from Canada?


James Angus MacKinnon: That is the result of conversations between the men in charge of supply in Canada and t'he officials of the Department of Trade and Commerce.


Howard Charles Green: Who are the culprits? Who are the controllers who reached that decision?
Commercial Corporation

Which branch of the Department of Trade and Commerce is involved in the decision? Is it the Canadian Commercial corporation or some other branch of the department?


James Angus MacKinnon: The Canadian Commercial corporation has nothing whatsoever to do with it. I do not wish to start a long discussion on the point, but-


Howard Charles Green: Shirts are hard to get.


James Angus MacKinnon: In response to a question to-day by the hon. member for Eglinton I tabled a return showing the number of shirts and other wearing apparel produced in Canada, and the number exported. The number exported is only a small fraction of the production.


John Ritchie MacNicol: Where are the shirts, then?


James Angus MacKinnon: The great shortage in Canada is in the kind of shirts the hon. member for Davenport wears.


John Ritchie MacNicol: I cannot get one at all.


James Angus MacKinnon: I have the same difficulty the hon. member has. That is something he will have to ask the producers.


Mr. JOHNSTON:: What fraction is exported?


Mr. GIBSON (Comox-Alberni):: Keep your shirt on.


Charles Edward Johnston: I haven't got one. They export them all, whether we 'have any or not.


James Angus MacKinnon: This matter has nothing whatsoever to do with the corporation under discussion. But the hon. member for Bow River will have a proper answer if he calls for the return I laid on the table to-day in answer to a question by the hon. member for Eglinton.


Charles Edward Johnston: Could the minister give the fraction?


James Angus MacKinnon: I believe it is a fraction of one per cent.


Howard Charles Green: I understand that the Canadian Commercial corporation has nothing to do with the decision as to what goods are to be exported?


James Angus MacKinnon: That is correct.


Howard Charles Green: When the resolution preceding the bill was in committee we asked the minister why it had not been possible for the Canadian export board to carry on, instead of a new crown company being set up. He promised to make an answer when the bill was in committee. Will he do so now?


James Angus MacKinnon: I am glad to do that. The government was urged to match the facilities afforded British and American traders by the United Kingdom Commercial corporation and the United States Commercial company. A government board which has to act in the name of His Majesty is not a practical medium through which to carry out foreign trade transactions, such as buying or selling a particular parcel of goods. Further, it was the experience of the Canadian export board that many firms preferred to do business with a company which could sue and be sued, rather than with a department of government.


Mr. THATCHER:: I am not clear as to what functions this company can perform that our trade commissioners cannot perform. Is there not likely to be some duplication?


James Angus MacKinnon: There is a mistaken idea that the trade commissioners representing Canada abroad are commercial travellers, and that they actually sell goods. That is not their function at all.


Wilbert Ross Thatcher: Do they not solicit trade?


James Angus MacKinnon: They seek out buyers in foreign countries-not so much individuals, although they would do it in that way-for merchandise in excess production in Canada. They do not sell a bill of goods, at all. They merely bring the buyer in a foreign country in touch with the vendor in Canada.


Mr. McKAY:: What is the relationship between a trade commissioner and the Canadian Commercial corporation? "Will these commissioners operate independently, or will they be servants of this organization?


James Angus MacKinnon: Actually there is no connection at all between our Canadian trade commissioners service abroad and this organization. As I said earlier, it may be that we may use their services to a slight extent in some foreign countries. But there is no duplication of service there; there is no conflict of service. It is not our intention to have any overlapping.


Eric Bowness McKay: Earlier in the evening the minister said that we were going to use certain of these trade commissioners to carry on the work of the corporation.


James Angus MacKinnon: I referred to the statement I had made earlier in the evening when I said it was possible that we may make use of our trade commissioners abroad in connection with this. But that has not yet been decided.

Commercial Corporation


Mr. FAIR:: How will the staff of the corporation be disposed of when its work is completed?


James Angus MacKinnon: The staff at present have the status of temporary civil servants only. I imagine, when the time comes, they will likely be absorbed in other branches of government, or in private industry.


Mr. BRYCE:: Is the corporation going to do any advertising to sell goods?


James Angus MacKinnon: No.


John Ritchie MacNicol: Is the corporation not 'being set up to seek to deal in a big way, not in the direct sale of surplus goods, but between one government and another, or between one large buyer and a large vendor?


James Angus MacKinnon: The corporation is being and will be used in the manner suggested by the hon. member. At the present time, for instance, we are marketing fish through the facilities of this corporation.


John Ritchie MacNicol: Would the meat pro-produced from the horses on the prairies around Swift Current not be sold through this corporation?


James Angus MacKinnon: That transaction would be handled through the Department of Agriculture.


[Stage Direction]
Section agreed to.
On section 2-Definitions.
Gordon Knapman Fraser: Will the corporation be set up in the present offices of the export board?


James Angus MacKinnon: In the same place, yes.


[Stage Direction]
Section agreed to.
On section 3-Corporation established.
Herbert Wilfred Herridge: I should like to ask a question in connection with subsection 4. I notice that as directors there are a representative of the Department of National Revenue, customs and excise branch, a representative from industry and one from fishing. However, I see no director representing agriculture. Why is there no representative of agriculture on the directorate?


James Angus MacKinnon: Agriculture has its own facilities for handling this sort of thing; the meat board, for instance.


John Lambert Gibson: The deputy minister of fisheries is mentioned.


Herbert Wilfred Herridge: What about British
Columbia apples?


James Angus MacKinnon: They are not marketed through a government agency. In answer to 63260-273
the hon. member for Comox-AIberni, the deputy minister of fisheries was shown when the bill was drafted because he was an employee at that time. However, he will have to be replaced.


[Stage Direction]
Section agreed to.
On section 4-Purposes.
Mr. SKEY:: I notice in paragraph (b) (ii) it is provided that the corporation is established to dispose of goods and commodities that are available for export from Canada. I think I am correct in saying that there are very few manufactured products now available for export; they are mostly natural products; am I correct?


James Angus MacKinnon: Yes, I think that is correct.


Lawrence Wilton Skey: I think there are many manufactured products that might be made available for export now in small quantities. I realize that there are tremendous demands for manufactured products in Canada and that there are many export companies able to sell these products in foreign countries, but they are prohibited from doing so at the present time because of the shortages that exist here. I am going to advocate that some of our manufactured products be made available for export in small quantities so that new markets can be opened up. There are plenty of markets all over the world crying for consumer goods and, if we will do in a very small way what Great Britain is doing in a large way and deny ourselves just a little bit more, we shall open up channels of communication for the export of manufactured articles to many countries to which we have never sold before. I am going to advocate that, despite the shortages which exist, the Department of Trade and Commerce should follow a truly liberal policy in the granting of export permits in order to develop new markets. I think such a policy would return large dividends to this country in the future.
There is one other thing I should like to bring to the attention of the committee and the minister. UNRRA has been buying in bulk from Canada, so I am told, and is taking the whole of our production in certain lines, which leaves nothing available with which to open up new markets. I am told also that other countries with which UNRRA is dealing are selling only a part of their production, which leaves some available for export. I have not this information on good authority, but I think it is something we should guard against. If we are to continue to sell to UNRRA in order to help the people of

Commercial Corporation

Europe, I do not think we should sacrifice the whole of our export surplus. We should not be asked to do more than other countries are doing in this connection. We should still leave ourselves some surplus for export. Are the markets of the British empire being opened up to Canadian goods? Is there any conflict with the mother country, or are we able to compete with the mother country on an equal basis?


James Angus MacKinnon: In concluding his
remarks, the hon. member has asked a most difficult question. The United Kingdom is doing everything in her power to establish an export trade, and in seeking export markets we are naturally in competition with the United Kingdom as we are with the other great trading nations. I do not think the United Kingdom is making it any easier for us than is any other country.


[Stage Direction]
Section agreed to.
On section 5-Powers.
Gordon Knapman Fraser: Paragraph (c) refers to the storing and processing of goods or commodities, either as principal or agent. Storing is all right, but I object to the processing of goods by this corporation and I think that should be deleted.


James Angus MacKinnon: There is no intention to go into the processing or manufacturing at all. In some cases merchandise might have to be repacked and it is to give sufficient power to do so, that this section is included.


Gordon Knapman Fraser: If you want to put in "repack", all right, but I do not think you should provide for processing because it is too broad. This is an agency of the people; it is not a manufacturing firm.


James Angus MacKinnon: I mentioned a few minutes ago that one of the commodities that we are handling is fish. It is necessary to do a certain amount of processing of the fish in order to keep them in a proper frozen state.


Howard Charles Green: In what way?


James Angus MacKinnon: Freezing them and keeping them frozen.


Howard Charles Green: Do you not buy them frozen from the fish companies?


James Angus MacKinnon: I expect we do, but in the ordinary storage of the fish steps will have to be taken to see that that frozen state is maintained. I am quite familiar with the handling of fish in the part of Canada from which I come, in this country north of Edmonton. Large quantities of fish are exported in

a semi-frozen state. I can quite conceive where that state would have to be maintained in any intermediate storage plant.


Howard Charles Green: Would not "storing" be broad enough to cover that?


James Angus MacKinnon: I do not think so, no.


Gordon Knapman Fraser: "Storing and packing" would be all right. I think the minister should change it because it is too broad.


James Angus MacKinnon: I can assure my hon. friend that there is no intention whatever of invading any manufacturing field.


John Ritchie MacNicol: Russia is in the market for machinery for heavy industrial plants, and I know a company in Toronto that makes just the kind of machinery they are after. Would it be part of the business of this corporation to bring buyers in Russia or the government in Russia in contact with the producer of such machinery in Canada?


James Angus MacKinnon: Not necessarily to bring them together. If they were together and needed this kind of machinery to complete the deal, it would be available.


Arthur Leroy Smith: Would the minister expand a Little more about this freezing of Edmonton fish because I did not quite understand it?


James Angus MacKinnon: The fish that I have in mind from the lakes north of Edmonton are shipped in a semi-frozen condition to the markets in Chicago and New York. They are shipped in great volume, and it was the maintenance of a proper state of freezing to which I was referring.


Arthur Leroy Smith: I am very happy to have that from the minister because I thought he was speaking about people.


Mr. WINTERS:: Will all exports arising out of foreign loans be handled through this corporation?


James Angus MacKinnon: Not necessarily.


Robert Henry Winters: Would the minister say what the machinery is and what the financial arrangements will be between foreign countries and the corporation?


James Angus MacKinnon: The corporation acts for the purchaser in the foreign country in placing the order and it gets cash from the purchaser in the foreign country.


Frederick Samuel Zaplitny: Section 5 says that the corporation may carry on the business of importing goods or commodities into Canada and exporting goods or commodities from Canada. A little while ago the minister said

Commercial Corporation
it was not the function of this corporation to carry on business on its own. Would he enlarge on that and show just exactly what are the functions of the corporation because, if this wording of section 5 means what it says, it appears that the corporation will, have power to carry on an importing and exporting business. If it is not going to do it on its own, on whose behalf will the corporation be acting?


James Angus MacKinnon: The corporation may technically be acting in its own right, but actually it will be acting as agent for the foreign government.


Frederick Samuel Zaplitny: I do not understand that. It will act as agent for what body in Canada? It will be the agent between a foreign government or an importer in a foreign country and what body in Canada? Between what two bargaining bodies will the corporation act as agent?


James Angus MacKinnon: The corporation will act on behalf of the foreign government and the Canadian supplier. In another case it might be acting for the Canadian purchaser, where the supplier was a temporary government in occupied enemy territory.


Frederick Samuel Zaplitny: Will the functions and activities of the corporation be confined to that type of business? For example, will the corporation act as agent between a private exporter in Canada and a private importer in another country, and vice versa, or will it deal only with foreign governments and private importers or exporters?


James Angus MacKinnon: I want the hon. member to remember that this corporation will not in any way invade the field of private business. It is the intention of the corporation to participate only in transactions which are unavailable to private trade at the present time.


Frederick Samuel Zaplitny: I want to follow this up so that I can get a clear picture of the functions of the corporation. Do I understand from the minister that this corporation will in no way act as an export-import board? It will have no power to decide how much and what shall be exported or imported, but will merely act as a commercial agent between buyers and sellers in other countries and Canada?


James Angus MacKinnon: The position is essentially as the hon. member has just stated it.


Mr. LENNARD:: How will this corporation get along with the wartime prices and trade board, which controls certain commodities and 63260-2731
says how much shall be shipped into this country and really controls the distribution of certain commodities? Will there be a conflict or cooperation between these two bodies? How will that be worked out?


James Angus MacKinnon: This corporation will not be dealing in commodities in which the wartime prices and trade board deals, such as sugar, tea, and so forth.


Mr. McLURE:: Will the Canadian Commercial Corporation become the purchaser for UNRRA, or will they be the export agent?
Mr, MacKINNON: The Canadian Commercial Corporation is now the procurement agent for UNRRA.


Gordon Knapman Fraser: I want to ask the minister how the corporation carries on. Are there any fees charged for its services? There is packaging and processing to do.


James Angus MacKinnon: It is intended that the corporation shall be self-sustaining. The intention of the corporation is to charge a handling fee of one-half of one per cent, which it is believed will cover expenses.


Gordon Knapman Fraser: One-half of one per cent of the Canadian price or the laid down price?


James Angus MacKinnon: One-half of one per cent of the purchase price.


Percy Ellis Wright: Will this corporation take over the functions of the bacon board?


James Angus MacKinnon: No.


Thomas John Bentley: I still am not clear on the answers given by the minister a moment ago to the hon. member for Dauphin as to the corporation acting as agent or liaison officer. Section 5 says that the corporation will actually have the power to import goods. It says that it may carry on the business of:
(a)	importing goods or commodities into Canada,
(b)	exporting goods or commodities from Canada, and
(c)	storing and processing goods or commodities, either as principal or as agent, in such manner and to such extent as it deems advisable to achieve the said purposes.
That gives the corporation power to act as principal or as agent, and if the corporation were to invoke that power would it be able to make a margin of profit on its operations? Or would the goods or commodities be handed over to the receiving party at cost? How would the transaction be carried on?


James Angus MacKinnon: I am not sure that I heard the hon. member's question fully. The corporation may, on occasion, have to act as principal. Take the case of something being
Commercial Corporation

required from Japan, from the military government of Japan. The purchaser in Canada would not be able to deal with an individual in that country, but this corporation could act on behalf of the purchaser in Canada.


Mr. BLACKMORE:: Can	the minister
name the commodities in which this corporation will be dealing? I am trying to get some sort of picture of the set-up. It looks to me as if the minister is removing all possible functions from the corporation and making it impossible to tell what this $10,000,000 is to be used for, and then, having done so, he conveys the impression that it will be an important factor in our trade, I wish he would take some particular commodity and tell us exactly how the corporation will handle it. Will the corporation take money from the $10,000,000 which will be available to it and buy a particular commodity? Suppose the commodity were wheat in Canada. Would it buy the wheat and retain possession of it until it arrived in Japan and then take back goods from Japan? In short, how would it work?


James Angus MacKinnon: Let us take such a commodity as fish, which has been referred to.


Howard Charles Green: Alberta fish.


James Angus MacKinnon: In the first place, the
S10,000,000 capital is to furnish a revolving fund for the operations of the corporation.


John Horne Blackmore: With some of which the corporation would actually buy produce?


James Angus MacKinnon: With some of which the corporation would actually buy fish, say for UNRRA, at the request of UNRRA. We would buy that fish with the corporation's funds at a price set by the Department of Fisheries and would accumulate a large shipment and deliver it to UNRRA in compliance with the request that we had already received.


John Horne Blackmore: And would the corporation buy a quantity of goods from Germany, Italy or Japan?


James Angus MacKinnon: The intention is to get cash from the Canadian purchaser and pay for the goods in the foreign country with that cash. It is not a profit-making corporation. One-half of one per cent is charged on the business done by the corporation and it is estimated that that will take care of expenses.


Charles Edward Johnston: If you supply goods to UNRRA where will you get the commission?


James Angus MacKinnon: We would be paid by UNRRA after we had delivered the goods, and included in our price would be commission.


Charles Edward Johnston: The minister said that it was not intended to go into manufacturing of any kind, and yet I see in paragraph (c) of subsection 1 the words "storing and processing goods or commodities". I can understand that goods might be handled in storage and still the corporation would not be engaged in the manufacturing business. But what would be required in the way of processing? Take fish. Would there be any processing?


John Ritchie MacNicol: They would put more ice on them.


James Angus MacKinnon: The hon. gentleman should have been here when we were discussing this point. As far as processing is concerned, it is largely a matter of possible repacking.


Charles Edward Johnston: It would not be carried beyond the point of repacking for shipment?


James Angus MacKinnon: That has all been dealt with earlier.


Charles Edward Johnston: I know it has been dealt with, but the minister said the corporation was not going to go into the business of manufacturing. If this section is interpreted, however, as it is at present worded the corporation might very well go into business. It is all very well to say that processing does not mean what it says, but when it comes to the application of the act you cannot take the interpretation of any individual here. The corporation will carry on business in accordance with the terms of the act as worded, and in the act reference is definitely made to processing. The minister says that the only processing done will be something in the form of repacking, and I want to know whether that will be limited to repacking for purposes of shipment.


James Angus MacKinnon: I can assure my hon.
friend that the government will not go into the business of manufacturing.


[Stage Direction]
Section agreed to.
On section 6-Employment of officers, and servants, R.S. c. 22.
Howard Charles Green: This is the clause that gives the corporation power to hire employees and incidentally gives them that power quite apart from the Civil Service Act, so that the employees will not be under the civil service commission. What are the salaries of the executive officers to be. I asked the minister that question on July 5, and he promised at

Commercial Corporation
that time to give the information when his officers were in the house. He has them here to-night.


James Angus MacKinnon: The managing director is W. D. Low, whose services have been lent to the government since July, 1939, by the Canadian National Railways. Prior to joining my department, he was executive assistant to the deputy minister of munitions. His salary is 89,500. The other executive officers are: T. F. Aspden, assistant manager of the corporation, formerly director general of the purchasing branch of the Department of Reconstruction and Supply, salary $6,000; J. D. McCarthy, secretary of the corporation, formerly assistant secretary of the Department of Reconstruction and Supply, salary $5,000; G. F. Wevill, comptroller, formerly comptroller of the inspection board of the United Kingdom and Canada, salary 86.000.


[Stage Direction]
Section agreed to.
On section 7-Head office branches.
Mr. KNIGHT:: This section declares that the corporation shall establish its head office in Ottawa. I also notice that the directorate board is made up for the most part of deputy ministers. I do not know why in particular. The minister mentioned trade commissioners some time ago. We who live in the country which is tributary to Hudson bay have sometimes thought the Canadian trade commissioners showed something of a lack of enthusiasm for that route, and I should dike to ask the minister whether there could not be placed on the board someone who would have interest in the west instead of having all the business centred in the east.


James Angus MacKinnon: Is my hon. friend suggesting that the trade commissioners may not be looking after the interests of western Canada as well?


Robert Ross (Roy) Knight: I am not suggesting anything; I am asking a question.


James Angus MacKinnon: Do I understand that the hon. member has already asked the question?


Robert Ross (Roy) Knight: I will ask it again.


James Angus MacKinnon: Please.


Robert Ross (Roy) Knight: The question is whether the minister would include on the directorate board someone who is known to be interested in the particular project I have mentioned, namely, the facilities of the Hudson bay route.


James Angus MacKinnon: I shall be glad to give it consideration,


John Ritchie MacNicol: The minister himself is from western Canada.


Wilbert Ross Thatcher: Is it contemplated
setting up branch offices in western Canada?


James Angus MacKinnon: There are as yet no plans for branch offices. May I make this one remark with reference to trade commissioners? They are recruited from all parts of Canada. I say to hon. members from western Canada that some of the brightest of new blood taken into our trade commissioners' service are from the prairie provinces and British Columbia,


Charles Edward Johnston: Are there any from Calgary?


Thomas John Bentley: There are no bright ones from anywhere else.


Wilbert Ross Thatcher: I agree with what the minister has said, but he has not said whether or not any branch offices are likely to be set up in western Canada. That is the answer I should like to get from him.


James Angus MacKinnon: It is quite improbable that there will be any branch offices in Canada, but that is something on which we cannot speak with any authority.


Wilbert Ross Thatcher: Anywhere in Canada?


James Angus MacKinnon: We are establishing warehouses.


Robert Ross (Roy) Knight: Subsection 1 of section 7 distinctly says:
The corporation shall establish its head office in Ottawa and may establish such branch offices, either inside or outside Canada . . .


James Angus MacKinnon: "As it deems necessary."


Robert Ross (Roy) Knight: The minister is not trying to tell me that the words mean that they are to be established either inside or outside Canada? It is quite evident that the language means 'both inside and outside Canada. My colleague's question was quite proper. He asked whether any branches were to be established in western Canada, and it seems to me to be a natural question.


James Angus MacKinnon: I have been trying to answer the question by saying "no," that it is improbable that- there will be any branch offices established in western or eastern Canada or outside Canada.


Robert Ross (Roy) Knight: May we delete it from the subsection?


James Angus MacKinnon: We have the authority if it is necessary.


[Stage Direction]
Section agreed to.
Commercial Corporation
[Stage Direction]
On section 8-Grants and advances to corporation.
Howard Charles Green: There is one provision in section 8 which should be explained. I refer to paragraph Ob) of subsection 1 Which gives power to make any other advances or grants to the corporation that are otherwise-


John Horne Blackmore: Would the hon. member speak louder? There is so much noise around me that I cannot hear.


Howard Charles Green: Paragraph (a) of subsection 1 of section 8 provides for grants and advances to the corporation to the extent of $10,000,000 out of the unappropriated' moneys in the consolidated revenue fund. In addition to that, further power is taken' in paragraph (b) covering any other advances or grants to the corporation that are otherwise authorized1 to be made from the consolidated1 revenue fund. I do not remember ever having seen a provision of that kind in a bill before. I should like to know what it is meant to cover.


James Angus MacKinnon: If it is necessary to enlarge the working capital, which we do not look forward to, this will give us the necessary authority. We do not expect that there will be an increase in it.


Howard Charles Green: I certainly object to blanket power of that kind being taken. Paragraph (a) provides as follows:
An amount or amounts not exceeding in the aggregate $10,000,000.
We are led to believe that wTe are committed to an expenditure of 810,000,000. Then, to be on the safe side, after having 810,000,000 to play with, we get paragraph Ob) which reads as follows:
Any other advances or grants to the corporation that are otherwise authorized to be made from the consolidated revenue fund.


An hon. MEMBER:: Any amount.


Howard Charles Green: Unlimited. I submit that paragraph Ob) should be deleted from the bill. If you want 815,000,000 now say so and we shall know what we are doing. This business of asking for 810,000,000 now and any additional amounts which may be required is not right.


James Angus MacKinnon: I do not think it is in keeping with the hon. member to suggest that there is any attempt to do something which the bill does not provide for here.


Howard Charles Green: The bill does provide for it; that is the trouble.


James Angus MacKinnon: The bill provides for:
An amount or amounts not exceeding in the aggregate ten million dollars to be paid out of unappropriated moneys in the consolidated revenue fund.
The only way in which that can be done is by this parliament; . the company itself cannot do it.


Howard Charles Green: Why do you take the second power?


James Angus MacKinnon: And any other-


Howard Charles Green: It reads "any other
advances".


James Angus MacKinnon: "Any other advances or grants to the corporation that are otherwise authorized to be made from the consolidated revenue fund." That is it exactly. Should it be found necessary to do that in the future, they will have to come back to parliament for it; there is no doubt about that.


Howard Charles Green: It does not say that.


John Horne Blackmore: "Otherwise authorized" is 'the expression which is giving the trouble. Authorized by whom?
Mr. ST. LAURENT: This is a bill which sets up the corporation. The corporation has to have enabling powers. With respect to moneys, they have to be authorized by parliament. The reason for paragraph (b) is to give enabling power to the corporation to receive other grants which might be made by parliament if it were found necessary to make them. If there were some special thing being contemplated for which a grant "was felt to be in order the grant could be made by the estimates without amending the enabling powers of the corporation. This is merely to provide that in this act there will be the right to the receiver general to make advances up to 810,000,000, but if something special were authorized by another act of parliament it would not interfere or cut down the provision made by paragraph (a).


Howard Charles Green: Yes, but that would be covered by the other act of parliament when it is found that, say another 85,000,000 is required for some special purpose; that has to be approved by act of parliament and the same act of parliament could give to the corporation whatever powers are necessary.
Mr. ST. LAURENT: It could.


Howard Charles Green: I submit that that is the way in which it should be done rather than taking blanket authority at this time. It says "otherwise authorized." What we may get would be a vote in the ordinary estimates, and we

Commercial Corporation
may find that this corporation is getting
35,000,000 in that way. I suggest that is not the proper way to do it.
Mr. ST. LAURENT: I do not think there would be any objection to that. I do not think there would be any objection to there being an additional grant authorized by a vote in the estimates without its being necessary to amend the charter of the corporation.


Howard Charles Green: These moneys are not being administered by the department. It would be different if they were being administered by the department and the minister would have to come into the house, stand up and take his medicine if the expenditures were not properly made. These expenditures are to be made by another one of these crown companies, and by the time parliament catches up with the expenditures which are made by crown companies we shall all be in the Senate. I suggest that the minister delete paragraph (b) from the bill.


Mr. BOUCHER:: Would that paragraph permit a further advance to be made to the corporation by order in council without special reference to parliament at all, or by an item in the estimates not specially designated? As I understand it, the bill empowers the receiver general to advance 810,000,000 out of the unappropriated moneys. Paragraph (t>) would also authorize advances of more money on occasions.
Mr. ST. LAURENT: Not unless additional advances were specially authorized by parliament.


George Russell Boucher: But if special authority is given; why cannot we have special authority to appropriate the funds and not have this paragraph give the authority of parliament to some, other concern to advance 810,000,000 out of the unappropriated funds?


John Horne Blackmore: Would it clarify the paragraph to any extent if the minister would put in additional words after the words "authorized" and make it read "otherwise authorized by parliament." Would there be any objection to adding these two words?


James Angus MacKinnon: That is the intention, and I should be quite satisfied to accept that suggestion.


Mr. BRACKEN:: Will the minister say what it is proposed to use this $10,000,000 for? Is that for current expenditures in the operation of this concern, or is it an advance that will be repayable to the government later on?


James Angus MacKinnon: It is a revolving fund, as I explained a little earlier this evening,
using as an example the item of fish. We would use this money to purchase fish to fill an order we had received from UNRRA. We would sell the fish to UNRRA and get payment for it, and that money would go back into the revolving fund. The price at which the sale would be made would be set by the Department of Fisheries.


John Bracken: Then it is anticipated that there will be no loss on those operations and that when this board ceases to function, if it ever does, this $10,000,000 will be returnable to the consolidated revenue fund?


James Angus MacKinnon: That is the intention. Earlier I also explained that we are charging a commission of one-half of one per cent, which we anticipate will cover our yearly expenses.


John Bracken: The minister expects that the treasury will be reimbursed to the extent of $10,000,000 if this amount is advanced to
the corporation?


James Angus MacKinnon: I do.


George Russell Boucher: May I ask if the Government Companies Operation Act is not sufficient as it now stands to permit the government to issue more than $10,000,000 to the Canadian Commercial Corporation without further reference to parliament? It is my opinion that under this act the treasury advances $10,000,000, but that the Government Companies Operation Act could be brought in under paragraph (b) to advance further sums with no reference at all to parliament, and no appropriation by parliament. I wonder if the minister could explain that.


James Angus MacKinnon: I am informed that the act referred to by my hon. friend does not apply to this corporation at all. It applies only to companies organized under the dominion Companies Act.


William Henry Golding: Mr. Blackmore has moved an amendment inserting the words " by parliament," so that paragraph (b) would read:
-any other advances or grants to the corporation that are otherwise authorized by parliament to be made from the consolidated revenue fund.


[Stage Direction]
Amendment agreed to.
John Bracken: Does this item of $10,000,000 appear in the estimates of the minister's department for this year?


James Angus MacKinnon: This $10,000,000 will not appear in my departmental estimates this year. We do not intend to use anything like this amount immediately, and at the present
Commercial Corporation

time we are financing on moneys advanced to the Canadian export board, the predecessor of this company.


Howard Charles Green: How much money did you get from them?


James Angus MacKinnon: About $4,000,000.


John Bracken: Some of this money will be used this year, will it not?


James Angus MacKinnon: We are using the
$4,000,000 now as capital, the money we have on hand at the present time.


John Bracken: But you are asking for $10,000,000 in this bill.


James Angus MacKinnon: Yes.


John Bracken: Will not some part of that be used this year?


James Angus MacKinnon: Section 8 provides.
The Minister of Finance shall, on the request of the Minister of Trade and Commerce, from time to time deposit to the credit of the corporation . . .
We are not asking for all this money at the present time.


John Bracken: Then this is the situation confronting us. We have had the budget of the Minister of Pinance, with the estimated expenditures for the year on current items amounting to some $2,700 million. Now we have in this form another appropriation bill providing for the advance or expenditure of $10,000,000 which does not appear in the statement of expenditures given by the Minister of Finance in his budget speech. The point I am making is that this measure is in itself an appropriation bill. It says this money may be advanced out of "unappropriated moneys in the consolidated revenue fund." I have spoken of this on various occasions previously. The consolidated revenue fund is the total of all the revenues received by this government. All the money goes into one pot. The appropriated revenues are those passed by this house in the estimates we consider from time to time. The unappropriated moneys are any balance there may be over what the government has been authorized to spend. By this bill we are adding to the expenditures the government has so far brought before us. In other words, we have another appropriation bill.


Howard Charles Green: The minister said they were taking over $4,000,000 from the Canadian export board, which was set up by order in council. Is that in addition to the $10,000,000 provided in this bill?


James Angus MacKinnon: No.


Howard Charles Green: It is included in the
$10,000,000?


James Angus MacKinnon: It is included in the


Gordon Knapman Fraser: This section provides that the accounts of the corporation shall be audited by the auditor general. Is it the intention of the minister that a statement will be sent to each member of the house, or how will we get those accounts? That will not appear in the auditor general's report, will it?


James Angus MacKinnon: The matter raised by the hon. member for Peterborough West is dealt with in section 13, which we have not as yet reached.


Mr. HACKETT:: Will the minister say whether the $4,000,000 he already has in hand is to be returned from the $10,000,000 he may receive under section 8(a), or is he to retain the $4,000,000 he now has and have authority to obtain the $10,000,000 provided by this section?


James Angus MacKinnon: The $10,000,000 asked for is the total. It includes the $4,000,000.


John Thomas Hackett: But will the minister say what will happen to the $4,000,000 he has on hand at the present time?
Mr. ST. LAURENT: I think the hon. member will find that point covered by section 16, which provides:
The Canadian Commercial Corporation order (P.C. 1218) made by the governor in council on the twenty-ninth day of March, nineteen hundred and forty-six, under the National Emerg-gency Transitional Powers Act, 1945, is revoked and anything at any time done by or pursuant to that order shall be deemed to have been done at that time by or pursuant to this act.
So that the $4,000,000 becomes part of the $10,000,000 the Minister of Finance is author ized to advance.
Section as amended agreed to.
Sections 0 and 10 agreed to.
On section 11-By-laws.


Howard Charles Green: I wish the minister would explain the latter part of this section, which provides:
The corporation may, subject to the approval of the governor in council, make such by-laws as it may deem necessary,
(a)	to carry out this act, or-
I should think that would have been enough, but they go on:
(b)	to authorize the president, executive officers or employees of the corporation to exercise powers vested in the corporation,

Commercial Corporation
and any such by-law, if it is not inconsistent with this act, shall be valid notwithstanding that it is inconsistent with any statute or other law applicable to the civil service or the conduct of public business.
I should like to know, first of all, why you have that power to authorize employees of the corporation to exercise powers that parliament is giving the corporation itself, and then why the last provision is put in under which those bylaws can override any statute or other law applicable to the civil service or to the conduct of public business.


James Angus MacKinnon: I shall endeavour to give a layman's explanation, from information given to me. I believe this additional authority is required to enable the officers of the company to engage and to dismiss staff; and further, they are given the power to purchase other than by tender, which may not be according to legislation governing government purchases.


Howard Charles Green: If that is what is wanted, why not say so?


James Angus MacKinnon: This is legal phraseology.


Howard Charles Green: No, it is not; that is the trouble. This is bureaucratic phraseology giving officers of the company powers which are far too wide. I suggest that the requirement would be met if the section stopped after the word "act" at the end of paragraph (a).


James Angus MacKinnon: I am advised that that would not be sufficient.


William Henry Golding: Shall section 11 carry?


Some hon. MEMBERS:: Carried.


Edmund Davie Fulton: Before that is done, I should like to ask a question respecting section 11. By whom has the minister been advised? Is that a ruling from the Department of Justice?


James Angus MacKinnon: The measure has been approved in detail by the Department of Justice.


Edmund Davie Fulton: Was this specific point raised in consultation with the department?


James Angus MacKinnon: I cannot say at the present time.


John Thomas Hackett: Does that mean that all the employees of this corporation might be taken into its service or dismissed without regard to the Civil Service Act, or as to whether they have served overseas?


William Henry Golding: Order. We are on section 12.


John Thomas Hackett: We are on section 11.


William Henry Golding: No; section 11 was carried.


Howard Charles Green: No, it was not.


John Thomas Hackett: No; section 11 was not carried. We have been discussing it, and I should like to know if it means that all the employees who may enter the service of the corporation may be engaged without reference to the Civil Service Act.


James Angus MacKinnon: The staff being set up by this legislation does not come under the control of the civil service commission. However, we have recruited the present staff through the civil service commission, and they have the standing equivalent to temporary employees. It is our intention to continue to recruit staff through the civil service commission, following the same principle.


John Thomas Hackett: Then, if that is the minister's intention, why is he enacting legislation to free himself from that obligation? If the provision is interpreted as the minister interprets it, the returned man would be deprived of his preference. Is it a matter of policy to set aside a returned man in connection with the engaging of employees for this commercial corporation?


James Angus MacKinnon: In that respect this corporation is just the same as any other crown company. There is a greater percentage of returned men on its staff than in any government department. It is over fifty per cent war veterans.


John Thomas Hackett: If the corporation has observed all the statutes governing the employment of servants taken into any government agency, what is the purpose of seeking to escape from the statute which makes it obligatory to refer to the civil service commission when employees are required? Is it because the corporation may wish to pay higher salaries than are authorized by the civil service commission, or is it because it may wish to take persons who are older than those who would be taken in by the commission? What is the reason for seeking to escape from the ordinary rules controlling the employment of servants by the government?


James Angus MacKinnon: Earlier this evening I gave information respecting salaries.


John Thomas Hackett: If the question was
answered before, then I do not wish to have it answered again.


James Angus MacKinnon: It was only partly answered. The staff might be a highly fluctuating one. A great deal depends on
Commercial Corporation

just how much business we may be doing at a certain time. It might be necessary to cut down or to enlarge the staff quickly.


John Thomas Hackett: But the 'Civil Service Act provides for all that. Hundreds of employees are taken into the post office service at Christmas time, and other employees are taken in at harvest time. The Civil Service Act provides for all that. I am trying to find a reason for placing this corporation outside the act.
Mr. MacKINN'O'N: I would point out to the hon. member for Stanstead that in the very nature of things this is temporary legislation. Earlier this evening I was pressed to state the maximum number of years that this corporation would continue to function, and I explained that it was impossible to do that but that it was not the intention of the government to carry on this organization any longer than was necessary. Even in the review of the civil service by the royal commission it was not suggested that this corporation should come under the civil service commission more directly than is proposed by this bill.


Angus MacInnis: Even with the statement which the minister made just as I came in, I find it difficult to understand, equally as difficult as the hon. member for Stanstead, why the staff of this corporation should be excluded from the civil service. I believe the minister stated that all the staff that had been taken on was taken on through the civil service commission and that it was the intention of the corporation to take on whatever additional staff might be required through the civil service commission.


James Angus MacKinnon: May I make a correction? If I made that statement, I made it in error. I intended to say that this corporation was following the same principle of engagement, veterans' preference and so forth, as the civil service commission.


Angus MacInnis: Why not go all the way and have them full-fledged civil servants with all the rights, privileges and obligations of civil servants? I do not think the temporary nature of the corporation should be a consideration. After all, a corporation, the life of which you do not know, is not necessarily a temporary one; it may continue forever. So far, no good reason has been given why these employees should be excluded from the civil service.


Gordon Knapman Fraser: Are these emplo3rees covered by the superannuation act or anything of that kind?


James Angus MacKinnon: No; they are not subject to superannuation.


Frederick Samuel Zaplitny: I am a little concerned about the last paragraph which provides that these by-laws shall be valid, notwithstanding that it is inconsistent with any statute or other law applicable to the civil service or the conduct of public business. It seems to me that you are taking in a great deal of territory by having these by-laws override any statute that has to do with the conduct of public business.


James Angus MacKinnon: One of the things that comes to mind is the procedure in connection with tendering and entering into of contracts.
Mr. ZAPL.ITNY: If this is intended to apply only to particular instances I do not see the necessity of making it so sweeping. The provision is that these by-laws will override any statute that has to do with the conduct of public business. I believe we should strike out practically everything in paragraph (b).


John Thomas Hackett: The minister mentioned two occasions on which he thought the bill should grant more latitude to the corporation than it otherwise would have. The second occasion he mentioned was the making of purchases not by tender. What is the objection to proceeding in the ordinary way and calling for tenders from suppliers of material or performers of work?


James Angus MacKinnon: I should like the hon. member to conceive of how you would buy something in Japan by the ordinary method of calling for tenders. Wider powers must be given.


John Thomas Hackett: I should like to call to the attention of the minister a fact with which I am sure he is fully acquainted. Governments have found it necessary to adopt cumbersome methods of doing business. The forcing of governments to call for tenders is the result of experience. It is done to protect the taxpayer and to protect the ministers who represent the taxpayers in government administration. As a result of long experience, it has been found that tenders publicly called for and publicly opened are the only safeguards that the people and their governments have against dishonesty. I like to think that our government is honest and that everybody who deals with it is honest, but, after all, we have had the experience of eighty years and this provision has been in all our statutes. I think some serious reason should be advanced- for setting it aside.

Commercial Corporation


James Angus MacKinnon: The corporation has followed the habit of purchasing by tender in Canada or wherever else it is practical to do so, but, as I mentioned a moment ago, there are certain circumstances where it would be absolutely impracticable to buy by the tender method. The corporation will have to use other methods. It will be acting as agent for a private purchaser whom it has to satisfy. This whole matter has been carefully considered by the officers of the department and checked by the Department of Justice, and these special powers are being given to the corporation because we have found by actual practice that it is necessary that they have them.	.


Howard Charles Green: I cannot see any wisdom in giving crown companies such extensive powers. I do not wonder at the officers of the corporation wanting to get them, but that is no excuse for parliament giving them such powers. I should like to move:
That all the words in section 11 of Bill No. 251 after the word "necessary" in line 7 on page 4 be deleted and the following substituted therefor: "to carry out this act."
That would give the corporation power to make by-laws to carry out the act. It -would then read that the corporation may, subject to the approval of the governor in council, make such by-laws as it may deem necessary to carry out this act. I would urge the minister to accept that amendment because it gives the power to make regulations to carry out the act.


James Angus MacKinnon: Take the matter ot tendering. Does the hon. member suggest that his amendment would enable the corporation to purchase other than by tender?


Howard Charles Green: I do not know that, but the corporation has power to carry on its business and this would give it pow'er to make by-laws. I think it goes too far to give power to make by-laws that override our statutory law.


Frederick Samuel Zaplitny: May I point out that the amendment would give the board power to carry out the terms of the act. To go back to section 5:
The corporation may do such things as it deems expedient for, or conducive to, the attainment of the purposes set forth in section 4 of this act.
The amendment does not seem to me to tie the hands of the corporation, because by section 5 it may still do what it considers necessary. Another Objectionable feature of section 11(b) is that executive officers or
employees of the corporation may exercise the powers vested in the corporation. That seems extraordinary, to say the least.


James Angus MacKinnon: The officers of the corporation considered that this language was necessary, but I am willing to accept the amendment of the hon. member for Vancouver South and try it out.


Howard Charles Green: Thank you.


[Stage Direction]
Amendment agreed to.
John Thomas Hackett: The minister has referred to the temporary nature of the act. Is there any provision which says that the act is to last for only one or two years?


James Angus MacKinnon: That ha? all been covered.
Section as amended agreed to.
On section 12-Corporation to act by resolution of the board.


John Ritchie MacNicol: Subsection 4 says:
A director may authorize a delegate to act on his behalf as director and the delegate while so acting shall be deemed to be a director.
The directors themselves, are appointed by the governor in council. Why should the governor in council not also appoint the . delegate? Further, why should a director have power to appoint a delegate who may be anybody at all, a nian of no capacity, so far as the wording of this subsection goes. I do not like the term "delegate".


James Angus MacKinnon: We are trying to tie in the operations of this corporation with the department and have departmental representatives as much as possible. In cases where the senior officer is absent his deputy or assistant can act for him.


John Ritchie MacNicol: I would see no objection to that if it said that, but a delegate may be anybody, a man off the street or from anywhere else-a friend of the director.


Howard Charles Green: This, again, is peculiar legislation. If you want to have the assistant of the man who is named as a director appointed, for example, the assistant of our very good deputy minister of customs and excise, David Sim.


James Angus MacKinnon: Take Mr. H. B.
McKinnon.


Howard Charles Green: You provide for a small quorum anyway. Is that not sufficient? But this gives any director the right to name anybody as his delegate to sit in on that board. All these directors are residents of
Commercial Corporation

Ottawa. It is not as if they were scattered across the country and could not get a quorum together veiy easily. Surely this is not good legislation.


John Ritchie MacNicol: Why not strike out subsection 4?
Mr. MaeKINNON: These senior civil servants do quite a bit of travelling and the use of the word "delegate" was carefully thought out.


Howard Charles Green: It sounds like a political convention.
Mr. MaeKINNON: At one time we thought of using the word "deputy", but Mr. Hector McKinnon has no deputy. The word "delegate" was used to enable the directors to appoint a high ranking civil servant from the department to act in the event of one of them being absent.


Howard Charles Green: Why not say, may appoint someone in his department? Mr. McKinnon is the only one who would not have anyone in his department, is he not?
Mr. MaeKINNON: I can give another case. Take Mr. Saint-Amour of the Bank of Canada.


Howard Charles Green: Someone else from the Bank of Canada could represent him.
Mr. MaeKINNON: These men are the very senior government officials, and it is presumed that we have sufficient confidence in them to trust them to select a proper deputy or delegate in the event of a director being absent.


John Thomas Hackett: Is it not well for the protection of the government, if for no other reason, that the directors should be known? If it be necessary to increase the number, very well; but it is a complete departure from the law that governs corporations to have a board of directors on a sliding scale. There is no identity then, and there would be no responsibility. The board, I assume, is responsible for the business of the corporation, and it is going to have what seems to many of us substantial sums of money at its disposal. It will have grave responsibility as well. I suggest most respectfully to the minister that he increase the number of his board if he believes that is necessary, but I suggest also that the identity of the board should be definite and final. He may wish to consult a specialist in this or that aspect of his business, and there is nothing to prevent him from inviting such a person to the board meeting or from consulting. I must submit, however, with great deference that a board that slithers and slides about

at the whim of anyone who wishes to go fishing is hardly good enough for a corporation of this importance, and I therefore suggest that the number of directors be fixed and their names known so that we know with whom we are dealing at all times.


Gordon Graydon: Another point which the minister might consider is this. This may be a small affair to the minister, but these small affairs have a habit of creeping up until they become precedents, as in the many crown companies which this parliament has already exercised its powers to create. Let me point this out in simple terms. We are stretching the chain of responsibility too far so that we are getting all the time farther away from the people who pay the shot. The first link in that chain is the taxpayer; then you have parliament; then you have the government; then the next link in the chain is the corporation under consideration; the next link the director; and now we are going to add still another link, namely, the right of the director to appoint another director in his stead. In other words, there are six links from the time you leave the man who pays the taxes until you reach the man who is spending the money, and I suggest that that is stretching the chain too far. There must be a halt somewhere. As far as responsibility is concerned, if this is to be a precedent for the future, the chain should be shortened rather than lengthened.
Mr. MaoINNIS: What is the sense of designating the board of directors in section 3 and then putting in a provision in section 12 that each director may appoint a delegate Whom nobody knows?


John Ritchie MacNicol: Or where he comes from.
Mr. MaoINNIS: He can pick up a delegate anywhere and say that he is a responsible person. But, after all, you cannot draw up legislation on the assumption that everyone who is to be associated with it is a responsible person.


Gordon Graydon: You would not need legislation.


Angus MacInnis: No. If you could do that you would not need legislation at all. Here we have a board of directors each one of whom may appoint a director to act in his behalf when, I presume, he is unable to be present. In my opinion that is certainly not consistent legislation.
Mr. MaeKINNON: It may be that we 'have sought to be meticulous, be careful, in anticipating all possibilities and have made provision where it is unnecessary. If the dropping of this (provision is satisfactory I am prepared to have it deleted.

Succession Duties
.Mr. MacNIOOL: I move, seconded by the hon. member for Vancouver South (Mr. Green), that clause 4 of section 12 be deleted.


William Henry Golding: That has already been suggested and moved by the Minister of Justice.


Gordon Graydon: There is a difference between a suggestion and an amendment. We are just saving the government work.


William Henry Golding: The minister has indicated that he is
prepared to have the Minister of Justice move an amendment to that effect. Shall the amendment carry?


[Stage Direction]
Amendment agreed to.
John Thomas Hackett: Does the minister feel that the number of directors is sufficient? He has seven directors and five is a quorum.
Mr. ST. LAURENT: Section 3 provides for a president and a board of not more than nine or less than five directors.
Section as amended agreed to.
Sections 14 to 16 inclusive agreed to.
Bill reported, read the third time and passed.



SUCCESSION DUTIES


[Stage Direction]
Right Hon. L. S. ST. LAURENT (Acting Prime Minister) moved the second reading of bill No. 301, respecting a succession duty agreement between Canada and the United Kingdom, signed at London, in England, on the 5th day of June, 1946.
Gordon Graydon: I am not sure whether the minister has made a comprehensive statement with reference to the subject matter of this bill, but if he has not done so either on the resolution or at some other stage, I suggest that before second reading is given he ought to make that statement.
Mr. ST. LAURENT: I understand that a comprehensive statement was made by the Minister of National Revenue (Mr. McCann) at the resolution stage, and I had 'hoped it would be sufficient to state at this time that the bill is to give legal effect to an arrangement entered into between the government of the United Kingdom and the government of Canada to avoid, if possible, duplication of succession duties. There are quite a large number of provisions in the agreement, all designed to avoid payment of succession duties both in Canada and in the United Kingdom on the same property, and that required agreement of the contracting parties to determine a great many questions respecting which decisions had not been the same in the two countries.
The situation which gives rise to a possibility of double taxation is where the decedent resides in one country and dies leaving property in the other. When it is tangible property there is not too much difficulty, though there may be double taxation; but even when there is a desire to avoid double taxation, if you do not follow the same principles for the purpose of determining where is the legal situs of the property you do not achieve the result. Therefore it was necessary to examine carefully the whole situation and agree upon rules which would apply in both jurisdictions to determine the situs of property and to determine in what jurisdiction it could be taxed and what credit would be given in the other jurisdiction when the tax was paid.
I think all hon. members would agree with the desirability of an arrangement of that kind. As hon. members know, there is a similar arrangement between Canada and the United States which was sanctioned by legislation passed by this parliament in 1944. In the general desire to facilitate trade and to eliminate obstacles which prevent that freedom of choice in setting up commercial establishments or branches thereof it is desirable to avoid this doubling of taxation. It is serious enough to have to pay them once, and I think all will agree that it is desirable, in order that these tax laws may not prevent the interchange of investment, to strive toward a goal of avoiding double taxation. This agreement was entered into for that purpose, and the legislation which is submitted to parliament is for the purpose of giving it legislative sanction; because, of course, there has to be legislative sanction to avoid the application of the taxes imposed by statutes in the two countries.
The bill gives legislative sanction to the agreement and if it is desired explanations can be given in committee as to the various clauses of the agreement and the reason for each one of them. I would hope on the principle that we would all agree that we were striving toward a desirable goal, and that the only criticism could be upon the effectiveness of the clauses to reach that goal. That could be more conveniently considered or explained at the committee stage.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Golding in the chair.
On section 1-Short title.
Succession Duties
John Thomas Hackett: Will the minister say whether this bill is restricted to duty levied by the dominion? I do not assume that it has any bearing upon duty which may be levied by any of the provinces. Are there any provisions which enable the provinces to avail themselves of this understanding?
Mr. ST. LAURENT: No; this is an agreement between the government of the United Kingdom and the government of Canada. The duties which are the subject of the agreement are m the United Kingdom, the estate duty imposed by the United Kingdom, and in Canada the succession duty imposed by Canada. It was well realized by the government of the United Kingdom that there were also succession duties imposed by provincial governments to which this would not in terms apply; but there was the hope that it would be a good example which the provinces might find it to their advantage and to the advantage of their respective citizens to follow.


John Thomas Hackett: Are there not agreements already existing between the United Kingdom and some of the provinces?
Mr. ST. LAURENT: I am informed that there are agreements existing between Quebec, Nova Scotia and British Columbia on the one part and the United Kingdom on the other.


Gordon Graydon: Have the agreements
which are made between Nova Scotia and the United Kingdom been confirmed by legislation of the two parties involved?
Mr. ST. LAURENT: I am not sure that there has been confirming legislation; I am under the impression that in the Quebec succession duties act there is authority given to the lieutenant governor in council to enter into reciprocal arrangements for the purpose of avoiding double taxation. I think it is the same in British Columbia. I believe there is empowering legislation under which the executive government may make an arrangement, and when it is made it operates by virtue of the empowering legislation. I am informed that even with respect to this agreement there will not have to be special legislation in the United Kingdom; that the finance statutes of the United Kingdom authorize the chancellor of the exchequer to make agreements of this kind, and that they can be made effective under order in council without further enactment by the United Kingdom parliament. But here there was no special enabling legislation. My experience over the last few years has been that it was preferable to come to parliament and say just what one 
wanted to have confirmed rather than to ask parliament to give one blanket authority in advance.


Gordon Graydon: The minister has been an excellent scholar.


John Thomas Hackett: Does the minister think it would be the better plan to go through the agreement before considering the legislation?
Mr. ST. LAURENT: That would make it much easier to understand what would be the effect of the legislation. Of course the various clauses of the agreement will not be carried or defeated, but they can be called and passed and then we can go back to the legislation.


Gordon Graydon: The minister mentioned similar legislation with respect to the United States government which was entered into in 1944. Are there any other countries with which Canada has made a similar agreement at any time with respect to succession duties?
Mr. ST. LAURENT: No, not up to the present time.


Gordon Graydon: Are there not other countries in connection with which this situation would apply in similar measure; and, if so, what provision is being made, or what negotiations are in progress with respect to those other countries?
Mr. ST. LAURENT: I understand there is a pretty general feeling, among the united nations at least, that arrangements of this kind are desirable. So far, Canada has not had any active negotiations with other governments. It is known that we have an arrangement with the United States of America. It is known that we have an arrangement with the government of the United Kingdom and are submitting it to parliament, and there have been conversations with representatives of the French government, but as yet they have not reached the point where any drafts have been prepared.


Gordon Graydon: No other part of the commonwealth ?
Mr. ST. LAURENT: No; I am informed there is not as yet any other part of the commonwealth. This agreement provides that it can be extended to all the colonies and dependencies of the United Kingdom, and that the extension can be acquiesced in or refused by us without affecting the main agreement between ourselves and the United Kingdom, which is to last for a minimum period of three years and then to continue after that time unless denounced.

Succession Duties


William Alexander McMaster: I always understood there was a difference in the interpretation of the situs of personal property as between the rules followed by the succession duties office and the rules followed generally in other cases. Would the minister care to say which rule has been adopted in making this agreement?
Mr. ST. LAURENT: The common law rule has been adopted expressly in a great many instances, and in other instances it would be questionable whether the agreement reached is the common law rule or not; there is doubt as to what is the common law rule. For certainly the special cases were envisaged and a decision was made as to what the parties would regard as the rule applicable in both jurisdictions. The deputy minister for taxation tells me that in some cases what was regarded as the common law rule was definitely departed from as not being appropriate to present-day conditions.


William Henry Golding: The Chair called section 1. Now it has been suggested that we deal with the agreement itself before we go on with the sections of the bill. If that is agreeable to the committee we will call article I of the agreement, on page 2 of the bill.
On article I:


William Irvine: I imagine I can ask my question on this article. I notice that in the definition of the United Kingdom it is shown to be composed of England, Wales, Scotland and so forth. There is no such corresponding definition of Canada, which I presume would mean mentioning the nine provinces. What I am worrying about is whether some provinces may retain their right to levy succession duty taxes. In that case this agreement would not be an agreement at all, would it?
Mr. ST. LAURENT: It will operate if the provinces continue to levy succession duty taxes, because the dominion government levies a substantial succession duty itself. The proposal contained in the budget resolutions is that in such provinces as may continue to levy succession duties themselves there will be a credit on the federal tax of roughly the amount of the provincial duty. This agreement is between the federal government and the government of the United Kingdom, and applies to the federal government's tax and the tax imposed by the United Kingdom. It may not at once have the effect of eliminating all duplication of taxes, because the rules as to situs may not be accepted by one or more
province that will continue to levy succession duties, but it will be a substantial improvement on what has existed heretofore.


William Alexander McMaster: Would the minister say whether the words "estate duty" are wide enough? As I recollect it, they have estate duties, inheritance taxes and possibly succession duties; that is, there are different imposts. It would not be enough for us to get rid of the estate duty unless we also got rid of the inheritance tax, unless the act in the United Kingdom has been consolidated in the last year.
Mr. ST. LAURENT: My information is that the estate duty is the heavy tax, and that is the only one with respect to which the United Kingdom authorities were willing to make an agreement. They were not willing to include in the agreement the lesser taxes such as legacy duty or inheritance tax. We got an agreement with them as far as they were willing to go.


[Stage Direction]
Article agreed to.
On article II:
Edmund Davie Fulton: There is a very small point here. Would the minister just tell us why the Isle of Man is omitted? I ask that question because I have personal knowledge of the case of a Canadian who has interests on the Isle of Man. Is it because the United Kingdom has no legislative jurisdiction over the Isle of Man?
Mr. ST. LAURENT: The Isle of Man may come in as a sovereign jurisdiction under article VIII of the agreement, but the government of the United Kingdom was not willing to include it without obtaining the prior consent of the proper authorities of the island.


[Stage Direction]
Article agreed to.
On article III:
Mr. ST. LAURENT: This is an important article, which determines many of these disputed questions of situs.
John Thomas Hackett: Have they been all determined according to the rules that obtain in Great Britain, or have they adopted some of our rules? For instance, I notice in paragraph (f) this provision:
Shares, stock . . . shall be deemed to be situated at the place where the company was incorporated . . .
That is quite a departure, is it not, from the rule we have observed up to date? I am just wondering what is going to happen to our transfer offices in Great Britain. We went to some expense to open them up over there, and
Succession Duties

I suppose the minister knows what that situation is. Perhaps he might be good enough to tell us?
Mr. ST. 'LAURENT: It might be helpful if I were to give hon. members this statement which has been prepared respecting article III. Clauses (a), (d), (h), (i), (j), (k), (1), (m) and (n) are thought to be a repetition of the common law rule.
Clause (b) deals with the situs of negotiable bills of exchange and negotiable promissory notes, and with the situs of property in transitu.
It has been held in England that bills of exchange and promissory notes do not alter the nature of simple contract debts, and these debts are situate in England if the debtor is resident there. On the other hand, the Supreme Court of Canada has recently decided that negotiable instruments are subject to duty if found in Canada. Clause (b) now makes a uniform rule applicable in the determination of the situs of all negotiable instruments, namely, that they are to be regarded as situated where they are found at the time of the owner's death.


John Thomas Hackett: Is that a special rule?
Mr. ST. LAURENT: No, that is a rule which has been agreed upon in deference to the decision of our supreme court, though it is contrary to what was held previously in the United Kingdom in respect of several of these instruments.
With regard to property in transitu the rule in England has been that where property is in transit to that country at the time of the owner's death it is situated there. In a recent Ontario case, however, this principle was not applied in the case of property in transit from Ontario to the United States. Clause (b) now makes a uniform rule applicable to the situs of this class of property.
Clause (c) provides that all debts, whether secured or unsecured, shall be deemed to be situated at the place where the debtor was resident.


John Thomas Hackett: What does that mean? Shares are not included as debts.
Mr. ST. LAURENT: Debts secured or unsecured, and whether under seal or not. It does away with the distinction between specialties and simple contract debts. That is for the purpose of having a uniform rule. The hon. member knows that simple debts were deemed to be situate where the debtor resided, but that a debt evidenced by an instrument under seal was deemed to be

situate where the instrument was found. The agreement provides that that distinction will not exist. A debt, whether under seal or not, shall be deemed to be situate at the residence of the debtor.


John Thomas Hackett: Then this agreement may give some strange results in taxation. We are going to have a set of rules which are the result of agreement between the dominion and Great Britain. There is another set of rules in effect between Great Britain and Quebec. The rules which obtain there as to shares would be entirely different from the ones in effect here. I do not know that the dominion will be influenced in any way by previous agreements which exist between Great Britain and the provinces, but it may result in great hardship, I should think, because you are going to have a property taxed in Great Britain under one set of rules and in Canada under another. Unless arrangements are made for set-offs and reciprocals, it seems to me that there may be entanglements. Of course the minister may say that is an argument in favour of making over succession duties to the provinces.
Mr. ST. LAURENT: I think this will remove, to the extent to which the jurisdiction of parliament can go, the payment of double taxes. It may be that something which will not be regarded as situated in Canada for the purpose of the federal tax would be regarded by, let us say Quebec, as situated in that part of Canada-that is Quebec-for the Quebec tax. But that would be so, whether we had this agreement or not. And having the agreement, the tax payable under the federal legislation will be avoided. The duplication which might- result from the federal legislation will be avoided, and it will be that much easier for the taxpayer than if the agreement did not exist.


[Stage Direction]
Article agreed to.
On article IV:
Edmund Davie Fulton: Could the minister give us an illustration of the working of the proviso at the end of clause 2 where it States:
Provided that this paragraph shall not apply as respects duty imposed in Great Britain in the case of property passing under a disposition governed by the law of Great Britain.
Can the minister say how this proviso works, and why it was inserted?
Mr. ST. LAURENT: This provides for quite substantial possible reduction in taxation. The value of the exemptions in each jurisdiction will be calculated separately, and the rate of tax will not be upon the aggregate of the estate, but upon the amounts found in each jurisdiction. Whilst heretofore,

Succession Duties
though there might be only a small -part of the estate in Canada, if it were a very large estate in the United Kingdom, the rate on that part in Canada would be fixed in relation to the aggregate value of the whole estate.


Edmund Davie Fulton: The rate would be fixed.
Mr. ST. LAURENT: Yes, the rate would be fixed in relation to the aggregate value of the whole estate. It was felt that, having this arrangement, it would be fair to treat the assets in each jurisdiction as separate assets, and tax them in accordance with the rate they would separately bear.


Edmund Davie Fulton: That, I believe, is the general purpose of the clause. However, it was the proviso I was wondering about. It seems to me to provide that if property is passing under a will which is governed by the law in England, then no matter where the property is situated it will be used in reckoning the total amount o-f the estate, and, therefore, the rate of tax.
Mr. ST. LAURENT: The proviso in article III is difficult to understand if one is not familiar with English estate duties.


Edmund Davie Fulton: I was talking about the proviso in article IV.


William Alexander McMaster: I had a question to ask on article III.


John Thomas Hackett: Would the minister go on with article III?


William Henry Golding: Order. Article III was carried, and we called article IV. If it is the wish of the committee to revert to article III we will do so.


John Thomas Hackett: Has the minister finished his explanation of article III?


William Henry Golding: If the committee wishes to revert to article III, which was carried, we will do so.


John Thomas Hackett: The minister had not finished reading his explanatory paper.


William Henry Golding: If it is the wish of the committee to revert to article III, it is all right, but we carried article III and called article IV.


John Thomas Hackett: I suggest that we shall make more progress if you do not call the articles before they are dealt with.


William Henry Golding: I suggest to the hon. member that when an article is called and carried he should not revert to that article unless he has the permission of the committee to do so.


John Thomas Hackett: The minister was in the midst of reading an explanatory note.


Mr. WEIR:: Not in order.
The ACTING CHAIRMAN (Mr. Golding) [DOT] He was not in order because that article has been carried. I want to be fair to all hon. members.


John Thomas Hackett: I should like to know if the minister had finished reading the explanatory note on three?


William Henry Golding: He had finished.
Mr. ST. LAURENT: It is the same explanation. In England an estate duty is imposed on the death of the life tenant of the property, notwithstanding that such life tenant was not the settler or disposer of the property. In Canada no such duty is imposed. The object of the proviso is to enable England still to continue to tax this type of transmission, because otherwise it would not be taxed at all. It is a passing of property governed by the law of England which would not be taxed here at all and in which, we have no interest.


Edmund Davie Fulton: I think I see the purpose, but I am just wondering if I really understand it. The purpose of the proviso is that if a deceased person is left a life estate in England the British authorities shall be permitted to impose their normal estate tax?
Mr. ST. LAURENT: On the extinction of the life tenant's interest.


Edmund Davie Fulton: I am wondering if that would not enable Great Britain to apply a tax in respect of some kind of property situated in Canada and whether the proviso is actually accomplishing what it seeks to accomplish?
Mr. ST. LAURENT: If it is something that passes under the laws of the United Kingdom and the passing is the result of the extinction of a life tenancy and England can reach the taxpayer, they want to be able to do so. It is not a tax that we impose. It does not conflict with any tax imposed under the Canadian statutes, so that we say to them, "If you can get that tax, it is no concern of ours." It does not conflict with any tax we want to collect.


William Alexander McMaster: I should like to ask the minister to elucidate one other case that would come under the first paragraph of article III. This reads in part:
. . . but in cases not within such rules the situs of such rights or interests shall be determined for these purposes in accordance with the laws in force in the territory of the other contracting government.
Succession Duties

Mr. ST. LAURENT: Anything that has not been covered by express agreement. The British authorities will have to recognize our rule and we shall have to recognize their rule if it is something that is within their territory.


William Alexander McMaster: There will be no agreement as to that?
Mr. ST. LAURENT: We say, "You will take our rule if it is in Canada, and if it is in the United Kingdom we will submit to your rule." We will give credit in any event.


[Stage Direction]
Article agreed to.
On article Y.
Edmund Davie Fulton: The first paragraph of this article raises the question of whether.it will affect separate agreements made between the United Kingdom and three of the provinces. The last part of the provision reads:
. . . equal to so much of the duty imposed in the territory of the other contracting government as is attributable to such property.
Inasmuch as British Columbia, Quebec and Nova Scotia are territories in Canada, it might be ruled that if those provinces imposed duties, then the government of the United Kingdom would have to take them into consideration under the terms of this section.
Mr. ST. LAURENT: The duties subject to the present agreement are, under article I, in Canada the succession duties imposed by Canada. We do not attempt to contract or legislate with respect to the rights of British Columbia or the rights of Quebec or the rights of Nova Scotia, but we do attempt to agree to and to legislate with respect to liabilities resulting from our own tax statute.


William Alexander McMaster: Would the minister give an example as to how this would be applicable?
Mr. ST. LAURENT: Paragraph 1 deals with a particular piece of property in respect of which one country imposes a duty by reason of the domicile of the deceased and the other country by reason of the situs of the property. This paragraph applies whether the property devolves under a will or upon intestacy or under an inter vivos settlement. The country of domicile is to allow against its own duty on the property a credit for the duty imposed by the country of situs. Thus, if a man domiciled in Canada, leaves personal estate of $25,000 situated in England, assuming that the Canadian duty on the $25,000 was $2,500 and the British duty $1,500, the Canadian taxing authorities will allow a credit of $1,500 against the Canadian duty of $2,500.


Edmund Davie Fulton: What is the position where one province makes an agreement with the dominion government with respect to succession duties and agrees not to levy them? Is the dominion allowed to take into consideration the rate the province would have exercised because the dominion is going to pay the province for giving up the tax?
Mr. ST. LAURENT: The dominion proposals under the present budget are to double the rates that were in existence last year and to give credit to the taxpayer for anything he pays in his province if his' province imposes succession duties. If his province does not impose succession duties, then the whole new duty comes under this agreement with the United Kingdom authorities.


William Alexander McMaster: Otherwise it will be
just half?
Mr. ST. LAURENT: Yes.


Edmund Davie Fulton: I will be frank in saying that I do not understand the operation of paragraph 4 and I would be obliged if the minister will explain how it is going to work.
Mr. ST. LAURENT: The object of paragraph 4 is to ensure that the duty of each contracting government is calculated after taking account of any relief, remission, et cetera, of duty for which the taxation code of either makes provision, but before taking account of any credit given under this article. The effect of paragraph (4) in a case involving taxation of personal property by three countries, including Great Britain and Canada, is illustrated by the following examples. In each of them it is assumed that duty is imposed by Great Britain on the ground that the property is included in a British settlement and by Canada on the ground of domicile, and that the property was situated in the third country. In the first example the property is taken to be situated in a country, Eire, with which Great Britain has, but Canada has not, a double taxation agreement; in the second example the situation is taken to be in Northern Ireland, with which both Great Britain and Canada will have a double taxation agreement if the present proposals are approved. In both examples the figures represent rates of duty. I have a table here which, with the consent of all hon. members, I should be glad to put on Hansard, so that they will have before them a concrete example of how the thing is expected to work.


William Henry Golding: Has the minister unanimous consent to put the table on Hansard?


Some hon. MEMBERS:: Agreed.

Income Tax-Canada-United Kingdom
Mr. ST. LAURENT: The table follows:
Example I	Great Britain	Canada	EireGross charge	
Credit allowed in ac-	25	15	5cordance with article V(4) 	5	Net charge 	
Apportioned under ar-	20	15	5tide Y(3) 15	[DOT]	= 3/7ths 	00	6f	20 + 15	Example II	Ilf	8*	5Great	Northern	Britain Canada Ireland	Gross charge	
Credit allowed in ac-	35	25	5cordance with article V(4) 	5	5	Net charge 	30	20	5
Apportioned under article V(3)
	12	8	
30 + 20	18	12	5
In both of the examples the sum of the three net rates is equal to the highest of the three gross rates.


Edmund Davie Fulton: The credit allowance for relief; is that the .relief which will result from the adoption of this agreement?
Mr. ST. LAURENT: No, for whatever relief comes from something other than this agreement.


Edmund Davie Fulton: 
Edmund Davie Fulton: I see.


[Stage Direction]
Article agreed to.
Articles VI to XI inclusive agreed to.
Sections 1 to 5 inclusive agreed to.
Schedule agreed to.
Bill reported, read the third time and passed.


[Stage Direction]
Right Hon. L. S. ST. LAURENT (Acting Prime Minister) moved the second reading of bill No. 300, respecting an income tax agreement between Canada and the United Kingdom, signed at London, in England, on the fifth day of June, 1946.
He said: Mr. Speaker, a statement was made on this bill by the Minister of National Revenue (Mr. McCann) at the resolution stage. The aim of this bill, like that of the one we have just passed, is to avoid duplication of taxation on the same income. I think the only way to get a clear idea of how the two governments have hoped that they might achieve that object is by going through the agreement itself article by article. I think it would be more convenient to have that done at the committee stage than for me to give any lengthy explanation on the second reading.
Motion agreed to, bill read a second time
and the house went into committee thereon, Mr. Golding in the chair.
Mr. ST. LAURENT: Might I suggest, Mr. Chairman, that we turn to the agreement itself before taking up the sections of the bill?
Edmund Davie Fulton: Before that is done, Mr. Chairman, would the minister give an opportunity for a general question which cannot be raised on any of the articles of the agreement. One presumes that some consideration must have been given to the possibility of the pro\ -inces reimposing income tax, how that would affect this measure and what modifications might be made on the part of the dominion government in order to take care of that possibility.
Mr. ST. LAURENT:	The negotiations
were between the government of the United Kingdom and the government of Canada, and no special consideration was given to the fact that there might be provinces that would reimpose personal income or corporation income taxes. But even if that were so, the rates of the taxes imposed by the federal authority are sufficiently high as compared with anything that was imposed before the wartime tax agreements with the provinces or that is apt to be imposed on top of the federal rates by the provinces after the wartime tax agreements expire to make this agreement worth while.


Edmund Davie Fulton: That is true. I was
wondering whether the federal government contemplated any move by which relief could
4346	COMMONS
Income Tax-Canada-United Kingdom
be given the individual taxpayer who resides in a province which does not make such agreement with the dominion. He would be put in a worse position than any other taxpayer.
Mr. ST. LAURENT: There is nothing that parliament can do about the matter beyond what is offered by the proposals made available under the budget resolutions. The hon. member knows that if a province does impose taxes certain credits on the taxpayer's liability to the federal government will be allowed, and that is as far as our jurisdiction will allow us to go. The United Kingdom made with us an agreement very similar to the one it made with the United States where the same difficulties present themselves.


Edmund Davie Fulton: This is modeled after that?
Mr. ST. LAURENT: It is very similar. Of course, there were certain special features that entered into the agreement between Canada and the United Kingdom, but it is very similar to the agreement made between, the United Kingdom and the United States, for the same purpose, to try to bring about a greater possibility of free exchanges between the United Kingdom and the United States and ourselves.


John Thomas Hackett: Do they apply the rule of domicile or nationality?
Mr. ST. LAURENT: Domicile plays no part. It is income tax, and it is ordinary residence or carrying on business that are the deciding features.
Articles I and II agreed to.
On article III.


Edmund Davie Fulton: Section 2 of article III has this proviso:
Provided that nothing in this paragraph shall affect any provisions of the law of the United Kingdom regarding the imposition of excess profits tax and national defence contribution in the case of interconnected companies.
Is there any similar protection for Canada?
Mr. ST. LAURENT: The explanation is that paragraphs 1 and 2 are reciprocal. Industrial and commercial profits arising from a permanent establishment shall be subject to taxation by the country in which the permanent establishment exists. But in paragraph 2, Canada, by the proviso, recognizes the right of the United Kingdom to continue to impose its present law on its own companies by sweeping in profits not only of the permanent establishment in Canada, as would be the case normally, but also profits in Canada of companies in Canada which are controlled by United Kingdom companies.


Edmund Davie Fulton: That seems to change the effect of the other provision which says that where an enterprise makes a profit in Canada, although it may be owned in the United Kingdom, it shall be taxable in Canada and treated as though it were a Canadian company. Is that not double taxation?
Mr. ST. LAURENT: That was not something that was taxed here. It was a form of excess profits tax which was imposed in the United Kingdom on their own company there.


Edmund Davie Fulton: On account of profits made here?
Mr. ST. LAURENT: Yes. There they were taxing more heavily or in another way than we would tax our people, but since the tax was to be collected from a company there, we felt it was their business to see how far they should go.


Edmund Davie Fulton: There is no double taxation at the moment?
Mr. ST. LAURENT: There is no double taxation because we have no parallel situation and it is payable by a company there.


[Stage Direction]
Article agreed to.
Articles IV to XVIII inclusive agreed to.
Sections 1 to 5 inclusive agreed to.
Bill reported, read the third time and passed.
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Tuesday, August 6, 1946